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EXHIBIT: 10.09
PRE-INCORPORATION AGREEMENT
1. This is a pre-incorporation agreement between Xxxxxx Xxxxxxx and Inland
Island, Inc., an Oklahoma corporation (Inland) (both hereafter referred
to as Xxxxxxx Group) and Fibr-Plast Corporation, an Oklahoma
corporation (Fibr-Plast).
2. RECITALS: Whereas,
2.1 Fibr-Plast has a trademark on the trade name Fibr-Plast(C);
additionally, Fibr-Plast has a patent application pending for
the manufacture of the Fibr-Plast(C) product.
2.2 Fibr-Plast has a unique process for utilizing and recycling
discarded materials into molded or extruded recycled products
for construction, fencing and other like uses;
2.3 Xxxxxxx Group is desirous of entering into a joint venture
with Fibr-Plast;
2.4 these parties shall now form an Oklahoma corporation (Nucorp),
which they will own equally and which will hold the assets of
this joint venture on the basis hereafter described;
2.5 Xxxxxxx Group has committed to invest sufficient funds (in the
opinion of Nucorp's Board) for the purchase of needed
equipment;
2.6 Xxxxxxx Group has also committed to purchase or furnish a
building suitable for a plant for the manufacture of
Fibr-Plast products and to make the necessary down payment
thereon;
2.7 Fibr-Plast has committed to deliver a mold (or floating mold)
for the manufacture of Fibr-Plast products.
And, Whereas, these parties have agreed upon the consideration for and
conditions of the formation of
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Nucorp and of their joint venture, all as such are separately hereafter
described.
3. CONSIDERATION. The consideration for this Agreement include $1.00 cash
in hand paid by each party to the other, the receipt of which is hereby
acknowledged, and the additional consideration of the agreements,
promises, commitments and covenants hereafter given and exchanged and
the performance of the parties with respect thereto.
4. ADDITIONAL CONSIDERATION FROM FIBR-PLAST. Fibr-Plast shall forthwith do
the following:
4.1 License the Fibr-Plast(C) name to be licensed to Nucorp on
that non-exclusive basis hereafter described;
4.2 As the equipment and plant facility are acquired as aforesaid,
then Fibr-Plast will disclose its technology to Nucorp for the
manufacture of the Fibr-Plast products in exchange for a
non-disclosure and non-compete agreements from Nucorp and from
Xxxxxxx Group;
4.3 Fibr-Plast will furnish a mold (or floating mold) for the
manufacture of its basic product and will lease the same to
Nucorp for $1.00 per year, such lease to be on those
additional conditions separately hereafter described;
4.4 Fibr-Plast shall furnish two persons to serve on the Board of
Directors of Nucorp; and,
4.5 Fibr-Plast shall act as the marketing and sales arm of Nucorp
for the sale of all Nucorp products in exchange for a
marketing and sales contract.
5. ADDITIONAL CONSIDERATION FROM XXXXXXX GROUP. Xxxxxxx Group shall now do
the following:
5.1 furnish sufficient capital to acquire the needed equipment and
additionally furnish sufficient
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start-up operating capital (all in the opinion of Nucorp's
directors) for the commencement of operations by Nucorp;
5.2 neither Xxxxxxx Group nor Nucorp shall mortgage nor encumber
the equipment EXCEPT for the initial unpaid purchase price
[after passing the agreed capital otherwise herein described];
5.3 obtain a loan based upon Xxxxxxx Group's credit of not less
than $50,000.00, to be used by Nucorp for the purchased of
additional equipment; and,
5.4 Xxxxxxx Group shall furnish two persons for the Board of
directors of Nucorp.
6. FORMATION OF NUCORP. The parties shall now jointly accomplish the
following:
6.1 the formation of an Oklahoma general corporation (and allowing
for the conduct of all businesses except that requiring
special licensure and also except banking and insurance);
6.2 the corporation shall have one class of stock only;
6.3 the corporation shall have 10,000 shares of common stock
authorized at $1.00 par each;
6.4 500 shares thereof shall be issued to Xxxxxxx Group and 500
shares thereof shall be issued to Fibr-Plast;
6.5 each shareholder shall have preemptive rights as to any future
issues of capital stock;
6.6 none of the capital stock of Nucorp shall be sold, assigned,
transferred, encumbered or subjected to any third-party lien,
security interest or claim.
