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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 7, 1997 (Agreement
dated February 28, 1997)
LEADING-EDGE EARTH PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
State of Oregon 93-67656-S 93-10022429
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(State of incorporation) (Commission (IRS Employer
file number) identification no.)
</TABLE>
319 Nickerson St. #186, Seattle, Washington 98109
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(Address of principal executive offices)
Registrant's telephone number, including area code: 800-788-3599
no change
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(Former name or former address, if changed since last report)
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8-K INFORMATION
Technology License, Related Company Organizations, and Shareholder Operating
Agreements between Grant Record, WLP, Agile Investment Corporation, and Agile
Building Technology dated December 4, 1995 has been canceled and a new
agreement between the parties dated February 28, 1997 was finalized on March
15, 1997. Subject Report is attached as an exhibit.
LEADING-EDGE EARTH PRODUCTS, INC.
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(Registrant)
Date: March 24, 1997 Grant C. Record, Secretary
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TECHNOLOGY LICENSE,
RELATED COMPANY ORGANIZATIONS,
AND
SHAREHOLDER OPERATING AGREEMENTS
THIS AGREEMENT is entered into as of February 28, 1997 by and between
Leading-Edge Earth Products, Inc., ("LEEP") an Oregon business corporation with
its principal office located at 319 Nickerson Street, Suite 186 Seattle, WA
98109. Grant Record ("Record") 416 River Ave., #302 Williamsport PA, 17701,
Agile Building Technology, Inc., ("Agile"), a Pennsylvania business corporation
with its office at 3500 W. 4th Street Williamsport, PA 17701; WLP Associates
Ltd. ("WLP"), a Pennsylvania business corporation, with offices at 3500 W, 4th
Street, Williamsport, PA 17701 and Agile Investment Corporation ("AIC") with
office at 3500 W. 4th Street Williamsport, PA 17701.
WHEREAS the above named parties entered into an Agreement dated December 4,
1995, a copy of which is attached as Exhibit A., (the "December, 1995 License
Agreement") which provided for technology licensing between LEEP and Agile,
planned business associations between the Parties, and creation of a related
Company, Agile Investment Corporation ("AIC"), which was intended to undertake
certain financial support activities thereunder; and
WHEREAS certain activities where undertaken under the December, 1995 License
Agreement, whereby technology was developed and enhanced by Agile, and LEEP
developed additional technology and enhancements; and
WHEREAS WLP, LEEP AIC and Agile have determined that AIC is not likely to
effectively carry out its purposes and have resolved in a separate instrument
to dissolve and eliminate AIC in two stages. The first step consists of
immediate return to LEEP of 4,216,601 of its shares, which represents LEEP's
pro-rata interest in AIC. The balance of 5,224,960 LEEP shares owned by AIC
(subject to release of 1.4 million LEEP shares pledged by AIC to creditors out
of the 5,224,960 total LEEP shares held by AIC) will be returned to LEEP for
cancellation pro-rata to the Option granted herein for LEEP's purchase of Agile
shares being exercised up to $4,000,000 for 14% of the outstanding shares of
Agile, equal to respectively, 5,224,960 LEEP shares held by AIC and 17,231
Agile shares. Should all $4,000,000 not be invested, LEEP shall receive
pro-rata return of 5,224,960 LEEP shares and pro-rata additional equity
ownership of Agile, e.g., should LEEP only invest $2,000,000, it will receive
7% additional equity ownership of Agile and return of 2,612,480 shares of LEEP
stock. If LEEP completes the full $4,000,000 phase of its intended investment,
AIC shall be dissolved; and
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WHEREAS the future of LEEP's share dilution is unknown relative to its new
financial role, the Parties agree that any shares remaining escrowed in
Spokane, WA which are left over from the original 443,054 escrow, per the
December 4, 1995 Agreement shall be returned to LEEP immediately following
closing of this Agreement and the escrow closed; and
WHEREAS WLP, Agile and LEEP have determined that the December 1995, License
Agreement, is not an effective method to carry out their business objectives,
and they wish to terminate that Agreement in its entirety, except that LEEP
shall, as consideration for its entering into this Agreement and benefits it
provided Agile under the previous Agreement, retain any shares of Agile to
which it was entitled under that Agreement. This new Agreement is intended to
solely govern the rights, duties and obligations between the Parties hereto and
AIC ; and
WHEREAS LEEP owns certain patent filings, an issued patent, other proprietary
technology, and expertise in connection with the development of cellular
concrete, magnesium based concrete and similar materials for use in the
manufacture of certain Building Products and LEEP has developed, independently
with outside investors support, a new panel product known as "Structural Core";
and Agile has developed certain other products known as "Agile Products" and
NOW THEREFORE in consideration of the mutual promises set forth herein, and for
other good and valuable consideration, the receipt and sufficiency thereof
being hereby acknowledged, the parties hereby agree as follows:
1. Technology License
Agile shall have a non-exclusive license to utilize for the purposes
of manufacture and sale, the LEEP technology described in Exhibit C
hereto, within a radius of 500 miles of Williamsport, PA. Said license
shall only be available so long as Agile shall effectively,
commercially use said LEEP Technology. LEEP Technology licensed
hereunder shall not, without the express consent of LEEP, for
consideration deemed adequate thereto, be sublicensed by Agile;
LEEP shall have the right to license the Agile Product under the same
terms and conditions as above (A), except the territory available
shall be any place outside a 500 mile radius of any Agile
manufacturing facility.
