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:
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SECTION
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1: P
RINCIPAL
E CONOMIC T ERMS AND R ELATED M ATTERS .
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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
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.
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SECTION
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2: M
UTUAL R ELEASE AND C OVENANT N OT TO S UE ;
O THER
C OVENANTS ; I NDEMNIFICATION .
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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,
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’