THIS AGREEMENT dated for reference the 1st day of May, 1998
BETWEEN:
LAXARCO HOLDING LIMITED, a Company incorporated pursuant to
the laws of the Republic of Cyprus and having a mailing address at Office
▇▇▇, ▇▇▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
OF THE FIRST PART
(herein referred to as "Assignor")
AND:
CARBON RESOURCES LIMITED, a Company incorporated pursuant to
the laws of the Republic of Cyprus and having a mailing address at Office
▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
OF THE SECOND
PART
(herein referred to as "Assignee")
WHEREAS:
Assignor is the holder of certain patents (the "patents") for the conversion
of Hydrocarbons assisted by gliding electric arcs in the presence of water
vapor and/or carbon dioxide which is found in the French patent
application, National Registration No. 9700364 filed January 13, 1997 and
further filed in the U.S. and omnibus international PCT application
appended hereto as Schedule A; and
Assignor has executed a Heads of Agreement (the "Heads of Agreement")
between the N.D. ▇▇▇▇▇▇▇▇ Institute whereby Assignor has been granted an
exclusive license to proprietary ▇▇▇▇▇▇▇-Tropsch technology including chain
limiting catalysts appended hereto as Schedule B; and
Assignor wishes to assign to Carbon the rights to the Patents and the Heads
of Agreement subject to the fulfilment by Carbon of the terms and
conditions as defined in this Agreement.
NOW THEREFOR THIS AGREEMENT WITNESSES that for and in
consideration of the mutual premises and the mutual covenants and
agreements contained herein, the parties covenant and agree each with the
other as follows:
1.0 DEFINITIONS
For all purposes of the Agreement:
"Assignor" means Laxarco Holding Limited
"Assignee" means Carbon Resources Limited
"Shareholder Approval" means the requisite shareholder approvals required
by each of the parties to this agreement.
"Patents" means the entire right, title and interest and in all foreign
countries, including all rights to claim priority, in and to any and all
improvements which are disclosed in the invention entitled:
"CONVERSION OF HYDROCARBONS ASSISTED BY GLIDING
ELECTRIC ARCS IN THE PRESENCE OF WATER VAPOR AND/OR
CARBON DIOXIDE" and which is found in the French patent application,
National Registration No. 9700364, filed January 13, 1997 appended hereto
as Schedule A, and any legal equivalent thereof in the U.S. or any other
country, including the right to claim priority in and to, all Letters of Patent
to be obtained for said invention by the above application or any
continuation, division, renewal, or substitute thereof, and as to letters patent
any reissue or re-examination thereof.
"Heads of Agreement" means that particular agreement executed by and
between Assignor and N.D ▇▇▇▇▇▇▇▇ Institute, as appended hereto in
Schedule B, granting Assignor the exclusive license to the proprietary
▇▇▇▇▇▇▇-Tropsch technology including chain limiting catalysts and any
continuation, division, renewal or substitute thereof, and as to any reissued
or re-examination thereof.
"Technology" means the technology as defined by the Patents and Heads of
Agreement.
"Closing" means the date that this agreement is approved by the
shareholders of the parties and is executed by the parties hereto.
In this Agreement, except as otherwise expressly provided:
"Agreement" means this agreement, including the preamble and the
schedules hereto, as it may from time to time be supplemented or amended
in effect.
all references in this Agreement to a designated "Section" or other
subdivision or to a schedule is to the designated Section or other
subdivision of, or Schedule to, this Agreement.
the words "herein", "hereof and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section
or other subdivision or Schedule.
the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope,
extent or intent of this Agreement or any provision hereof.
the singular of any term includes the plural, and vice versa, the use of any
term is equally applicable to any gender and, where applicable, a body
corporate, the word "or" is not exclusive and the word "including" is not
limiting, whether or not non-limiting language, such as "without limitation"
or "but not limited" to words of similar import, is used with reference
thereto.
any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principals applicable to
Cyprus.
any reference to a statute includes and is a reference to that statute and to
the regulations made pursuant thereto, with all amendments made thereto
and in force from time to time, and to any statute or regulations that may be
passed which has the effect of supplementing or superceding that statute or
regulations.
where any representation or warranty is made "to the knowledge of" any
Person, such Person will not be liable for a misrepresentation or breach of
warranty by reason of the fact, state of facts, or circumstances in respect of
which the representation or warranty is given being untrue if such Person
proves:
that such Person conducted a reasonable investigation so as to provide
reasonable grounds for a belief that there had been no misrepresentation or
breach of warranty; and
that fact, state of facts, or circumstances could not reasonably be expected
to have been determined as a result of that reasonable investigation,
irrespective of the actual investigation conducted by such Person.
except as otherwise provided, any dollar amount referred to in this
Agreement is
in U.S. funds; and
any other term defined within the text of this Agreement has the meanings
so ascribed.
