INTELLECTUAL PROPERTY AND ASSET PURCHASE
AGREEMENT
THIS INTELLECTUAL PROPERTY SALE AND LICENSE AGREEMENT ("
Agreement ") is to have effect and is dated for reference
as of the 28 th day of
September, 2007 (“ Effective Date
”).
BETWEEN:
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Montilla Capital Inc , a company duly
incorporated under the laws of the British Virgin Isles and having
its’ offices at c/o First First Independent Trust (Curacao)
N.V. 7 Abraham de Veerstraat, P.O. Box 840, Curacao, Netherlands
Antilles
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(hereinafter
called “ Montilla ”)
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OF
THE FIRST PART
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AND :
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Syntec Biofuel Inc , a company duly incorporated under the
laws of the State of Washington, USA and having
corporate offices at # 206-388 Drake Street, Vancouver, Canada
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(hereinafter
called “ PUBCO ”)
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OF
THE SECOND PART
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(Montilla
and PUBCO jointly referred to as the 'Parties')
WHEREAS;
A.
Montilla
is 100% owner of and has the entire right, title and
interest in and to;
i) certain
inventions related to “a method for producing catalysts
and processes for the manufacture of lower aliphatic alcohol
(which includes Ethanol, methanol, butanol and propanol) from
Syngas” as detailed in the patent application attached
hereto as Schedule “A” (the
“Intellectual Property” or "I.P")
ii) the
operational Assets set forth in Schedule
“B” including but not limited to the
registered internet domain name
‘Syntecbiofuel.com’, laboratory equipment, the
furniture, fixtures and equipment in the laboratory
located at 8666 Commerce Court, Burnaby, British Columbia,
Canada and the research and development contract with Syntec
Biofuel Research Inc. ("SBRI") collectively
referred to as the “Assets” which they acquired
from Syntec Biofuel (Canada) in November 2006. Montilla, in
collaboration with SBRI, is in the development stage working
towards commercializing the technology which Montilla proposes
to license to third party operators and Joint Venture
partners.
B.
Montilla is desirous of
selling, assigning, transferring and relinquishing
to Pubco co-ownership, title and interest in and to the
Intellectual Property, plus all the Assets that are
currently being used by Montilla and/or SBRI in the conduct of
Montilla's business, and all contracts on those terms and
conditions hereinafter set forth herein;
C.
Pubco wishes to acquire the Assets and certain rights of
ownership to the Intellectual Property in order to generate
revenue from joint venture operations, by licensing the right
to use the technology and the process, by earning fees from
royalty sales, from joint venture projects and from commission
on sales of the catalysts.
D.
The Purchaser has agreed to assume the debts of Montilla set
forth in Schedule “C” not to
exceed $350,000.
E. The
Pubco is acting as Trustee for and on behalf of themselves and
certain other investors more fully described in
Schedule "D"
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1.1
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Agreement ” means this Intellectual Property and Asset
Purchase Agreement
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1.2
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"Assets" shall mean the domain name
‘Syntecbiofuel.com’, all laboratory equipment,
furniture, fixtures and equipment in the laboratory, and the
research and development contract with Syntec Biofuel Research
Inc.
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1.3
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"Assignee" shall mean a wholly owned subsidiary, an associates
company or an affiliate of Montilla
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1.4
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"Catalysts " shall mean the catalysts that have been developed
by Syntec Biofuel ('Syntec Catalysts') used to convert biogas
and/or syngas generated from gasification of
biomass into alcohols including ethanol,
methanol, butanol and propanol.
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1.5
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"Commercialization " shall mean 'when the life of the catalyst
has been tested in an industrial environment, quantified and proved
economically viable'.
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1.6
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"Debt" shall mean the debt owing
by Montilla
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1.7
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Dollar ” or “ $ ” means
denomination in United States Dollars
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1.8
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“
Effective Date ” shall mean: The date of signing of
this Agreement
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1.9
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"
Fee " has the same meaning as 'Purchase Price’ in
Section 4.