2. Products
Only products shown in Exhibit A and B are covered by this Agreement,
the "Covered Products". There are no other products known by the
parties to be under consideration as of the date of this Agreement.
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3. Sales Territory:
Both LEEP and Agile shall have the right to sell their respective
products worldwide.
4. Ownership of the Technology, Products, Designs and Enhancements
Each Company shall own its own technology, designs and enhancements
previously developed thereby under the December 1995, License
Agreement.
5. Sub-Licensing Rights
Subject to the license provisions contained in Section 1 hereof, Agile
and LEEP shall not have the right to sub-license the others products
and/or technology to other parties.
6. Option
6.1 Agile hereby grants to LEEP an option from the date of this
Agreement until December 31, 1997, to purchase 14% of Agile's common
shares for $4,000,000 (the "Option"). In the event, $1,000,000 has
been invested or caused to be invested by LEEP by December 31, 1997,
this option shall be automatically extended to December 31, 1998.
6.2 Agile shall not, without the consent of LEEP, for the term of
the Option, create or permit to be created any other class of shares
except for common shares, one class.
6.3 During the Term of the Option, as of the time the option is
exercised to the aggregate level of $100,000, at the option of LEEP,
LEEP shall have the right to elect the majority of the members of the
Board of Directors of Agile, notwithstanding the relative share
ownership of LEEP in Agile which shall remain three (3) in number.
LEEP shall be required by WLP to submit the name and credentials of
the director it elects and WLP shall have 5 days to examine the
credentials and meet the director personally prior to his election for
WLP approval. WLP's approval shall not be unreasonably withheld in
the event, a director's performance is questioned by either LEEP or
WLP, such director can be replaced by WLP or LEEP giving 10 day notice
to the other party partitioning the director's replacement. In the
event, 5 day approval cycle, as described above, will be followed.
Based on Agile becoming profitable at an average monthly sales rate in
excess of $1 million for 3 consecutive months, WLP shall have the
right to elect a majority of the Agile Board of Directors.
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To effect the changes contemplated in AIC, release of LEEP shares,
issuance's of Agile shares under the option and related corporate
matters and electing the two directors per the terms of this
agreement, LEEP shall be given an irrevocable proxy coupled with an
interest.
6.4 As LEEP exercises the Option granted hereby, WLP shall cause
AIC, or its successors or assigns, as the case may be, to release to
LEEP, pro-rata, the 5,224,960 remaining shares of LEEP, subject to
release of any LEEP shares pledged by AIC, prior hereto to third
parties which were issued to AIC under the December, 1995, License
Agreement (the other 4,216,601 shares held thereby already having
been earlier returned) at a rate equivalent to one share for every
$.7656 LEEP invests in the Option, so that when $4,000,000 has been
invested pursuant to the Option, all of the 5,224,960 LEEP shares held
by AIC shall have been returned, or as to pledged shares, shall be
returnable when the conditions of pledge have been satisfied and AIC
dissolved.
No LEEP shares held by AIC can be returned to LEEP until specific
obligations are satisfied which release such shares from any
outstanding pledges.