The following are the Schedules to this Agreement:
Schedule Description
A Patents
B Heads of Agreement
2.0 UNDERTAKING OF ASSIGNEE:
Subject to the terms and conditions hereof and the requisite shareholder
approvals, Assignee undertakes the following in order for the assignment of
the Technology, Patents, and Heads of Agreement from Assignor as
provided in Article 4.1, and to maintain its interest in and to the
Technology, Patents, and Heads of Agreement:
Assignee will raise a total of $6,000,000. (Six Million) dollars for the
purposes of development of the Technology to be funded as follows:
(i) $1,000,000 within 90 days of the Closing Date of this Agreement;
(ii) $1,000,000 within 180 days of the Closing Date of this
Agreement;
(iii) $4,000,000 within 360 days of the Closing Date of this
Agreement or as required for operating capital;
Assignee will allocate funds as defined in Article 2.1(a) to develop, prove
up and market the Technology to generate license and running royalty fees
based on pre-approved budgets by the Board of Directors of Assignee and
Assignor; and
Assignee will pursue the commercialization of the Technology, such
commercialization to be as defined by the Board of Directors of Assignor,
acting reasonably in conjunction with an independent consultant in the
industry acceptable to the Assignee and the Assignor; and
Assignee will remain in good standing as a Cyprus Corporation; and
Assignee will not sublicense or attempt to circumvent the technology
without the written approval of Assignor, such approvals not to be
unreasonably withheld; and
Assignee will not transfer the rights to the Technology to resolve litigation,
nor can any judgement against Assignee result in such transfer, save that the
transfer of the rights would be to the Assignor; and
Assignee must maintain all Patents and licenses current in all jurisdictions at
the expense of Assignee; and
Assignee agrees to promptly pay to Assignor 25% of the gross proceeds of
any license fees, royalties, or any such other revenues less any costs or
expenses of development associated with such license fee, royalty, or other
revenues, derived from the use of the Technology or any such other
consideration as may be paid to Assignee by any party whatsoever for any
matter related to the use of the Technology, the Patents, or the Heads of
Agreement; and
the improvements in the Technology and any Patents filed in relation to the
improvements will be subject to the payment of 25% of the gross proceeds
of any and all revenues, less any costs or expenses of development
associated with such license fee, royalty or other revenues, derived from the
use of the Technology or any such other consideration, as may be paid to
Assignee by any part whatsoever for any matter related to the use of the
Technology or any further Patents filed in relation to the Technology or the
Heads of Agreement; and
Assignee agrees to process, in a timely and professional manner, at the sole
expense of Assignee, any new patent applications for new technology
offered to Assignee by Assignor pursuant to Article 3.1 (d); and
Assignee agrees to employ the following individuals as employees or as
third party contractors on an oil industry reimbursable cost basis for a
minimum of three years or until such time as the development of the
technology as related to the Patents and the Heads of Agreement is
discontinued, whichever comes first, these individual being deemed essential
to the development of the technology:
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
3.0 UNDERTAKINGS OF ASSIGNOR:
3.1 Assignor shall undertake:
to deliver to Assignee all documents duly executed required to effect the
assignment of the Technology, Patents and the Heads of Agreement in trust,
to the offices of legal counsel for Assignor in conjunction with an
irrevocable letter of direction to effect the assignment of the patents and
heads of Agreement immediately upon written notice from Assignor that
Assignee has fulfilled its obligations under this Agreement, such notice not
to be unreasonably withheld; and
not to enter into negotiations with any other parties in relation to the
Patents or Heads of Agreement until such time as Assignee has agreed to
termination of this Agreement pursuant to Article 5 of this Agreement; and
that the improvements in the Technology and any patents filed in relation to
the improvements will become the property of Assignee; and
that new patents or technology not associated with the Technology, Patents
and Heads of Agreement which may be developed by Assignor will be
offered to the Assignee on terms to be negotiated for each new patent
standing alone.