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1.9.1
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"
Intellectual Property " or "I.P'
" means the Catalyst Technology for producing catalysts
and processes for the manufacture of lower aliphatic alcohol (which
includes Ethanol) from Syngas” as detailed in the patent
application attached hereto as Schedule
“A”, such patent application and all existing
substitute, divisional, continuation or continuation in-part patent
applications of such patent application and all research
and development processed by from 2001 up until the effective
date. ;
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1.9.2
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"
Organic Waste Processor ” shall mean a company that
processes organic waste into fertilizer which can also be
re-directed for processing into fuel and/or energy.
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1.9.3
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"
Patent ” means the patent application that is going
to be filed with the USPTO in respect of the new catalysts that
have been developed since 2005 using non-precious
metals
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1.9.4
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"
Patent Application" or Patent Pending " means the patent #
11138077
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1.9.5
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"
Process ” shall mean the process or methodology for
producing catalysts and conversion of syngas to
alcohols.
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1.9.6
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"
Purchaser" shall mean Syntec Biofuel Inc., a fully
reporting Public Company trading on the OTC.B.B.; symbol
SYBF.
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1.9.7
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"
Purchase Price " shall mean the consideration given to
Montilla for the Assets and rights to the I.P.
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1.9.8
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"
Syntec” shall mean Syntec Biofuel
Inc.(Canada) and Syntec Biofuel Research Inc. who
respectively developed and are developing catalysts to convert
syngas into alcohol (the "Syntec Technology").
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1.9.9
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"
Syntec Technology " shall mean the intellectual property
that has been developed by Syntec Biofuel Inc (Canada) and Syntec
Biofuel Research Inc. (Canada) in the production of catalysts and
the process using syngas comprising hydrogen and carbon monoxide
produced by the gasification of biomass which is passed through a
fixed bed reactor incorporating the Syntec Catalysts to produce
alcohols which comprise ethanol, butanol, methanol and
propanol.
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2. SCOPE
2.1 The
division of this Agreement into sections and subsections and
the insertion of headings are for convenience of reference
only and will not affect the interpretation of this
Agreement. Unless otherwise indicated, any
reference in this Agreement to a section or subsection refers
to the specified section or subsection of this
Agreement.
2.2 In
this Agreement, words importing the singular number only will
include the plural and vice versa, words importing gender will
include all genders and words importing persons will include
individuals, corporations, partnerships, associations, trusts,
unincorporated organizations, governmental bodies and other
legal or business entities of any kind
whatsoever.
2.3 In
this Agreement "hereof", "herein", "hereby", "hereto" and
similar terms refer to this Asset Purchase & Assignment
Agreement and not to any particular clause, paragraph or other
part of this Agreement. References to particular
clauses are to clauses of this Agreement unless another
document is specified.
2.4 In
this Agreement "including" means including without limitation
or prejudice to the generality of any description, definition,
term or phrase preceding that word, and the word "include" and
its derivatives will be construed accordingly.
2.5 Pubco
will have unfettered discretion in using or dealing with the
I.P. and shall have rights which include (but are not limited
to) the rights to license, maintain, support and modify (but
not re-sell) their interest in the I.P. in
accordance with the terms and conditions of this Agreement.
Pubco may license their technology to any other potential
entity wishing to use the Syntec Technology to convert any
carbonaceous biomass or any biogas into alcohols.
2.6 Pubco
agrees not to license their technology during the first 24
months after commercialization (the "Period") to any organic
waste processor with the exception of any partner and/or
client of the Sojitz Corporation. After the Period, Pubco may
sub-license the Catalysts and Process to any potential
user.
2.7 Pubco
may not re-sell their ownership interest in the I.P. in its
present form or as improved, at any time to any other person
or entity without Montilla's written consent but may assign
this License to a wholly owned subsidiary or an associate or
affiliated company who will be subject to the same terms and
conditions as set out herein.. In the event
Pubco sells a copy of the Source Code contrary to this
agreement, Pubco shall immediately cease using the I.P. for
their own use and shall recover the I.P. from the purchaser
and return it to Montilla.
2.8 Montilla
is in the process of preparing a Patent for filing with the
USPTO in the USA however, Montilla's may request Pubco to file
the application for their mutual benefit. Pubco will be a
co-applicant and co-owner with Montilla of the Patent in
respect of the Catalyst formulations and process. If the
Patent is approved, it shall become part of the I.P. and
jointly owned by Montilla and Pubco.
