This agreement made this 11th day of March 1998
Between: Pinnacle Plastic Inc. (hereafter referred to as "PPI")
and
The Shareholders of PPI (as appearing on the signature page hereto)
and
Micron Enviro Systems Inc. (hereafter referred to as "Micron":)
Whereas Micron is desirous of purchasing from the shareholders of PPI all of the
issued and outstanding shares of PPI on certain terms and conditions as
hereafter set out; and
Whereas the shareholders of PPI and PPI are agreeable to sell all of the issued
and outstanding shares of PPI on certain terms and conditions as hereafter set
out.
Now therefore witnessed:
1. The Parties agree that in consideration of the transfer of 100% of the
issued and outstanding shares of PPI (2 million shares) by the shareholders
of PPI to Micron, Micron will cause to be issued to the shareholders of PPI
two million (2,000,000) shares of Micron, free trading and unrestricted at
issue (subject to clause 7 hereafter set out).
2. The Parties agree that the value of the aforesaid shares of Micron to be
issued are $.10 U.S. per share and PPI represent that the assets of PPI net
of debt are valued at $200,000 U.S. and the shareholders of PPI represent
that their total shareholding represent 100% of the equity and securities
of PPI.
3. Micron having examined the books and records of PPI are satisfied the
shares of PPI have a value of $200,000 U.S. independent of any
representation by PPI or PPI shareholders.
4. PPI represents and warrants the following:
a) (i) PPI has by written agreement been granted an exclusive license
form 815969 Alberta Ltd. (operating as Global Plastics, hereafter
referred to as "Global") to manufacture in Canada for sale to Cultec
Inc. (of Brookfield Conn.) and for distribution in the U.S. and Canada
a product known as Septic and Stormwater Xxxxxxxx; and
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(ii) In the event the product demands of Cultec and good business
practice require the establishment of one or more manufacturing
facilities in the U.S.A. PPI (its subsidiary or parent) shall have the
exclusive license from Global to manufacture and sell in the U.S.A. as
a joint venture partner with Global. The joint venture shall provide
that PPI (its subsidiary or parent) shall provide all capital required
to fund the joint venture's interest and receive all revenues of the
joint venture interest until PPI recovers twice its capital investment
and thereafter share profit from the U.S. facility with Global,
seventy percent (70%) to PPI and thirty percent (30%) to Global. The
agreement shall further provide a proviso with the purpose of
protecting the market of PPI acquired under its exclusive license to
manufacture in Canada and sell in Canada and U.S.A. for distribution
as set out in 4(a)(i).
b) PPI has by written agreement with Global the exclusive right to
participate with Global as a partner or joint venture partners in any
license granted by Global to use Global technology in the manufacture
and marketing of any other Cultec products (other than those
identified in 4(a) license) in the U.S.A. and Canada; the terms of the
partnership specifying that the partnership shall hold no less than a
70% interest, PPI (its subsidiary or parent) shall be responsible for
Capital financing of the partnership interest with a right to recover
two times its capital contribution before sharing partnership revenues
with Global; and
c) PPI (its subsidiary or Parent) has by written agreement with Global
the exclusive license to manufacture and sell plastic pallets in
Canada with exclusive delivery territory of Canada using Global
technology. The license shall allow PPI to sell the product to any
other jurisdiction until Global licenses or sells for other
jurisdictions; and
d) PPI (its subsidiary or Parent) has by written agreement with Global
the exclusive right to participate with Global as a partner in any
license granted by Global to use Global's technology in the
manufacture and sale of plastic pallets in the U.S.A. and
internationally the terms of partnership to be the same as in 4(a)ii)
above; and
e) The royalties payable to Global for the licensing rights referred to
in 4(a), b), c), and d) above shall be seven percent 7% of that amount
represented by deducting "cost of sales" from "Sales Revenue".
f) PPI has a written agreement with Cultec Inc. of Brookfield Conn. to
provide specific lines of product to Cultec on a progressive delivery
to manufacturing capability of up to 15,000 units per month with
delivery commencing May 1, 1999;
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g) PPI has by written agreement with Global the first right of refusal
for the exclusive or non exclusive license to manufacture products
other than those hereinbefore identified, royalties attributed shall
be negotiated within reasonable industry standards having regard to
reasonable return on investment and reasonable profit.
5. Micron in consideration of the aforesaid share sale and transfer of PPI
shares by PPI shareholders undertakes and agree as follows:
a) to raise by equity and debt sufficient capital to finance PPI's
present projected budget on a best-efforts basis; failure to raise
less than $450,000 as required may at the sole option of Global result
in PPI having the licensing rights granted in 4(a)ii, (b), c), d) and
e) amended or terminated; and
b) to direct its capital on a priority basis to the Pinnacle project; and
c) to not dilute it's shares by issue of stock beyond full dilution of
7,620,000 shares prior to raising the capital referred to in 5(a)
above.
6. Micron acknowledges and affirms Pinnacle have or shall enter into a
contract management agreement with 3 shareholders of PPI Contract
Management Company to collectively provide for PPI management and
supervision of Research and development, production operations, marketing,
logistics and strategic development of Pinnacle Cultec agreement as
contemplated in 4(a)i). The term for such service shall be for a period of
5 years with provision for penalty in the event of termination without
cause. Remuneration shall be 15% of profits of Pinnacle before tax
provision or $216,000 whichever is the lesser in Phase 1, such payments to
accrue from April 1, 1999 and be paid commencing June 1, 1999;
In addition to the remuneration set out for Phase I, thee shall be a
provision of additional incentive remuneration by way of bonus related to
increase in pre-tax profit in subsequent years and to workload and scope of
management contract.
Where possible the principals of the Contract Management Company will
participate in any employee benefit plan of Pinnacle.
The Contract Management Company shall be reimbursed for allowable and
authorized expanses.
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Xxxxxxxxx xxxxx xx made for compensation or incompetence adjustment in
event of death, disability or incapacity of individuals designated as
service providers in the Contract Management agreement.
7. It is understood and agreed by MATTSTAN, #615967 Alberta Ltd., and 000000
Xxxxxxx Ltd. that because of their Construction Management agreement, (in 6
above) shares held by them may be designated as "insider" shares and
restricted as to trading by the Securities and Stock Exchange or they may
be restricted as to trading due to the close affiliation as "a control
block" representing collectively more than 10% of the issued stock of
Micron.
8. This agreement is conditional on Pinnacle providing the agreements referred
to in clause 4 hereof in form and content agreeable by Micron.
9. The technology of Global herein referred to is that technology, process and
procedure as set out in the existing patent application of Global, any
amendments or extensions thereto.
10. This agreement may be executed in counterpart and by fax upon each page
being initialed by Micron and Pinnacle.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
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[ILLEGIBLE] Mattstan
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
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[ILLEGIBLE] 815967 ALTA LTD.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
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Xxxxxxxx, C 815966 ALTA LTD.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
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[ILLEGIBLE] Pinnacle
/s/ [ILLEGIBLE]
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Micron
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