4.0 ASSIGNMENT: CLOSING
4.1 In consideration of the mutual covenants and agreements contained
herein, including but not limited to the undertakings set forth in Articles 2
and 3 hereof, Assignor hereby irrevocably assigns and transfers to Assignee
all rights, title and interests that it owns and/or holds in the Technology,
Patents, and Heads of Agreement, except as may be limited or conditioned
herein and further grants Assignee all of the rights, duties and obligations of
Assignor as set forth in the Heads of Agreement.
4.2 Closing shall take place upon the execution of this Agreement and
the approval
of the shareholders of Assignee and Assignor.
5.0 TERM AND TERMINATION
This agreement shall be in effect for a term beginning on the date hereof and
shall continue until terminated in accordance with the provisions of this
Agreement.
This agreement shall be terminated only upon default of Assignee of any of
the terms of Section 2.1 of this Agreement and then only after Assignee
shall fail to cure the default as noticed and provided for in Section 6.1 of
this Agreement; and
In the event that this Agreement is terminated then all rights and interests in
and to the Technology, Patents, and the Heads of Agreement will revert to
Assignor and Assignee will have no further right or interest therein.
6.0 EVENTS OF DEFAULT AND REMEDIES
In the event that Assignee shall fail to observe and perform any of the
obligations imposed on it by Article 2.1 of this Agreement (a "Default") the
Assignor may give notice of such Default in writing to the Assignee
specifying the nature of such default. In the event that a Default, as
specified in the said notice, shall continue after a period of ninety (90) days
from the receipt or deemed receipt of such said notice by the Assignee, the
Assignor may issue a Notice of Termination.
Without restricting the generality of Section 6.1, the term "Default" in this
Agreement will include the occurrence of any of the following events:
the failure of Assignee to make, punctually and fully, the payments required
to fund or finance the development of the Technology;
the failure of Assignee to allocate the required funds to develop, prove up
and market the Technology to generate license and running royalty fees;
the failure of Assignee to pursue the commercialization of the Technology;
the failure of Assignee to remain in good standing as a Cyprus Corporation;
the attempt by Assignee to sublicense or to circumvent the Technology
without the written approval of Assignor;
the transfer by Assignee of the rights to the Technology to resolve litigation,
save for the transfer of the rights to Assignor;
the Assignee filing for bankruptcy;
the failure of Assignee to maintain all Patents and Licenses current in all
jurisdictions at the expense of Assignee;
the failure of Assignee to pay promptly to Assignor 25% of the gross
proceeds derived from any license fee, royalties, or any such other revenues
derived from the use of the Technology or any such other consideration as
may be paid to Assignee by any party whatsoever for any matter related to
the use of the Technology, the Patents, or the Heads of Agreement more
particularly as define in Section 2.1 (h) (i) of this Agreement; and
the failure of Assignee to abide by any of the terms as represented under
section 2.1 of this Agreement.
7.0 TRANSACTION EXPENSES
7.1 Except as provided in Section 3.3, each party to this Agreement
shall bear all costs and expenses incurred by him or it in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement. Unless otherwise expressly provided
herein, all costs and expenses related to satisfying any condition or fulfilling
any covenant contained in this Agreement shall be borne by the party whose
responsibility it is to satisfy the condition or fulfil the covenant in
question.
8.0 APPROVALS
The obligations of the parties to complete this Agreement shall be subject
to, in addition to conditions set forth in Section 12.1, the following:
the passing of the resolutions by the shareholders of the parties to this
Agreement authorizing and directing each respective party to consummate
the transactions contemplated herein.