The Escrow Agent holding the AIC's LEEP shares should be instructed to
release 7,656 LEEP shares to LEEP for each $10,000 invested or caused
to be invested in Agile by LEEP out of "Free Shares", i.e., shares
which are free of specific pledges.
6.5 LEEP shall retain the 43,077 shares of Agile which it acquired
under the December 1995, License Agreement notwithstanding the extent
or whether LEEP exercises any part of the Option granted herein.
6.6 WLP shall give AIC, or its successors, a pledge with respect
to its 5,224,960 remaining shares of LEEP which are subject to this
option, said pledge to be in favor of LEEP to secure the delivery of
LEEP shares with this option. Shares are to be legended accordingly.
6.7 During the term of the option, as of the time the option is
exercised to the aggregate level of $100,000, no Agile equities or
convertible securities may be sold or committed to be sold at prices
below $285,714 per one percent (1%) of Agile's outstanding stock,
unless the term of said investment satisfies the terms and conditions
described in Exhibit "I" ("Eligible Investment").
7. Representations and Warranties of LEEP
LEEP hereby represents and warrants as follows:
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7.1 Organization and Standing; Articles and Bylaws
LEEP is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of Oregon and
is in good standing under such laws.
7.2 Corporate Power
LEEP has all requisite legal and corporate power to enter into
this Agreement, and to carry out and perform its obligations
under the terms of this Agreement.
7.3 Authorization to enter in to this Agreement.
All corporate actions required on the part of LEEP's officers
and directors have been taken, or will be taken, for: the
execution, delivery, and performance required under this
agreement.
8. Representations and Warranties of Agile, and WLP and Restrictions on
Transfer Imposed by the Securities Act of 1933.
8.1 Organization and Standing; Articles and Bylaws
Agile is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of Pennsylvania
and is in good standing under such laws. Agile has the
requisite corporate power to own and operate its properties
and assets, and to carry on its business as presently
conducted and as proposed to be conducted.
8.2 Corporate Power.
Agile has all requisite legal and corporate power to enter
into this Agreement, to issue the Common Stock hereunder and
to carry out and perform its obligations under the terms of
this Agreement.
8.3 Capitalization
The authorized Stock of Agile is 1,000,000 shares of No Par
common stock and no shares of Preferred stock. 80,000 Shares
of Common are outstanding and zero (0) shares of Preferred are
outstanding. There are no additional covenant warrants,
options or other agreements outstanding for purchase of Agile
stock.
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8.4 Authorization to enter in to this Agreement.
All corporate actions on the part of Agile, its officers,
directors and shareholders necessary for (I) the grant of
Option and issuance of the Common Stock pursuant hereto to the
Option granted hereunder and (ii) the execution, delivery, and
performance by Agile of this Agreement, have been taken. This
Agreement is a valid and binding obligation of Agile,
enforceable in accordance with it's terms, except as limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and rules or laws
concerning equitable remedies.
8.5 Title to Properties and Assets; liens, etc.
Agile has good and marketable title to its respective
properties and assets, and good title to all its leasehold
estates, in each case, subject to no mortgage, pledge, lien,
including labor and material liens, encumbrance, or charge,
other than resulting from taxes which have not yet become
delinquent and minor liens and encumbrances which do not in
any case materially detract from the value of the property
subject hereto or materially impair the operations of Agile,
and which have not arisen otherwise than in the ordinary
course of business, except as shown in Attachment 3.
8.6 Compliance with Other Instruments
Agile is not in violation of any term of its Articles of
Incorporation or Bylaws. Agile is not in violation in any
respect of any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule, or
regulation applicable to Agile by which it is bound or to
which its properties are subject. The execution, delivery and
performance or this Agreement and the issuance and sale of the
Common Stock, will not result in any such violation, will not
accelerate performance under the terms of any agreement or
constitute an event that will result in a default under any
such term or agreement, and will not result in the creation of
any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of Agile pursuant to any such term;
and there is no such term which adversely affects the of its
properties or assets.
8.7 Litigation
No action, suit, proceeding or investigation is pending or
threatened by Agile except as shown in attachment 4. nor is
there any basis therefore. No
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action, suit, proceeding or investigation is pending or
threatened against Agile, nor, to the best of its knowledge,
is there any basis therefore.
