EXHIBIT 10.2
LOAN CONVERSION
AND
COMMON STOCK AGREEMENT
THIS LOAN CONVERSION AND COMMON STOCK AGREEMENT ("Agreement") is made and
effective this July 31, 2000 by and between EnviroClean International, Inc.
(ENVI), formerly known as Advanced EnviroTech Systems, Inc., and Xxxx X.
Xxxxxxx, M.D. ("Xxxxxxx"), the Parties.
ENVI is in debt to Xxxxxxx in the amount of One-Million and no/100 Dollars
($1,000,000.00) for funds previously loaned to ENVI with an extended maturity
date of May 31, 2001 plus accrued interest.
ENVI is agreeable to converting the debt to Xxxxxxx into shares of common stock
of ENVI as set forth below.
NOW THEREFORE, ENVI and Xxxxxxx agree as follows:
1. DEFINITIONS.
A. "Obligation". All of the interest, principal and other amounts
payable under the Notes and Agreements between the parties,
dated previous to March 31, 1999, repayment of which was
extended until May 31, 2001, under a Loan Extension Agreement
dated May 31, 1999.
B. "Extension". The due and payable date on above referenced
notes is extended to May 31, 2001.
C. "Interest". The annual percentage rate of interest shall be
no more than ten percent (10%) per annum.
D. "Conversion". All of the unpaid loan principal amounting to
One-Million and no/100 Dollars ($1,000,000.00) will be
converted into One-Million-Eight-Hundred-Fifty-Thousand
(1,850,000) shares of ENVI Common Stock par value $0.001 per
share at an average price of fifty-four and five hundredth
cents ($0.5405) per share.
E. "Accrued interest". All accrued interest associated with the
unpaid loan to July 31, 2000 will be paid to Xxxxxxx in the
form of a new loan in the amount of
One-Hundred-Sixteen-Thousand-Six-Hundred-Sixty-Six Dollars and
Sixty-Seven cents ($116,666.67), said new loan to bear
interest at no more than ten percent (10%) per annum and to be
payable on July 31, 2002.
F. "New Loan". New loan will be secured by the so-called "IMCO
Contract being negotiated with the Kingdom of Saudi Arabia,"
specifically from the royalties from the sale of an estimated
twenty (20) EnviroClean EC-500 Systems to said customer and by
the patented technology known as the EnviroClean Thermal
Oxidation System.
G. "Repayment/Conversion". No principal payments on the new loan
are allowed for a period of twenty-four (24) months or until
July 31, 2002. The new loan principal and accrued interest
thereon may be converted into shares of ENVI Common Stock par
value $0.001 per share at the rate of One dollar and Fifty
cents ($1.50) per share on a pre split basis.
H. "Cash Investment". In consideration for accepting this
agreement, Xxxxxxx agrees to make an additional cash
investment in the following amount on July 31, 2000: A cash
investment of Fifty-Thousand and no/100 Dollars ($50,000.00)
in exchange for Fifty-Thousand (50,000) shares of ENVI Common
Stock par value $0.001 per share at a price of One dollar
($1.00) per share.
2. REPRESENTATIONS AND WARRANTIES OF ENVI.
ENVI represents and warrants to Xxxxxxx that this Agreement is in full
satisfaction of the extended obligation to Xxxxxxx. ENVI further represents that
it will use its best efforts to negotiate on Xxxxxxx'x behalf Xxxxxxx'x right to
sell up to $1,500,000.00 worth of common stock through Lilly Beter Capital
Group, Inc. (LBCG) following the issuance of the LBCG Firm Commitment Letter to
ENVI by LBCG under the terms specified in the Letter of Intent dated June 26,
2000 and a successful Form SB10 registration by ENVI which results in ENVI
becoming a publicly traded stock on the OTC markets.
3. FINAL AGREEMENT.
This Loan Conversion and Common Stock Agreement constitutes the final agreement
and understanding between the parties on the subject matter hereof and
supersedes all prior understandings or agreements whether oral or written. This
Agreement may be modified only by a further writing that is duly executed by
both parties.
4. HEADINGS.
Headings used in this Loan Conversion and Preferred Stock Agreement are provided
for convenience only and shall not be used to construe meaning or intent.
IN WITNESS WHEREOF, Xxxx X. Xxxxxxx, M.D. and EnviroClean International, Inc.
have executed this Agreement on the date first above written.
ENVIROCLEAN INTERNATIONAL, INC.
By: /s/ XXXX X. XXXXXXX, M.D. By: /s/ XXXXXXX X. XXXXXXX
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Xxxx X. Xxxxxxx, M.D. Xxxxxxx X. Xxxxxxx, President
