AGREEMENT
AGREEMENT
THIS
AGREEMENT is made as of the 14th day of September, among Rubber Research
Elastomerics, Inc. (“RRE”), Xxxxxxx Xxxxxx (“Xxxxxx”) and Riviera Investments,
Inc., a corporation controlled by Xxxxxx (“Riviera”).
Recitals
A.
RRE
desires to engage Xxxxxx as its Chief Executive Officer, and Xxxxxx is willing
to accept such engagement. The parties wish to establish certain terms regarding
Xxxxxx’x employment as CEO.
X.
Xxxxxx
and Riviera have previously provided funding to RRE. During the period from
May
2007 through July 2007, Xxxxxx or Riviera provided approximately $121,900 to
RRE
as described in that certain Agreement and Receipt of Payments, dated August
2,
2007 (the “Payments Agreement”). In August 2007, Xxxxxx or Riviera provided an
additional $30,829 to RRE as described in that certain letter agreement dated
August 3, 2007. (References herein to Xxxxxx include Riviera, where
applicable.)
C.
RRE
desires to obtain additional funding, and Xxxxxx and Riviera are willing to
provide additional funding to RRE on the terms and conditions described
below.
Therefore,
the parties hereby agree as follows:
1.
Employment
of Xxxxxx as CEO.
RRE
agrees to employ Xxxxxx as its CEO. The term of his employment will be four
years, unless terminated earlier. RRE will pay Xxxxxx a base salary of $150,000
per year for his services as CEO, plus such other compensation and benefits
as
may be determined by the Board of Directors from time to time. Xxxxxx’x base
salary will be paid in equal installments on RRE’s regular payroll dates. If RRE
terminates Xxxxxx’x employment without cause before the expiration of the 4-year
term, Xxxxxx will be entitled to receive his salary for the remainder of the
4-year term.
2.
Purchase
of Stock; Other Funding.
(a)
Purchase
of Stock.
On or
promptly after the date of this Agreement, Xxxxxx or Riviera, or a combination
thereof, will purchase $300,000 of 8.5% Convertible Preferred Stock from RRE
at
a
price of $0.42 per share (i.e.,
714,286 shares). The purchase price will be paid (i) by applying the $152,729
previously provided to RRE by Xxxxxx or Riviera, plus accrued interest thereon,
and (ii) the balance in cash. The issuance of such stock will satisfy RRE’s
indebtedness to Xxxxxx and Riviera with respect to the prior advances so
applied. Notwithstanding such application of prior advances to purchase stock,
Xxxxxx and Riviera shall continue to have the rights set forth in the Payments
Agreement, as provided in Section 3 hereof.
(b)
Convertible
Debenture.
Within
45 days after the date of this Agreement, Xxxxxx or Riviera will provide an
additional $300,000 in funding to RRE. This will be evidenced by a convertible
debenture, payable on demand and bearing interest at the rate of twelve percent
(12%) per annum, payable quarterly. Such convertible debenture shall be
convertible into shares of 8.5% Convertible Preferred Stock at a conversion
price of $0.42 per share. RRE will reserve 714,286 shares of 8.5% Preferred
Stock for issuance upon such conversion.
(c)
Use
of
Funds; Escrow of Funds.
RRE
agrees to use the funds provided by Xxxxxx or Riviera as follows:
1
(i)
$100,000
of the funds provided by Xxxxxx or Riviera on or after the date of this
Agreement (or less, if the full $100,000 is not required) will be used to
terminate the license agreement between RRE and 0000 Xxxx Xxxxxx LLC and to
refund to 0000 Xxxx Xxxxxx LLC the partial payment previously made to RRE with
respect to such license agreement; and RRE shall terminate or confirm the
expiration of the options agreement to purchase licenses, which 0000 Xxxx Xxxxxx
LLC has failed to maintain.
(ii)
The
remaining funds (including funds provided in payment for stock and funds
advanced by Xxxxxx or Riviera for the convertible debenture) will be placed
in
an escrow account with a bank, and will be released to RRE and applied to the
following purposes: (A) to pay the salary of Xxxxxx as CEO; (B) to pay
debentures held by Xxxxxx Xxxx, Xxxxxx Xxxxxx or Xxxx Xxxxxx, if such debentures
are tendered to RRE for payment; or (C) for other corporate purposes approved
by
Xxxxxx.
3.
Continued
Effect of Payments Agreement.
Notwithstanding the application of funds to purchase stock under this Agreement
and the other provisions of this Agreement, the parties agree that Xxxxxx and
Riviera shall continue to have the rights set forth in the Payments Agreement,
including but not limited to the right to purchase Tirecycle Licenses or to
pay
costs and expenses relating to the manufacture of Tirecycle Treatments, and
may
supply the funds required for the exercise of any or all of such rights by
applying some or all of the funds provided by Xxxxxx or Riviera under this
Agreement and evidenced by the convertible debenture, or by providing additional
funds in the future.
4.
Definitive
Agreements.
The
parties agree to prepare and execute one or more definitive documents setting
forth the detailed terms of these relationships, including the terms set forth
in this Agreement. This Agreement shall govern the terms of such relationships
until definitive agreements are executed by the parties.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
RUBBER
RESEARCH ELASTOMERICS, INC.
By
/s/
Xxxx X. Xxxxx,
Xx.
Xxxx
X.
Xxxxx, Xx., Chief Executive Officer
XXXXXX:
/s/ Xxxxxxx
Xxxxxx
Xxxxxxx
Xxxxxx
RIVIERA
INVESTMENTS, INC.
By
/s/ Xxxxxxx
Xxxxxx
Xxxxxxx
Xxxxxx, President
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