DATED NOVEMBER 29, 2005
(1) NEWGEN
TECHNOLOGIES INC
(2) AG GLOBAL
PARTNERS LIMITED
(3) NEWGEN FUEL
TECHNOLOGIES LIMITED
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JOINT VENTURE AGREEMENT
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TABLE OF CONTENTS
Clause Headings
Page
1.
DEFINITIONS AND
INTERPRETATION........................................1
2.
SUBSCRIPTION AND PURCHASE OF
SHARES...................................5
3. THE
BUSINESS..........................................................6
4. THE
TERRITORIES.......................................................7
5.
GENERAL
UNDERTAKINGS..................................................8
6.
BUDGETS AND
ACCOUNTS.................................................15
7.
STRATEGIC
CONSULTATION...............................................18
8.
TECHNICAL
SUPPORT....................................................18
9.
FUNDING OF THE
COMPANY...............................................18
10.
ALLOCATIONS AND
DISTRIBUTIONS........................................18
11. PROTECTION
OF THE BUSINESS...........................................19
12.
REPRESENTATIONS AND WARRANTIES
......................................20
13. DEFAULT
.............................................................21
14.
TERMINATION
.........................................................22
15. COSTS AND
EXPENSES...................................................22
16.
CONFIDENTIALITY AND
ANNOUNCEMENTS....................................22
17.
MISCELLANEOUS
PROVISIONS.............................................24
18. GOVERNING
LAW, JURISDICTION AND SERVICE OF PROCESS...................26
SCHEDULE 1 Shareholders
SCHEDULE 2 Initial Budget
AGREED DRAFTS
Agreed Draft 'A' New Articles
Agreed Draft 'B' Completion Board
Minutes
Agreed Draft 'C' Technology License
Agreed Draft 'D' Non-Executive Director
Service Agreement
Agreed Draft 'E' Managing Director Service
Agreement
Agreed Draft 'F' Executive Director Service
Agreement
Agreed Draft 'G' Short-term Loan
Agreement
<PAGE>
THIS AGREEMENT is made November 29,
2005
BETWEEN:
1. NEWGEN TECHNOLOGIES
INC. ("NewGen") a Nevada corporation having its
principal
place of business at 6000 Fairview Ave., Charlotte, NC 28210,
USA;
2. AG GLOBAL PARTNERS
LIMITED having its principal place of business at Elan
House,
5-11 Fetter Lane, London EC4A 1QD, England ("AG Partners")
3. NEWGEN FUEL
TECHNOLOGIES LIMITED ("Company") having its principal place of
business
at c/o KSB Law, Elan House, 11-15 Fetter Lane, London, EC4A
1QD,
England
.
WHEREAS:
(A) The Company was incorporated
in England on 17 November, 2005, under the
Companies
Act 1985 with registered number 5626514 and is a private
company
limited by
shares.
(B) The Company has not traded
and has no liabilities.
(C) The authorised share capital
of the Company is (pound)100 divided into
1000
shares of (pound)0.10 each, 500 of which shares are in issue,
fully
paid, and
no person has any right to call for the issue or allotment of
any shares
or other securities in the Company.
(D) Immediately prior to
completion of this Agreement Mr G. Dawson and Mr A.
Greystoke
were the only directors of the Company and Mr A. Greystoke was
its
Secretary.
(E) NewGen wishes to acquire 500
Shares in the Company for the purpose of
carrying
on in joint venture the business of exploiting certain NewGen
technology
in the field of conventional and biofuel blends, and the sale
and
distribution of such products.