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Each stock certificate shall bear a legend on the certificate
stating as follows:
The capital stock of Nucorp [or other name chosen by
the parties hereafter] shall not be sold,
transferred, assigned or subjected to any mortgage,
security interest or other encumbrance except as such
may be allowed by the bylaws of Nucorp;
6.7 the bylaws shall be jointly approved by both parties;
6.8 the bylaws - among other things - shall provide that no
shareholder may sell, encumber nor otherwise transfer the
capital stock of Nucorp without (a) the written consent of the
other shareholder thereto, which written consent shall only be
good for thirty (30) days, following a full disclosure and
copies of all writings dealing with such transferor's proposed
sale, encumbrance or other transfer, and (b) the right of the
other shareholder receiving such notice to purchase, loan or
take such transfer on the same terms as the third-party
covered by such disclosure, and (c) with the foregoing
exceptions only, a shareholder shall not be entitled to sell,
encumber or transfer its interest;
6.9 Once Xxxxxxx Group has constructed, completed and equipped a
manufacturing facility as herein contemplated, then Fibr-Plast
shall issue to Xxxxxxx Group 300,000 shares of Fibr-Plast
common stock. Additionally, 12 months after such date,
Fibr-Plast shall issue to Xxxxxxx Group an additional 300,000
shares of Fibr-Plast common stock assuming the continued
compliance with the terms hereof by Xxxxxxx Group. Further,
Fibr-Plast shall deliver options to Xxxxxxx Group to purchase
250,000 shares of Fibr-Plast at $0.25 per share, to be
exercised within three years from the date of such option,
subject only to the continued compliance of Xxxxxxx Group with
the terms hereof.
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7. OWNERSHIP OF PATENTS, PATENT APPLICATIONS AND DEVELOPMENTS.
7.1 (Intent). At this time Fibr-Plast has a patent application
pending for the manufacture of the Fibr-Plast(C) product. That
patent application and all resulting patents shall be and
remain the sole and exclusive property of Fibr-Plast.
7.2 (Disclosure of Technology -- Additional Developments).
Fibr-Plast will now disclose to Nucorp and Xxxxxxx Group all
of Fibr-Plast's confidential and privileged and proprietary
information and trade secrets as to the formulation,
manufacture, extrusion and finishing of the Fibr-Plast(C)
product.
7.3 (Title to Patents & Developments). All modifications or
improvements relating either to the concept or patent
application of Fibr-Plast shall be and remain the property of
Fibr-Plast. Any other developments and inventions covering any
other products or methods of manufacturing other products
shall be and become the property of Nucorp. These parties
agree to execute such transfers or assignments of patents or
interests as shall be necessary to effect the foregoing.
8. PLANT FACILITY.
8.1 (Intent). Xxxxxxx Group desires to purchase (rather than rent
or lease) a plant facility suitable for the joint venture
activities of these parties through Nucorp.
8.2 (Acquisition of Facility). The proposed facility shall be
subject to approval by the Nucorp Board of Directors.
8.3 (Mortgage Installment Payments). From available income Nucorp
shall make the installment payments coming due on the financed
purchase
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price of the building. Notwithstanding, if Nucorp does not
occupy all of the building or if Xxxxxxx Group shall (with
Nucorp's approval) utilize any portion of the building for its
own business purposes, then Xxxxxxx Group shall be responsible
for and pay that pro rata share of such mortgage installment
payments which the space not utilized by Nucorp bears to the
total space.
8.4 (Inability of Nucorp to Pay Share of Installments). If Nucorp
is unable from its revenue stream to pay its share of such
monthly mortgage installment payments, then Xxxxxxx Group
shall do so and Nucorp be obligated to Xxxxxxx Group in
connection with exercising its equity and options as such are
separately hereafter described. By way of clarification,
Xxxxxxx Group in the first instance shall make such payments
as are due. Nucorp, from available net profits available
thereafter shall repay Xxxxxxx Group or - when feasible - make
those payments direct to the parties entitled to receive the
same.
8.5 (Nucorp Equitable Interest in Premises). If such property is
acquired as aforesaid and if Nucorp makes all or some of the
mortgage installment payments as above discussed, then Xxxxxxx
Group agrees that (a) Nucorp shall have an equitable interest
in the property commensurate with that proration of the total
of mortgage installments made (b) that Xxxxxxx Group shall not
sell the property to a third-party without accounting to
Nucorp for such equitable interest from the sale proceeds (c)
at the time of purchase and recording the deed of any such
property, Nucorp, Xxxxxxx Group and Fibr-Plast shall all
execute and file of record a Notice in recordable form setting
forth their equities in such properties as described in this
Agreement and in that certain Joint Venture Agreement between
these parties.
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8.6 (Lease of Premises). If such business premises are leased by
Xxxxxxx Group (rather than purchased), then Xxxxxxx Group and
Nucorp shall prorate the rentals on the same formula and basis
above discussed.
8.7 (Lease -- Purchase of Premises). If the premises are used on a
lease - purchase basis, then Xxxxxxx Group and Nucorp shall
prorate the rentals on the same formula and basis above
discussed.
8.8 If Nucorp shall itself lease or rent business facilities, then
it shall not be obligated to participate in any building
acquisition as otherwise above contemplated.
