Exhibit 10.52

 

TERM SHEET

 

This Term Sheet is intended to serve as an outline of the basic terms upon which
certain Purchasers agree to purchase shares of IWT Tesoro Corporation (the
“Company”).

 

Company:

 

IWT Tesoro Corporation

 

 

 

Purchaser:

 

Sophisticated Accredited Investors (the “Purchaser”)

 

 

 

Security to be Issued:

 

Series A Convertible Cumulative Preferred Stock (“Series A”) Preferred Stock.

 

 

 

Coupon Rate:

 

Year 1
Year 2
Year 3
Year 4
Year 5 and beyond

4%
6%
8%
10%
10%

 

 

 

 

Shares Being Offered:

 

At the Closing, the Purchaser will purchase up to 2,000,000 shares of Series A
at a price of $5.00 per share for the aggregate price of up to ten million US
dollars (“$10,000,000 USD”) through November 15, 2007. Payment for shares can be
in tranches.

 

 

 

Restriction of Issuance
of Securities

 

Excluding any Company benefit plan or any securities (derivative securities)
outstanding, Company shall not issue additional securities, options, warrants,
or pledges without the approval of the Series A Preferred Stockholders for a
period of 12 months following funding of not less than $5.0 million.

 

 

 

Board Member:

 

The current Directors of the Company shall appoint a new Director selected by
the Purchaser at such time as the Company has received funding of not less than
$2.0 million.

 

 

 

Non-Shorting:

 

The Purchaser warrants that it will not engage in short sales of the Company’s
common stock.

 

 

 

Conversion:

 

In the event the Company fails to meet any of the financial or operational
performance criteria as identified and defined in Exhibit A -Performance
Criteria, each share of Series A Preferred Stock is convertible into 20 shares
of the Company’s Restricted Common stock (“Common Stock”). If the Company meets
or exceeds all performance criteria as defined in Exhibit A Performance
Criteria, each share of Series A is convertible into 8 shares of the Company’s
Restricted Common stock. The offering is being made on a best efforts basis. The
Common Stock is currently quoted on the Over The Counter Bulletin Board under
the symbol IWTT.OB.

 

The Purchaser may convert the Series A Preferred Stock and any unpaid dividends
into Common Stock at any time as stated above. Unpaid dividends will be
converted into Restricted Common Stock according to the appropriate conversion
right stated above.

 

The shares of Series A Preferred Stock, subject to certain limitations, shall be
converted, in whole or in part from time to time at the Company’s option, at any
time that the trading price of the Common Stock shall be $3.00 per share or
higher for 20 consecutive trading days.

 

 

 

Sales to Purchaser:

 

The offering of the Securities has not been registered under the U.S. Securities

 

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Act of 1933, as amended (the “Securities Act”) and the Securities are being
offered in reliance upon the exemption under Section 4(2) of the Securities Act
and the provisions of Regulation D promulgated thereunder. Sales of the
Securities will be made only to “accredited investors” as such term is defined
in Rule 501(a) of Regulation D under the Securities Act.

 

Each of the Securities to be issued shall contain a legend in substantially the
following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. THE
SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT.

 

 

 

Use of Proceeds:

 

The Company and Purchaser shall mutually agree on the use of proceeds.

 

 

 

Conditions to Closing:

 

Customary conditions, including (a) acceptable legal and business due diligence
on the Company and its subsidiaries, (b) required approvals, and (c) appropriate
documentation.

 

 

 

RISK FACTORS

 

The Securities offered hereby are highly speculative and involve a high degree
of risk and, therefore, should not be purchased by anyone who cannot afford the
loss of their entire investment. Risk Factors relating to this offering and the
Company are set forth in the Company’s filings with the SEC.

 

 

 

Information Provided
or Made Available.

 

Each Purchaser must represent their intention to acquire the securities for
investment only and not with a view for sale in connection with any distribution
thereof and appropriate legends were affixed to the share certificates and
instruments issued in such transactions. The sales of these securities were made
without general solicitation or advertising. Each Purchaser has been provided
with or has had access to all information, including financial, has reviewed the
information and has had the opportunity to ask the Company questions about the
Company, including financial, and the Securities.The Company’s filings with the
Securities and Exchange Commission are available at www.sec.gov.

 

Agreed to by:

 

 

 

 

 

The Company

 

The Purchaser

 

 

 

IWT Tesoro Corporation

 

KMA Capital Partners, Inc, its affiliates and investors

 

 

 

By:

 

 

By:

 

 

Henry J. Boucher, Jr., CEO and President

 

 

Douglas Calaway, President and CEO

 

Duly Authorized

 

 

7658 Municipal Drive

 

 

 

Orlando, FL 32819

 

 

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