8.8 Governmental Consent
No consent, approval, or authorization or designation,
declaration, or filling with any governmental authority on the
part of Agile is required in connection with the valid
execution and delivery of this Agreement.
8.9 Financial Statements
Agile has delivered to LEEP a statement of financial condition
as of the date of execution of this agreement; said financial
statement is warranted to accurately represent the financial
status as of the date hereof of Agile. Agile shall provide
financial statements to LEEP throughout the period of the
Option on a not less than quarterly basis and on the
occurrence of any material event.
8.10 Disclosure
All representations herein by Agile, do not contain any
untrue statement of a material fact and do not omit to state a
fact that would be material to an investment by a prudent
person, or would be misleading. There is, to the best of
Agile's knowledge, no fact that materially adversely affects
the business, prospects, condition, affairs, or operations of
Agile or any of its properties or assets that has not been set
forth in this Agreement.
WLP and Agile shall have a continuing obligation throughout
the period of the Option to continuously disclose to LEEP any
facts material to the business and operations of Agile and WLP
that would be material to a prudent investor and not to omit
to state any facts that would be material or would make other
facts disclosed misleading; any offering materials which may
be used by LEEP may be submitted to Agile and WLP; in the
event such materials are so submitted, WLP and Agile shall
have an affirmative obligation hereunder to review said
materials as they may apply Agile operations, prospects,
financial conditions or otherwise as an investment pursuant to
the Option, and shall inform the Board of Directors of LEEP in
writing promptly thereafter if, in the opinion of Agile or WLP
additional or different statements should be made as to Agile
thereunder in order that said statements or omissions would
not be inadequate or misleading to a prudent investor.
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8.11 Diligence Representations
(a) During the negotiation of the transaction
contemplated herein, LEEP and their representatives are
represented by WLP and Agile to have been afforded full and
free access to the corporate books, financial statements,
records, contracts, documents, and other information
concerning WLP and Agile and their officers and business
operations, financial condition, assets, liabilities and other
relevant matters
(b) Neither Agile, nor any of its agents or employees,
have acted as an agent of LEEP. Agile was informed by LEEP
that it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits
and risks of purchasing additional Common Stock of Agile.
WLP represents it has conducted adequate due diligence on LEEP.
8.12 WLP warrants that neither LEEP, its directors or officers have
any responsibilities to WLP investors, nor are they in any way
involved in representing WLP to WLP investors.
9. New Capital and Capital Distribution
9.1 LEEP is in the process of developing an offering circular for
a public offering of its common shares of up to $10,000,000
from time to time, and short-term/intermediate-term
development of bridge capital.
9.2 LEEP intends to provide as a use of the proceeds therefrom, a
portion estimated at 40% thereof to exercise the Option
granted to LEEP in section 6 herein; subject to State and
Federal Securities regulatory approval, and LEEP being
satisfied that general business conditions and the financial
and business conditions of LEEP and Agile are such that
exercise thereof is a prudent exercise of the business
judgment of LEEP.
9.3 Agile and WLP agree that Agile shall, during any period in
which the Option is granted to LEEP, maintain the business
affairs of Agile in such a fashion that it shall not be in
default to the Northern Central bank or other creditors,
including employees. In the event that this shall require
that a portion of any of the proceeds to be received by Agile
pursuant to the Option be applied therefor, Agile shall so
inform LEEP prior thereto.
9.4 To strengthen the capital structure of Agile, after
distribution of 4,216,661 LEEP referred to in section 6.5,
shares out of AIC to LEEP, AIC shares held by LEEP shall be
canceled and WLP agrees to make AIC a wholly owned subsidiary
of Agile.
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10. Miscellaneous
10.1 Waivers and Amendments
This Agreement may be changed, waived, discharged, or
terminated only by a statement in writing signed by LEEP, WLP,
and Agile.
10.2 Governing Law.
This Agreement shall be governed in all respects by the laws
of the Commonwealth of Pennsylvania.
10.3 Survival
The representations, warrants, covenant, and agreements made
herein shall survive the execution of this Agreement.
10.4 Successors and Assigns
Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of
the parties hereto, provided, however, that no party to this
Agreement shall have the right to assign this Agreement or any
right, duty or obligation hereunder, without the express
written consent of all other parties hereto, which consent
shall not be unreasonably withheld.
