Letter Agreement: Geothermal Applications for SFD Technology.
Exhibit 99.1
April
18, 2021
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[REDACTED]
Calgary,
Alberta
[REDACTED]
Delivered by email
Dear
▇▇▇▇▇▇:
Re:
Letter
Agreement: Geothermal Applications for SFD Technology.
The
Board of Directors has concluded a series of in camera meetings to consider the
application being prepared by NXT
Energy Solutions Inc. ("NXT" or the "Company") to
[REDACTED].
As you
are aware, at the meeting of the Board of Directors on March 4,
2021 the Board passed a resolution supporting the submission of an
application by the Company to [REDACTED] for funding in order to
determine if the SFD technology could be adapted for use in
identifying geothermal resources.
Pursuant
to the SFD Technology Ownership
Agreement (the "SFD Ownership Agreement") dated December 31,
2006 Energy Exploration
Technologies Inc., (being the predecessor in name to the
Company), entered into an agreement with you which confirmed the
ownership of all rights, title and interest in and to the SFD
Technology, as it may be applied in various commercial
applications.
Pursuant
to the SFD Ownership Agreement, the Company acquired, received and
was provided with all rights, title and interest in and to the SFD
Technology for commercial applications with respect to the
exploration for hydrocarbon resources, and you retained all rights,
title and interest in and to the SFD Technology for commercial
applications, other than with respect to, the exploration for
hydrocarbon resources.
In
order that [REDACTED] application be considered by [REDACTED] it is
necessary that the use of the SFD technology in
identifying geothermal resources be transferred by you, to the
Company.
As we
review this matter with the Company's legal counsel, we are advised
that an amendment to the "Field of Use" definition in Paragraph 1
of the SFD Ownership Agreement will transfer the necessary rights
to the Company and permit the Company to submit the application to
[REDACTED].
[COUNTERPARTY
INFORMATION REDACTED AS CONFIDENTIAL AND SERIOUSLY
PREJUDICIAL]
Accordingly,
by executing and returning this letter agreement, NXT and you agree
that the SFD Ownership Agreement will be amended on the terms and
conditions set forth below, with respect to the definition of the
Field of Use only, as follows:
1.
Paragraph 1,
Sentence 1 of the SFD Ownership Agreement is hereby terminated in
its entirety, and is replaced with the following:
1.
Acknowledgement
of Interests. The Parties hereby acknowledge and agree that
effective as of the date
of this Letter Agreement, and in accordance with the
provisions of the Technology Transfer Agreement, NXT owns all
right, title and interest in and to the SFD Technology as it may be
applied in connection with the exploration for: (a) hydrocarbon resources; and (b)
Geothermal resources; and that Liszicasz retains all right,
title and interest in and to the SFD Technology as it may be
applied in connection with all other applications (each such
application a "Field of Use").
2.
Paragraph 9,
Subsection (f) is hereby added as follows:
(f)
Geothermal
Resources. For the purposes of this Agreement, “Geothermal
Resources” means a naturally occurring reservoir inside the
earth from which heat can be extracted and utilized for generating
electric power, or other industrial, agricultural or domestic
application and includes geothermal reservoirs which may contain
heat both in the solid rock as well as in the fluids that fill the
fractures and pore spaces within the rock.
For
greater certainty, all terms and conditions set forth in the SFD
Ownership Agreement shall remain of full force and effect, and
currencies appear in both Canadian dollars ("Cdn.$") and United
States dollars ("US$") based upon source of funds.
In
consideration for agreeing to the amendment to the Field of Use as
set forth in the SFD Ownership Agreement, and subject to the
conditions as set forth in Section E (Consideration Shares), the Company
shall pay to you the following amounts, and shall provide to you
the following shares:
A.
Signature
Payment and Share Grant.
The
Company shall pay to you:
(i)
a signature payment
of US$40,000 (the "Signature Payment"); plus
(ii)
300,000 common
shares of NXT Energy Solutions Inc. (the "Consideration
Shares").
B.
[REDACTED] Research Funding Milestone
Payment.
In
addition to the Signature Payment and issuance of the Consideration
Shares, in the event that the Company is awarded research funding
from [REDACTED], the Company shall pay to you a Research Funding
Milestone Payment calculated as follows:
(i)
if the research
funding grant is greater than Cdn.$100,000 but less than or equal
to Cdn.$200,000,the Research Funding Milestone Payment shall be
Cdn.$20,000; and
(ii)
if the research
funding grant is greater than Cdn.$200,000 the Research Funding
Milestone Paymentshall be Cdn.$25,000.
[COUNTERPARTY
INFORMATION REDACTED AS CONFIDENTIAL AND SERIOUSLY
PREJUDICIAL]
C.
[REDACTED] Projects.
In
addition to the Signature Payment and issuance of the Consideration
Shares, and the [REDACTED] Research Funding Milestone Payment (if
applicable), in the event that the Company receives payment
pursuant to one or more [REDACTED] Projects, [REDACTED] the Company
shall pay to you an additional US$200,000, provided that such
additional payment does not reduce the Company’s available
cash to less than Cdn.$5.0 million.
[COUNTERPARTY
AND CONTRACTUAL INFORMATION REDACTED AS CONFIDENTIAL AND SERIOUSLY
PREJUDICIAL]
D.
SFD
Contract Milestone Payment.
Finally, in
addition to the Signature Payment and issuance of the Consideration
Shares, the [REDACTED] Research Funding Milestone Payment (if
applicable), and payment pursuant to the [REDACTED] Projects, (if
applicable), in the event that, within two years of the date of
this letter agreement, the Company executes and thereafter
completes and receives full payment for a contract to provide SFD
Services, (whether with respect to the exploration for hydrocarbon
resources, Geothermal Resources, or otherwise), with a value of
US$10,000,000 or greater, then upon receipt of at least
US$5,000,000 by the Company, the Company shall pay to you a SFD
Contract Milestone Payment of US$250,000.
[COUNTERPARTY
AND CONTRACTUAL INFORMATION REDACTED AS CONFIDENTIAL AND SERIOUSLY
PREJUDICIAL]
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E.
Consideration
Shares.
The
issuance and listing of the Consideration Shares will be subject to
conditions customary in transactions of this nature, including, but
not limited to, approval by the Toronto Stock Exchange which the
Company shall apply for forthwith upon the execution of this letter
agreement. Upon fulfilling the customary conditions referred to
above, the Consideration Shares shall be issued as fully paid and
non-assessable shares in the capital of NXT and shall be subject to
no restriction on trading other than those restrictions imposed by
securities regulators and/or administrators in accordance with
applicable securities laws, rules and regulations. The Company
shall keep you advised as to the status of its application to the
Toronto Stock Exchange and the fulfilment of any other necessary
conditions.
F.
Legal
Expenses; Execution.
NXT
shall pay the legal fees of your counsel in connection with this
letter agreement and the transactions contemplated hereby, not to
exceed Cdn.$3,000.
We
understand that you have consulted with your personal legal counsel
with respect to the terms and conditions set forth herein and that
you are in agreement with the foregoing. Accordingly, please
execute and return one copy of this letter agreement to the
undersigned. The Parties hereto agree that this letter agreement
may be executed in counterpart and with the application of
electronic signatures.
Yours
truly,
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Per:
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“Signed”
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[NAME
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[TITLE
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AGREED TO AND
ACCEPTED this 18th day of April, 2021
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“Signed’
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“Signed’
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▇▇. ▇▇▇▇▇▇
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[Witness to the
signature of ▇▇. ▇▇▇▇▇▇▇▇▇]
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[NAME REDACTED]
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[Printed name of
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