Exhibit 10.3
MOU - TERM SHEET
between
WASTE TO ENERGY GROUP LLC ("WTE")
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
WASTE TO ENERGY GROUP INC ("WTEINC")
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.0 Overview
Waste to Energy Group LLC (WTE) is an engineering firm that has developed a
business plan of licensing the latest technologies in the alternative energy
sector. WTE is in the process of signing their first contracts in Hawaii, Utah
and South Korea, and is desirous of receiving funding to develop the business.
If ▇▇▇.▇▇▇ arranges initial financings of at least $2,000,000, then WTE's
shareholders have agreed to accept 15,000,000 shares of ▇▇▇.▇▇▇, a public
company quoted for trading on the OTC Bulletin Board market, for their interest
in WTE when the formal acquisition agreement for WTE is signed, and WTE
shareholders will also receive the option to receive further up to 8,500,000
more shares of ▇▇▇.▇▇▇ based on performance criteria as stated below. Both of
these share amounts are stated on a post split basis as described below. After
the above mentioned forward share split ▇▇▇.▇▇▇ will have 50,265,000 shares
issued and outstanding and 58,765,000 after the issuance of the 8,500,000 shares
mentioned above. WTE shareholders would own a total of 23,500,000 shares of
▇▇▇.▇▇▇, if the 8,500,000 shares are issued, which would be 40.0% of the
58,765,000 shares. ▇▇▇.▇▇▇ has reviewed various business documents of WTE, as
provided by ▇▇▇▇▇ ▇▇▇▇, CEO, and is desirous of arranging the funding for WTE
based on the terms below:
This Memorandum of Understanding ("Agreement") sets forth the following terms:
Now, in Consideration of $120,000.00 hereinafter considered paid the parties
agree that:
1.1. ▇▇▇.▇▇▇ has arranged for loans to WTE totaling $120,000. As
consideration for making this loan, ▇▇▇.▇▇▇ will have an option to
purchase 100% of the shares of WTE as described below.
1.2. Waste to Energy Group Inc. has applied to do a forward split of its
shares on a 25 new for one old basis, after this forward share split
there will be 50,265,000 shares issued and outstanding.
1.3. ▇▇▇.▇▇▇ will issue a minimum of 2,500,000 shares from its treasury on
a post split basis, at $0.80 per share by September 15, 2008, for
minimum gross proceeds of $2,000,000. WTEGI will lend up to $1,500,000
of these funds to WTE to allow WTE to proceed with its business plan,
and ▇▇▇.▇▇▇ will use a maximum of $500,000 in ▇▇▇.▇▇▇'s effort to
raise a further $20,000,000 for WTE's projects. If ▇▇▇.▇▇▇ does not
arrange the $2,000,000 by September 15, 2008, then ▇▇▇.▇▇▇ can earn a
one time extension on the right to acquire WTE by funding $100,000 on
September 15 for a thirty day extension. The $100,000 extension
payment will be deemed to be a part of the $2,000,000 funding.
1.4. The shareholders of WTE will receive 15,000,000 shares of ▇▇▇.▇▇▇ on
closing and a further 2,600,000 shares of ▇▇▇.▇▇▇ from Treasury when
WTE has completed the financings necessary to build two pyrolysis
plants and will receive a further 5,900,000 shares from treasury when
a formal deal has been signed with individuals in South Korea for the
construction of MSW Plant costing at least $200,000,000, including
long term feedstock supply contracts to supply the MSW Plant and long
term off-take contracts for the products produced.
1.5. There will be 4,000,000 directors and employee incentive stock
options, to be granted to the management, directors and officers of
▇▇▇.▇▇▇ on the closing of the transaction between ▇▇▇.▇▇▇ and WTE,
which shall have a five year term at an exercise price of $1.00 per
share. The options will vest over 3 years. The initial composition of
the Board of Directors will be comprised of 3 directors from the
current management team of WTE and two chosen by the current Directors
of ▇▇▇.▇▇▇.
1.6. First year salaries for management and key employees will be as stated
in the pro forma financials that are attached to and form an integral
part of this MOU.
1.7. Over a period not exceeding three months, this MOU will be replaced by
a formal shareholder agreement which will be signed by all parties
having an equity interest in the corporation whose material terms will
not differ from those laid out above.
1.8. The business plan / Executive Summary attached also forms an integral
part of this agreement.
2. Effective Date. This Agreement will become effective as of the date which
it is fully executed by the parties.
3. Authority. Each party represents that (i) it has full power and authority
to enter into and perform this Agreement, (ii) this Agreement is the valid
and binding obligation of such party, enforceable against it in accordance
with its terms, and (iii) the performance by such party of its obligations
under this Agreement does not violate any law, rule or regulation binding
on such party or such party's charter documents.
4. Waivers, Remedies Cumulative, Amendments, etc. No provision of this
Agreement may be amended, modified, waived, discharged or terminated, other
than by the express written agreement of the parties hereto nor may any
breach of any provision of this Agreement be waived or discharged except
with the express written consent of the party not in breach.
5. Notices. All notices, requests, demands and other communications required
to be given under this Agreement shall be in writing and shall conclusively
deemed to have been duly given (a) when hand delivered to the other party,
(b) the next business day if sent by a generally recognized overnight
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courier services that provides written acknowledgement by the addressee of
receipt, or (c) when received, if sent by facsimile or other generally
accepted means of electronic transmission with proof of sender.
if to WTE to:
Waste to Energy Group, LLC
Attention: ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
if to ▇▇▇.▇▇▇ to:
Waste to Energy Group Inc.
