Exhibit 10.1 

 

 

FERN HOLDINGS CORP.

 

C/O SAMIR MASRI CPA FIRM P.C.

175 GREAT NECK ROAD, SUITE 403

GREAT NECK, NY 11021

 

 

 

 

Mr. Nick Havercroft Chief Executive Officer iQuitine Limited

3rd Floor

1 Creed Court 5 Ludgate Hill

London EC4M 7AA England

July 17, 2014

 

Re: Binding Letter of Intent for Share Exchange

 

Dear Mr. Havercroft:

 

This letter of intent (this "LOI") sets forth the terms pursuant to which Fern
Holdings Corp. ("Fern") agrees to (a) acquire no less than 100% of the issued
and outstanding equity interests on a fully diluted basis (the "iQuitine Equity
Interests") of iQuitine Limited (“iQuitine") free and clear of all liens, claims
and other encumbrances of any kind or nature whatsoever in exchange for
4,250,000 shares (based on 100% of the iQuitine Equity Interests) (the "Fern
Shares") of common stock, par value $0.000 I per share (the "Common Stock"), of
Fern (the "Share Exchange") issuable to the equity holders of iQuitine
(including any holders of debt or other securities convertible into or
exchangeable for iQuitine Equity Interests) (collectively, the "iQuitine Equity
Holders"), and then (b) engage in a merger with iQuitine in which Fern will be
the surviving corporation (the "Merger").

 

1.Share Exchange1

 

(a)                Subject to the terms and conditions contained herein, to be
superseded by a definitive agreement (the "Definitive Agreement"), Fern shall
acquire the iQuitine Equity Interests from the iQuitine Equity Holders in
exchange for the Fern Shares which shall be issued to the iQuitine Equity
Holders. As an inducement for iQuitine and the iQuitine Equity Holders to
consummate the Share Exchange, upon the closing (the "Closing") of the Share
Exchange, the sole shareholder of Fern (the "Sole Shareholder") will agree to
cancel 4,250,000 issued and outstanding shares of Common Stock of Fern (the
"Cancellation Shares") representing 85% of Fern's issued and outstanding capital
stock. iQuitine and Fern shall negotiate in good faith to arrive at a mutually
acceptable Definitive Agreement for approval, execution and delivery on the
earliest practicable date. The parties shall cooperate with each other and
proceed, as promptly as is reasonably practicable, to seek to obtain all
necessary consents and approvals, if any, from third parties or governmental
entities, and to endeavor to comply with all other legal or contractual
requirements for, or preconditions to, the execution and consummation of the
Definitive Agreement.

 

(b)                The Closing of the Share Exchange shall take place on July
31, 2014 or as soon thereafter as practicable (the "Closing Date"). At the
Closing, iQuitine shall cause the iQuitine Equity Holders to sell, convey,
assign, transfer and deliver the iQuitine Equity Interests to Fern free and
clear of all liens, claims and other encumbrances of any kind or nature
whatsoever by delivery of all required documentation as specified in the
Definitive Agreement, and Fern shall cause to be delivered to iQuitine or the
iQuitine Equity Holders, stock certificates representing the Fern Shares. In
addition, on or prior to the Closing, the Sole Shareholder shall deliver to Fern
a certificate or other instrument representing the Cancellation Shares,
effective upon the Closing, and Fern shall cancel the Cancellation Shares as
issued and outstanding. Each party shall pay its own fees and expenses and those
of its agents, counsel and advisors with respect to the Share Exchange.

 

 

__________________________

 

1 Any specific UK requirements relating to the Share Exchange to be addressed in
this section.

 

1

 

 

 

(c)                   The Merger shall proceed diligently after the Closing of
the Share Exchange and shall be conducted in accordance with all applicable law.

 

2.     Transaction Structure. iQuitine and Fern, upon their mutual consent, may,
at any time, amend the provisions of Section 1 hereof for the purpose of
changing the type of securities or structure of the transaction contemplated by
this LOI; provided, however, that any change to the terms of the transaction
shall result in iQuitine becoming the wholly owned subsidiary of Fern.

 

3.Fern Restrictive Covenants.

 

(a)                   From the date of this LOI until the earlier of the date of
termination of this LOI as provided below and the Closing, Fern shall not,
without the prior written consent of iQuitine, (A) issue any equity or debt
securities or options, warrants or other rights to purchase any of such
securities, (B) redeem, repurchase or cancel any of its securities, except as
contemplated by the LOI, (C) enter into any transaction or agreement that would
make the consummation of the transactions contemplated by this LOI impossible or
commercially impracticable, or (D) in any way impact the value of any
intellectual property ("IP") or market opportunity for anything related
toe-cigarettes.

 

(b)                  From the date of this LOI until the earlier of (i) the date
of termination of this LOI as provided below or (ii) 120 days from the date of
this LOI, neither Fern, nor any of its officers, employees, directors, managers,
advisors, representatives or affiliates will enter into or continue any
negotiations or discussions with other parties relating to any transaction
similar to the Share Exchange. iQuitine may pursue any and all remedies in law
or in equity in the event of a material breach of this provision by iQuitine,
including an action for specific performance without the posting of any bond.

