Exhibit 3(5)
XENOTECH INC
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XENOTECH AUSTRALIA PTY LTD
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XENOTECH RESEARCH PTY LTD
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DEED OF COMPROMISE & RELEASE
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Solomon Brothers
Solicitors
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Ref: PFF
THIS DEED is made the day of 1995
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BETWEEN
XENOTECH INC of c/- ▇▇▇▇▇▇▇ & Co, 1600, ▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ("XI") - and XENOTECH AUSTRALIA PTY LTD ACN ▇▇▇ ▇▇▇ ▇▇▇ of Suite 2,
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("XA")
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XENOTECH RESEARCH PTY LTD ACN ▇▇▇ ▇▇▇ ▇▇▇ of Suite 1, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("XR") - and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇▇▇ ▇,
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("AR")
WHEREAS
A. XI is a corporation incorporated in Canada and listed on the Alberta
Stock Exchange ("ASE").
B. XA is a corporation incorporated in Western Australia having ACN number
060 154 949.
C. XR is a corporation incorporated in Western Australia having ACN number
060 154 912.
D. AR is a director of XI and the trustee of the R & D Services Trust and
the ▇▇▇▇▇▇▇▇ Family Trust. AR executes this deed in his own right and
in his capacity as trustee of those trusts.
E. XA and XR are both wholly owned subsidiaries of XI.
F. XI, XA and XR (together "Xenotech") have raised certain claims as
against AR which claims are detailed in the Federal Court Application
WAG 30 of 1993 and documents filed in those proceedings ("the Action").
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G. In order to avoid the expense and inconvenience of further litigation
Xenotech and AR have agreed to a settlement of the Action and all
matters in dispute between them related to the Action on the terms set
out in this agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES AS FOLLOWS:
1. In this deed the following expressions have the following meanings:
"Business Plan" means the Barrington Enterprises business plan produced
by XA.
"Consultancy Agreement" means the deed so named and executed by
Xenotech and AR contemporaneously with this deed a copy of which is
attached as schedule 1.
"Feasibility Report" means the Feasibility Study Report for XA by
Systems Intellect in July 1994.
"fully document" means disclose in detail by writing, video tape or
computer disc as appropriate, all information held or available.
"Listing Application" means the application by XI to the ASE a copy of
an excerpt from which is attached as schedule 2.
"Licence Agreement" means the licence agreement dated 24 June 1993
between XR, XA and AR.
"Intellectual Property" means copyright, know-how, confidential
information, concepts, expertise, proposals for commercialisation,
patents, patent applications, patentable concepts, designs and
trademarks.
"Intellectual Property Rights" means all legal and equitable rights,
benefits or entitlements with respect to the Intellectual Property.
"▇▇▇▇ Loan Debt" has the meaning given by clause 6.7.
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"Samsung Licence Agreement" means the licence agreement dated 5 October
1994 between Samsung Electronics Co Ltd and XA.
"the Technologies" means the autostereoscopic three dimensional
television display system under development by XR and any improvements
or alterations of any kind to that system together with all parts,
attachments and accessories and any patent relating thereto and all
other inventions, developments, products, processes, systems, methods,
techniques and concepts referred to in the Listing Application, the
Feasibility Report, the Business Plan and the Report by XR to XA headed
"Project Options and Strategies", and all developments, advances,
improvements and alterations of any kind thereto together with all
parts, attachments and accessories and any patent relating thereto.
"ASE" means the Alberta Stock Exchange in Calgary, Alberta, Canada.
"the 2D to 3D/DDC Upgrades" has the meaning given in clause 1.1.19 of
the Consultancy Agreement.
"the Settlement Loan Debt" has the meaning given by clause 5.4.
"2D to 3D/DDC Licence Agreement" means the deed of that name executed
by AR and XR contemporaneously with this deed.
"2D to 3D/DDC Deed of Assignment" means the deed of that name executed
by AR and XR contemporaneously with this deed.
"2D to 3D Process" means the process known to the parties as the 2D to
3D conversion process described in the Listing Application as "2D to 3D
Film and Video Reprocessing".
