Form 8-K - Current report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 29, 2024

iQSTEL Inc.
(Exact name of registrant as specified in its charter)

 

Nevada	000-55984	45-2808620
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

300 Aragon Avenue, Suite 375 Coral Gables, FL 33134	33134
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

________________________________________________ (Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   [ ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      [ ]

 

 

SECTION 1 - Registrant's Business and Operations

 

Item 1.01 – Entry into a Material Definitive Agreement

 

The disclosures concerning the entry into material definitive agreements contained in Item 5.02 are incorporated herein by reference into this Item 1.01.

 

SECTION 5 – Corporate Governance and Management

 

Item 5.02

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

 

Officer Compensation

 

On February 29, 2024, our board of directors approved amended and restated employment and indemnification agreements in favor of our Chief Executive Officer, Leandro Jose Iglesias and our Chief Financial Officer, Alvaro Quintana Cardona, to replace their existing agreements. The agreements are effective as of January 1, 2024.

 

The new five year employment agreement with Mr. Iglesias provides that we will compensate him with a salary of $31,000 monthly and he is eligible for a bonus as follows: (i) up to two months of salary on a yearly basis, (ii) up to 4% of our net income on a yearly basis, and (iii) up to 1,000,000 shares of our common stock, a determined by our board of directors, all payable 15 days after our annual report is filed. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.

 

Mr. Iglesias agreed to two year non-compete and non-solicit restrictive covenants. If Mr. Iglesias is terminated for cause he shall forfeit any rights to severance, which is available to him in the event of termination without cause.

 

The new five year employment agreement with Mr. Quintana provides that we will compensate him with a salary of $22,000 monthly and he is eligible for a bonus as follows: (i) up to two months of salary on a yearly basis, (ii) up to 4% of our net income on a yearly basis, and (iii) up to 800,000 shares of our common stock, a determined by our board of directors, all payable 15 days after our annual report is filed. If we do not have the cash available, the agreement provides that Mr. Cardona may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.

 

Mr. Cardona agreed to two year non-compete and non-solicit restrictive covenants. If Mr. Cardona is terminated for cause he shall forfeit any rights to severance, which is available to him in the event of termination without cause.

 

The foregoing description of the Amended and Restated Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the Employment Agreements filed as Exhibits 10.1 to 10.2 hereto and incorporated herein by reference.

 

Board Member Compensation

 

All Directors shall receive reimbursement for reasonable travel expenses incurred to attend Board and committee meetings.

 

Effective on January 1, 2024, and thereafter, all Directors shall be compensated monthly with 10,000 shares of common stock cash of $2,500 for their service as Directors. The Chairman and Secretary of the Board shall receive an additional $2,500 per month in addition to the Director compensation.

 

Each Director shall also be entitled to a bonus of up to 1% of our net income on a yearly basis.

 

In lieu of the cash compensation set forth above, each Director may elect to receive shares of our Common Stock equal to the total cash compensation divided by the average market value of the Company's Common Stock during the last 10 trading days and applying a discount of 25%.

 

2

 

Resignation of Officer

 

On March 1, 2024, Juan Carlos Lopez Silva resigned from his position as Chief Commercial Officer of the Company.  Mr. Lopez will formally assume the position of CEO of the IQSTEL subsidiaries, Etelix and SwissLink, a position that he has been holding as interim in recent months. The existing employment agreement Mr. Lopez has with the Company will remain in effect with the change in position. 

 

SECTION 9 – Financial Statements and Exhibits

 

Item 9.01

Financial Statements and Exhibits.

 

Exhibit No.	Description
10.1	Amended and Restated Employment Agreement with Mr. Iglesias, dated February 29, 2024
10.2	Amended and Restated Indemnification Agreement with Mr. Iglesias, dated February 29, 2024
10.3	Amended and Restated Employment Agreement with Mr. Cardona, dated February 29, 2024
10.4	Amended and Restated Indemnification Agreement with Mr. Cardona, dated February 29, 2024

 

3

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

iQSTEL Inc.

 

 

/s/ Leandro Iglesias

Leandro Iglesias
Chief Executive Officer

 

Date March 4, 2024

 

4

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”)is made this 29^th day of February 2024, but effective as of the 1^st of the year (the "Effective Date"), between iQSTEL, Inc., a Nevada corporation (hereinafter referred to as the "Company"), and Leandro Jose Iglesias, residing at Carretera de San Miguel de Breamo 9, Pontedeume, A Coruna, 15.614, Spain. (hereinafter referred to as the "Employee").

 

WHEREAS, the Parties previously entered into an Employment Agreement dated May 2, 2019 that was amended on November 1, 2020 (together, the “Original Agreement”), and now the parties desire to amend and restate the Original Agreement;

 

WHEREAS, the Company wishes to engage the services and expertise of the Employee on the terms and conditions hereinafter set forth, and the Employee wishes to accept such an engagement;

 

NOW THEREFORE in consideration of the covenants of each of the parties given to the other and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto

agree as follows:

 

1.          NATURE OF AGREEMENT; SERVICES

 

1.1        This Amended and Restated Employment Agreement completely replaces and supersedes the Original Agreement as of January 1, 2024.

 

1.2          Effective as of the Effective Date, the Company hereby engages the Employee and the Employee hereby accepts an engagement with the Company to serve as the Chief Executive Officer of the Company (the "Services"). Employee shall bear such responsibilities as are customary for such a position in a public company in performing the Services. The parties understand that the position will be full-time employment and that the Employee shall devote sufficient time, attention and abilities to the business of the Company for the proper exercise of the Employee's duties hereunder. Employee understands that the Services may, from time to time, entail extensive travel. Employee may assign the compensation hereunder but not the responsibility to fulfill the services and responsibilities as per this Agreement. Employee shall not be required to move his residence.

 

2.          REMUNERATION

 

The Company agrees to pay the Employee as set out in Schedule "A" attached hereto.

 

3.          CONFIDENTIALITY; OWNERSHIP OF DOCUMENTS; NON-COMPETE; NON-SOLICIT

 

3.1       Confidential Information. Employee recognizes and acknowledges that by reason of this Agreement and service to the Company, he will have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company and its affiliates ("Confidential Information"). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or at any time after the Term of this Agreement, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of the Employee or except as, and to the extent as, may be required by law.

1

 

 

3.2        Non-Competition

 

Employee recognizes that in his position as an Employee to the Company, he will acquire such information outlined in Section 3.1 hereof, including Confidential Information and for good and valuable consideration, including his engagement by the Company, he agrees that during the Term of this Agreement and for a period of 24 months after termination of this Agreement, the Company has the right to request to the Employee that he will not work in a company that directly or indirectly, manage, operate, join, control, or participate in the management, operation, control, or be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise with or use or permit his name to be used in connection with, any business or enterprise engaged in the primary line of business in which the Company is engaged in at the time of execution of this Agreement, unless acting pursuant hereto or with the prior written consent of the Company.

 

(a)       This Company right is based on the premise that the Company shall not have any debt with the Employee, and all the remunerations of the last six months previous to the end of the term of the agreement will be paid on time and in cash, and the Company shall pay the compensation for Noncompetition as set in out in Schedule "A" attached hereto.

 

(b)       The foregoing restriction shall not be construed to prohibit the ownership by the Employee of no more than 4.99% of any class of securities of any corporation that is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither the Employee nor any group of persons including the Employee in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising his rights as a shareholder, or seeks to do any of the foregoing.

 

3.3       Non-solicitation; Non-association. The Employee hereby acknowledges and agrees that he, together with other Employees engaged by the Company, is likely to be exposed to a significant amount of Confidential Information concerning the Company's, business methods, operations, employment relationships, and customers while engaged under this Agreement, that such information might be retained by the Employee and such other Employees in tangible form or simply retained in their memory, and that the protection of the Company's exclusive rights to such confidential information and the benefits flowing from it can best be ensured by means of a restriction on the Employee's activities after termination of this Agreement. Therefore, the Employee agrees that for a 24 month period following termination of this Agreement, he shall not engage in the following activities:

 

(a)        He shall not solicit, divert, or initiate any contact (or attempt to solicit, divert, or initiate any contact) with any relationship of the Company or any affiliate with whom Employee dealt (including any customers or vendors), for the purpose of doing business in the same lines of business as the Company, and further will not solicit or initiate any contact with any potential relationship of the Company or affiliate, that the Employee solicited or contacted while engaged by the Company. This provision does not restrict Employee from developing relationships independently obtained outside of Employee's position with the Company.