 

4.iOuitine Restrictive Covenants.

 

(a) From the date of this LOI until the earlier of the date of termination of
this LOI as provided below and the Closing, iQuitine shall not, without the
prior written consent of Fern, (A) issue any equity or debt securities or
options, warrants or other rights to purchase any of such securities, (B)
redeem, repurchase or cancel any of its securities, except as contemplated by
the LOI, (C) enter into any transaction or agreement that would make the
consummation of the transactions contemplated by this LOI impossible or
commercially impracticable, or (D) out license any and all e-cigarette, e-liquid
or any related IP, all of which must become/remain property of iQuitine.

 

(b) From the date of this LOI until the earlier of (i) the date of termination
of this LOI as provided below or (ii) 120 days from the date of this LOI,
neither iQuitine, nor any of its officers, employees, directors, managers,
advisors, representatives or affiliates will enter into or continue any
negotiations or discussions with other parties relating to any transaction
similar to the Share Exchange. Fern may pursue any and all remedies in law or in
equity in the event of a material breach of this provision by Fern, including an
action for specific performance without the posting of any bond.

 

5.                  Satisfaction of Indebtedness. Liabilities and Obligations;
Transfer of Assets. Notwithstanding any other provision of this LOI, Fern shall
have satisfied, discharged or otherwise paid all of its outstanding liabilities,
debts and obligations at or before the Closing, other than outstanding accounts
payable and other debt payable to related parties up to an aggregate of
approximately $55,000 (the "Loan Amount"), to be repaid upon the closing of a
financing of at least $20 million in gross proceeds raised by Fern following the
Share Exchange (the "Offering"). In the event less than $20 million in gross
proceeds is raised by Fern in connection with the Offering, the Loan Amount
shall be converted into a note payable upon the one year anniversary of the
earlier of the closing of the Offering or the termination of the Offering. Any
amounts payable by Fern, from the date of this LOI until the Closing, for the
purpose of maintaining the periodic and other filings required to be filed with
the Securities and Exchange Commission (the "Commission") in accordance with
Fern's reporting requirements pursuant to the Securities Exchange Act of 1934,
as amended, and to effect the Share Exchange, including but not limited to legal
and accounting fees and expenses, shall be paid directly by iQuitine. In
addition, all current assets of Fern as of the Closing shall be transferred to
the existing sole shareholder of Fern or affiliates to reduce the Loan Amount or
satisfy any other outstanding accounts payable or related party debt.

 

2

 

 

 

6.                  Resignations. At or prior to the Closing, Fern shall use its
commercially reasonable efforts to cause the current officers and directors of
Fern to resign, without any payment or other additional consideration, and to be
replaced by designees of the current owners of iQuitine, subject to compliance
with Section 14F of the Securities Exchange Act of 1934, as amended, and all
books and records of Fern pertaining to Fern and reasonably needed by Fern shall
be delivered to iQuitine. The resignations and appointment of the officers and
directors shall be a condition to the Closing and resignation letters and board
consents authorizing the appointments shall be delivered at Closing.

 

7.                  Conditions. The drafting, negotiation, execution and
delivery of the Definitive Agreement with respect to the Share Exchange shall be
acceptable to all parties including iQuitine, Fern and the holders of no less
than 100% of the issued and outstanding iQuitine Equity Interests, which shall
include representations, warranties, covenants, indemnifications, and conditions
customary for transactions of this type.

 

8.                 Due Diligence. Fern and iQuitine will provide full access to
the other party and its advisors to conduct a reasonable investigation of
information and materials relating to the financial, business and legal
condition of Fern and iQuitine, as the case may be. The due diligence period
shall commence on the execution of this LOI by Fern and iQuitine and shall
terminate upon the Closing.

 

9.                 Public Disclosure. Unless otherwise permitted by this LOI,
Fern and iQuitine shall consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or
non-confidential) disclosure (whether or not in response to an inquiry)
regarding the terms of this LOI and the transactions contemplated hereby, and
neither shall issue any such press release or make any such statement or
disclosure without the prior approval of the other (which approval shall not be
unreasonably withheld), except as may be required by law including, without
limitation, the filing of any required documents with the Securities and
Exchange Commission ("SEC").

 

10.              SEC Filings. Fern shall cooperate with iQuitine in (i) the
preparation, filing and mailing of a Schedule 14F-l Information Statement to
Fern's stockholders, at least ten (10) days prior to the Closing, to report a
change in the majority of the directors serving on Fern's Board of Directors
after the Closing, if so required, and (ii) the preparation and filing of a
Current Report on Form 8-K, not later than four (4) business days after the
Closing, to report a change in control of Fern and its termination of shell
status.

 

11.              Binding Effect. This LOI is binding upon the parties hereto.
iQuitine and Fern shall proceed in good faith to negotiate, agree upon and enter
into the Definitive Agreement and consummate the Closing of the Share Exchange
and the Merger pursuant to the terms hereof.