10.5 Entire Agreement
This Agreement, the exhibits to this Agreement and any other
documents delivered pursuant to this Agreement constitute the
full and entire understanding and agreement between the
parties with respect to the subjects hereof, and supersedes
any and all commitments or other understandings, whether
written or oral, between the parties with respect to the
subject matter of this Agreement.
10.6 Notices.
All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by certified
or registered mail, postage prepaid, return receipt requested,
addressed (a) if to Agile, or WLP at the address set forth at
the beginning of this Agreement, or at such other address as
shall have been furnished by LEEP to Agile, and WLP in
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writing; (b) if to LEEP, at its address set forth at the
beginning of this Agreement or at such other address as Agile,
and WLP shall have furnished to LEEP.
10.7 Impossibility
In case any provision of this Agreement shall be declared
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
10.8 Signatures
This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together
shall constitute one instrument. Signature by telefax is
legally binding.
10.9 Delays or Omissions
It is agreed that no delay or omission to exercise any right,
power, or remedy accruing to LEEP, WLP, or Agile upon any
breach or default under this Agreement, shall impair any such
right, power, or remedy, nor shall it be construed to be a
waiver of any such breach or default, or any acquiescence
therein, or of or in any similar breach or default be deemed a
waiver of any other breach or default therefore or thereafter
occurring. It is further agreed that any waiver, permit,
consent or approval of any kind or character on the part of
either LEEP, WLP or Agile of any breach or default under this
Agreement, or any waiver of any provisions or conditions of
this Agreement must be in writing and shall be effective only
to the extent specifically set forth in such writing and that
all remedies, either under this Agreement, or by law, or
otherwise afforded to LEEP, WLP or Agile, shall be cumulative
and not alternative.
10.10 Disputes
The Parties hereto hereby confer jurisdiction and venue with
respect to any matter which may arise hereunder on the
Superior Court, King County, State of Washington, said County
being the location of administrative offices of LEEP, and
further agree that said Court shall have jurisdiction over the
Parties hereto in all respects as if all the Parties hereunder
were located in King County Washington and all transactions
which may arise hereunder had occurred in King County
Washington. Any dispute involving sums under $1 million will
be submitted under the rules of the American Arbitration
Association to binding arbitration, settled through
arbitration.
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10.11 Anti - Dilution
Except as specified in Section 6.7 herein, Agile shall not,
during the term of this agreement, or thereafter, cause or
permit to be caused any stock issue, stock split,
reclassification or similar transaction which would have the
effect of diluting the interest of LEEP in Agile by issuing
stock at prices less than the Option price without the consent
of LEEP, as long as LEEP owns at least 20% of Agile.
11.0 The Parties agree to create administer and execute any documents
required to perfect the performance of this Agreement including updating of
attachments hereto as required.
12.0 The Parties understand that this Agreement is binding. The Parties,
however, agree to examine and negotiate in good faith, certain provisions of
this Agreement as shown in Exhibit "E" and "G" hereto. It is agreed that
examination, and negotiation of the "E" items must be completed by March 15,
1997 and all such changes be embodied in a "schedule of changes" agreed to by
the parties hereto, and which cross-references to the specific contract
provisions. With respect to the "G" items, it is agreed that: 1) employment
contract and 2) Back Salary Agreement per "G" Exhibit will be completed, and
effective by March 15, 1997. No changes shall be made after March 15, 1997,
and Employment Agreements and back salary Agreements shall not be changed after
March 15, 1997 during the term of this Option. The said schedule pertaining to
"E" items shall be completed, signed, and attached to this Agreement as Exhibit
"H". Back salary Agreements and Employment Contracts need not accompany this
Agreement but must be completed and official for investor examination by March
15, 1997.
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In witness whereof, and intending to be legally bound, the parties have
executed this agreement as of the day and year first above written.
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LEADING-EDGE EARTH PRODUCTS, INC.
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AGILE BUILDING TECHNOLOGY, INC.,
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WLP ASSOCIATES, LTD
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AGILE INVESTMENT CORPORATION
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GRANT RECORD, INDIVIDUAL
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AGILE INVESTMENT CORPORATION