 

(b)        He shall not directly solicit the employment of or hire any employee or Employee of the Company or affiliate and will not attempt to persuade any employee or Employee to leave the employment or consulting relationship of the Company or such affiliate.

 

2

 

 

3.4          Equitable Relief.

 

(a)         Employee acknowledges that the restrictions contained in Article 3 hereof are reasonable and necessary to protect the legitimate interests of the Company and that any violation of such restrictions would result in irreparable injury to the Company. If the period of time or other restrictions specified in A1ticle 3 should be adjudged unreasonable at any proceeding, then the period of time or such other restrictions shall be reduced by the elimination or reduction of such portion thereof so that such restrictions may be enforced in a manner adjudged to be reasonable. Employee acknowledges that the Company shall be entitled to preliminary and permanent injunctive relief for a violation of any such restrictions without having to prove actual damages or to post a bond; Company shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Company may be entitled in law or equity.

 

(b)         Employee agrees that until the expiration of the covenants contained in Sections 3.2 and 3.3 of this Agreement, the Company may provide a copy of the covenant contained in such Sections to any business or enterprise (i) that Employee may directly or indirectly own, manage, operate, finance, join, control, or participate in the ownership, management, operation, financing, control, or control of, or (ii) with which he may be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise, or in connection with which he may use or permit his name to be used.

 

4.            TERM AND TERMINATION

 

4.1         Employee's employment under this Agreement shall begin on January 1, 2024 for an initial period of 60 months, renewable automatically for 36-month periods; unless the Company or the Employee gives a written notification with at least 90 days prior to the termination date of the initial 60-month period or any subsequent 36-month period, expressing their intention to not renew the employment agreement. Upon expiration of the Term without renewal, the relationship between the parties will be at will but all other provisions of this Agreement shall be applicable. This agreement may be terminated by either Employee or Company for cause or willful or gross negligence by either party. The Board of Directors of the Company may at any time remove the Employee from his position of Chief Executive Officer, which removal shall not be deemed a termination of the Agreement. Notwithstanding anything to the contrary herein, if Employee is removed for cause or willful or gross negligence, then Employee will not be entitled to any compensation under the Company Employee Agreement Early Termination as described in Schedule A, number 9, or for not competing with the Company as described in Schedule A, number 8.

 

4.2          Employee's obligations, and those of Employee's employees, agents, successors and assignees, if any, pursuant to Section 3 (Confidentiality; Ownership of Documents, Non-Compete, Non-Solicit), 5 (Indemnification), and 8 (Governing Law and Dispute Resolution) shall survive completion of the Services, and the expiration or termination of this Agreement.

 

4.3          Except as provided in Section 4.1 above, in case the Company decides to terminate this agreement before the termination date (Company Employee Agreement Early Termination), during the initial period of 60 months or any subsequent 36 months of the renewed periods, the Company shall provide Employee with a Company Employee Agreement Early Termination compensation as set in out in Schedule "A" attached hereto.

 

3

 

 

5.             REPRESENTATION AND WARRANTIES; INDEMNIFICATION

 

5.1          The Employee warrants and represents that he is duly qualified to perform his duties hereunder, and further covenants that in performing his duties hereunder, he will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. The Employee further warrants that his execution of this Agreement and the performance of services hereunder does not violate any agreement to which Employee is a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against the Employee or the Company.

 

5.2          This Agreement is conditional on the Company's commitment to obtain a directors' and officers' insurance policy as soon as commercially reasonable, and the Company signing an Indemnification Agreement satisfactory to the Employee. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Employee at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. Additionally, the Employee shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

6.            EMPLOYEE BENEFITS

 

Both parties will comply with Company policy regarding employee benefits or as required by law.

 

6.1

Paid Time Off. Employee shall be entitled to paid time off in the amount of 25 days per year.

 

6.2

Sick Leave. Employee shall be entitled to paid sick leave of up to 10 days per year.

 

6.3

Personal Leave. Employee shall be entitled to paid personal leave of up to 5 days per year.

 

7.          NOTICES

 

Any notices delivered or received between either party shall be deemed to have been received:

 

(a)         if it was delivered in person or email on the date it was delivered:

 

(b)          if it was sent by registered mail, on the day it was received to the following address:

 

iQSTEL, Inc.

300 Aragon Avenue,

Suite 375, Coral Gables,

FL 33134.

By email: [e-mail]

Attention: CFO

 

Leandro Jose Iglesias

Carretera de San Miguel de Breamo 9

Pontedeume, A Coruna, 15.614, Spain

By email: [e-mail]

4

 

 

8.          MODIFICATION OF AGREEMENT

 

Any modification of this Agreement must be made in writing and signed by the Employee and the Company, or it shall have no effect and shall be void.

 

9.           GOVERNING LAW

 

9.1          This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any conflict of law rules otherwise.

 

9.2          Any and all disputes arising hereunder, including disputes arising from or relating to termination and the grounds therefor, including all grounds arising from statutory claims alleging discrimination or violations of federal, state or local civil rights law, or otherwise, shall be resolved by binding arbitration in Florida before a single arbitrator in accordance with the arbitration rules of the American Arbitration Association (the"AAA") applicable to arbitration then in effect. Notice of the demand for arbitration by either party shall be given in writing to the other party to this Agreement. On such demand, the dispute shall be heard by arbitration before a single arbitrator selected pursuant to the AAA rules. Any award rendered by the arbitrator shall be conclusive and binding on the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. The arbitrator shall be entitled to award equitable relief. Each party shall pay its own expenses of arbitration, including attorneys' fees. Nothing herein shall prevent the Company from seeking and obtaining preliminary equitable relief from a court pursuant to Section 3.5.

 

9.3          The parties hereby submit to the jurisdiction of the federal and state courts located in Florida for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators, and to the non-exclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder. and waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue.

 

10.           HEADINGS

 

The headings utilized in this Agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this Agreement.

 

I l.           GENERAL MATTERS

 

11.1       The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or of any other provisions of this Agreement.

 

11.2       This Agreement shall be binding upon the parties hereto and shall ensure to the benefit of and be enforceable by each of the parties hereto and their respective successors and assigns, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in part by the Employee without prior written consent of the Company.

 

5

 

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the 29^th day of February, 2024.

 

 

iQSTEL, Inc.

 

 

 

By: /s/ Alvaro Quintana Cardona

Name: Alvaro Quintana Cardona

Title: CFO

 

 

 

 

/s/ Leandro Jose Iglesias

Leandro Jose Iglesias

Employee

 

6

 

 

SCHEDULE "A"

 

 

REMUNERATION

 

1. As full consideration for performance of the services by the Employee, the Company shall pay the Employee $31,000 per month ($372,000 per Year). The monthly amount will be paid to Employee once a month on the 5th of each month. Company shall deduct or withhold any and all federal income and social security taxes and state and local taxes required by law, if apply.

 

2. Employee shall receive a yearly bonus of up to 2 months’ salary for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

 

3.  Employee shall receive a bonus of up to 4% of the Company's Net Income for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

 

4.  Employee shall receive a bonus of up to 1,000,000 shares of the Company’s common stock for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

5.  In case the monthly remuneration is not set in full on time, the Employee has the right to request to the Company convert any or all accrued salary into Company restricted common shares, by written notification. Amount to be converted in shares must be converted considering the average price of the share during the last 10 trading days and applying a discount of 25%.

 

6. As of effective Date, normal direct business expenses and travel expenses including business class travel on flights over 5 hours will be covered by the Company.

 

7. All the Bonuses to be as determined by the Board of Directors with the following factors applying equally: achievement of company goals and plans, capital raising, hiring of key employees in key locations.

 

8.  NON-COMPETITION, If the company desire to request to that the Employee not compete with the Company according to Section 3.2 of this Agreement, the Employee shall receive a compensation of 24 months of salary.

 

9.  COMPANY EMPLOYEE AGREEMENT EARLY TERMINATION, the Company shall provide the Employee with a severance of 36-month salary and additional compensation, in the case of early termination of the agreement. If Employee is removed for cause or willful or gross negligence, then Employee will not be entitled to any compensation.

 

* * * *

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), dated effective as of February 29, 2024, is made by and between iQSTEL Inc., a Nevada corporation (the “Corporation”), and Leandro Jose Iglesias (the “Indemnitee”).

 

PREMISES

 

A. The Corporation desires to provide for indemnification of the Corporation’s directors and officers to the fullest extent permitted by the Nevada Revised Statutes (collectively, “Nevada Law”).