9. INSURANCE COVERAGES.
9.1 (Building Insurance). Xxxxxxx Group in the first instance
shall be responsible for building insurance unless the
premises are leased or purchased only and solely by Nucorp.
Where such premises are initially titled in Xxxxxxx Group (and
subject to the Nucorp equitable interest above described),
then any insurance shall be for replacement value and insuring
Xxxxxxx Group, any record mortgagee and Nucorp `as their
respective interests may exist'.
9.2 (Fire and Extended Coverage -- Equipment, Machinery, Supplies,
Materials & Inventory. Nucorp shall be responsible to insure
its equipment, machinery, supplies, materials and inventory.
If either Xxxxxxx Group or Fibr-Plast has any separate
business activity on the same premises, then Xxxxxxx Group or
Fibr-Plast (as the case may be) shall separately be
responsible to insure equipment, machinery, supplies,
materials and inventory.
9.3 (Non-Owned Vehicle Insurance; Uninsured Vehicles and
Under-Insured vehicles. Nucorp shall be
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responsible to provide adequate insurance for any employees or
agents covering the use of non-owned vehicles as well as
third-party uninsured and under-insured vehicles; provided,
however, that if such vehicles now or hereafter are owned by
Xxxxxxx Group, then Xxxxxxx Group shall provide such coverage
and shall cause Nucorp to be shown as a co-insured and shall
waive rights of subrogations to Nucorp (so that Xxxxxxx
Group's carrier will not have recourse against Nucorp for
contribution or recovery).
10. DIVISION OF DUTIES IN NUCORP. These parties have discussed a division
of duties. In the initial stages of operation of Nucorp, Xxxxxxx Group
(under the supervision of the Nucorp Board) will manage and direct the
manufacturing functions. In those same initial stages, Fibr-Plast
(under the supervision of the Nucorp Board) will handle the marketing
and sales functions. In this connection, neither Xxxxxxx Group nor
Fibr-Plast will charge for the time and services of their personnel
UNTIL the Nucorp Board shall determine that Nucorp has established an
income stream, is also realizing net income and that reasonable
salaries, consulting fees or other compensation can be paid from such
net income. Any such compensation shall be reasonable, shall relate to
the time expended and value of service and results obtained by such
Xxxxxxx Group and Fibr-Plast personnel.
11. DIVISION OF PROFIT. Xxxxxxx Group and Fibr-Plast shall equally divide
the profits from the operation of Nucorp. To the extent that money
shall have been advanced by either of these parties or debt otherwise
incurred by Nucorp owing to either of these parties, then the first
monies distributed by Nucorp to either of these parties shall be in
satisfaction for and retirement of such indebtedness or other
obligations. Notwithstanding anything herein to the contrary, 70% of
after-tax net profit of Nucorp shall be paid to Xxxxxxx Group in
satisfaction of such approved debt as
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Xxxxxxx Group shall have incurred for Nucorp for approved facilities,
equipment, machinery and building. The remaining 30% shall be paid
separately and equally to Fibr-Plast and to Xxxxxxx Group as
COMPENSATION for services rendered by Xxxxxxx Group for services
rendered in the management of the production facilities and as
compensation to Fibr-Plast for marketing and sales [since such parties
will not receive salaries, commissions or other distributions initially
and these parties agree that such distributions are not intended to be
dividends nor profit distributions as such but - instead - their
compensation for services rendered by the persons they will furnish to
Nucorp for its management and operations. If hereafter the sums
distributable to Xxxxxxx Group or to Fibr-Plast exceed reasonable
compensation for executive services, then - upon advice of Nucorp's
accountants - the Board of Directors of Nucorp shall make specific the
compensation to the various persons being furnished by both Slavens
Group and by Fibr-Plast, determine the retention of other income for
operating capital and determine sums to be paid to the stockholders as
either dividends or distributions. After repayment of all debt incurred
by Nucorp, profits shall be split 50% to Fibr-Plast and 50% to Xxxxxxx
Group, only after Fibr-Plast has been approved for and is actually
being publicly traded.
12. NON-DISCLOSURE AND NON-COMPETITION AGREEMENTS. Xxxxxxx Group before
commencing any manufacturing activity of the Fibr-Plast(C) products or
like-type products, shall execute a mutually satisfactory
non-competition agreement and non-disclosure agreement:
o (Non-Competition Agreement). During the term of the joint
venture represented by the formation and activity of Nucorp
and additionally for two years thereafter. Xxxxxxx Group will
not make Fibr-Plast products using Fibr-Plast technology. This
includes not using Fibr-Plast's name nr the same nor similar
technology for continuous-line production nor floating mold
usage.