9.0 ASSIGNOR WARRANTIES AND REPRESENTATIONS
9.1 Assignor warrants and represents to Assignee, with the intent that
Assignee will rely thereon in entering into this Agreement and in fulfilling
the terms of this Agreement as contemplated herein that:
Assignor is a company duly incorporated, validly existing and presently in
good standing under the laws of Cyprus and has the power, authority and
capacity to enter into this Agreement and to carry out its terms;
the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorised by all
necessary corporate action on the part of Assignor and this Agreement
constitutes a legal, valid and binding obligation of Assignor in accordance
with its terms except as limited by laws of general application affecting the
rights of creditors;
to the knowledge of Assignor, Assignor has filed all reports and documents
required to be filed with the Registrar of Companies for Cyprus, and is not
in default of any requirements of the Company Act of Cyprus;
Assignor holds the rights to the Technology, Patents and Heads of
Agreement and has the full power and authority to enter into this
Agreement and to assign all rights, title and interests it has in the
Technology, Patents and Heads of Agreement, as contemplated by this
Agreement to Assignee, free and clear of all liens and encumbrances, save
for those defined in the Heads of Agreement appended hereto as Schedule
B;
Assignor acknowledges and agrees that if the Technology, the Patent or any
claim thereof, or the Heads of Agreement shall be found invalid by a court
of competent jurisdiction from which decision no appeal may be taken,
Assignee's obligation to pay Assignor the percentage of gross license fees,
royalties or any other revenues described in Article 2.1(i) hereof shall cease
as of the date of such decision.
Assignor acknowledges and agrees that if either party learns of a claim of
infringement of or by the Technology or any part thereof, that party shall
give immediate notice of such claim to the other party. Assignor shall then
use all reasonable efforts to terminate such infringement. In the event
Assignor fails to ▇▇▇▇▇ the infringing activity within ninety (90) days after
such written notice or to bring legal action against the third party, Assignee
may bring suit for patent infringement, naming Assignor as nominal party
plaintiff.
there are no existing agreements or contemplated agreements, written or
oral, of any nature or kind whatsoever to which Assignor is a party, except
those disclosed as set out in Schedule A and Schedule B attached hereto,
and true copies of all such agreements set out in Schedule A and Schedule
B have been delivered to Assignee;
Assignor has all corporate power and authority to carry on its business as
presently carried on;
Assignor is not in breach of any statute, regulation or by-law applicable to
the Company or its operations.
10.0 ASSIGNEE WARRANTIES AND REPRESENTATIONS
Assignee warrants and represents to Assignor, with the intent that Assignor
will rely thereon in entering into this Agreement and in concluding the
agreements as contemplated herein that:
Assignee has the power and capacity and good and sufficient right and
authority to enter into this Agreement on the terms and conditions herein
set forth;
Assignee is a corporation duly incorporated, validly existing and in good
standing under the laws of the Republic of Cyprus;
Assignee has the power, authority and capacity to carry on the Business as
presently conducted by it;
all material transactions of Assignee have been promptly and properly
recorded or filed in or with its respective books and records, and the minute
book of Assignee contains all records required to be kept pursuant to
applicable legislation pertaining to corporations in Assignee's jurisdiction of
incorporation;
there is no basis for and there are no actions, suits, judgements,
investigations or proceedings outstanding or pending or to the knowledge
of Assignee threatened against or affecting Assignee at law or in equity or
before or by any court or federal, provincial, state, municipal or other
governmental authority, department, commission, board, tribunal, bureau or
agency and neither is Assignee a party to or threatened with any litigation;
11.0 COVENANTS OF THE PARTIES:
11.1 The parties agree that they:
will diligently take all reasonable steps to obtain prior to the Closing Date,
all consents and approvals required to complete the transactions
contemplated herein in accordance with the terms and conditions hereof
including any consents, waivers, and approvals as required;
attend to all corporate matters to carry out and implement this Agreement
as soon as possible.
The representation and warranties of the parties hereto will survive the
Closing Date and the Closing, and shall continue in full force and effect.
Not withstanding the completion of the transactions herein contemplated,
the waiver of any condition contained herein (unless such waiver expressly
releases Assignor or Assignee of such representation, warranty, covenant or
agreement), the same will remain in full force and effect.
The representations, warranties, covenants and agreement of the parties
contained herein and those contained in the documents and instruments
delivered pursuant hereto will be true at and as of the Closing Date as
though made at the Closing Date and will survive the Closing Date, and
notwithstanding the completion of the transactions herein contemplated, the
waiver of any condition contained herein (unless such waiver expressly
releases the Company of such representation, warranty, covenant or
agreement), or any investigation by the parties, the same will remain in full
force and effect.
12.0 CONDITIONS PRECEDENT
The obligations of the parties to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following
conditions at the times stipulated:
the representations and warranties of the parties contained herein are true
and correct in all respects at and as of the Closing Date except as may be in
writing disclosed to and approved by the parties; and
all covenants, agreements and obligations hereunder on the part of the
parties to be performed or complied with at or prior to the Closing,
including the parties obligation to deliver the documents and instruments
herein provided for, have been performed and complied with at and as of
the Closing Date.