 

B. The parties recognize the continued difficulty in obtaining liability insurance for the Corporation’s directors, officers, employees, stockholders, controlling persons, agents, and fiduciaries, the significant increases in the cost of such insurance, and the general reductions in the coverage of such insurance. Furthermore, the parties further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, stockholders, agents, and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance have been severely limited.

 

C. Indemnitee does not regard the current protection available under the Articles of Incorporation of the Corporation, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time (as amended, the “Articles”), and the Bylaws of the Corporation (the “Bylaws”) as adequate under the present circumstances, and Indemnitee and other directors, officers, employees, stockholders, controlling persons, agents, and fiduciaries of the Corporation may not be willing to serve in such capacities without additional protection. Moreover, the Corporation (i) desires to attract and retain the involvement of highly qualified persons, such as Indemnitee, to serve the Corporation and, in part, in order to induce Indemnitee to be involved with the Corporation, (ii) wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law, and (iii) wishes to assure Indemnitee that there will be increased certainty of adequate protection in the future.

 

D. In addition to any insurance purchased by the Corporation on behalf of Indemnitee, it is reasonable, prudent, and necessary for the Corporation to obligate itself contractually to indemnify Indemnitee so that he may remain free from undue concern that he will not be adequately protected both during his service as an executive officer and a director of the Corporation and following any termination of such service.

 

E. This Agreement is a supplement to and in furtherance of the Articles and Bylaws and shall not be deemed a substitute therefor or to abrogate any rights of Indemnitee thereunder.

 

F. The directors of the Corporation have duly approved this Agreement and the indemnification provided herein with the express recognition that the indemnification arrangements provided herein exceed that which the Corporation would be required to provide pursuant to Nevada Law.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

1. Definitions. As used in this Agreement:

 

(a) A “Change in Control” means the occurrence of any of the following events:

 

(i) any Person is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Corporation representing 20% or more of the Corporation’s then outstanding voting securities unless the change in relative beneficial ownership of the Corporation’s securities by any person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

 

 

 

(ii) the consummation of a reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the beneficial owners of the voting securities of the Corporation immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such transaction;

 

(iii) during any period of two consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board of Directors (the “Board”) (including for this purpose any new directors whose election by the Board or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board; or

 

(iv) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets.

 

(b) The term “Indemnifiable Matter” means any event, occurrence, status, or condition that takes place either prior to or after the execution of this Agreement, including any threatened, pending, or completed action, suit, proceeding or alternative dispute resolution activity, whether brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative, or investigative nature, in which Indemnitee was, is, or believes might be involved as a party, witness, or otherwise (except any of the foregoing initiated by Indemnitee pursuant to Section 16(a) to enforce Indemnitee’s rights under this Agreement), by reason of the fact, in whole or in part, that Indemnitee is or was actually or allegedly a director, officer, agent, or advisor of the Corporation; by reason of any action actually or allegedly taken by him or of any inaction or omission on his part while acting as a director, officer, agent, or advisor of the Corporation; by reason of the registration, offer, sale, purchase, or ownership of any securities of the Corporation; by reason of any duty owed to, respecting, or in connection with the Corporation; or by reason of the fact, in whole or in part, that he is or was actually or allegedly serving at the request of the Corporation as a director, officer, employee, agent, or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise, in each case whether or not he is acting or serving in any such capacity at the time any loss, liability, or expense is incurred for which indemnification or reimbursement can be provided under this Agreement and even though Indemnitee may have ceased to serve in such capacity.

 

(c) The term “Indemnitee” shall include the Indemnitee named in the first paragraph of this Agreement and such Indemnitee’s actual or alleged alter egos, spouse, family members, and corporations, partnerships, limited liability companies, trusts, and other enterprises or entities of any form whatsoever under the control of any of the foregoing, and the property of all of the foregoing. The term “control” (including the terms “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, as interpreted under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

(d) Except as provided in Section 15, the term “Independent Counsel” shall mean an attorney, law firm, or member of a law firm, who (or which) is licensed to practice law in the state of Nevada and is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Corporation or Indemnitee in any other matter material to either such party; or (ii) any other party to the Indemnifiable Matter giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. From time to time, the Corporation may select and preapprove the names of persons or law firms that it deems qualified as Independent Counsel under the foregoing criteria. Further, at the request of Indemnitee, the Corporation shall review the qualifications and suitability under the foregoing criteria of persons or law firms selected by Indemnitee and preapprove them as Independent Counsel if they meet the foregoing criteria. An Independent Counsel that has already been preapproved by the board of directors may be appointed as Independent Counsel without any further evaluation, so long as such prospective Independent Counsel continues, as determined by the board of directors, to remain independent.

 

2

 

 

(e) The term “Losses” means any and all losses, claims, damages, expenses, liabilities, judgments, fines, penalties and actions in respect thereof, as they are incurred, against Indemnitee in connection with an Indemnifiable Matter; amounts paid by Indemnitee in settlement of an Indemnifiable Matter; any indirect, consequential, or incidental damages suffered or incurred by Indemnitee; and all attorneys’ fees and disbursements, accountants’ fees and disbursements, private investigation fees and disbursements, retainers, court costs, payments of attachment, appeal or other bonds or security, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, appealing, or being or preparing to be a witness in any threatened or pending Indemnifiable Matter or establishing Indemnitee’s right or entitlement to indemnification for any of the foregoing.

 

(f) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee, agent, or advisor with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

 

(g) The term “substantiating documentation” shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders, decrees, or settlement agreements, as the case may be, accompanied by a declaration, which need not be notarized, from Indemnitee that such bills, invoices, court or agency orders, decrees, or settlement agreements represent costs or liabilities meeting the definition of “Losses” herein.

 

2. Indemnity of Indemnitee. The Corporation hereby agrees to indemnify, protect, defend and hold harmless Indemnitee against any and all Losses incurred by reason of the fact that Indemnitee is or was a director, officer, agent, or advisor of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, agent or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise, to the fullest extent permitted by Nevada Law. The termination of any Indemnifiable Matter by judgment, order of the court, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee is not entitled to indemnification, and with respect to any criminal proceeding, shall not create a presumption that such person believed that his conduct was unlawful. The indemnification provided herein shall be applicable whether or not the breach of any standard of care or duty, including a breach of a fiduciary duty, of the Indemnitee is alleged or proven, except as limited by Section 3 herein. Notwithstanding the foregoing, in the case of any Indemnifiable Matter brought by or in the right of the Corporation, Indemnitee shall not be entitled to indemnification for any claim, issue, or matter as to which Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom (a “Final Adjudication”), to be liable to the Corporation or for amounts paid in settlement to the Corporation unless, and only to the extent that, the court in which the Indemnifiable Matter was brought or another court of competent jurisdiction determines, on application, that in view of all the circumstances, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

3. Limit on Indemnification. Notwithstanding any breach of any standard of care or duty, including breach of a fiduciary duty, by the Indemnitee, and subject to the restrictions in Nevada Revised Statutes § 78.7502 or any successor Nevada Law, the Corporation shall indemnify Indemnitee except when a Final Adjudication establishes that Indemnitee’s acts or omissions involved intentional misconduct, fraud, or a knowing violation of law and were material to the cause of action.

 

4. Choice of Counsel. Indemnitee shall be entitled to employ and be reimbursed for the fees and disbursements of counsel separate from that chosen by any other person or persons whom the Corporation is obligated to indemnify with respect to the same or any related or similar Indemnifiable Matter.

 

3

 

 

5. Advances of Losses. Losses (other than judgments, penalties, fines, and settlements) incurred by Indemnitee shall be paid by the Corporation, in advance of the final disposition of the Indemnifiable Matter, within 10 days after receipt of Indemnitee’s written request accompanied by substantiating documentation.

 

6. Officer and Director Liability Insurance. The Corporation shall, from time to time, make the good faith determination whether or not it is practicable for the Corporation to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Corporation with coverage for losses, or to ensure the Corporation’s performance of its indemnification obligations under this Agreement. Among other considerations, the Corporation will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. The Corporation shall consult with and be heard by Indemnitee in connection with the Corporation’s actions hereunder. In all policies of director and officer liability insurance, (a) Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Corporation’s directors, if Indemnitee is a director, or of the Corporation’s officers, if Indemnitee is not a director of the Corporation but is an officer; and (b) the policy shall provide that it shall not be cancelled or materially modified without 30 days’ prior written notice to Indemnitee. Notwithstanding the foregoing, the Corporation shall have no obligation to obtain or maintain such insurance if the Corporation determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Corporation.