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o (Non-Disclosure Agreement). For a period of two years Xxxxxxx
Group agrees they will not disclose all or any part of the
trade secrets, proprietary information, product mixes,
suppliers of products, tool and die makers, methods of
manufacturing, producing, extruding, forming or otherwise
producing Fibr-Plast products as herein described, whether
such disclosure is for the gain and profit of Xxxxxxx Group,
of any third-party entities in which Xxxxxxx Group has any
interest [direct or indirect], for the profit of third-parties
or for the detriment of Fibr-Plast. In that connection, upon
effecting or allowing any such disclosure or being part of any
competitive effort with respect to such products, Xxxxxxx
Group shall be liable for all actual and consequential damages
to Fibr-Plast which result directly or indirectly therefrom.
o (Agreed Exceptions to Non-Competition and Non-Disclosure).
These parties contemplate that situations may arise where
Fibr-Plast and Nucorp might agree to the production and sale
of a similar or like-type product by Xxxxxxx Group and its
disclosure of relevant production information as reasonably
needed to the construction industry, Code enforcement agencies
and the like. In that connection, any such agreements shall be
in writing and no verbal agreements shall be binding.
o (Term of Non-Competition Agreement). Such Non-Competition
shall be in effect so long as the parties continue to operate
under the terms of this Agreement or subsequent agreements
covering the subject matter hereof and additionally
twenty-four (24) months thereafter.
13. FIRST RIGHT OF REFUSAL AND OPTIONS. Each party grants to the other an
option to buy its interests in Nucorp, as follows:
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a) If the parties cannot agree upon the management and operation
of Nucorp (including the manufacture of product, marketing,
sales, financing or other aspects thereof), then the interest
of either party shall be sold to the other as next provided.
b) Under such circumstances and if one party desires to sell but
there is no third party offer in hand, then the second party
shall have the right [but not the obligation] to buy such
interest at fair market value.
c) fair market value means the value of the undivided 50% of the
capital stock of such party as determined by the accountants
for Nucorp. In making that determination, such accountants
shall follow Generally Accepted Accounting Procedures (GAAP),
including reasonable valuation for name, goodwill and the
like.
d) In this connection, Fibr-Plast shall have the first right and
option to buy the interest of Xxxxxxx Group at fair market
value. Payment for any such interest shall be made in three
(3) equal annual installments, the first due at closing, the
second on the one-year anniversary thereof and the third on
the two-year anniversary thereof, all without interest.
e) At closing, the selling party shall deliver all its stock in
Nucorp to the other by unconditional assignment and transfer.
Such stock shall be free and clear of any lien, encumbrance,
security interest or third party claim whatsoever.
f) If the selling party shall have encumbered or allowed any
encumbrance on its stock in Nucorp, then the buying party
shall have the right (but not the obligation) to pay such
portion of the purchase price of the stock [determined as
above
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discussed] to such third party mortgagee, security interest
holder, tax authority or the like. The buying party may rely
upon the advice of its attorneys and Certified Public
Accountants in determining the amounts reasonably necessary to
obtain such third party releases.
g) Where the parties cannot agree upon the operation and
management of the Company and if Fibr-Plast does not elect to
buy the stock of Xxxxxxx Group within a period of ninety (90)
days after seller shall have requested such purchase in
writing, then Xxxxxxx Group shall have the right to buy
Fibr-Plast's stock in Nucorp on the same basis above
described.
14. MISCELLANEOUS.
14.1 (Interpretation). The captions on the various sections and
paragraphs are for convenience only and the entire Agreement
shall be construed as a whole. The invalidity of any phrase,
clause or provision herein contained shall not render this
Agreement as void nor unenforceable and the same shall
thereafter be construed as if such phrase, clause or provision
were not herein contained and to otherwise give maximum effect
to the intent of these parties. This Agreement is made in
Oklahoma and may be litigated in the District or Federal
Courts in that County where the home offices of Company are
situated. This Agreement supercedes and cancels any prior
discussions, negotiations, agreements or contracts covering
the subject matter hereof and may hereafter be modified or
amended only by the joint written act of both parties.
14.2 (Incorporation of Conditions into Certificate of Incorporation
and Bylaws). All of the foregoing provisions, terms and
conditions of this Pre-
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Incorporation Agreement shall be incorporated into the
Certificate of Incorporation and the bylaws of Nucorp.
14.3 (Assignment of Contract). Xxxxxxx Group and Fibr-Plast shall
not assign this contract without the prior written consent
thereto.
14.4 (Parties Bound). This Agreement shall be binding upon and
inure to the benefit of these parties, together with their
respective personal representatives, successors and assigns
whomsoever.
14.5 (Effective Date). Notwithstanding the date or dates of
subscription hereof, the effective date of this Agreement
shall be as of the 29th day of August, 2000.
Dated: August 29, 2000 Signed: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
INLAND ISLAND, INC.
Dated: August 29, 2000 Signed: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, President
FIBR-PLAST CORPORATION
Dated: August 29, 2000 Signed: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, President
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