[EXHIBIT 10.2]
February 24, 2003
This Letter of Intent ("LOI") reflecting the understanding
between Carbon Recovery Corp., a New Jersey corporation ("CRC"),
to enter into a definitive agreement (the "Agreement", or
"Definitive Agreement" or "Joint Venture") with SJAP, Inc., a New
Jersey corporation ("SJAP"), to obtain, manufactuer and deliver
fuel chips which are manufactured from used tires. In this
letter, (i) the CRC and SJAP are sometimes called the "Parties
Part One
The Parties wish to commence negotiating a written
Definitive Agreement providing for the Joint Venture. Based on
the information currently known, it is proposed that the
Definitive Agreement include the following terms:
1. Basic Transaction. The CRC would be resposable to the Joint
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Venture to provide all raw materials (used tires) contracts and
all contracts for the delivery of fuel chips. SJAP will be
resposable for providing the processing equipment and operation
including on site shredding for customers, shredding at SJAP work
site, other additional processing and shipping. All revenues
derived will first pay expenses of the Joint Venture and then be
shared equally by the Joint Venture partners. Expenses shall be
inclusive of marketing, processing, taxes, shipping, license fees
and all other normal business costs. Neither Party will receive
management fees for their participation in the Joint Venture
unless mutially agreed to by both Parties. Revenues shall
consist of tipping fees for used tire collection and sales of
fuel chips.
2. Closing. The closing of this transaction (the
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"Closing") would occur on or before the time specified
in Part 1, Paragraph 4.4 herein, ("Closing Date).
4. Conditions to Closing. The Closing is subject to the
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satisfaction of the following on or before the Closing
Date set forth in this Letter of Intent:
4.1 Non Disclosure Agreements. The Parties will enter into
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a Non-Disclosure or Confidentially Agreement.
4.2 Non-Competition Agreements. The Agreement will
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require the Parties to agree not to compete with the
other for the intended business of the Joint Venture.
4.3 Due Diligence. SJAP and CRC completing to its
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satisfaction a due diligence review (`Due Diligence
Review") and inspection of the other party of the
assets and their financial, legal, environmental and
other affairs. Between the date of this Letter of
Intent and the Closing Date (or earlier termination of
the transactions contemplated by this Letter of
Intent), SJAP and its representatives and CRC and its
representatives will be given full access to the other
party's books and records, management, employees,
physical facilities, equipment and properties. SJAP and
its representatives and CRC and its representatives
will undertake its Due Diligence Review in a manner
that does not unduly interfere with the other party's
normal business operations.
4.4 Definitive Agreement. SJAP and CRC executing a
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Definitive Agreement in a form approved by the parties
and their respective legal counsel governing the
transactions described by this Letter of Intent and
superseding this Letter of Intent. The Parties should
execute the Definitive Agreement within forty-five (45)
days from the date of this LOI. In the Definitive
Agreement the Parties shall make representations,
warranties, covenants and indemnities of the type
customary in transactions of a similar size and nature
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Exhibit 10.2
including but not limited to representations and
warranties pertaining to the assets and operations of
Company and its financial, organizational, legal,
environmental and other affairs and such
representations and warranties shall be true and
correct as of the Closing Date and all of which shall
survive Closing.
4.5 Consents. The Parties shall obtain the consents, in
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form and substance necessary or desirable for them to
carry out the transaction as contemplated, including
without limitation, consent and authorizations of third
parties and governmental entities, if any.
4.6 Opinion of Counsel. Closing under the Definitive
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Agreement will be conditioned upon receipt by the
Parties of an Opinion of Counsel by the Parties
covering customary matters for a transaction of this
kind.
4.7 Other Terms.
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(a) The Parties shall agree to cooperate fully
with each other in compiling and supplying any
information that is required to prepare a private
placement offering memoranda, registration
statement or other documents necessary in order to
comply with any state or federal securities laws.