 

7. Indemnification Trust Fund or Other Financial Arrangements. Pursuant to Nevada Revised Statutes § 78.752 or any successor Nevada Law, the Corporation may establish an indemnification trust fund or make other financial arrangements acceptable to Indemnitee for Indemnitee’s benefit. Indemnitee shall be an intended third-party beneficiary of any such fund or arrangement, with the right, power, and authority of the Indemnitee to sue for, enforce, and collect the same, in the name, place, and stead of the Corporation or otherwise, for Indemnitee’s benefit. Such fund or other arrangements shall be available to Indemnitee for payment of Losses upon the Corporation’s failure, inability, or refusal to pay Losses incurred by the Indemnitee.

 

8. Right of Indemnitee to Indemnification upon Application; Selection of Independent Counsel; Procedure upon Application.

 

(a) Any application for indemnification under this Agreement, other than when Losses are paid in advance of any final disposition pursuant to Section 5 hereof, shall be submitted to the board of directors. If a quorum of the board of directors were not parties to the action, suit, proceeding or other matter, a majority of the directors who were not parties to the action, suit, proceeding or other matter may determine whether indemnification of the applicant is not prohibited by law or may have such determination made by Independent Counsel in a written decision. If a quorum of the board directors who were not parties to the action cannot be obtained, the board of directors shall have such determination made by Independent Counsel in a written decision. Notwithstanding the foregoing, however, the board of directors may under any circumstances submit the determination of whether indemnification is proper in the circumstances to the stockholders. The board of directors shall respond to a request for indemnification or initiate the process of submitting the determination to the stockholders within 45 days after receipt by the Corporation of the written application for indemnification.

 

(b) If required, Independent Counsel shall be selected by the board of directors, and the Corporation shall give written notice to Indemnitee advising him of the identity of Independent Counsel so selected. Indemnitee may, within seven days after such written notice of selection shall have been given, deliver to the Corporation a written objection to such selection. Such objection may be asserted only on the ground that Independent Counsel so selected does not meet the requirements of “Independent Counsel,” as defined in Section 1, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is made, Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written objection to the Independent Counsel selected, the Corporation has failed to identify a replacement Independent Counsel, the Indemnitee may petition any court of competent jurisdiction for resolution of any objection that shall have been made by Indemnitee to the Corporation’s selection of Independent Counsel and for appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel. The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with its fees and expenses incident to the procedures of this Section 8 regardless of the manner in which such Independent Counsel was selected or appointed.

 

4

 

 

(c) The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its board of directors or Independent Counsel) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances, nor an actual determination by the Corporation (including its board of directors or Independent Counsel) that indemnification is not proper in the circumstances, shall be a defense to the action, suit, proceeding, or other matter or create a presumption that indemnification is not proper in the circumstances.

 

9. Notice to Insurers. If, at the time of the receipt of an application for indemnification pursuant to Section 2 hereof or a request for advances of Losses pursuant to Section 5 hereof, the Corporation has director and officer liability insurance in effect, the Corporation shall give prompt notice of the commencement of such Indemnifiable Matter to the insurers in accordance with the procedures set forth in the respective policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Indemnifiable Matter in accordance with the terms of such policies.

 

10. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Corporation any advances of Losses pursuant to this Agreement to the extent that it is ultimately determined pursuant to a Final Adjudication that Indemnitee is not entitled to indemnification.

 

11. Indemnification Hereunder Not Exclusive. The indemnification and advancement of Losses provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the Articles or Bylaws, the Nevada Law, any policy or policies of directors’ and officers’ liability insurance, any other agreement, any vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office (together, “Other Indemnification”). However, Indemnitee shall reimburse the Corporation for amounts paid to him under Other Indemnification and not under this Agreement in an amount equal to any payments received pursuant to such Other Indemnification, to the extent such payments duplicate any payments received pursuant to this Agreement.

 

12. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Indemnitee is a director, officer, employee, agent, or advisor of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee, agent, or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Indemnifiable Matter.

 

13. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of Losses, but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such Losses to which Indemnitee is entitled.

 

14. Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Indemnifiable Matter effected without the Corporation’s written consent. The Corporation shall not settle any Indemnifiable Matter in any manner that would impose any penalty or limitation on Indemnitee’s rights under this Agreement without Indemnitee’s written consent. Neither the Corporation nor Indemnitee will unreasonably withhold its consent to any proposed settlement. The Corporation shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.

 

15. Change in Control.

 

(a) Notwithstanding the provisions of Section 6, any provision for the benefit of officers and directors existing immediately prior to a Change in Control, including officer and director liability insurance, an indemnification trust fund or other financial arrangements, shall be maintained for so long as Indemnitee is subject to any Indemnifiable Matter. In the case of officer and director liability insurance, such insurance shall be maintained with the same scope and amount of coverage, with no larger deductible or retention amounts, and otherwise on the same terms and conditions as were in effect immediately prior to such Change in Control unless such coverages, terms and conditions are no longer available.

 

5

 

 

(b) With respect to all matters thereafter arising concerning the rights of Indemnitee to payments of Losses under this Agreement or any other agreement, or under the Articles or Bylaws as now or hereafter in effect, independent counsel shall be selected by the Indemnitee and approved by the Corporation (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Corporation and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under Nevada Law as determined in accordance with Section 16(d). The Corporation agrees to abide by such opinion and to pay the reasonable fees of the independent counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

16. Enforcement.

 

(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Indemnitee to serve as a director or officer of the Corporation, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director or officer. The Corporation shall be precluded from asserting in any action commenced pursuant to this Section 16 that the procedures and presumptions in this section are not valid, binding and enforceable and shall stipulate in any such judicial proceedings that the Corporation is bound by all of the provisions of this Agreement.

 

(b) In any action commenced pursuant to this Section 16, Indemnitee shall be presumed to be entitled to indemnification and advancement of Losses in accordance with Section 5 under this Agreement, as the case may be, and the Corporation shall have the burden of proof in overcoming such presumption and must show by clear and convincing evidence that Indemnitee is not entitled to indemnification or advancement of Losses, as the case may be.

 

(c) The execution of this Agreement shall constitute the Corporation’s stipulation by which it shall be irrevocably bound in any action by Indemnitee for enforcement of Indemnitee’s rights hereunder that the Corporation’s obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and immediate injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity respecting a breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

 

(d) In the event that Indemnitee shall deem it shall be necessary or desirable to retain legal counsel and/or incur other costs and expenses in connection with the interpretation or enforcement of any or all of Indemnitee’s rights under this Agreement, Indemnitee shall be entitled to recover from the Corporation, and the Corporation shall indemnify Indemnitee against, any and all fees, costs, and expenses (of the types described in the definition of Losses in Section 1(b)) incurred by Indemnitee in connection with the interpretation or enforcement of said rights. The Corporation shall make payment to the Indemnitee at the time such fees, costs, and expenses are incurred by Indemnitee. If, however, the Indemnitee does not prevail in such action under this Section 16, Indemnitee shall repay any and all such amounts to the Corporation. If it shall be determined in an action pursuant to this Section 16 that Indemnitee is entitled to receive part but not all of the indemnification or advancement of fees, costs, and expenses or other benefit sought, the expenses incurred by Indemnitee in connection with an action pursuant to this Section 16 shall be equitably allocated between the Corporation and Indemnitee. Notwithstanding the foregoing, if a Change in Control shall have occurred, Indemnitee shall be entitled to indemnification under this Section 16 regardless of whether Indemnitee ultimately prevails in such judicial adjudication or arbitration. This Section 16(b) is not subject to the provisions of Section 8.

 

17. Governing Law; Binding Effect; Amendment and Termination; Construction.

 

(a) This Agreement shall be interpreted and enforced in accordance with Nevada Law.

 

(b) This Agreement shall be binding upon the Corporation, its successors and assigns, and shall inure to the benefit of Indemnitee such Indemnitee’s actual or alleged alter egos, spouse, family members, and corporations, partnerships, limited liability companies, trusts, and other enterprises or entities of any form whatsoever under the control of any of the foregoing, the property of all of the foregoing, and the successors and assigns of all of the foregoing.

 

6

 

 

(c) No amendment, modification, termination, or cancellation of this Agreement shall be effective unless in writing signed by the Corporation and Indemnitee.

