LETTER OF INTENT
Exhibit
10.1
THIS LETTER OF INTENT (the
“LOI”), is entered into
by and,
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BETWEEN:
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XXXXXX RESOURCES, INC.,
a Nevada corporation having an office at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx
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(“COMPANY”)
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AND:
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ABTECH INDUSTRIES, INC.,
a Delaware corporation having an office at 0000 X. Xxxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx,
X.X.X.
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(“ABTECH”)
BACKGROUND
AND PURPOSE
WHEREAS,
the Company is a publicly traded company on the United States over-the-counter
(“OTC”) bulletin board securities market.
WHEREAS,
ABTECH is an environmental technologies firm dedicated to providing innovative
solutions to communities and industry addressing issues of water pollutants
and contamination and its products are based on polymer technologies
capable of removing hydrocarbons, sediment and other foreign elements from
still (ponds, lakes and marinas) or flowing water (curbside drains, pipe
outflows, rivers and oceans).
WHEREAS,
the parties wish to enter into a reverse acquisition transaction whereby the
Company will acquire all of the shares of outstanding capital stock of ABTECH in
exchange for the issuance of a controlling ownership interest in the Company to
the shareholders of ABTECH.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual agreements and representations contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
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1.
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Except
for the provisions in paragraphs 7-17, which are intended to be binding,
this LOI is expressly intended to be non-binding and subject to the
satisfactory completion of due diligence and the negotiation of mutually
acceptable definitive agreements with regard to this
transaction.
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2.
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The
Company and ABTECH agree that they will use their commercially reasonable
efforts to enter into a definitive agreement containing substantially the
same terms and provisions as set forth in Paragraphs 3-6 of this LOI
within fourteen (14) days from the date of execution of this LOI (the
“Definitive
Agreement”).
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3.
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Upon
the satisfaction of the conditions set forth herein and in the Definitive
Agreement, the Company will acquire all of the issued and outstanding
capital stock of ABTECH (through a reverse merger of ABTECH into a
subsidiary of the Company or other mutually acceptable mechanism) in
exchange for the issuance to ABTECH shareholders of 46,000,000 shares of
common stock of the Company (the “Merger”). Upon
Closing, ABTECH shall become a wholly-owned subsidiary of the Company and
ABTECH shareholders shall own approximately 78% of the outstanding shares
of the Company on a post-Closing
basis.
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4.
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The
closing of the Merger (the “Closing”) shall occur on
or before ninety (90) days from the date on which ABTECH completes the
audit of its financial statements as required to be filed by the Company
upon the Closing in accordance with the Securities Exchange Act of 1934,
as amended, and ABTECH receiving no less than an aggregate of $3,000,000
in advances from the Company, as more fully described in paragraphs 7 and
8, below. Immediately after the Closing, the Company will have
59,000,000 shares issued and
outstanding.
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5.
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At
Closing, the Board of Directors of the Company shall be comprised of nine
(9) directors. On or prior to the Closing, the Board of Directors of the
Company shall appoint nine (9) directors of ABTECH onto the Board of
Directors of the Company, and at Closing, the management of ABTECH shall
be appointed as the management of the
Company.
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6.
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The
Definitive Agreement shall contain customary representation and
warranties, covenants and indemnification provisions for transactions of
this nature.
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7.
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The
Company has advanced an aggregate of $300,000 to ABTECH as of the date of
this LOI. Upon execution of this LOI, the Company will
immediately advance an additional $145,000 to
ABTECH.
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8.