 

3

 

 

 

12.              Confidentiality. Each party hereby agrees to maintain the
confidentiality of all Confidential Information (defined below) provided to it
by the other party and to return any materials and other information containing
Confidential Information of the other party in the event that the Closing is not
consummated. "Confidential Information" does not include information disclosed
by Fern in its filings with the SEC. For the purposes hereof, "Confidential
Information" shall mean any and all proprietary information and documents
provided by the disclosing party to the receiving party, either directly or
indirectly, in writing, electronically, orally, by inspection of tangible
objects, or otherwise unless such information has been explicitly designated by
the disclosing party as not Confidential Information. Confidential Information
shall not include information that (i) at the time of use or disclosure by the
receiving party is in the public domain through no fault of, action or failure
to act by the receiving party; (ii) becomes known to the receiving party from a
third-party source on a non-confidential basis whom the receiving party does not
know to be subject to any obligation of confidentiality to the disclosing party;
(iii) was known by the receiving party prior to disclosure of such information
by the disclosing party to the receiving party; or (iv) was independently
developed by the receiving party, or on the receiving party's behalf, without
any use of Confidential Information. Notwithstanding the foregoing, in the event
that disclosure of Confidential Information by a receiving party is made to
comply with any request or inquiry of or by any governmental or regulatory
authority (any of the foregoing, a “Governmental Requirement"), it is agreed
that prior to any such disclosure of such Confidential Information, the
receiving party will, unless such action would violate or conflict with
applicable law, provide the disclosing party with prompt notice of such
Governmental Requirement and the Confidential Information so required to be
disclosed, so that the disclosing party may seek an appropriate protective order
and/or waive compliance with the provisions hereof. It is further agreed that
if, in the absence of a protective order or in the absence of receipt of a
waiver hereunder, the receiving party is nonetheless, in the opinion of the
receiving party's counsel, compelled by Governmental Requirement to disclose any
of such Confidential Information, the receiving party, after notice to the
disclosing party (unless such notice would violate or conflict with applicable
law), may so disclose such Confidential Information as required pursuant to
Governmental Requirement without liability hereunder; provided, however, the
receiving party will furnish only that portion of the Confidential Information
which the receiving party, in the opinion of the receiving party's counsel, is
legally compelled to disclose pursuant to the Governmental Requirement and will
exercise reasonable efforts to cooperate with the disclosing party, at the
disclosing party's expense, with the disclosing party's efforts to obtain an
order or other reliable assurance that confidential treatment will be accorded
to the disclosed Confidential Information. The obligation of confidentiality
under this Section shall survive the termination of this LOI.

 

13.General Provisions.

 

(a)    Termination. This LOI shall terminate in one year from the signature date
if the Share Exchange does not close on or before then.

 

(b)   Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to each party at
the addresses so provided for this purposes. For Fern the address is set forth
at the beginning of this LOI and for iQuitine, the address is also set forth at
the beginning of the LOI (or at such other address for a party as shall be
specified by like notice).

 

(c)    Counterparts; Signatures. This LOI may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same LOI. Delivery by fax or electronic
image of an executed counterpart of a signature page to the LOI shall be
effective as delivery of an original executed counterpart of this LOI.

 

(d)   Severability. In the event that any one or more of the provisions of this
LOI shall be held invalid, illegal or unenforceable in any respect, or the
validity, legality and enforceability of any one or more of the provisions
contained herein shall be held to be excessively broad as to duration, activity
or subject, such provision shall be construed by limiting and reducing such
provision so as to be enforceable to the maxim um extent compatible with
applicable law.

 

4

 

 

(e)    Entire Agreement: Assignment: Parties in Interest. This LOI: (i)
constitutes the entire understanding and agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof; and (ii) is not intended to confer upon any other person
any rights or remedies hereunder, except as specifically provided in this LOI.
No representations, warranties, inducements, promises or agreements, oral or
written, by or among the parties not contained here in shall be of any force of
effect.

 

(f)    Governing Law: Jurisdiction. This LOI shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the law
that might otherwise govern under applicable principles of conflicts of law.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
the federal court for the Southern District of New York and the New York State
Supreme Court located in New York County, New York, in connection with any
matter based upon or arising out of this LOI or the matters contemplated herein
, and also agrees that process may be served upon them in any manner authorized
by the laws of the State of New York for such persons and waives and covenants
not to assert or plead any objection which they might otherwise have to such
jurisdiction and such process.

 

 

*****

 

 

Please execute this LOI be low to acknowledge your agreement and understanding
with respect to the terms and conditions contained herein.

 

  Very truly yours,           FERN HOLDINGS CORP.           By: /s/ Samir N.
Masri     Name: Samir N. Masri     Title: President                 SOLE
STOCKHOLDER:     NLBDIT 2010 SERVICES, LLC           By: /s/ Samir N. Masri    
Name: Samir N. Masri     Title: Manager               ACKNOWLEDGED AND AGREED
TO:             IQUITINE LIMITED           By: /s/ Nick Havercroft     Name:
Nick Havercroft     Title: Chief Executive Officer      

 

 

 

5

--------------------------------------------------------------------------------