UNITED ECOENERGY CORP.
000 Xxxxxxx Xxxxxx
P.O. Box 307
Cocoa, FL 00000-0000
Telephone 000.000.0000
Facsimile 321.433.1082
xxx.xxxxxxxxxxxxxxx.xxx
January 20, 2007
GEI Development, LLC
Attn: Xxxxx Xxxxxx and Xxxx Xxxxxx
P.O. Box 220842
Kirkwood, Missouri 63122
Dear Xxxxx and Xxxx:
This binding letter of intent sets forth the terms upon which United
EcoEnergy Corp. ("Buyer") will acquire one hundred percent (100%) of the
issued and outstanding voting and non-voting membership interests (the
"Membership Interests") of GEI Development, LLC, a Missouri limited liability
company (?GEI?) and Solid Waste Properties, LLC (?Solid?) from all owners of
the outstanding and issued voting and non-voting Membership Interests of GEI
and Solid set forth in the signature lines of this letter of intent
(collectively referred to hereinafter as the "Sellers").
1. Purchase of Membership Interests. Buyer shall purchase from
Sellers, on the terms provided herein, all of the outstanding stock (the
Stock)
of a new corporation, or corporations, to be formed by Sellers (the Company)
and to which Company the Membership Interests in GEI and Solid will have been
transferred, free and clear of all liens, claims and encumbrances in exchange
for the Stock.
2. Consideration. Subject to adjustments for normal and customary
closing costs, Buyer shall issue to Sellers in exchange for the Stock (the
"Exchange Price") common shares of Buyer equal to Twenty Five Million, Two
Hundred Ninety Thousand Six Hundred (25,290,600) (the "Transferred
Securities")
in validly issued, restricted common stock of Buyer free and clear of all
liens, claims and encumbrances having a par value of $0.001 per share. At
Closing, Buyer shall cause the issuance of the Transferred Securities to
Sellers, subject to agreed release provisions, and Sellers shall transfer the
Stock to Buyer, free of any claims, liens or encumbrances.
3. Investment Capital. At Closing, Buyer shall make available to
the Company up to Two Million Dollars ($2,000,000.00) in working capital, on
an investment basis to be determined by Buyer, consistent with the regulations
governing the Buyer as a Business Development Company under the Investment
Company Act of 1940. Following Closing, Buyer shall use all customary and
reasonable efforts to obtain and raise further capital for the Company and
its affiliates by means which may include equity and debt offerings as well as
partnerships with other financed projects of the Buyer. A portion of such
investment capital shall be utilized for the purpose of buying a portion of
Xxxx'x ownership interest in Liquid Solutions LLC and Environmental Solutions
Ltd. so that Xxxx'x ownership interest in same will be reduced from its
current ownership interest of fifty percent (50%), as determined hereafter by
Buyer?s Board of Directors.
4. Board of Directors. Buyer covenants and agrees that as of the
Closing Date, subject to applicable law, rule and regulation, a representative
of Seller shall be appointed as a director of Buyer, currently representing
twenty (20) percent of Buyer?s Board of Directors, to replace one non-
independent director of Buyer, who shall resign effective at Closing.
5. Employment Contracts/Retention of Management of Company. At
Closing, Buyer and Company shall enter into employment agreements with key
personnel of the Company which employees may include, without limitation,
Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxx and certain of the Sellers, Xxxxxxx,
XxXxxx, Xxxxxxx, Duesel, Xxxxxxx, and Xxxxxx (collectively, the "Key
Employees")
on terms acceptable to each respective Key Employee. In addition, Buyer and
the Company shall enter into a management consulting agreement under which
Buyer shall provide management assistance and advice to the Company as
required
by the Investment Company Act of 1940 as applicable to Buyer. Xxxxx
acknowledges and agrees that it is relying upon the knowledge and expertise of
the Key Employees in carrying on the business of the Company following the
Closing and that it desires to retain and shall retain all required key
personnel of the Company and that Xxxxx Xxxxxx and Xxxxxxx Xxxxxx shall
continue to be responsible for the day to day business operations of the
Company pursuant to their respective employment agreements as acknowledged and
executed by the Company and Buyer at Closing.
6. Conditions to Closing. The closing of the transactions
contemplated
hereunder, in addition to the customary conditions, shall be subject to and
contingent upon, on behalf of both Buyer and Sellers (as the context so
indicates), satisfaction of the following conditions precedent in each
respective party's reasonable judgment: as to Sellers, Xxxxx's immediate
availability at Closing of funds required pursuant to Section 3 hereof and
Seller?s satisfaction with the tax effects of the proposed transaction; as to
Buyer, Seller?s incorporation of the Company and transfer of all Membership
Interests to the Company to be acquired by Buyer; and, as to both Sellers and
Buyer, receipt of all necessary regulatory and other consents and approvals to
the transfers and transactions contemplated hereunder, execution of agreed
release and forfeiture provisions, based on Company performance, for the
Transferred Securities and the execution of the employment and management
agreements provided for in Paragraph 5.
7. Confidentiality. In consideration of the time and expense
invested by Xxxxx in evaluating and negotiating the transactions contemplated
hereunder, Xxxxxxx agree that, from the date hereof until termination of such
negotiations in writing signed by Xxxxx, Sellers will not disclose the
contents
of this letter agreement to any person or entity other than the necessary
officers and employees of Sellers, GEI, Solid or the Company required to
implement the provisions of this letter agreement, which officers and
employees
shall also be bound by the terms of this Paragraph 7. Notwithstanding the
foregoing, Xxxxx expressly agrees that Sellers, GEI, Solid, and Company shall
be entitled to release and disclose such matters to Shaw.