 

(d) This Agreement shall be construed liberally in favor of the Indemnitee to the fullest extent possible under Nevada Law, even if such indemnification is not specifically authorized by this Agreement or any other agreement, the Articles or Bylaws, or by Nevada Law. In the event Nevada Law is changed after the date of this Agreement, through statutory amendment, judicial interpretation, administrative regulations or otherwise, to allow additional indemnification or to remove or restrict current limitations on indemnification, this Agreement shall be deemed to be amended and reformed so that Indemnitee shall enjoy by this Agreement the greater benefits of such change. In the event of any change in Nevada Law that narrows or restricts the right of a Nevada corporation to indemnify Indemnitee, such change, to the extent not otherwise required by Nevada Law to be applied to Indemnitee in the relevant circumstances, shall have no effect on this Agreement or the rights and obligations of the parties hereunder.

 

18. Mutual Acknowledgement; Federal Preemption. Notwithstanding anything to the contrary herein, both the Corporation and Indemnitee acknowledge and agree that in certain instances, federal law or applicable public policy may prohibit the Corporation from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the Securities and Exchange Commission’s prohibition on indemnification for liabilities arising under certain federal securities laws. Indemnitee understands, acknowledges and agrees that the Corporation has undertaken, or may be required in the future to undertake with the Securities and Exchange Commission, to submit the question of indemnification to a court in certain circumstances for a determination of the Corporation’s right under public policy to indemnify Indemnitee.

 

19. Severability. If any provision of this Agreement shall be held to be invalid, illegal, or unenforceable:

 

(a) the validity, legality, and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby; and

 

(b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable.

 

Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.

 

20. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice. 

 

[Signature Page Follows]

 

7

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective on and as of the day and year first above written.

 

	Corporation:   iQSTEL Inc..
	By:	/s/ Alvaro Quintana Cardona
	Name:	Alvaro Quintana Cardona
	Title:	CFO
	Indemnitee:
	/s/ Leandro Jose Iglesias
	Leandro Jose Iglesias Carretera de San Miguel de Breamo 9, Pontedeume, A Coruna, 15.614, Spain

 

[Signature Page to Indemnification Agreement]

 

8

 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”) is made this 29^th day of February 2024, but effective as of the 1^st of the year (the "Effective Date"), between iQSTEL, Inc., a Nevada corporation (hereinafter referred to as the "Company"), and Alvaro Quintana Cardona, residing at Av. Circunvalaci6n del Sol. Qta. 598, Santa Paula. Caracas, Venezuela (hereinafter referred to as the "Employee").

 

WHEREAS, the Parties previously entered into an Employment Agreement dated May 2, 2019 that was amended on November 1, 2020 (together, the “Original Agreement”), and now the parties desire to amend and restate the Original Agreement;

 

WHEREAS, the Company wishes to engage the services and expertise of the Employee on the terms and conditions hereinafter set forth, and the Employee wishes to accept such an engagement;

 

NOW THEREFORE in consideration of the covenants of each of the parties given to the other and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.          NATURE OF AGREEMENT; SERVICES

 

1.1        This Amended and Restated Employment Agreement completely replaces and supersedes the Original Agreement as of January 1, 2024.

 

1.2       Effective as of the Effective Date, the Company hereby engages the Employee and the Employee hereby accepts an engagement with the Company to serve as the Chief Financial Officer of the Company (the "Services"). Employee shall bear such responsibilities as are customary for such a position in a public company in performing the Services. The parties understand that the position will be full-time employment and that the Employee shall devote sufficient time, attention and abilities to the business of the Company for the proper exercise of the Employee's duties hereunder. Employee understands that the Services may, from time to time, entail extensive travel. Employee may assign the compensation hereunder but not the responsibility to fulfill the services and responsibilities as per this Agreement. Employee shall not be required to move his residence.

 

2.         REMUNERATION

 

The Company agrees to pay the Employee as set out in Schedule "A" attached hereto.

 

3.        CONFIDENTIALITY; OWNERSHIP OF DOCUMENTS; NON-COMPETE; NON-SOLICIT

 

3.1       Confidential Information. Employee recognizes and acknowledges that by reason of this Agreement and service to the Company, he will have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company and its affiliates ("Confidential Information"). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or at any time after the Term of this Agreement, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of the Employee or except as, and to the extent as, may be required by law.

 

1

 

 

3.2        Non-Competition

 

Employee recognizes that in his position as an Employee to the Company, he will acquire such information outlined in Section 3.1 hereof, including Confidential Information and for good and valuable consideration, including his engagement by the Company, he agrees that during the Term of this Agreement and for a period of 24 months after termination of this Agreement, the Company has the right to request to the Employee that he will not work in a company that directly or indirectly, manage, operate, join, control, or participate in the management, operation, control, or be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise with or use or permit his name to be used in connection with, any business or enterprise engaged in the primary line of business in which the Company is engaged in at the time of execution of this Agreement, unless acting pursuant hereto or with the prior written consent of the Company.

 

(a)       This Company right is based on the premise that the Company shall not have any debt with the Employee, and all the remunerations of the last six months previous to the end of the term of the agreement will be paid on time and in cash, and the Company shall pay the compensation for Noncompetition as set in out in Schedule "A" attached hereto.

 

(b)       The foregoing restriction shall not be construed to prohibit the ownership by the Employee of no more than 4.99% of any class of securities of any corporation that is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither the Employee nor any group of persons including the Employee in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising his rights as a shareholder, or seeks to do any of the foregoing.

 

3.3       Non-solicitation; Non-association. The Employee hereby acknowledges and agrees that he, together with other Employees engaged by the Company, is likely to be exposed to a significant amount of Confidential Information concerning the Company's, business methods, operations, employment relationships, and customers while engaged under this Agreement, that such information might be retained by the Employee and such other Employees in tangible form or simply retained in their memory, and that the protection of the Company's exclusive rights to such confidential information and the benefits flowing from it can best be ensured by means of a restriction on the Employee's activities after termination of this Agreement. Therefore, the Employee agrees that for a 24 month period following termination of this Agreement, he shall not engage in the following activities:

 

(a)        He shall not solicit, divert, or initiate any contact (or attempt to solicit, divert, or initiate any contact) with any relationship of the Company or any affiliate with whom Employee dealt (including any customers or vendors), for the purpose of doing business in the same lines of business as the Company, and further will not solicit or initiate any contact with any potential relationship of the Company or affiliate, that the Employee solicited or contacted while engaged by the Company. This provision does not restrict Employee from developing relationships independently obtained outside of Employee's position with the Company.

 

(b)        He shall not directly solicit the employment of or hire any employee or Employee of the Company or affiliate and will not attempt to persuade any employee or Employee to leave the employment or consulting relationship of the Company or such affiliate.

 

2

 

 

3.4          Equitable Relief.

 

(a)         Employee acknowledges that the restrictions contained in Article 3 hereof are reasonable and necessary to protect the legitimate interests of the Company and that any violation of such restrictions would result in irreparable injury to the Company. If the period of time or other restrictions specified in A1ticle 3 should be adjudged unreasonable at any proceeding, then the period of time or such other restrictions shall be reduced by the elimination or reduction of such portion thereof so that such restrictions may be enforced in a manner adjudged to be reasonable. Employee acknowledges that the Company shall be entitled to preliminary and permanent injunctive relief for a violation of any such restrictions without having to prove actual damages or to post a bond; Company shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Company may be entitled in law or equity.

 

(b)         Employee agrees that until the expiration of the covenants contained in Sections 3.2 and 3.3 of this Agreement, the Company may provide a copy of the covenant contained in such Sections to any business or enterprise (i) that Employee may directly or indirectly own, manage, operate, finance, join, control, or participate in the ownership, management, operation, financing, control, or control of, or (ii) with which he may be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise, or in connection with which he may use or permit his name to be used.

 

4.            TERM AND TERMINATION

 

4.1         Employee's employment under this Agreement shall begin on January 1, 2024 for an initial period of 60 months, renewable automatically for 36-month periods; unless the Company or the Employee gives a written notification with at least 90 days prior to the termination date of the initial 60-month period or any subsequent 36-month period, expressing their intention to not renew the employment agreement. Upon expiration of the Term without renewal, the relationship between the parties will be at will but all other provisions of this Agreement shall be applicable. This agreement may be terminated by either Employee or Company for cause or willful or gross negligence by either party. The Board of Directors of the Company may at any time remove the Employee from his position of Chief Financial Officer, which removal shall not be deemed a termination of the Agreement. Notwithstanding anything to the contrary herein, if Employee is removed for cause or willful or gross negligence, then Employee will not be entitled to any compensation under the Company Employee Agreement Early Termination as described in Schedule A, number 9, or for not competing with the Company as described in Schedule A, number 8.