13.0 TRANSACTIONS OF ASSIGNOR AT THE CLOSING DATE
At the closing, Assignor will execute and deliver or cause to be executed
and delivered, in trust to Assignee's legal counsel all documents,
instruments, and resolutions as are necessary to effectively transfer and
assign a 100% interest in and to the Technology, Patents and the Heads of
Agreement to Assignee; including
certified copies of resolutions of directors of Assignor authorizing the
transfer of a 100% interest in and to the patents and the heads of agreement
to Assignee;
14.0 TRANSACTIONS OF ASSIGNEE AT THE CLOSING DATE
Assignee will deliver or cause to be delivered the following at the Closing
Date:
Certified copies of resolutions of directors of Assignee approving the
execution of this agreement and the terms thereto;
15.0 POST CLOSING AGREEMENTS
15.1 Assignor will indemnify and hold harmless Assignee from and
against:
any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any covenant on
the part of Assignor under this Agreement or from any misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished to the Assignee hereunder; and
any and all actions, suits, proceedings, demands, assessments, judgements,
costs and legal and other expenses incidental to any of the foregoing.
Assignee will indemnify and hold harmless Assignor from and against:
any and all losses, damages or deficiencies resulting from any
misrepresentation , breach of warranty or non-fulfilment of any covenant on
the part of the Company under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to Assignor hereunder; and
any and all actions, suits, proceedings, demands, assessments, judgements,
costs and legal and other expenses incidental to any of the foregoing.
16.0 TIME OF THE ESSENCE
Time is of the essence of this Agreement
17.0 FURTHER ASSURANCES
The parties will execute and deliver such further documents and instruments
and do all such acts and things as may be reasonably necessary or requisite
to carry out the full intent and meaning of this Agreement and to effect the
transactions contemplated by this Agreement.
18.0 SUCCESSORS AND ASSIGNS
This Agreement will enure to the benefit and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
This Agreement may not be assigned by any party hereto with the prior
written consent the parties to this Agreement.
19.0 COUNTERPARTS
19.1 This Agreement may be executed in several counterparts, each of
which will be deemed to be an original and all of which will together
constitute one and the same instrument.
20.0 NOTICE
All notices, requests, demands and other communications required or
permitted hereunder, or desired to be given with respect to their rights or
interest herein, assigned or reserved, shall be deemed to have been properly
given or delivered, when delivered personally or sent by registered mail or
sent by electronic communication with all postage or other charges fully
prepaid, and addressed to the parties respectively as follows:
To Assignor:
Laxarco Holding Limited
Office ▇▇▇, ▇▇▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
To Assignee:
Carbon Resources Limited
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or such other address as any Party may specify by notice in writing to the
other.
Any notice delivered on a business day, or sent by electronic communication
on a business day, will be deemed conclusively to have been effectively
given on the date notice was delivered or transmitted.
Any notice sent by prepaid registered mail will be deemed conclusively to
have been effectively given on the tenth business day after posting; but if at
the time of posting or between the time of posting and the tenth business
day thereafter if there is a strike, lockout or other labour disturbance
affecting postal service, then the notice will not be effectively given until
actually delivered.
21.0 AGENTS
Assignor warrants to Assignee that no agent or other intermediary has been
engaged by Assignor in connection with the share exchange herein
contemplated; and Assignee warrants to Assignor that no agent or other
intermediary has been engaged by Assignee in connection with the
Agreement herein contemplated.
22.0 PROPER LAW
22.1 This Agreement will be governed by and construed in accordance
with the laws of the State of Colorado and the parties will attorn to
jurisdiction of the Courts thereof.
IN WITNESS WHEREOF the parties hereto have set their hand and seal as
of the day and year first above written.
SIGNED, SEALED and DELIVERED
by LAXARCO HOLDING LIMITED
in the presence of:
/S/ ANDREAS PIFANIS
LAXARCO HOLDING
LIMITED
/S/ PANYAIOTA PIFANI
SIGNED, SEALED and DELIVERED
by CARBON RESOURCES LIMITED
in the presence of:
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
CARBON RESOURCES
LIMITED
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