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ASSET
EXCHANGE AGREEMENT
between
FOUR CRYSTAL FUNDING LLC
and
PRO TECH COMMUNICATIONS, INC.
and
NCT HEARING PRODUCTS, INC.
Dated:
May 20, 2008
This
letter hereby sets forth the intent with respect to the asset
exchange between Four Crystal Funding LLC (“FCF”),
Pro Tech Communications, Inc. (“PCTU”) and NCT
Hearing Products, Inc. (“NCTH”) (collectively,
these entities shall be referred to as the
“Parties”).
WHEREAS, PCTU has 300,000,000 shares of common stock
authorized and 78,834,140 shares issued and
outstanding;
WHEREAS, NCTH is the holder of 64,569,954 PCTU common
stock;
WHEREAS, FCF owns $4,039,872,177 in Mexican gold backed
bonds (“ASSET”) and wishes to exchange the Asset with
PCTU for PCTU stock.
NOW
THEREFORE, the Parties hereby agree that the specific terms
and conditions of the Asset Exchange Agreement are proposed
and set forth as follows:
1.
Terms of the
Transaction.
- FCF
shall obtain 228,818,182 shares of PCTU common stock as
follows:
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a.
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NCTH
shall sell, dispose or otherwise transfer to FCF 53,354,461 shares
or 85% of its PCTU common stock.
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b.
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PCTU
shall issue 175,463,721 shares of its authorized but un-issued
common stock.
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- FCF
shall transfer the ASSET to PCTU and PCTU will issue preferred
shares to FCF that have a controlling common vote.
- PCTU
shall agree to transfer all of its existing assets to NCTH as
satisfaction for the note that PCTU is liable to NCTH for in the
amount of approximately $5,000,000.
- PCTU
shall agree to change its name to a name designated by
FCF.
- Four
Crystal LLC has obtained the PCTU convertible preferred stock from
a third party and they agreed to convert the preferred shares into
18,000,000 shares of PCTU common stock. They will convert no more
than 5% of the current outstanding preferred stock to common stock
of PCTU at any one time.
- In
addition, FCF shall agree to pay $300,000 to NCTH as a commitment
fee used for operations and pay PCTU $250,000 for the outstanding
professional fees to bring PCTU up to date in its SEC
filings.
2.
Conduct of
Business. Prior to the closing of the Transaction, the
Parties will conduct their 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 will the Parties make any distributions, dividends or
other payments to any affiliate or shareholders other than
those shares already committed to outstanding options,
preferred stock, debt to employees.
3.
Public Announcements. No 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 parties. If and when any party
desires to make such public disclosure, after receiving such prior
written consent, the disclosing party wil
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