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ESCROW RESOLUTION AND TRANSITION AGREEMENT

Transition Agreement

ESCROW RESOLUTION AND TRANSITION AGREEMENT | Document Parties: China Water & Drinks, Inc | Heckmann Corporation | Kotex Development Limited | Xu Transitioning Parties You are currently viewing:
This Transition Agreement involves

China Water & Drinks, Inc | Heckmann Corporation | Kotex Development Limited | Xu Transitioning Parties

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Title: ESCROW RESOLUTION AND TRANSITION AGREEMENT
Date: 3/16/2009
Industry: Misc. Financial Services     Sector: Financial

ESCROW RESOLUTION AND TRANSITION AGREEMENT, Parties: china water & drinks  inc , heckmann corporation , kotex development limited , xu transitioning parties
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Exhibit 10.35

E SCROW R ESOLUTION A ND T RANSITION A GREEMENT

T HIS E SCROW R ESOLUTION A ND T RANSITION A GREEMENT (this “ Agreement ”) is made and entered into freely and voluntarily the 13 th day of March 2009, by and among Heckmann Corporation (“ Heckmann ”), China Water & Drinks, Inc. (“ China Water ”), Xu Hong Bin (“ Xu ”) and Kotex Development Limited (“ Kotex ” and together with “ Xu ,” the “ Xu Transitioning Parties ”) The Xu Transitioning Parties and Heckmann are collectively referred to as the “ Parties .”

R ECITALS

Mr. Xu, directly and through Kotex, received shares of Heckmann common stock in connection with the acquisition by Heckmann of China Water. Under this Agreement, Heckmann is repurchasing some of those shares, and the Parties are modifying certain aspects of their current relationship.

N OW , T HEREFORE , in consideration of the acts, payments, covenants, and mutual agreements herein described and agreed to be performed, Heckmann and the Xu Transitioning Parties agree as follows:

 

 

SECTION

1:    P RINCIPAL E CONOMIC T ERMS AND R ELATED M ATTERS .

1.1   Repurchase of Shares .

(a) Concurrently herewith, the Xu Transitioning Parties shall sell to Heckmann 13,032,100 shares of Heckmann stock. The Xu Transitioning Parties hereby authorize release of such shares from escrow. The certificates for the shares shall be returned to Heckmann, accompanied by such further instruments and such further information, including stock powers and tax declarations, as Heckmann shall reasonably request in connection with the foregoing. In consideration for the return of such shares, Heckmann shall, simultaneously with the delivery of the certificates and documents referenced above (when paid, the “ Payment Date ”), pay the Xu Transitioning Parties $14 million dollars (US).

(b) In addition, the balance of the 3,500,000 shares held in escrow will be returned to the Xu Transitioning Parties or their designees and the Xu Transitioning Parties and their designees may sell those shares, together with Xu’s 1,836,900 shares (totaling 5,336,900 shares) (the “ Remaining Shares ”) pursuant to the provisions of Section 1.3.

1.2    Reimbursement of Xu . On the Payment Date, Heckmann will reimburse Xu $6,000,000 for investments made by Xu personally on behalf of China Water after December 31, 2008 in the domestic manufacturing plants in People’s Republic of China.

1.3    Restrictions on Transfer .

 

(a) Until May 1, 2009, Xu and Xu Transitioning Parties or their designated nominees agree that they will not sell, transfer or pledge any shares of Heckmann stock, or engage in any short sales of Heckmann shares or other securities, as those terms are defined below.

(b) With respect to the Remaining Shares, from and after May 1, 2009, the Xu Transitioning Parties or their designated nominees may sell any such Remaining Shares pursuant to Rule 144 under the Securities Act of 1933, provided, however, that the aggregate maximum number of shares that may be sold during the period from May 1, 2009 to June 1, 2009 shall not exceed 150,000 shares and that the aggregate maximum number of shares that may be sold during each consecutive monthly period

 

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thereafter shall not exceed 150,000 plus the aggregate number of shares not sold in previous monthly periods but capped at a total of 600,000 in any given month, unless the common stock of Heckmann trades at $10.00 per share or higher for five consecutive days, in which case, the number of shares that may be sold shall be unlimited, subject to Rule 144.

