TIERRA NEVADA EXPLORATION CORPORATION AGREEMENT

 

                                                                    EXHIBIT 10.6

 

                 TIERRA NEVADA EXPLORATION CORPORATION AGREEMENT

 

      This Agreement, dated as of June 30, 2005, is a binding agreement as to

the structure of a relationship between the parties hereto, and their affiliated

entities, pursuant to which the parties have developed plans for funding and

developing Tierra Nevada Exploration Company ("TNEC") as a Delaware limited

liability company or limited partnership. There are several responsibilities

discussed below, which the parties have agreed to accept, and the parties have

agreed to act as follows:

 

      1. THE PARTIES. Terra Insight Corporation ("TIC"), a wholly-owned

subsidiary of CompuPrint, Inc. ("CPPT"), and is a Delaware corporation with

offices at 99 Park Avenue, 16th Floor, New York, New York 10016 (facsimile:

212-808-4155). Enficon Establishment ("Enficon") is a Liechtenstein entity with

offices at Liechtenstein, Poststrasse 403, FL-9491 Ruggell.

 

      2. TIC has a STeP(TM) process for the mapping and analysis of satellite

and geological data that is used to assess the location and nature of natural

resources for exploration and development. For purposes hereof, "exploration"

means the activity, operations or work performed for the purpose of ascertaining

the existence, location, extent or quality of a natural resource deposit,

including such corporate, legal or other professional services, travel and other

expenses, that are reasonably related to the further development thereof as

contemplated by the parties hereto.

 

      3. TIC has mapped certain areas in the State of Nevada and identified

geological structures to an identified prospecting area TIC believes to have

significant unexploited value with regard to crude oil reserves. Through TNEC,

the plan is to pursue acquisition of the leases related to oil rights in certain

properties in the designated area of Nevada to implement an exploration program

for the drilling of three wells in the designated area of Nevada in 2005/2006

pursuant to, as specifically provided for, and as specifically limited in the

estimated budget annexed hereto as Schedule 1. TIC is the Manager (general

partner, managing partner or managing member) of TNEC. TNEC's business purpose

shall be for the exploration of a targeted structure within the identified

prospecting area in the State of Nevada and the drilling of three wells as

specifically provided for in Schedule 1. The Manager will arrange to provide

funding for TNEC specifically related to and in furtherance of the planned three

wells, by deposit within five (5) banking days from the date of TNEC

incorporation of $1 million of such amount in a TNEC bank account established

for the sole benefit of TNEC to effect the plan for exploration and development

of the three wells in the targeted structure. TIC further agrees to provide an

additional $2 million in funding to TNEC, provided that Enficon has purchased a

total of $5 million of CPPT convertible debentures in the form annexed as

Exhibit A to the Securities Purchase Agreement between the parties dated June

30, 2005. Enficon will immediately provide a written corporate guarantee of the

payment to TNEC, as capital contribution of the total amounts paid to TNEC by

CPPT and TIC, up to $3 million, and Enficon will fund that guarantee in

accordance with budgetary needs of TNEC as declared by TIC on notice to Enficon,

by Enficon's payment thereof within five business days of such notice by TIC

into the account of TNEC, and these amounts shall be solely for the funding of

exploration and other related activities of TNEC for the drilling of three wells

pursuant to Schedule 1 hereto. The funds provided through TIC shall be the first

funds spent by or for the benefit of TNEC. TIC and Enficon will each be entitled

to 50% of the equity interest of TNEC with an equal interest in the

distributions of TNEC, with Enficon's ownership interest and interest in

distributions being subject to the condition subsequent of payment to TNEC by

Enficon of an amount equal to the total amount paid to TNEC by CPPT and TIC, up

to $3 million for such interests. To the extent that Enficon pays less than $3

million to TNEC or less than such other amount as required hereby, and CPPT and

TIC pay more to TNEC than Enficon does, then the ownership interest and

distribution interest of Enficon in TNEC shall be reduced, such that if Enficon

pays $1 million to TNEC and fails to pay the balance, and CPPT/TIC pays $3

million to TNEC, then Enficon shall own an one-quarter equity interest of TNEC

and TIC shall own a three-quarter equity interest of TNEC, and, such equity

interest ownership shall be proportionately adjusted for funding by Enficon of

amounts more than $1 million to TNEC but less than $3 million. If Enifcon

provides at least $1 million pursuant to this Agreement, future dilution as to

the equity interests of TNEC and CPPT/TIC shall be on a

 

 

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pro rata basis. Moreover, if, for any reason, additional funding of TNEC is

required beyond the six million dollar estimated budget, or, if Enficon shall

fail to provide funding as required, if funding is required thereafter, and

Enficon has provided at least $1 million to TNEC pursuant hereto, TIC and

Enficon shall be responsible for attracting such financing, and the dilution of

equity in TNEC for such additional funding shall be borne by both TIC and

Enficon, proportionate to their ownership interests in TNEC.

 

      Provided Enficon has paid at least $1 million to TNEC, TNEC shall effect a

mandatory distribution of cash if: (i) TNEC is sold; (ii) there is a material

sale of material assets of TNEC; or (iii) if TNEC has accumulated a seven figure

surplus, in which event up to 50% of such surplus shall be distributed, up to

the amount of the capital contribution provided by the parties.

 

      4. TNEC, after additional data-gathering of technical, commercial and

business information, will negotiate agreements with target license holders and

property owners in the designated area in Nevada, as well as the negotiation of

other rights and agreements relating to the properties in the identified area

containing the targeted structure selected by TIC through its STeP(TM)

technology for the contemplated three wells.

 

      5. TNEC will further negotiations and due diligence with support from

third party advisors, including engineering, accounting and legal. This process

would include drafting, negotiation & completion of petroleum contracts and

purchase and sale agreements in support of the business and commercial aspects

of the process. TNEC would maintain updated technical analysis, financials;

complete acquisitions of licenses and sub-licenses with the owners/lessees of

the properties containing the targeted structure; and execute the exploration

and development of the venture, with the potential farming out, third-party

financing or other agreements with drillers and developers, among others.

 

      6. TIC will cause TNEC to provide regular reports to TIC and to Enficon,

communicating with bi-weekly and monthly reports, summarizing status,

recommendations and the forward plans. TNEC will establish office in Nevada.

Enficon will appoint one representative with full authorization and bank

signature to be present in such office. TIC, as the Manager of TNEC, covenants

that it shall keep Enficon regularly informed by weekly reports of all checks

written on the TNEC bank account as well as any material bu