MADISON AVENUE CAPITAL ENTERS INTO LICENSE AGREEMENT WITH INTERNATIONAL TIMBER USA
MADISON AVENUE CAPITAL ENTERS INTO LICENSE
AGREEMENT WITH INTERNATIONAL TIMBER USA
NEW YORK, Dec. 9 /PRNewswire/ -- Madison Avenue Capital, Inc. (OTC) today announced that it has entered into a license agreement with International Timber USA, Limited, by which Madison Avenue Capital, Inc. (MAC) has acquired the exclusive worldwide license in perpetuity to plant, grow, develop, market and distribute all tissue culture and clonal material for trees (particularly the paulownia tree).
The paulownia tree is grown principally in China and is used mainly for making furniture, cabinets, veneering and house fixing. The paulownia wood is suited for these purposes because it does not split or warp when dry-kilned.
The clonal material which is the subject of MAC's license has been developed in a laboratory in Australia and then planted for the purpose of producing a tree virtually identical to the paulownia but which is disease-free and grows much more rapidly than the actual paulownia. In some cases, the clonal tree has grown to 15-18 feet in height in 12 months. The clones developed in the laboratory can produce up to 1 million clonally identical trees per year. The licensor has guaranteed that if a clonal tree does not grow to at least one foot, it will be replaced.
The license agreement provides in part that in exchange for the license MAC will pay to the licensor the following: (a) $40,000 immediately; (b) $90,000 in 14 days; (c) $65,000 on or before Jan. 10, 1992; (d) a royalty of $6 per tree planted by MAC anywhere in the world; (e) on or before June 30, 1992, stock of MAC equal to 55 percent of the shares outstanding; and (f) 35 percent of warrants issued to MAC's directors, if any are issued. MAC currently has secured the funds to make the three payments required by (a), (b) and (c) above.
Madison Avenue Capital, Inc. has also agreed to immediately change its corporate name to Tree Technology International, Inc. and to effect a one-for-five reverse split of its outstanding common stock. The one- for-five reverse split will become effective on Dec. 20, 1991.
As part of the agreement, MAC has agreed to (a) secure the right to establish a facility with at least 1,300 acres in Southeastern United States before March 1, 1992, for developing the clones in the United States and planting the clonal trees, the cost for which is expected to be no less than $900,000; (b) secure an additional 4,000 acres in Southeastern United States within one year; and (c) secure an additional 10,000 acres each year for the succeeding 10 years. MAC has been informed by the licensor that approximately 275 clonally developed trees can be grown per acre.
/CONTACT: John B. Lowy, corporate counsel for Madison Avenue Capital, 212-371-7799/ CO: Madison Avenue Capital, Inc.; International Timber USA, Limited ST: New York IN: PAP SU: LIC FC-CK -- NY049 -- 0609 12/09/91 13:59 EST