(c) Certificates representing the Remaining Shares will include legends reflecting their restricted status under the Securities Act of 1933, and the contractual limitations of Section 1.3(b). Once the Xu Transitioning Parties are eligible to sell any of the Remaining Shares under Rule 144, within 10 days of notice from the Xu Transitioning Parties or their designees and upon receipt of customary paperwork, Heckmann will, at its own cost and expense, take all necessary actions to cause the removal of any restrictive securities legends on certificates representing the Remaining Shares, including the delivery by counsel of Heckmann of an opinion permitting removal of any legend restricting any such sale of the Remaining Shares. Heckman shall not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Remaining Shares, except as may be required by any applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the Xu Transitioning Parties and their designated designees. Heckmann shall not close its transfer books subsequent to receiving notice from the Xu Transitioning Parties or their designated designees regarding any transfer of the Remaining Shares.

1.4    Positions of Xu, Impact to Xu’s Executive Employment Agreement . Xu hereby resigns from the board of directors of Heckmann, and all other positions he holds with Heckmann and China Water. Sections 8 and 10 of the Parties’ Executive Employment Agreement dated October 30, 2008 are modified and set forth anew in Sections 2.5 and 2.6 below.

 

 

SECTION

2:    M UTUAL R ELEASE AND C OVENANT N OT TO S UE ; O THER C OVENANTS ; I NDEMNIFICATION .

2.1    Release by Xu Transitioning Parties . In consideration of the matters referenced in this Agreement, the Xu Transitioning Parties on behalf of each of themselves and their respective subsidiaries, affiliates, agents, officers, owners, directors, employees, counsel, insurers, successors, assigns, heirs, executors or administrators (collectively, “ Related Parties ”), hereby forever release, discharge, cancel, waive, and acquit Heckmann, China Water and their Related Parties of and from any and all rights, claims, demands, causes of action, obligations, damages, penalties, fees, costs, expenses, and liabilities of any nature whatsoever, whether in law or equity (collectively, “ Claims ”), which the Xu Transitioning Parties have, had, or may hereafter have against Heckmann or China Water or any of their Related Parties arising out of, or by reason of, any cause or matter, existing as of the date of this Agreement, WHETHER KNOWN TO THE XU TRANSITIONING PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT OR NOT, including, without limitation, matters relating to the Acquisition, and (except as provided in Section 2.4) any right such party may have to indemnification, defense or advancement of expenses in connection with any Claim brought by a stockholder, creditor or counterparty of Heckmann, China Water or any Related Party, provided, however, that nothing herein shall be deemed to modify, override or terminate any exculpation of liability to the extent provided under or arising from the Certificate or Articles of Incorporation of Heckmann or China Water, and approved by a court or other authority, in a final, binding and nonappealable decision. This release shall not apply to any breaches by Heckman or China Water of this Agreement.

2.2    Release by Heckmann . In consideration of the matters referenced in this Agreement, Heckmann and China Water, for themselves and their Related Parties, hereby forever release, discharge, cancel, waive, and acquit the Xu Transitioning Parties and their respective Related Parties of and from any and all Claims existing as of the date of this Agreement, WHETHER KNOWN TO HECKMANN OR CHINA WATER AT THE TIME OF EXECUTION OF THIS AGREEMENT OR NOT, including,

 

Execution Edition

2


without limitation, matters relating to the Acquisition, and any right such party may have to indemnification, defense or advancement of expenses. This release shall not apply to any breaches by the Xu Transitioning Parties of this Agreement.

2.3    Covenant Not to Sue . The Xu Transitioning Parties and Heckmann further covenant and agree not to institute, nor cause to be instituted, nor aid (except as required by law) any legal proceeding of any nature whatsoever, including, without limitation, in contract or tort or for personal injury, negligence or infliction of emotional distress, except that a party hereto may file a legal proceeding against the other solely to enforce the terms of this Agreement.

2.4    Indemnification .

Except as limited by law, Heckmann Corporation shall indemnify and defend Xu and hold Xu harmless from any and all Claims for losses, damages, liabilities, costs or expenses, including attorney’s fees, to which Xu may become subject that arise out of or in connection with Xu’


 
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