"DDC Process" means the process known to the parties as Dynamic Depth
Cueing and described in the Listing Application as "Television
Transmission of Reprocessed 3D over 2D TV."
"the Processes" means both the 2D to 3D Process and the DDC Process.
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COVENANTS BY XA AND XR
2. XA acknowledges that no call to repay the ▇▇▇▇ Loan Debt shall be made
unless and until AR is in default of this Deed of Compromise and
Release or the Consultancy Agreement, or the Consultancy Agreement is
terminated.
3. It is confirmed by XR that within 7 days of receipt by XA of $750,000
from Samsung pursuant to clause 3.1.2 of the Samsung Licence Agreement
AR shall receive by way of additional Consultancy Fee $25,000 in one
lump sum ("Samsung Success Fee").
4. XR shall forthwith engage AR as a consultant by the Consultancy
Agreement.
5. COVENANTS BY XI
5.1 XI shall continue to promote AR as the inventor of the
Technologies, for the purposes of assisting Xenotech to
effectively market the Technologies.
5.2 XI shall use its best endeavours to raise further capital as a
matter of urgency.
5.3 XI shall use its best endeavours to find a purchaser for such
of AR's shares in XI as AR wishes to dispose of.
5.4 Subject to XI raising sufficient further capital XR shall
advance to AR as soon as possible TWENTY FIVE THOUSAND DOLLARS
AUSTRALIAN (A$25,000) ("the Settlement Loan Debt") by way of
loan repayable out of the Samsung Success Fee and the Upgrade
Fees. XR is entitled to withhold payment of sufficient of
those fees to extinguish the ▇▇▇▇ Loan Debt as well as the
Settlement Loan Debt. AR shall pay interest on the Settlement
Loan Debt in amounts per annum equal to the fringe benefits
tax liability arising for XR by reason of the Settlement Loan
Debt such amounts to be capitalised and payable as and when
the Settlement Loan Debt principal is repaid.
6. COVENANTS BY AR
AR covenants and agrees with Xenotech that:
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6.1 he shall forthwith execute the Consultancy Agreement and shall
immediately hereinafter work pursuant to the Consultancy
Agreement and shall comply with all of his obligations arising
under the Consultancy Agreement;
6.2 in the event that he or any partnership or company with which
he is associated develops improvements or alterations to the
Processes, the beneficial right to the said improvements or
alterations is automatically vested in XR and such
improvements or alterations shall be disclosed by AR to XR
fully documented as part of the 2D to 3D/DDC Upgrades;
6.3 subject to the provisions of this deed he has no claim
whatsoever to the Technologies;
6.4 XR had full entitlement to grant, and has effectively granted,
to XA a licence in terms of the Licence Agreement with respect
to all of the Technologies, other than the Processes, and the
Intellectual Property Rights in respect of the Intellectual
Property underlying the Technologies, except for the
Processes, and the definition of "Technology" contained in the
Licence Agreement extends to and encompasses each of the
Technologies, except for the Processes, and the said
Intellectual Property;
6.5 by the 2D to 3D/DDC Licence Agreement 3 AR grants to XR
certain rights with respect to the Processes;
6.6 by the 2D to 3D/DDC Deed of Assignment AR, subject to the
conditions expressed in the 2D to 3D/DDC Deed of Assignment,
assigns to XR the entirety of his rights and interest in the
Processes;
6.7 he is indebted to XA in the sum of $24,756 advanced by XA to
AR for the purposes of settling a dispute as between AR and
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, a former partner of AR, that such loan has
been advanced free of interest and is repayable at call and
that while XA has agreed on the same terms to advance a
further $10,244 to AR as and when required for the purposes of
the settlement, XR ceases to be under any obligation to make
the further advance upon AR being in
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default under this deed or the Consultancy Agreement. The said
advances up to a total of $35,000 are referred to as the "▇▇▇▇
Loan Debt" AR shall use his best endeavours to sell shares in
XI held by him for the R & D Services Trust the proceeds of
which shall be paid by AR to XR to extinguish the ▇▇▇▇ Loan
Debt;
6.8 Any person engaged now or in the future by Xenotech, has total
liberty and entitlement to disclose to Xenotech all knowledge
and information held by that person concerning the Processes
and concerning 3D systems generally, insofar as that knowledge
and information is relevant to research and development of the
Technologies, and this clause enures to the benefit of any
such person engaged, as well as Xenotech.