Part Two
The following paragraphs of this LOI (the "Binding Provisions")
are the legally binding and enforceable agreements.
1. Access. During the period from the date this LOl is signed
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by the Parties (the "Signing Date') until the date on which
either Party provides the other with written notice that
negotiations toward a Definitive Agreement are terminated (the
"Termination Date"), the Parties will provide to each other full
and free access to information until the Termination Date
provided in Part 1, Paragraph 4.4 herein.
2. Conduct of Business. During the period from the Signing Date
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until the Termination Date, the Parties shall operate their
businesses only in the ordinary course.
3. Confidentiality. This LOI and all disclosures during the due
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diligence period regarding the Definitive Agreement shall be
Confidential.. However, SJAP grants permission to CRC to disclose
to stockholders and regulatory agiencies the existence of this
LOI and the Definitive Agreement.
4. Public Announcements. The parties anticipate jointly
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announcing their relationship. Prior to the execution of the
Agreement by the parties, neither party shall make any public
announcement about this LOI or the parties' discussions without
the written consent of the other party, which consent shall not
be unreasonably withheld or delayed. Either of the Parties may at
any time make announcements which are required by applicable law,
regulatory bodies, or stock exchange or stock association rules,
so long as the party so required to make the announcement
promptly upon learning of such requirement, notifies the other
party of such requirement and discusses with the other party in
good faith the exact wording of any such announcement, The
parties agree that any announcement concerning the execution of
this LOI or the Agreement shall be mutually agreed upon joint
announcement.
5. Costs. SJAP and CRC will be responsible for and bear all of
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its own costs and expenses (including any broker's or finder's
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Exhibit 10.2
fees and the expenses of its representatives) incurred at any
time in connection with pursuing or consummating the Joint
Venture.
6. Entire Agreement. The Binding Provisions constitute the
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entire agreement between the parties, and supercede all prior
oral or written agreements, understandings, representations and
warranties, and courses of conduct and dealing between the
parties on the subject matter hereof except as otherwise provided
herein, the Binding Provisions may be amended or modified only by
a writing executed by all of the parties.
7. Governing Law. The Binding Provisions will be governed by
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and construed under the laws of the State of New Jersey without
regard to conflicts of laws principles.
8. Jurisdiction: Service of Process. Any action or proceeding
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seeking to enforce any provision of; or based on any right
arising out of; this LOI may be brought against any of the
parties in the courts of the State of New Jersey, or, if it has
or can acquire jurisdiction, in the United States District Court.
Each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
9. Termination. The Binding Provision will automatically
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terminate on the date provided in Part 1, Paragraph 4.4 herein,
and may be terminated earlier upon written notice by the SJAP to
the CRC, for any reason or no reason, with or without cause, at
any time; provided, however that the termination of the Binding
Provisions will not affect the liability of a party for breach of
any of the Binding Provisions prior to the termination. Upon
termination of the Binding Provisions, the parties will have no
further obligations hereunder.
10. Counterparts. This LOI may be executed in one or more
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counterparts, each of which will be deemed to be an original copy
at this LOI and all of which when taken together, will be deemed
to constitute one and the same agreement.
11. No Liability. The paragraphs and provisions of Part One of
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this LOI do not constitute and will not give rise to any legally
binding obligation on the part of any of the Parties. Moreover,
except as provided in the Binding Provision (or as expressly
provided in any binding written agreement that the Parties may
enter into in the future) no past or future action, course of
conduct, or failure to act relating to the Joint Venture, or
relating to the negotiation of terms of the Joint Venture or any
Definitive Agreement will give rise to or serve as a basis of any
obligation or other liability on the part of the Parties.
Duly executed and agreed as to the Binding provisions on
________________, 2003
CRC: Carbon Recovery Corp. SJAP: SJAP, Inc.
______________________________ _________________________________
By: Xxxx Xxxxxxxxx, President By: Xxxxxx Xxxxxx, Xx., President
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Exhibit 10.2