Attention: ▇▇▇▇▇ ▇. ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address, or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.
6. Confidentiality. Each party and its respective affiliates shall maintain
the confidentiality of all information of a confidential or proprietary
nature which it may have or acquire regarding the customers, business,
finances, assets or affairs of the parties and its affiliates except for
(a) any information which is generally available to the public or becomes
generally available to the public other than through disclosure in
violation of this provision or (b) which is required to be disclosed by
applicable law or to enforce the provisions of this Agreement.
6.1 In recognition of each party's understanding that the other may in the
future invite third parties to participate as equity or non-equity
investors or other providers of finance in or to such party or its
respective affiliates, the parties agree that each may provide to such
entities copies of agreements, business plan, financial statements and
other financial information provided by WTE to its members, and such
other information as would be reasonable in the circumstances for a
potential investor to require. Notwithstanding the foregoing, no such
information will be provided until a confidentiality agreement for the
benefit of the parties and their respective affiliates has been signed
by such potential investor.
6.2 In recognition of the fact that WTE will become a publicly held
company, the parties agree that ▇▇▇.▇▇▇ may provide to institutional
investors and analysts such information concerning WTE as is
conventional to assist such investors in deciding whether to invest or
such analysts to prepare their reports; provided, that no information
may be disclosed without the prior consent of WTE that would
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reasonably be expected to cause harm to WTE, including with respect to
its competitive position.
7 Termination. Agreement may be terminated at any time by mutual agreement.
There is no exclusivity in this Agreement and should either party fail to
meet the obligations define in this Agreement, either party may terminate
this Agreement.
8 Dispute Resolution. Any dispute arising out of or relating to this
Agreement shall be resolved in accordance with the procedures specified in
this Section 8, which shall be the sole and exclusive procedures for the
resolution of any such disputes which shall be litigated in a court of law.
The parties intend to include substantially similar provisions in the
Superseding Documents so that the following provisions will continue to
govern dispute resolution with respect to WTE and ▇▇▇.▇▇▇. The parties
intend that these provisions shall be valid, binding, enforceable and
irrevocable and shall survive any termination of this Agreement or the
Superseding Agreements.
8.1 The parties shall promptly notify each other in writing of any dispute
arising out of or relating to this Agreement. The parties shall
attempt in good faith to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between executives
who have authority to settle the controversy. All reasonable requests
for information made by one party to the other will be honored. All
negotiations pursuant to this clause are confidential and shall be
treated as compromise and settlement negotiations for purposes of
applicable rules of evidence.
8.2 If any such dispute remains unresolved within 30 days of original
notice thereof, each party shall refer the dispute to a more senior
executive of such party who has authority to settle the dispute and
who shall likewise meet with the other to attempt to resolve the
dispute.
8.3 Any controversy or claim arising out of or relating to this Agreement
or the breach, termination or validity thereof, which remains
unresolved 45 days after original notice thereof shall be finally
settled under the Rules of Arbitration of the International Chamber of
Commerce; provided, however, that if either party will not participate
in a non-binding procedure described above, the other may initiate
binding arbitration before expiration of the above period. The
tribunal shall consist of a sole arbitrator appointed jointly by the
parties. In the case of the parties failing to choose a sole
arbitrator, the tribunal shall consist of three arbitrators, two of
whom shall be appointed by the respective parties and the third of
whom shall be appointed jointly by the first two. Each arbitrator
shall be knowledgeable in matters similar to those involved in the
business of WTE. The place of arbitration shall be Los Angeles,
California, or such other location as the parties may agree. The
language of the arbitration shall be English. Each arbitrator shall be
independent and unrelated to any of the parties.
8.4 Except as expressly provided below, the arbitrator is not empowered to
award damages in excess of compensatory damages and each party hereby
irrevocably waives any right to recover such damages with respect to
any dispute resolved by arbitration. The arbitrator shall have the
authority to include, as an item of damages, the costs of arbitration,
including legal fees and expenses, incurred by the prevailing party
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and to apportion such costs among the parties on a claim by claim
basis as such party prevails thereon. For purposes of the foregoing,
the "prevailing party" shall mean the party whose final settlement
offer (or other position or monetary claim) prior to the start of
arbitration is closest to the judgment awarded by the arbitrator,
regardless of whether such judgment is entered into in favor of or
against such party.
8.5 All negotiations pursuant to Sections 8.1, 8.2 and 8.3 are
confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.
8.6 Each party agrees that service by registered or certified mail, return
receipt requested, delivered to such party at the address provided in
Section 5 (Notices), will be deemed in every respect effective service
of process upon such person for all purposes of these provisions
relating to arbitration. Subject to Section 8, each party irrevocably
submits to the jurisdiction of the courts of the State of California
and with respect to all matters governed by the laws of the State of
California, regardless of where any alleged breach or other action,
omission, fact or occurrence giving rise thereto occurred. Each party
hereby irrevocably waives any claim that any action or proceeding
brought in California in accordance herewith has been brought in any
inconvenient forum.
8.7 The parties will negotiate in good faith and agree on such further or
modified arbitration provisions as are reasonably necessary for awards
and other judgments resulting from the provisions set forth above to
be recognized and enforceable in the respective jurisdictions.
Signed this 3rd day of August 2008.
WASTE TO ENERGY GROUP LLC WASTE TO ENERGY GROUP INC.
/s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇
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▇. ▇▇▇▇▇▇▇ ▇▇▇▇, CEO ▇▇▇▇▇ ▇. ▇▇▇, President
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