 

4.2          Employee's obligations, and those of Employee's employees, agents, successors and assignees, if any, pursuant to Section 3 (Confidentiality; Ownership of Documents, Non-Compete, Non-Solicit), 5 (Indemnification), and 8 (Governing Law and Dispute Resolution) shall survive completion of the Services, and the expiration or termination of this Agreement.

 

4.3          Except as provided in Section 4.1 above, in case the Company decides to terminate this agreement before the termination date (Company Employee Agreement Early Termination), during the initial period of 60 months or any subsequent 36 months of the renewed periods, the Company shall provide Employee with a Company Employee Agreement Early Termination compensation as set in out in Schedule "A" attached hereto.

 

3

 

 

5.             REPRESENTATION AND WARRANTIES; INDEMNIFICATION

 

5.1          The Employee warrants and represents that he is duly qualified to perform his duties hereunder, and further covenants that in performing his duties hereunder, he will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. The Employee further warrants that his execution of this Agreement and the performance of services hereunder does not violate any agreement to which Employee is a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against the Employee or the Company.

 

5.2          This Agreement is conditional on the Company's commitment to obtain a directors' and officers' insurance policy as soon as commercially reasonable, and the Company signing an Indemnification Agreement satisfactory to the Employee. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Employee at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. Additionally, the Employee shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

6.         EMPLOYEE BENEFITS

 

Both parties will comply with Company policy regarding employee benefits or as required by law.

 

6.1

Paid Time Off. Employee shall be entitled to paid time off in the amount of 25 days per year.

 

6.2

Sick Leave. Employee shall be entitled to paid sick leave of up to 10 days per year.

 

6.3

Personal Leave. Employee shall be entitled to paid personal leave of up to 5 days per year.

 

7.          NOTICES

 

Any notices delivered or received between either party shall be deemed to have been received:

 

(a)         if it was delivered in person or email on the date it was delivered:

 

(b)          if it was sent by registered mail, on the day it was received to the following address:

 

iQSTEL, Inc.

300 Aragon Avenue,

Suite 375, Coral Gables,

FL 33134.

By email: [e-mail]

Attention: CEO

 

Alvaro Quintana Cardona

Av. Circunvalaci6n de Sol

Qta. 598. Santa Paula. Caracas. Venezuela

By email: [e-mail]

4

 

8.          MODIFICATION OF AGREEMENT

 

Any modification of this Agreement must be made in writing and signed by the Employee and the Company, or it shall have no effect and shall be void.

 

9.           GOVERNING LAW

 

9.1          This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any conflict of law rules otherwise.

 

9.2          Any and all disputes arising hereunder, including disputes arising from or relating to termination and the grounds therefor, including all grounds arising from statutory claims alleging discrimination or violations of federal, state or local civil rights law, or otherwise, shall be resolved by binding arbitration in Florida before a single arbitrator in accordance with the arbitration rules of the American Arbitration Association (the"AAA") applicable to arbitration then in effect. Notice of the demand for arbitration by either party shall be given in writing to the other party to this Agreement. On such demand, the dispute shall be heard by arbitration before a single arbitrator selected pursuant to the AAA rules. Any award rendered by the arbitrator shall be conclusive and binding on the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. The arbitrator shall be entitled to award equitable relief. Each party shall pay its own expenses of arbitration, including attorneys' fees. Nothing herein shall prevent the Company from seeking and obtaining preliminary equitable relief from a court pursuant to Section 3.5.

 

9.3          The parties hereby submit to the jurisdiction of the federal and state courts located in Florida for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators, and to the non-exclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder. and waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue.

 

10.           HEADINGS

 

The headings utilized in this Agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this Agreement.

 

I l.         GENERAL MATTERS

 

11.1       The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or of any other provisions of this Agreement.

 

11.2       This Agreement shall be binding upon the parties hereto and shall ensure to the benefit of and be enforceable by each of the parties hereto and their respective successors and assigns, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in part by the Employee without prior written consent of the Company.

 

5

 

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the 29^th day of February, 2024.

 

 

iQSTEL, Inc.

 

 

 

By: /s/ Leandro Jose Iglesias

Name: Leandro Jose Iglesias

Title: CEO

 

 

 

 

/s/ Alvaro Quintana Cardona

Alvaro Quintana Cardona

Employee

 

6

 

 

SCHEDULE "A"

 

 

REMUNERATION

 

1. As full consideration for performance of the services by the Employee, the Company shall pay the Employee $22,000 per month ($264,000 per Year). The monthly amount will be paid to Employee once a month on the 5th of each month. Company shall deduct or withhold any and all federal income and social security taxes and state and local taxes required by law, if apply.

 

2. Employee shall receive a yearly bonus of up to 2 months’ salary for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

 

3.  Employee shall receive a bonus of up to 4% of the Company's Net Income for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

 

4.  Employee shall receive a bonus of up to 800,000 shares of the Company’s common stock for services rendered under this agreement, and shall be paid 15 days after the Company’s Form 10-K is filed with the SEC.

5.  In case the monthly remuneration is not set in full on time, the Employee has the right to request to the Company convert any or all accrued salary into Company restricted common shares, by written notification. Amount to be converted in shares must be converted considering the average price of the share during the last 10 trading days and applying a discount of 25%.

 

6. As of effective Date, normal direct business expenses and travel expenses including business class travel on flights over 5 hours will be covered by the Company.

 

7. All the Bonuses to be as determined by the Board of Directors with the following factors applying equally: achievement of company goals and plans, capital raising, hiring of key employees in key locations.

 

8.  NON-COMPETITION, If the company desire to request to that the Employee not compete with the Company according to Section 3.2 of this Agreement, the Employee shall receive a compensation of 24 months of salary.

 

9.  COMPANY EMPLOYEE AGREEMENT EARLY TERMINATION, the Company shall provide the Employee with a severance of 36-month salary and additional compensation, in the case of early termination of the agreement. If Employee is removed for cause or willful or gross negligence, then Employee will not be entitled to any compensation.

 

* * * *

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), dated effective as of February 29, 2024, is made by and between iQSTEL Inc., a Nevada corporation (the “Corporation”), and Alvaro Quintana Cardona (the “Indemnitee”).

 

PREMISES

 

A. The Corporation desires to provide for indemnification of the Corporation’s directors and officers to the fullest extent permitted by the Nevada Revised Statutes (collectively, “Nevada Law”).

 

B. The parties recognize the continued difficulty in obtaining liability insurance for the Corporation’s directors, officers, employees, stockholders, controlling persons, agents, and fiduciaries, the significant increases in the cost of such insurance, and the general reductions in the coverage of such insurance. Furthermore, the parties further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, stockholders, agents, and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance have been severely limited.

 

C. Indemnitee does not regard the current protection available under the Articles of Incorporation of the Corporation, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time (as amended, the “Articles”), and the Bylaws of the Corporation (the “Bylaws”) as adequate under the present circumstances, and Indemnitee and other directors, officers, employees, stockholders, controlling persons, agents, and fiduciaries of the Corporation may not be willing to serve in such capacities without additional protection. Moreover, the Corporation (i) desires to attract and retain the involvement of highly qualified persons, such as Indemnitee, to serve the Corporation and, in part, in order to induce Indemnitee to be involved with the Corporation, (ii) wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law, and (iii) wishes to assure Indemnitee that there will be increased certainty of adequate protection in the future.

 

D. In addition to any insurance purchased by the Corporation on behalf of Indemnitee, it is reasonable, prudent, and necessary for the Corporation to obligate itself contractually to indemnify Indemnitee so that he may remain free from undue concern that he will not be adequately protected both during his service as an executive officer and a director of the Corporation and following any termination of such service.

 

E. This Agreement is a supplement to and in furtherance of the Articles and Bylaws and shall not be deemed a substitute therefor or to abrogate any rights of Indemnitee thereunder.

 

F. The directors of the Corporation have duly approved this Agreement and the indemnification provided herein with the express recognition that the indemnification arrangements provided herein exceed that which the Corporation would be required to provide pursuant to Nevada Law.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

1. Definitions. As used in this Agreement:

 

(a) A “Change in Control” means the occurrence of any of the following events:

 

(i) any Person is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Corporation representing 20% or more of the Corporation’s then outstanding voting securities unless the change in relative beneficial ownership of the Corporation’s securities by any person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

 

 

 

(ii) the consummation of a reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the beneficial owners of the voting securities of the Corporation immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such transaction;

 

(iii) during any period of two consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board of Directors (the “Board”) (including for this purpose any new directors whose election by the Board or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board; or

 

(iv) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets.