7. INTELLECTUAL PROPERTY
7.1 AR covenants and agrees with Xenotech that the right to use
the Intellectual Property which underlies the Technologies is,
as between Xenotech and AR, and subject to the 2D to 3D/DDC
Licence Agreement, owned wholly and solely by Xenotech
provided that AR shall be entitled to use such Intellectual
Property in the development of products, processes or systems
unrelated to the Technologies. AR and Xenotech acknowledge
that such rights shall survive termination of the Consultancy
Agreement.
7.2 AR covenants and agrees that all inventions, developments,
products, processes, systems, methods, techniques and concepts
produced by Xenotech from its use of the said Intellectual
Property shall be owned by Xenotech and AR has no claim
thereto.
8. RELEASE BY XENOTECH
In consideration for the execution by AR of this deed Xenotech fully
and finally discharges and releases AR from all claims which it
considers it presently may have as against AR in relation to the
matters the subject of the Action.
9. Subject to clause 10, this deed may be pleaded in bar to any action or
proceeding on any matter the subject of the Action by Xenotech against
AR.
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10. Nothing in clauses 8 and 9 prevents Xenotech from enforcing the terms
of this deed.
11. RELEASE BY AR
11.1 In consideration for the execution by Xenotech of this deed AR
fully and finally discharges and releases Xenotech from all
claims which he considers he presently may have as against
Xenotech in relation to the matters the subject of the Action.
11.2 Subject to clause 11.3 this deed may be pleaded in bar to any
action or proceeding on any matter the subject of the Action
by AR against Xenotech.
11.3 Nothing in clauses 11.1 and 11.2 prevents AR from enforcing
the terms of this deed.
12. INDEPENDENT ADVICE
Each of the parties hereto acknowledges and agrees that he and it has
taken independent legal advice concerning the substance and effect of
this deed and has not relied upon or in any way been induced by any
representation made by any party to determine to execute this deed.
13. UNRELATED INVENTIONS
Xenotech acknowledges that it has no rights or entitlement with respect
to any inventions made by AR unrelated to the Technologies.
14. STAMP DUTY
Xenotech shall bear the stamp duty payable on this deed.
15. COSTS
The parties hereto shall bear their own costs of the dispute, the
Action and the preparation of this deed and shall forthwith execute,
and Xenotech shall file, a consent order in the Action to the effect
that the Action shall be dismissed with no order as to costs.
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16. TIME OF THE ESSENCE
Time shall be of the essence with respect to the terms of this deed.
17. CONFIDENTIALITY
The contents of this deed, other than the schedules, are confidential
to the parties and except to the extent required by compulsion of law
or for the purposes of enforcing this deed may not be disclosed by any
party without the prior written consent of each other party.
18. GOVERNING LAW
The governing law with respect to construction and enforcement of this
deed shall be the law in force in Western Australia and the parties
submit to the jurisdiction of the Supreme and Federal Courts of Western
Australia and the High Court of Australia.
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EXECUTED AS A DEED
XENOTECH INC
Per
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Per
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THE COMMON SEAL of )
XENOTECH RESEARCH PTY LTD )
ACN 060 154 912 was hereunto )
affixed by authority of the Directors )
in the presence of: )
Director:
Director/Secretary:
THE COMMON SEAL of )
XENOTECH AUSTRALIA PTY LTD )
ACN 060 154 949 was hereunto affixed )
by authority of the Directors in the )
presence of: )
Director:
Director/Secretary:
SIGNED BY the said )
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
in the presence of: )
Witness:
Address:
Occupation:
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