EXHIBIT 10.2
FORMATION AGREEMENT
THIS AGREEMENT is made this 13 day of January 2001 by and among
EARTHFIRST TECHNOLOGIES, INC., a Florida corporation ("EFT"), XXXXXXX XXXXXXXXX
("Chirinsky"), XXXX XXXXXX ("Xxxxxx") and TOMORROWS INNOVATIVE TECHNOLOGY TODAY,
INC., a Florida corporation ("TI Tech"). (Collectively the "Parties")
W I T N E S S E T H:
WHEREAS, EFT has been technically and financially supportive of various
solid waste to energy technologies such as the Starved Air Combustor, Pyrolytic
Carbon Extraction and, most recently, Green Waste to Energy ("GWE Technology")
WHEREAS, EFT is the exclusive licensee of the GWE Technology, pursuant
to that certain World Wide Exclusive License Agreement dated December 1999 by
and between the parties (the "Exclusive License") relating to all matters
associated with the GWE Technology. A copy of the Exclusive License is attached
hereto as Exhibit "A";
WHEREAS, EFT provided financing and managerial support and TI Tech has
assembled a working prototype facility located in Port Xxxxxx, Mississippi which
encompasses the GWE equipment in a configuration capable of converting various
feedstock into saleable oil, commercial grade carbon black, commercial synthetic
gas and saleable scrap steel;
WHEREAS, Chirinsky is the sole shareholder of TI Tech and Xxxxxx is the
sole inventor of the GWE Technology; and
WHEREAS, the Parties now desire to form a new entity dedicated to the
commercialization of the GWE Technology pursuant to the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, intending to be legally bound relating to the mutual
promises made herein and for other good and valuable considerations, receipt of
which is hereby acknowledged the Parties hereby agree as follows.
1. RECITALS. The Parties agree that the foregoing Recitals are
true and correct.
2. FORMATION. The Parties shall form a new entity according to
the following:
(a) The name of the new entity shall be EarthFirst Waste
to Energy, LLC ("EFWE");
(b) EFT shall be responsible for the formation of EFWE as
a limited liability company established in Delaware or other jurisdiction
acceptable to the Parties, and shall prepare the operating agreement which shall
incorporate the terms set forth herein and other customary terms and provisions;
(c) EFT shall receive a fifty-one percent (51%) interest
in EFWE and Chirinsky shall receive forty-nine percent (49%) interest in EFWE;
(d) EFWE shall be organized in such a way to allow for
the consolidation of its revenues with EFT for accounting and financial
reporting purposes;
(e) The Board of Directors of EFWE shall consist of XXXX
XXXXXXX, who shall also serve as the Chairman of the Board of Directors, XXXX
XXXXX, and XXXXXX. Messrs. Xxxxxxx and Xxxxx (or their replacements) shall be
designated by EFT and Xxxxxx (or his replacement) shall be designated by
Chirinsky. The operating agreement of EFWE shall provide that EFT shall select
two-thirds (2/3) of the Board of Directors and Chirinsky shall select one-third
(1/3) of the Board of Directors; and
(f) The offices of EFWE shall consist of XXXX XXXXXXX as
Chairman of the Board of Directors, XXXX XXXXX as President and Chief Executive
Officer, XXXXXX as Vice President of Sales and Development and EFT shall select
an individual to serve as Secretary.
3. EFT CONTRIBUTION. In exchange for the 51% interest of EFWE,
EFT will contribute:
(a) An assignment to EFWE of all its rights under the,
Exclusive License, which assignment is annexed hereto as Exhibit "B";
(b) EFT shall provide all financial record keeping and
administration;
(c) EFT shall assist with the coordination of grant.
Applications on behalf of EFWE related to the GWE Technology and shall respond
in a diligent and timely manner to any informational requests made in connection
with EFT's obligations under this subsection; and
(d) Until such time as EFWE is profitable (as determined
under GAAP), EFT shall contribute the Day-to-Day Operating Expenses of EFWE. The
President of EFWE, after consulting with Xxxxxx, shall submit a budget in
advance for each six-month period which shall be subject to the reasonable
approval of EFT which approval shall not be unreasonably withheld. For purposes
of this Agreement, "Day-To-Day Operating Expenses" shall mean those expenses
required to complete all budgeted expenses of EFWE, including, without
limitation those items specified in Technology Development section herein.
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4. CHIRINSKY CONTRIBUTION. In exchange for the 49% interest of
EFWE, Chirinsky, TI Tech and Xxxxxx shall contribute the following:
(a) Assignment to EFWE of any and all rights, privileges
or any claims of any nature relating to the GWE Technology not embodied within
that Exclusive License Agreement annexed hereto as Exhibit A;
(b) Conveyance to EFWE of all their right, title and
interest in and to all matters and property associated with the Port Xxxxxx,
Mississippi GWE facility.
5. OBLIGATIONS AND RIGHTS OF EFWE AT FORMATION. In the formation
of EFWE, the Parties, at the expense of EFT, shall cause to have prepared:
(a) A certified Balance Sheet as of September 31, 2000
and a Statement of Operations from a date given through December 31, 2000
(Exhibit "C"). For the purposes of this Agreement, the term "date given" shall
refer to the date of the first expenditures with respect to the, assembly and
operation of the Port Xxxxxx, Mississippi GWE facility,
(b) Opening statements attached as Exhibit D and executed
by all Parties hereto certifying that those items specified in Exhibit C
represent 100% of the liabilities, assets or any legal matters of any nature of
EFWE and that there are no others, such statement shall further at a minimum
state that each Party hereon shall individually indemnify each and every other
Party from any omissions of an asset or liability that leads to any claim by any
other party asserting a right or privilege to either the GWE Technology or the
Port Xxxxxx, Mississippi GWE facility. All Parties hereto explicitly acknowledge
that EFWE shall only be obligated for those items set forth in Exhibit C hereon
and for any changes that result from the operation of EFWE from the date of the
Balance Sheet into perpetuity or for so long as EFWE dull remain in existence.