FOR VALUABLE CONSIDERATION AND BY THEIR MUTUAL
COVENANTS
THE PARTIES AGREE AS FOLLOWS:
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3.
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PURCHASE & SALE OF ASSETS
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3.1
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For
and in consideration of the covenant and agreement of Pubco to pay
the Purchase Price to Montilla and assume the debt of Montilla as
herein provided, the sufficiency of which is hereby acknowledged,
Montilla hereby agrees, subject to the terms of this Agreement, to
sell, assign and transfer to Pubco
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a)
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100%
of the Assets more fully described in Schedule "B"
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b)
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an
undivided half ownership interest,
including the copy right, in and to the I.P.
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3.2
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Unrestricted use. Both parties may use the
I.P. in any manner in their respective sole unfettered discretion
subject only to clause 3.4. Such uses may include (but
are not limited to the following) purposes:
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(a)
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to
modify and/or use the I.P. in connection with improving and
enhancing the existing catalysts and developing new
catalysts.
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(b)
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to
promote, market, distribute and license the technology to other
entities who wish to produce alcohols using the Syntec
Technology.
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(c)
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to
build and/or operate a corporate or joint venture plant to produce
alcohols from biomass.
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3.3
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Joint Ownership . All proprietary and intellectual
property rights, title and interest including copyright in and to
the original and all copies of the I.P. and patent pending and the
documentation or any changes or modifications made to the I.P. or
related documentation as provided to Pubco shall be owned jointly
by each party. Pubco will continue to operate their Laboratory and
will share the results with Montilla until commercialization. After
commercialization, neither party will have proprietary and
intellectual property rights, title or interest in or to any
subsequent modifications, changes, revisions, enhancements, updates
or upgrades made by the other party to the Syntec
Technology.
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3.4
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Non-Compete . Pubco may not license the use of the
Catalysts or the Process to any potential organic waste processor
(licensee or joint venture partner) ('Licensee") for 24 months
after commercialization with the exception of the Sojitz
Corporation. Thereafter Pubco may contract with any potential user
of the Syntec Technology. Montilla may not sell, use or license the
technology to any third party during the Period other than an
organic waste processor.
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3.5
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Physical Transfer of the I.P and Assets. On
the Effective Date, Montilla will provide a copy of the
Intellectual Property to Pubco, (including all applicable
documentation as prepared to date and to be updated) and assignment
of the contract with Syntec Biofuel Research Inc, in exchange for
Purchase Consideration. Montilla will assign all other
Assets to Pubco. All Assets and I.P. transfers shall be held in
trust subject to clause 8.2.
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3.4
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Montilla
has the right to use and/or sell and/or assign the Technology to an
associate company.
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3.5
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This
assignment and transfer shall become effective as of the Effective
Date. However the parties agree that the executed
transfer and assignment agreement will be held in trust by the
Pubco pending the removal of subject in clause 8.2.
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4.
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PURCHASE CONSIDERATION
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4.1
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Purchase Price . The Purchase consideration to
be paid by Pubco for the Assets and the ownership interest in the
Intellectual Property shall be by way of Pubco issuing to Montilla
11,000,000 common shares at a deemed value of 45.5c per share and
assumption of $350,000 in debt. The shares issued will be held in
trust by Pubco pending Pubco raising a minimum amount of $500,000
at which time they will be released to Montilla. Pubco is in the
process of raising $3 million in a private placement by offering 13
million shares at 23c/share for a 40% equity interest.
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4.2
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The
certificate representing the Securities will bear a legend stating
that such Securities shall not be traded, unless permitted under
securities legislation, until the earlier of (i) the date that is
12 months and a day after the date the issuer first became a
reporting issuer in any of Alberta, British Columbia, Manitoba,
Nova Scotia, Ontario, Quebec and Saskatchewan, if the issuer is a
SEDAR filer; and (ii) the date that is 12 months and a day after
the later of (A) the distribution date, and (B) the date the issuer
become a reporting issuer in the local jurisdiction of the
purchaser of the securities that are the subject of the
trade.
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4.3
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Montilla
understands and agrees that there may be material tax consequences
to Montilla of an acquisition or disposition of the
Securities. Pubco gives no opinion and makes no
representation with respect to the tax con
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