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The
Company agrees that it will advance an aggregate of $3,000,000 in cash to
ABTECH, which shall include the amounts advanced as described in paragraph
7 above, and additional amounts in accordance with the following schedule:
(a) $200,000 per month each month after the execution of this LOI until
the Closing Date, with the first such $200,000 payment to be made within
five (5) days after the execution of this LOI and subsequent monthly
payments to be made on the same day of each month thereafter (or the next
business day if such day falls on a weekend or holiday); and (b) the
remainder upon the Closing Date; provided, however, if a
definitive agreement has not been entered into between the Company and
ABTECH within twenty-eight (28) days from the date of this LOI, the
Company’s obligations to advance any additional funds shall immediately
terminate. If, at any time prior to the execution of the Definitive
Agreement, either party, for whatever reason, provides written notice
(“Termination
Notice”) to the other party that it does not intend to proceed with
the Closing of the transaction, any funds advanced to ABTECH hereunder
shall, at ABTECH’s sole discretion be either a) repaid to the Company, b)
converted into an investment in the Senior Convertible Promissory Notes
currently offered (as of the date of this LOI) to investors by ABTECH, or
c) upon supermajority approval of ABTECH’s Board of Directors, converted
into a common stock equity investment in ABTECH at ABTECH’s current common
stock price of $3.75 per share. ABTECH agrees to prepare all
the necessary paperwork in connection with the repayment or conversion of
the advanced funds in accordance with a), b) or c) above and to issue the
appropriate repayment, notes or shares of its common stock to the Company,
no later than 60 days from the date of the Termination
Notice. The repayment or conversion options described in a), b)
and c) above shall be accepted by the Company in lieu of any and all
claims, remedies or other recourse of any kind for the return of such
advanced funds.
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2
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9.
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Upon
the execution of the Definitive Agreement, Xxxxx X. Xxxx will be appointed
to the Board of Directors of the
Company.
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10.
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Neither
party shall have any liability whatsoever to the other with respect to the
non-binding provisions hereof or the failure to conclude the transactions
described in such non-binding provisions for any reason whatsoever,
including ABTECH’s failure to obtain approval for such transactions from
its Board of Directors
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11.
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No
party hereto will make any disclosure or public announcements of the
proposed transactions, the LOI or the terms thereof without the prior
consent of the other parties, which shall not be unreasonably withheld, or
except as required by relevant securities laws; provided, however, each
party may issue press releases in the ordinary course of
business.
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12.
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Each
party agrees and acknowledges that such party and its directors, officers,
employees, agents and representatives will disclose business information
and information about the proposed transaction in the course of securing
financings for the Company and ABTECH and that the parties and their
representatives may be required to disclose that information under the
continuous disclosure requirements of the Securities Exchange Act of
1934.
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13.
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This
LOI shall be construed in accordance with, and governed by, the laws of
the State of Delaware, and each party separately and unconditionally
subjects itself to the jurisdiction of any court of competent authority in
the State of Delaware, and the rules and regulations thereof, for all
purposes related to this agreement and/or their respective performance
hereunder.
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14.
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The
parties shall prepare, execute and file any and all documents necessary to
comply with all applicable federal and state securities laws, rules and
regulations in any jurisdiction where they are required to do
so.
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15.
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All
references to currency in this LOI are references to the lawful currency
of the United States of America.
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16.
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This
LOI may be executed in counterparts, by original or facsimile signature,
with the same effect as if the signatures to each such counterpart were
upon a single instrument; and each counterpart shall be enforceable
against the party actually executing such counterpart. All
counterparts shall be deemed an original
copy.
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3
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17.
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The
delay or failure of a party to enforce at any time any provision of this
LOI shall in no way be considered a waiver of any such provision, or any
other provision of this LOI. No waiver of, delay or failure to
enforce any provision of this LOI shall in any way be considered a
continuing waiver or be construed as a subsequent waiver of any such
provision, or any other provision of this
LOI.
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DATED
EFFECTIVE: June 10, 2010
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XXXXXX
RESOURCES, INC.
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/s/ Xxxxx
Xxxx
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Xxxxx
Xxxx
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ABTECH
INDUSTRIES, INC.
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/s/ Xxxxx X.
Xxxx
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Xxxxx
X. Xxxx
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4