6. RATIFICATION OF EXCLUSIVE LICENSE. The parties hereby reaffirm
the validity of the Exclusive License included hereon as Exhibit A, as modified
hereby.
7. NOTICES. Any notice or other communication required or
Permitted hereunder shall be sufficiently given if delivered in person or sent
by facsimile transmission (promptly confirmed by registered or certified mail as
provided herein), by overnight courier service or three days after being sent by
registered or certified mail, postage prepaid, addressed as follows:
If to Xxxx Xxxxxx, Xxxxxxx Xxxxxxxxx or TI Tech:
Tomorrows Innovative Technologies Today, Inc.
0000 Xxxxxxxxx 000xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
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Copy to:
Xxxxxxxxx Traurig. P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx
If to EarthFirst Technologies, Inc.:
EarthFirst Technologies, Inc.
0000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000,
8. CERTAIN OBLIGATIONS AT AND AFTER CLOSING.
(a) Xxxxxx shall resign as an employee of EFT and shall
be retained by EFWE on term and conditions as determined by the Board of EFWE,
but shall be at the current levels of salary ($90,000 per annum) and other
current benefits. Other incentive bonus plans will be approved by the Board of
Directors of EFWE. Xxxxxx'x salary, bonus program and other matters at inception
of EFWE, are more My set forth in a letter agreement attached hereto as Exhibit
"F."
(b) At closing, TI Tech, Xxxxxx, Chirinsky and EFT shall
present a specific listing of all expenses made in furtherance of the GWE
Technology and EFWE shall reimburse them for those expenses. EFWE shall repay
such expenses on a pro rata basis from available cash provided however that EFWE
shall pay the first $500,000 in expenses submitted by Ti Tech, Xxxxxx and
Chirinsky prior to repayment of any expenses to EFT. The Parties agree that only
direct expenditures for the project shall be reimbursed and EFT shall not seek
reimbursement for such item as corporate overhead, or legal or accounting
assistance.
(c) By execution hereof, the Parties to that Exclusive
License attached hereto as Exhibit A shall amend same as necessary to reflect
the provisions of this Agreement, including the waiver by Xxxxxx of all royalty
payments required under the Exclusive License as such remuneration shall be made
through distributions from EFWE.
(d) The operating agreement of EFWE shall include, among
other things, the provisions attached as Exhibit G.
9. MISCELLANEOUS
(a) The Parties agree that this entire Agreement will be
binding upon and will inure to the benefit of the parties and their respective
successors, heirs, executors and assigns.
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(b) Subject to the terms and conditions herein provided,
each of the Parties shall use their best efforts to take or cause to be taken
such action to execute and deliver or cause to be executed and delivered, such
additional documents and instruments and to do or cause to be done, all things
necessary proper and advisable under the provisions of this Agreement and under
applicable law to consummate and make effective the transaction contemplated by
this Agreement.
(c) Every covenant term and provision of this Agreement
shall be construed simply according to its fair meaning and not strictly for or
against any of the Parties. This Agreement supercedes any prior agreements,
either oral or in writing, between the Parties including that certain Exclusive
License Agreement which is annexed hereto as Exhibit A
(d) This Agreement may be signed in more than one
counterpart, in which case each counterpart shall constitute an original of this
Agreement.
(e) This Agreement may not be changed orally, but only by
an agreement in writing signed by the parties hereto. No waiver by any party of
any breach of or right under any provision of this Agreement shall be effective
unless in writing and signed by the party purporting to give the same, and no
such waiver shall constitute, a waiver of any subsequent breach of or right
under that or any other provisions of this Agreement.
(f) In case any provision in this Agreement shall beheld
invalid, illegal or unenforceable by a court of competent jurisdiction in any
respect in any jurisdiction, the validity, legality and enforceability of such
provision in any other jurisdiction and the validity, legality and
enforceability of the remaining provisions hereof in any jurisdiction will not
in any way be affected or impaired thereby.
(g) In the event that any exhibit which is referred to in
this Agreement is not attached hereto at the time of execution of this Agreement
the Parties shall promptly cause any such missing exhibit to be prepared and
submitted to the other Party for its approval within fifteen (15) days form the
date of the Agreement.
IN WITNESS WHEREOF, the Parties have signed this Agreement as of the
day and year first written above.
WITNESSES: TOMORROWS INNOVATIVE
TECHNOLOGIES TODAY, INC.
/s/ XXXXXX XXXX By:/s/ XXXXXXX XXXXXXXXX
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Its: CEO/PRESIDENT
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EARTHFIRST TECHNOLOGIES, INC.
/s/ XXXXXX XXXX By:/s/ XXXX X. XXXXX
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Its: EXECUTIVE V. PRESIDENT
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/s/ XXXXXX XXXX /s/ XXXXXXX XXXXXXXXX
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XXXXXXX XXXXXXXXX
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/s/ XXXXXX XXXX /s/ XXXX XXXXXX
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XXXX XXXXXX
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