MILLER DIVERSIFIED CORPORATION 4401 NW 167th Street Miami, FL 33055 (786)-222-5756 July 15, 2009
Exhibit 10.1
XXXXXX DIVERSIFIED CORPORATION
0000 XX 000xx Xxxxxx
Xxxxx, XX 00000
(786)-222-5756
July 15, 2009
Smoke Anywhere USA, Inc.
0000 Xxxxxxxxxx Xxxxx Xxxx #000
Xxxxxxxx Xxxx Xx 00000
Re: Binding Letter of Intent between Xxxxxx Diversified, Corp. and Smoke
Anywhere USA, Inc.
Dear Board of Directors:
This letter sets forth our binding letter of intent (“Letter of Intent”) among
Xxxxxx Diversified Corp., a Nevada corporation (“Xxxxxx”) and Smoke Anywhere
USA, Inc., a Florida corporation (“Smoke”) and in connection therewith, the
purchase of 100% of the issued and outstanding shares of Smoke by Xxxxxx in
exchange for common stock of Xxxxxx representing approximately 83% of the
outstanding shares of common stock on a fully diluted basis (the “Transaction”),
subject to the terms of a definitive share purchase agreement to be negotiated
and executed by the parties.
The proposed terms of the Transaction are as follows:
1. Definitive Agreement. Consummation of the Transaction as contemplated
hereby will be subject to the negotiation and execution of a mutually
satisfactory definitive share purchase agreement (the “Definitive Agreement”),
setting forth the specific terms and conditions of the stock purchase
transaction proposed hereby. The parties will use their reasonable best efforts
to negotiate in good faith the Definitive Agreement, which will contain, among
other standard terms and conditions, the following provisions:
| (a) | Xxxxxx will issue shares of its common stock to Smoke in an amount to be agreed upon based upon an approximate 83% of Xxxxxx′vs issued and outstanding shares upon completion of the Transaction. | |
| (b) | Upon completion of the Transaction, Xxxxxx will change its name to a name designated by Smoke and will apply for a new trading symbol to better represent the business of the combined companies. | |
| (c) | Smoke shall be reasonably satisfied with the accounting treatment of the Transaction for accounting and financial statement purposes. |
2. Conditions to Closing.
| (a) | The approval of the board of directors of each of Smoke and Xxxxxx. |
3. Conduct of Business. Prior to the
execution of a Definitive Agreement and the closing of the Transaction, Xxxxxx
will conduct its operations in the ordinary course consistent with past practice
and will not issue any capital stock or grant any options with respect to its
capital stock, nor xxxx Xxxxxx make any distributions, dividends or other
payments to any affiliate or shareholders without the consent of Smoke.
4. Public Announcements. Neither party will make any public disclosure
concerning the matters set forth in this letter of intent or the negotiation of
the proposed Transaction without the prior written consent of the other party,
which consent shall not be unreasonably withheld. If and when either party
desires to make such public disclosure, after receiving such prior written
consent, the disclosing party will give the other party an opportunity to review
and comment on any such disclosure in advance of public release. Notwithstanding
the above, to the extent that either party is advised by counsel that disclosure
of the matters set forth in this letter of intent is required by applicable
securities laws or to the extent that such disclosure is ordered by a court of
competent jurisdiction or is otherwise required by law, then such disclosing
party will provide the other party, if reasonably possible under the
circumstances, prior notice of such disclosure as well as an opportunity to
review and comment on such disclosure in advance of the public release.
5. Due Diligence; Confidentiality Agreement. Each party and its
representatives, officers, employees and advisors, including accountants and
legal advisors, will provide the other party and its representatives, officers,
employees and advisors, including accountants and legal advisors, with all
information, books, records and property (collectively, “Transaction
Information”) that such other party reasonably considers necessary or
appropriate in connection with its due diligence inquiry. Each party agrees to
make available to the other party such officers, employees, consultants,
advisors and others as reasonably requested by the other party for meetings,
visits, questions and discussions concerning each other and the Transaction.
