ENVIROKARE TECH, INC.
0000 X. X. Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000 Fax: (000) 000-0000
March 20, 2003
New Age Shelters Ltd.
X.X. Xxx 000, Xxx. X
Xxxxxxx, XX X0X 0X0
Xxxxxx
LETTER AGREEMENT
This letter agreement is intended to provide the basis for preparation of a
definitive agreement, between New Age Shelters Ltd. ("New Age") and Envirokare
Tech, Inc. ("Envirokare" or "Parent") on terms mutually satisfactory to the
parties hereto. Except for the agreements and obligations contained in Sections
1.a - 1.b hereof, this letter represents only the parties' current good faith
intention to negotiate and enter into a definitive agreement for the purposes of
forming a strategic alliance to develop, produce and market modular structures.
It is not, and is not intended to be, a binding agreement between the parties
except as to the Sections specified as binding, above. The obligation of the
parties to effect the transactions contemplated by this letter are subject to a
number of conditions, including without limitation, approval by the Boards of
Directors of the respective parties, obtaining necessary third-party consents,
completion of due diligence and other conditions as may be specified in the
contemplated definitive agreement.
Section 1. Prior Agreements
The following listed items represent pertinent agreements that were existing and
in effect, prior to the date of this letter agreement. It is acknowledged by the
parties to this letter agreement that all obligations, terms and conditions, as
set forth in the following listed agreements, supercede any term or condition,
whether actual or implied, that may be contemplated by this letter agreement and
any subsequent definitive agreement that may entered into between the parties
hereto :
a. License Agreement between Thermoplastic Composite Designs, Inc. and
Envirokare Composite Corp., a wholly-owned subsidiary of Envirokare,
dated March 30, 2001.
b. Merger Agreement by and among Envirokare Tech, Inc. Envirokare
Composite Corp., on the one hand and Thermoplastic Composite Designs,
Inc., Xxxx Xxxx, Xx., and Xxxx Xxxx, Xx. on the other hand, dated
March 30, 2001.
Section 2. Terms of Contemplated Agreement
The contemplated agreement between the parties hereto, is anticipated to contain
provisions that include the following items:
a. The Parent would create a wholly-owned subsidiary named, "EnviroDome".
EnviroDome would be responsible for the development, manufacture, sale
and marketing of Dome shelters.
b. EnviroDome would receive an exclusive license from New Age to
sublicense, produce and market Dome shelters currently manufactured by
New Age for its clients. The Dome shelters are currently manufactured
using fiberglass as the substrate material. Patents have been issued
on New Age's fiberglass Dome shelters.
c. The Parent, through its wholly-owned subsidiary Envirokare Composite
Corp. ("ECC"), would make the TPF technology available to EnviroDome
to sublicense, produce and market Dome structures that utilize New
Age's patented Dome structure technology and the TPF processing
technology in the Dome manufacture.
d. The Parent would fund production of EnviroDome products, with funding
to be arranged by the Parent on a best-efforts basis.
e. New Age would receive a portion of EnviroDome's net profits based on
the following schedule;
Range of EnviroDome Net Profit Consideration Received
Net Profits to New Age (%) by New Age (Maximum)
-------------------------- -------------- -----------------------
$0 - $6,500,000 40% $2,600,000
$6,500,001 - $9,833,333 30% $1,000,000
$9,833,334 - $14,833,333 20% $1,000,000
$14,833,334 and upward 10% unlimited
f. Xxxxx Xxxxxxx would be appointed President of EnviroDome and paid
$5,000 per month salary.
Signatures by the parties, as provided below, indicate agreement with respect to
the terms as set forth in this letter agreement.
New Age Shelters Ltd. Envirokare Tech, Inc.
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxxx
------------------------ ---------------------------
Xxxxx Xxxxxxx, President Xxxxxx Xxxxxxxxx, President
Date: April 1, 2003 Date: April 1, 2003
