Exhibit 10.1

 

Pivotal Battery Corp.

6424 E. Greenway Parkway, Suite 100

Scottsdale, AZ 85254

 

 

CONFIDENTIAL

 

 

June 5, 2019

 

 

Mr. Doug Bathauer

Chief Executive Officer

Integral Technologies, Inc.

412 Mulberry

Marietta, OH 45750

 

Dear Doug:

 

Re: BINDING TERM SHEET TO ACQUIRE INTEGRAL TECHNOLOGIES, INC’S BIPOLAR BATTERY
TECHNOLOGY

 

Integral Technologies, Inc. (“Integral”) and Pivotal Battery Corp. (“Pivotal”)
are parties to a non-binding term sheet dated March 11, 2019 setting forth the
terms under which Pivotal would acquire Integral’s proprietary bi-polar plate
technology. The technology includes but is not limited to all prototypes,
equipment, patents (pending), patent applications, know-how, copyrights, and
trademarks related to the technology owned by Integral (the “Technology”).

The parties now desire to make a formal commitment by entering into this binding
term sheet (the “Binding Term Sheet”) setting forth the terms of the purchase by
Pivotal for the Technology owned by Integral.

 

BINDING TERM SHEET

 

1. Parties:

 

Integral Technologies, Inc., a Nevada corporation, and Pivotal Battery Corp., a
Delaware corporation.

     

2. Asset

 

Pivotal will purchase 100% of the Technology from Integral (“Asset Purchase”).

     

3. Purchase Price

 

The purchase price for the Asset Purchase shall be $2,000,000 in cash, plus
Pivotal’s common stock (the “Purchase Price”) as stated below.

 

 

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4. Payment

 

On the Closing Date of the Asset Purchase, Pivotal shall provide the following
to Integral:

●  $2,000,000 in cash, or in cash and a promissory note. The promissory note
shall be convertible into shares of Pivotal common stock at Integral’s sole
discretion.

●  The note shall be secured by a security interest in all the assets in the
Asset Purchase. The note shall bear interest at the rate of 7% per annum.

     

5. Equity

 

Within 30 business days from the Closing Date, Pivotal shall provide Integral,
the greater of 1,500,000 shares or 15%, on a fully diluted bases at time of
stock issuance, of Pivotal’s common stock.

     

6. Closing Date

 

No later than 5PM, Eastern Daylight Savings Time, August 30, 2019.

     

7. Royalty

 

Pivotal shall pay Integral the following royalties from sales generated from the
Technology, including licensing revenue, and sales of bipolar plates, if any,
for a term of 10 years (the “Royalty Term”) based on gross sales (net sales
minus returns). The Royalty Term shall start upon the first commercial scale
sale of bipolar plates and shall be the following royalty rate (“Royalty Rate”):

●  Years 1-4: 5%

●  Years 5-7: 4%

●  Years 8-10: 3%

     

8. Form of Purchase of the Technology

 

A technology asset purchase agreement shall be entered into between Integral and
Pivotal stating the terms of the Technology purchase and the payment schedule
(the “Technology Asset Purchase Agreement”).

     

9. Post-Closing Agreements

 

Pivotal shall put in place consulting agreements for Slobodan Pavlovic and Mo
Zeidan to continue the development of a bi-polar lead acid battery. The time
spent by Pavlovic and Zeidan on the bi-polar lead acid battery development shall
not prohibit them from performing their current roles for Integral’s current
long fiber conductive business.

     

10. Supplier Agreement

 

Integral and Pivotal shall enter into a supplier agreement where Integral shall
be the exclusive supplier of conductive plastic materials used by Pivotal for
the manufacture of bi-polar plates for a period of ten (10) years (the
“Exclusive Supplier Period”). During the Exclusive Supplier Period, Integral
shall supply its conductive materials at a mutually agreeable price. Upon the
expiration of the Exclusive Supplier Period, Integral shall have the right to
match any third party supplier price to maintain its exclusive supplier role
with Pivotal.

 

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11. Non-Compete

 

For a period of five (5) years after the Closing Date of the Technology Asset
Purchase, or as long as Integral remains a supplier to Pivotal, whichever may be
longer, Integral shall not, without the prior written consent of Pivotal,
participate or engage in, directly or indirectly, any business that is
competitive with the Technology.

     

12. Board of Directors

 

Any time after the Closing Date, Integral shall have the right to nominate one
director to Pivotal’s board of directors, and Pivotal shall take all necessary
actions to add Integral’s nominee to Pivotal board within five (5) business days
after the nomination. Integral shall maintain its board representation as long
as Integral owns 2.5% of Pivotal’s outstanding common stock, or the promissory
note remains outstanding.

     

13. Additional Terms

 

A. Integral will receive 20% of net benefit from the pending DOD project that
Pivotal is pursuing with its prospective UK licensee, The Ultimate Battery Co.
Net benefit equals the total funds received from DOD minus out of pocket
expenses incurred by Pivotal.

 

B. Assignment of the Joint Technology Assessment Agreement (“JTAP”) between
Integral and Advanced Battery Concepts, LLC (“ABC”) to Pivotal on the Closing
Date. The JTAP provides ABC’s support and manufacturing resources in
incorporating the bipolar plates into ABC’s existing bipolar battery design, and
also provides for prototyping and testing support.

     

14. Integral Shareholder Allotment in the Share Offering

 

Pivotal is presently conducting a share offering of its common stock to fund the
Asset Purchase (the “Share Offering”).

 

Pivotal shall set-aside an allotment of 1,000,000 shares of the Share Offering
for Integral shareholders, with an overallotment of 1,500,000 shares if the
initial allotment has been fully subscribed by June 27, 2019. Integral
shareholders must be shareholders of record, as of December 31, 2018. Rights are
non nontransferable and non-assignable.

     

15. Press Release

 

Except as required by law, the parties agree that this Binding Term Sheet and
the transactions contemplated herein shall be kept confidential and no public
announcement of the transactions shall be made unless agreed upon in writing by
both parties. Notwithstanding the foregoing, Integral shall have the right to
make any disclosure or filing that Integral is required by OTC listing standards
or under federal securities laws, including form 8K regarding the disposition of
material assets.

 

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16. Execution Agreements:

 

The parties shall work together in drafting the necessary execution agreement(s)
for the asset purchase. The execution agreements and other related documentation
customary for transactions of this type shall contain (among other things)
customary representations, warranties and indemnities. The parties will make
best effort to negotiate and execute final agreements promptly following the
execution of the Binding Term Sheet.

 

     

17. Expenses:

 

Pivotal shall pay up to $10,000 for Integral’s expenses, including its legal
expenses, time and effort related to the development of all necessary
documentation and travel, if any, related to the transactions contemplated.

     

18. Governing Law; Enforcement:

 

This letter agreement shall be governed by the laws of the State of Arizona. Any
dispute or controversy arising under or related in any way to this letter
agreement shall be adjudicated by a court of competent jurisdiction located in
the State of Arizona.

 

 

 

[Remainder of Page Intentionally Blank.  Signature Page Follows]

 

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If the terms set forth in this Binding Term Sheet are acceptable, please sign
below.

 

 

 

 

Sincerely,

 

 

 

 

 

Dated: June 5, 2019

By:

/s/ Richard Bogan

 

 

Name:

Richard Bogan

 

 

Title:

Managing Director

Pivotal Battery Corp.

 

 

 

 

 

Agreed:

   

 

 

 

By:

/s/ Doug Bathauer

 

Name:

Doug Bathauer

 

Title:

Chief Executive Officer

Integral Technologies, Inc.

 

 

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