Each of the parties will use its reasonable best efforts to maintain the
confidentiality of the Transaction Information, unless all or part of the
Transaction Information is required to be disclosed by applicable securities
laws or to the extent that such disclosure is ordered by a court of competent
jurisdiction. Due to the commercially sensitive nature of the Transaction
Information, promptly following the execution of this Letter of Intent, the
parties shall cause each of their respective directors, representatives,
officers, employees and advisors, including accountants and legal advisors, who
receive Transaction Information to enter into a confidentiality agreement in
form and substance reasonably satisfactory to the other party.
6. Exclusivity. In consideration for the mutual covenants and agreements
contained herein, until the earlier of the closing of the Transaction or
termination of this letter of intent in accordance with its terms, Xxxxxx, its
officers, directors, employees, shareholders and other representatives will not,
and will not permit any of their respective affiliates to, directly or
indirectly, solicit, discuss, accept, approve, respond to or encourage
(including by way of furnishing information) any inquiries or proposals relating
to, or engage in any negotiations with any third party with respect to any
transaction similar to the Transaction or any transaction involving the transfer
of a significant or controlling interest in the assets or capital stock of
Xxxxxx, including, but not limited to, a merger, acquisition, strategic
investment or similar transaction (“Acquisition Proposal”). Xxxxxx and its
officers or their respective affiliates will immediately notify Smoke in writing
of the receipt of any third party inquiry or proposal relating to an Acquisition
Proposal and will provide Smoke with copies of any such notice inquiry or
proposal. Notwithstanding the foregoing, nothing in this Section 5 will be
construed as prohibiting the board of directors of Xxxxxx from making any
disclosure required by applicable law to its shareholders.
7. Termination. This letter of intent may be terminated (a) by mutual
written consent of the parties hereto and (b) by either party (i) after 5:00
p.m. Eastern standard time on September 1, 2009 if a Definitive Agreement is not
executed and delivered by the parties prior to such time, (ii) if the
Transaction is enjoined by a court or any governmental body (including if
consummation of the Transaction is enjoined pending approval by the shareholders
of Smoke).
8. No Brokers. Each party represents and warrants to the other that there
are no brokers or finders entitled to any compensation with respect to the
execution of this Letter of Intent, and each agrees to indemnify and hold the
other harmless from and against any expenses or damages incurred as a result of
a breach of this representation and warranty.
9. Expenses. Each of the parties will be responsible for its own expenses
in connection with the Transaction, including fees and expenses of legal,
accounting and financial advisors.
10. Choice of Law. This Letter of Intent shall be governed by and
construed in accordance with the internal substantive laws of the State of
Florida.
11. Compliance with the Securities Laws. Smoke acknowledges that it and
its officers, directors, shareholders and employees and other representatives
may, in connection with the Transaction, come into possession of material
non-public information about Xxxxxx. Accordingly, Smoke will use its best
efforts to ensure that none of its officers, directors, shareholders and
employees or other representatives will trade (or cause or encourage any third
party to trade) in any of the securities which they will receive as a result of
the Transaction while in possession of any such material, non-public
information. Xxxxxx acknowledges that it and its officers, directors,
shareholders and employees and other representatives may, in connection with the
Transaction, come into possession of material non-public information about Smoke
and its respective affiliates. Accordingly, Xxxxxx will use its best efforts to
ensure that none of its officers, directors, shareholders and employees or other
representatives will trade (or cause or encourage any third party to trade) in
any of the securities which they will receive as a result of the Transaction
while in possession of any such material, non-public information.
12. Counterparts. This letter of intent maybe executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Fax copies of signatures shall be
treated as originals for all purposes.
13. Effect. This letter of intent is a binding contract between the
parties, and contains the entire agreement by and among the parties to date with
respect to the subject matter hereof and supersedes any and all prior agreements
and understandings, oral or written, with respect to such matters.
This letter of intent will terminate at 5:00 p.m. Eastern standard time on
September
1, 2009 unless it has been duly executed by or on behalf of the Parties prior to
such time.
Very truly yours,
XXXXXX DIVERSIFIED CORPORATION
|
By: /s/ Xxxxx Xxxxx
|
| Name: Xxxxx Xxxxx |
| Title: Chief Executive Officer |
Agreed and Accepted:
SMOKE ANYWHERE USA, INC.
|
By: /s/ Xxxxx Xxxx
|
| Name: Xxxxx Xxxx |
| Title: Authorized Representative for the Board of Directors |