 

(b) The term “Indemnifiable Matter” means any event, occurrence, status, or condition that takes place either prior to or after the execution of this Agreement, including any threatened, pending, or completed action, suit, proceeding or alternative dispute resolution activity, whether brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative, or investigative nature, in which Indemnitee was, is, or believes might be involved as a party, witness, or otherwise (except any of the foregoing initiated by Indemnitee pursuant to Section 16(a) to enforce Indemnitee’s rights under this Agreement), by reason of the fact, in whole or in part, that Indemnitee is or was actually or allegedly a director, officer, agent, or advisor of the Corporation; by reason of any action actually or allegedly taken by him or of any inaction or omission on his part while acting as a director, officer, agent, or advisor of the Corporation; by reason of the registration, offer, sale, purchase, or ownership of any securities of the Corporation; by reason of any duty owed to, respecting, or in connection with the Corporation; or by reason of the fact, in whole or in part, that he is or was actually or allegedly serving at the request of the Corporation as a director, officer, employee, agent, or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise, in each case whether or not he is acting or serving in any such capacity at the time any loss, liability, or expense is incurred for which indemnification or reimbursement can be provided under this Agreement and even though Indemnitee may have ceased to serve in such capacity.

 

(c) The term “Indemnitee” shall include the Indemnitee named in the first paragraph of this Agreement and such Indemnitee’s actual or alleged alter egos, spouse, family members, and corporations, partnerships, limited liability companies, trusts, and other enterprises or entities of any form whatsoever under the control of any of the foregoing, and the property of all of the foregoing. The term “control” (including the terms “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, as interpreted under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

(d) Except as provided in Section 15, the term “Independent Counsel” shall mean an attorney, law firm, or member of a law firm, who (or which) is licensed to practice law in the state of Nevada and is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Corporation or Indemnitee in any other matter material to either such party; or (ii) any other party to the Indemnifiable Matter giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. From time to time, the Corporation may select and preapprove the names of persons or law firms that it deems qualified as Independent Counsel under the foregoing criteria. Further, at the request of Indemnitee, the Corporation shall review the qualifications and suitability under the foregoing criteria of persons or law firms selected by Indemnitee and preapprove them as Independent Counsel if they meet the foregoing criteria. An Independent Counsel that has already been preapproved by the board of directors may be appointed as Independent Counsel without any further evaluation, so long as such prospective Independent Counsel continues, as determined by the board of directors, to remain independent.

 

2

 

 

(e) The term “Losses” means any and all losses, claims, damages, expenses, liabilities, judgments, fines, penalties and actions in respect thereof, as they are incurred, against Indemnitee in connection with an Indemnifiable Matter; amounts paid by Indemnitee in settlement of an Indemnifiable Matter; any indirect, consequential, or incidental damages suffered or incurred by Indemnitee; and all attorneys’ fees and disbursements, accountants’ fees and disbursements, private investigation fees and disbursements, retainers, court costs, payments of attachment, appeal or other bonds or security, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, appealing, or being or preparing to be a witness in any threatened or pending Indemnifiable Matter or establishing Indemnitee’s right or entitlement to indemnification for any of the foregoing.

 

(f) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee, agent, or advisor with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

 

(g) The term “substantiating documentation” shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders, decrees, or settlement agreements, as the case may be, accompanied by a declaration, which need not be notarized, from Indemnitee that such bills, invoices, court or agency orders, decrees, or settlement agreements represent costs or liabilities meeting the definition of “Losses” herein.

 

2. Indemnity of Indemnitee. The Corporation hereby agrees to indemnify, protect, defend and hold harmless Indemnitee against any and all Losses incurred by reason of the fact that Indemnitee is or was a director, officer, agent, or advisor of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, agent or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise, to the fullest extent permitted by Nevada Law. The termination of any Indemnifiable Matter by judgment, order of the court, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee is not entitled to indemnification, and with respect to any criminal proceeding, shall not create a presumption that such person believed that his conduct was unlawful. The indemnification provided herein shall be applicable whether or not the breach of any standard of care or duty, including a breach of a fiduciary duty, of the Indemnitee is alleged or proven, except as limited by Section 3 herein. Notwithstanding the foregoing, in the case of any Indemnifiable Matter brought by or in the right of the Corporation, Indemnitee shall not be entitled to indemnification for any claim, issue, or matter as to which Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom (a “Final Adjudication”), to be liable to the Corporation or for amounts paid in settlement to the Corporation unless, and only to the extent that, the court in which the Indemnifiable Matter was brought or another court of competent jurisdiction determines, on application, that in view of all the circumstances, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

3. Limit on Indemnification. Notwithstanding any breach of any standard of care or duty, including breach of a fiduciary duty, by the Indemnitee, and subject to the restrictions in Nevada Revised Statutes § 78.7502 or any successor Nevada Law, the Corporation shall indemnify Indemnitee except when a Final Adjudication establishes that Indemnitee’s acts or omissions involved intentional misconduct, fraud, or a knowing violation of law and were material to the cause of action.

 

4. Choice of Counsel. Indemnitee shall be entitled to employ and be reimbursed for the fees and disbursements of counsel separate from that chosen by any other person or persons whom the Corporation is obligated to indemnify with respect to the same or any related or similar Indemnifiable Matter.

 

3

 

 

5. Advances of Losses. Losses (other than judgments, penalties, fines, and settlements) incurred by Indemnitee shall be paid by the Corporation, in advance of the final disposition of the Indemnifiable Matter, within 10 days after receipt of Indemnitee’s written request accompanied by substantiating documentation.

 

6. Officer and Director Liability Insurance. The Corporation shall, from time to time, make the good faith determination whether or not it is practicable for the Corporation to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Corporation with coverage for losses, or to ensure the Corporation’s performance of its indemnification obligations under this Agreement. Among other considerations, the Corporation will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. The Corporation shall consult with and be heard by Indemnitee in connection with the Corporation’s actions hereunder. In all policies of director and officer liability insurance, (a) Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Corporation’s directors, if Indemnitee is a director, or of the Corporation’s officers, if Indemnitee is not a director of the Corporation but is an officer; and (b) the policy shall provide that it shall not be cancelled or materially modified without 30 days’ prior written notice to Indemnitee. Notwithstanding the foregoing, the Corporation shall have no obligation to obtain or maintain such insurance if the Corporation determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Corporation.

 

7. Indemnification Trust Fund or Other Financial Arrangements. Pursuant to Nevada Revised Statutes § 78.752 or any successor Nevada Law, the Corporation may establish an indemnification trust fund or make other financial arrangements acceptable to Indemnitee for Indemnitee’s benefit. Indemnitee shall be an intended third-party beneficiary of any such fund or arrangement, with the right, power, and authority of the Indemnitee to sue for, enforce, and collect the same, in the name, place, and stead of the Corporation or otherwise, for Indemnitee’s benefit. Such fund or other arrangements shall be available to Indemnitee for payment of Losses upon the Corporation’s failure, inability, or refusal to pay Losses incurred by the Indemnitee.

 

8. Right of Indemnitee to Indemnification upon Application; Selection of Independent Counsel; Procedure upon Application.

 

(a) Any application for indemnification under this Agreement, other than when Losses are paid in advance of any final disposition pursuant to Section 5 hereof, shall be submitted to the board of directors. If a quorum of the board of directors were not parties to the action, suit, proceeding or other matter, a majority of the directors who were not parties to the action, suit, proceeding or other matter may determine whether indemnification of the applicant is not prohibited by law or may have such determination made by Independent Counsel in a written decision. If a quorum of the board directors who were not parties to the action cannot be obtained, the board of directors shall have such determination made by Independent Counsel in a written decision. Notwithstanding the foregoing, however, the board of directors may under any circumstances submit the determination of whether indemnification is proper in the circumstances to the stockholders. The board of directors shall respond to a request for indemnification or initiate the process of submitting the determination to the stockholders within 45 days after receipt by the Corporation of the written application for indemnification.

 

(b) If required, Independent Counsel shall be selected by the board of directors, and the Corporation shall give written notice to Indemnitee advising him of the identity of Independent Counsel so selected. Indemnitee may, within seven days after such written notice of selection shall have been given, deliver to the Corporation a written objection to such selection. Such objection may be asserted only on the ground that Independent Counsel so selected does not meet the requirements of “Independent Counsel,” as defined in Section 1, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is made, Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written objection to the Independent Counsel selected, the Corporation has failed to identify a replacement Independent Counsel, the Indemnitee may petition any court of competent jurisdiction for resolution of any objection that shall have been made by Indemnitee to the Corporation’s selection of Independent Counsel and for appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel. The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with its fees and expenses incident to the procedures of this Section 8 regardless of the manner in which such Independent Counsel was selected or appointed.