8. Closing Date. Unless both parties agree in writing to extend such
date, the transactions contemplated hereunder will be closed no later than
March
31, 2007 (the "Closing" or "Closing Date").
9. Due Diligence. The transactions contemplated herein and Xxxxx?s
agreements hereunder are subject to a due diligence investigation by Xxxxx of
the GEI, Solid and the Company, its financial condition and their assets,
among
other things, satisfactory to Buyer in its sole and reasonable determination.
Such due diligence shall commence upon execution of this letter agreement by
all parties and shall continue for a period of forty-five (45) days from such
date unless otherwise extended by mutual consent of the parties. During such
due diligence period, Buyer (and its attorneys, advisors, agents and
accountants) will be given reasonable access to the assets, properties,
buildings, offices, books, files, data, financial statements, leases,
licenses,
contracts, agreements and records of GEI, Solid and the Company. All records,
files, financial statements and the like relating to GEI, Solid and the
Company delivered to Buyer in connection with the negotiations of the
Definitive Agreement shall remain and be deemed to be the property of Sellers
until consummation of the transactions contemplated in this letter of intent.
In the event the transactions contemplated herein are not consummated, Buyer
shall return all of the foregoing materials to Sellers together with all
copies thereof. All inventories, appraisals and other products of Buyer?s due
diligence paid for by Buyer shall remain the sole property of Buyer.
10. Fees and Expenses. Each party hereto shall be solely responsible
for its respective fees and expenses, including, but not limited to attorneys'
fees, if any, incurred in connection with the transactions contemplated
herein.
11. Continued Operations. Xxxxx acknowledges and agrees that prior to
the Closing Date, Sellers shall continue to manage and operate all aspects of
GEI, Solid and the Company in the ordinary course in a manner consistent with
existing business practices. Sellers acknowledge and agree that Sellers shall
promptly inform Xxxxx of any significant developments concerning GEI, Solid
and the Company or other material developments which Sellers believes would
materially affect the financial performance, prospects, value or viability
of GEI, Solid and the Company, the Membership Interests or the Stock, or which
they believe may otherwise materially interfere with the consummation of the
transactions contemplated herein.
12. Break Up and No Shop Provision. It is understood that Xxxxx will
incur expenses in connection with analyzing GEI, Solid and the Company and
financial aspects of the transactions contemplated herein and in seeking
financing for the Membership Interests purchase, and will incur legal expenses
in connection with drafting proposed agreements and related documents. In
order to induce Buyer to incur these expenses, it is specifically agreed
that GEI, Solid and the Company and Sellers will not directly or indirectly
offer or entertain any offer, proposal or discussions concerning the possible
purchase of the GEI, Solid and the Company, their assets, the Stock, the
Membership Interests or any other transaction contemplated herein with any
party other than Buyer throughout the term of this letter of intent.
13. General. This letter may be signed in counterparts, each of
which shall constitute an original and all of which, when read together, shall
be deemed one and the same instrument. This letter shall be governed by and
construed in accordance with the internal laws of the State of Florida. This
letter shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, executors, successors and
assigns.
14. Indemnification. GEI, Solid and the Company shall indemnify and
hold Buyer harmless from and against any loss, claims, damages and other
expenses that Buyer may suffer in connection with a breach by GEI, Solid and
the Company or Sellers of any representation, warranty, covenant or agreement
contained herein. Buyer shall indemnify and hold GEI, Solid and the Company
and Sellers harmless from and against any loss, claims, damages and other
expenses that Sellers and/or GEI, Solid and the Company may suffer in
connection with a breach by Buyer of any representation, warranty, covenant or
agreement contained herein.
Please indicate your agreement to the foregoing by countersigning this
letter. This letter of intent shall become effective only upon full execution
and delivery by all parties hereto.
Sincerely,
United EcoEnergy Corp.
By: _/S/ Xxxxxxx X. Xxxxxx_____
Print Name: _Xxxxxxx X. Xxxxxx___
Title: ___President and CEO______
Accepted and confirmed by all of the holders of the outstanding and issued
voting
membership interests of the Company as of the date first written above.
XXXXXX GROUP, LLC RBI 2, LLC
By: _/s/ Xxxxx Xxxxxx___________ By: __/s/ Xxxxxxx
Xxxxxx__________
Xxxxx Xxxxxx, Managing Member Xxxxxxx Xxxxxx, Manager
BAIN 2 INVESTMENTS, LLC
By: ___/s/ Xxxxx Xxxx__________ _________/s/ Xxxxx X.
Xxxxxxx_______
Xxxxx X. Xxxxxxx, a Missouri
resident
______/s/ Xxxx X. XxXxxx________ ____________/s/ Xxx X.
Xxxxxxx______
Xxxx X. XxXxxx, a Louisiana resident Xxx X. Xxxxxxx, a
Missouri resident
_____/s/ Xxxxxxx X. Xxxxxx_____ _______/s/ Xxxxx X.
XXxxxxx_________
Xxxxxxx X. Xxxxxx, a New York resident Xxxxx X. Xxxxxxx, a Wisconsin
resident
_____/s/ Xxx Xxxxxx____________ _____/s/ Xxxxx X.
Xxxxxx__________
Xxx Xxxxxx, a Tennessee resident Xxxxx X. Xxxxxx, a Missouri
resident
_____/s/ Xxxxx X. Xxxxxxxx_____
Xxxxx X. Xxxxxxxx, an Oklahoma resident.
