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 budgetary rev