 

4

 

 

(c) The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its board of directors or Independent Counsel) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances, nor an actual determination by the Corporation (including its board of directors or Independent Counsel) that indemnification is not proper in the circumstances, shall be a defense to the action, suit, proceeding, or other matter or create a presumption that indemnification is not proper in the circumstances.

 

9. Notice to Insurers. If, at the time of the receipt of an application for indemnification pursuant to Section 2 hereof or a request for advances of Losses pursuant to Section 5 hereof, the Corporation has director and officer liability insurance in effect, the Corporation shall give prompt notice of the commencement of such Indemnifiable Matter to the insurers in accordance with the procedures set forth in the respective policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Indemnifiable Matter in accordance with the terms of such policies.

 

10. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Corporation any advances of Losses pursuant to this Agreement to the extent that it is ultimately determined pursuant to a Final Adjudication that Indemnitee is not entitled to indemnification.

 

11. Indemnification Hereunder Not Exclusive. The indemnification and advancement of Losses provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the Articles or Bylaws, the Nevada Law, any policy or policies of directors’ and officers’ liability insurance, any other agreement, any vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office (together, “Other Indemnification”). However, Indemnitee shall reimburse the Corporation for amounts paid to him under Other Indemnification and not under this Agreement in an amount equal to any payments received pursuant to such Other Indemnification, to the extent such payments duplicate any payments received pursuant to this Agreement.

 

12. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Indemnitee is a director, officer, employee, agent, or advisor of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee, agent, or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Indemnifiable Matter.

 

13. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of Losses, but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such Losses to which Indemnitee is entitled.

 

14. Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Indemnifiable Matter effected without the Corporation’s written consent. The Corporation shall not settle any Indemnifiable Matter in any manner that would impose any penalty or limitation on Indemnitee’s rights under this Agreement without Indemnitee’s written consent. Neither the Corporation nor Indemnitee will unreasonably withhold its consent to any proposed settlement. The Corporation shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.

 

15. Change in Control.

 

(a) Notwithstanding the provisions of Section 6, any provision for the benefit of officers and directors existing immediately prior to a Change in Control, including officer and director liability insurance, an indemnification trust fund or other financial arrangements, shall be maintained for so long as Indemnitee is subject to any Indemnifiable Matter. In the case of officer and director liability insurance, such insurance shall be maintained with the same scope and amount of coverage, with no larger deductible or retention amounts, and otherwise on the same terms and conditions as were in effect immediately prior to such Change in Control unless such coverages, terms and conditions are no longer available.

 

5

 

 

(b) With respect to all matters thereafter arising concerning the rights of Indemnitee to payments of Losses under this Agreement or any other agreement, or under the Articles or Bylaws as now or hereafter in effect, independent counsel shall be selected by the Indemnitee and approved by the Corporation (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Corporation and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under Nevada Law as determined in accordance with Section 16(d). The Corporation agrees to abide by such opinion and to pay the reasonable fees of the independent counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

16. Enforcement.

 

(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Indemnitee to serve as a director or officer of the Corporation, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director or officer. The Corporation shall be precluded from asserting in any action commenced pursuant to this Section 16 that the procedures and presumptions in this section are not valid, binding and enforceable and shall stipulate in any such judicial proceedings that the Corporation is bound by all of the provisions of this Agreement.

 

(b) In any action commenced pursuant to this Section 16, Indemnitee shall be presumed to be entitled to indemnification and advancement of Losses in accordance with Section 5 under this Agreement, as the case may be, and the Corporation shall have the burden of proof in overcoming such presumption and must show by clear and convincing evidence that Indemnitee is not entitled to indemnification or advancement of Losses, as the case may be.

 

(c) The execution of this Agreement shall constitute the Corporation’s stipulation by which it shall be irrevocably bound in any action by Indemnitee for enforcement of Indemnitee’s rights hereunder that the Corporation’s obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and immediate injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity respecting a breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

 

(d) In the event that Indemnitee shall deem it shall be necessary or desirable to retain legal counsel and/or incur other costs and expenses in connection with the interpretation or enforcement of any or all of Indemnitee’s rights under this Agreement, Indemnitee shall be entitled to recover from the Corporation, and the Corporation shall indemnify Indemnitee against, any and all fees, costs, and expenses (of the types described in the definition of Losses in Section 1(b)) incurred by Indemnitee in connection with the interpretation or enforcement of said rights. The Corporation shall make payment to the Indemnitee at the time such fees, costs, and expenses are incurred by Indemnitee. If, however, the Indemnitee does not prevail in such action under this Section 16, Indemnitee shall repay any and all such amounts to the Corporation. If it shall be determined in an action pursuant to this Section 16 that Indemnitee is entitled to receive part but not all of the indemnification or advancement of fees, costs, and expenses or other benefit sought, the expenses incurred by Indemnitee in connection with an action pursuant to this Section 16 shall be equitably allocated between the Corporation and Indemnitee. Notwithstanding the foregoing, if a Change in Control shall have occurred, Indemnitee shall be entitled to indemnification under this Section 16 regardless of whether Indemnitee ultimately prevails in such judicial adjudication or arbitration. This Section 16(b) is not subject to the provisions of Section 8.

 

17. Governing Law; Binding Effect; Amendment and Termination; Construction.

 

(a) This Agreement shall be interpreted and enforced in accordance with Nevada Law.

 

(b) This Agreement shall be binding upon the Corporation, its successors and assigns, and shall inure to the benefit of Indemnitee such Indemnitee’s actual or alleged alter egos, spouse, family members, and corporations, partnerships, limited liability companies, trusts, and other enterprises or entities of any form whatsoever under the control of any of the foregoing, the property of all of the foregoing, and the successors and assigns of all of the foregoing.

 

6

 

 

(c) No amendment, modification, termination, or cancellation of this Agreement shall be effective unless in writing signed by the Corporation and Indemnitee.

 

(d) This Agreement shall be construed liberally in favor of the Indemnitee to the fullest extent possible under Nevada Law, even if such indemnification is not specifically authorized by this Agreement or any other agreement, the Articles or Bylaws, or by Nevada Law. In the event Nevada Law is changed after the date of this Agreement, through statutory amendment, judicial interpretation, administrative regulations or otherwise, to allow additional indemnification or to remove or restrict current limitations on indemnification, this Agreement shall be deemed to be amended and reformed so that Indemnitee shall enjoy by this Agreement the greater benefits of such change. In the event of any change in Nevada Law that narrows or restricts the right of a Nevada corporation to indemnify Indemnitee, such change, to the extent not otherwise required by Nevada Law to be applied to Indemnitee in the relevant circumstances, shall have no effect on this Agreement or the rights and obligations of the parties hereunder.

 

18. Mutual Acknowledgement; Federal Preemption. Notwithstanding anything to the contrary herein, both the Corporation and Indemnitee acknowledge and agree that in certain instances, federal law or applicable public policy may prohibit the Corporation from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the Securities and Exchange Commission’s prohibition on indemnification for liabilities arising under certain federal securities laws. Indemnitee understands, acknowledges and agrees that the Corporation has undertaken, or may be required in the future to undertake with the Securities and Exchange Commission, to submit the question of indemnification to a court in certain circumstances for a determination of the Corporation’s right under public policy to indemnify Indemnitee.

 

19. Severability. If any provision of this Agreement shall be held to be invalid, illegal, or unenforceable:

 

(a) the validity, legality, and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby; and

 

(b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable.

 

Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.

 

20. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice. 

 

[Signature Page Follows]

 

7

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective on and as of the day and year first above written.

 

	Corporation:   iQSTEL Inc..
	By:	/s/ Leandro Jose Iglesias
	Name:	Leandro Jose Iglesias
	Title:	CEO
	Indemnitee:
	/s/ Alvaro Quintana Cardona
	Alvaro Quintana Cardona Av. Circunvalación del Sol Qta. 598. Santa Paula. Caracas. Venezuela

 

[Signature Page to Indemnification Agreement]

 

8

 

Cover	Feb. 29, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 29, 2024
Entity File Number	000-55984
Entity Registrant Name	iQSTEL Inc.
Entity Central Index Key	0001527702
Entity Tax Identification Number	45-2808620
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	300 Aragon Avenue
Entity Address, Address Line Two	Suite 375
Entity Address, City or Town	Coral Gables
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	(954)
Local Phone Number	951-8191
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

---