(F) NewGen has accordingly
agreed to subscribe for Shares in the Company and
the
Shareholders and the Company have agreed to make provision for
the
management
and administration of its affairs on the terms and conditions
set out in
this Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND
INTERPRETATION
1.1 Definitions
In this
Agreement, the following words and expressions shall have the
following
meanings:
"Act"
means the Companies Act 1985 (as amended by the Companies Act
1989);
"Agreed
Accounting Practices and Policies" means those accounting
practices
and policies which comply with Generally Accepted Accounting
Principles
in the United States (US GAAP) and International Financial
Reporting
Standards (IFRS), which are to be applied in the preparation of
the
Company's accounts, as such may be amended from time to time in
accordance
with this Agreement;
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"Agreed
Draft" means a draft in a form agreed between the parties
bearing
an
identifying letter and initialled by the parties for the purpose
of
identification;
"Article"
means a reference to a regulation set out in the New Articles;
"Auditors"
means the Company auditors as appointed by Newgen in accordance
with this
Agreement;
"Budget"
means, in respect of a financial year, the budget prepared by
the
Company
and furnished pursuant to Clause 6, and reference to an
"approved"
Budget is,
for any financial year, a reference to such Budget as approved
by the
Shareholders pursuant to that Clause;
"Business"
means the business, as defined in Sub-Clause 3.1, to be carried
on by the
Company (including through one or more Subsidiaries) in
accordance
with the provisions of this Agreement;
"Business Day" means a day
(excluding Saturdays) on which banks are open
for
business in the City of London;
"Completion" means the completion of the subscription to Shares
pursuant
to Clause
2 and the due compliance with the obligations in Clause 2;
"Connected
Person" means any person with which any relevant person is
connected
(as determined in accordance with the provisions of Section 839
of the
Income and Corporation Taxes Act 1988);
"Director"
means a director of the Company appointed pursuant to Article 5
of the New
Articles;
"Encumbrance" means any mortgage, pledge, lien, charge,
assignment,
hypothecation, or other agreement or arrangement which has the same
or a
similar
effect to the granting of security;
"Financial
Year" means each period for which the Company is required to
produce
accounts in accordance with the Act;
"Hazardous
Material" means any pollutant, contaminant, toxic substance,
hazardous
waste, hazardous substance, chemical substance or mixture,
pesticide,
pollutant, contaminant, toxic chemical, petroleum product or
byproduct,
asbestos, polychlorinated biphenyl, noise or radiation or any
other as
defined in or pursuant to any law, regulation, rule or
ordinance
applicable
to the Company or any of its Subsidiaries, whether existing as
of the
Completion, previously in force, or subsequently enacted.
"Intellectual Property" means patents and applications,
registered
designs,
unregistered design rights, copyrights, logos, rights in trade
marks and
service marks whether registered or not, goodwill and rights in
confidential information and know-how and any associated or similar
rights
in any
part of the world (including, in all cases, applications and
rights
to apply
therefor);
"License
Agreement" means the agreement between NewGen and the Company
in
the form
of the Agreed Draft pursuant to which NewGen will licence
certain
proprietary technology to the Company for use and exploitation
in
connection
with the Company's conduct of the Business in the Territories.
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"Material
Adverse Effect" means, with respect to any Person, any material
adverse
change in the business, operations, assets (including levels of
working
capital and components thereof), condition (financial or
otherwise), prospects, operating results, Liabilities or relations
with
material
customers, material suppliers or key employees of such Person
or
any
material casualty loss or damage to the assets of such Person,
whether
or not
covered by insurance.
"New
Articles" means the Articles of Association to be adopted by
the
Company at
Completion in the form of Agreed Draft "A";
"Permit"
means all permits, licenses, authorizations, registrations,
franchises, approvals, certificates, variances and similar
rights
obtained,
or required to be obtained, from any Person.
"Person"
shall be construed broadly and shall include an individual, a
partnership, a corporation, an association, a joint stock company,
a
limited
liability company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency
or
political
subdivision thereof.
"Proceeding" means any claim, action, suit, proceeding,
arbitration,
complaint,
charge, hearing, inquiry or investigation (including a tax
audit),
whether administrative or in mediation or arbitration, before
or
by any
person.
"Release"
means any release, spill, emission, leaking, injection,
deposit,
disposal,
discharge, dispersal, leaching or migration into the
atmosphere,
or on,
into, under or from the soil, surface water, ground water or
property.
"Requisite
Regulatory Approvals" means all Permits, approvals, filings,
consents
and waivers required to be obtained from or made with any
Person,
and all
waiting periods required to expire, before the consummation of
the
transactions contemplated by this Agreement, as applicable, under
all
applicable
laws of any jurisdiction, domestic or foreign, having
jurisdiction over the transactions contemplated by this
Agreement.
"Resolutions" means the resolutions of the Company in the form of
Agreed
Draft "B"
to be passed at an extraordinary general meeting of the Company
in
accordance with Sub-Clause 2.1.
"Sale of
the Company" means (i) a sale of the Company (or any
Subsidiary)
or
substantially all of its (or their) shares of capital stock or
assets
or
otherwise, whether by way of merger, consolidation,
recapitalization,
sale of
stock or assets, or otherwise, or (ii) any transaction where
the
Shareholders holding outstanding Shares representing all of the
voting
rights of
the Company prior to such transaction shall, immediately
following such
transaction, hold securities representing less than 50% of
such
voting rights.
"Shareholder" means each person or entity listed in Schedule 1;
"Shares"
means, collectively, the 1000 shares of (pound)0.10 each in the
capital of the
Company, including the 500 shares currently held by AG
Partners
and the 500 shares of (pound)0.10 each in the capital of the
Company to
be subscribed for pursuant to this Agreement and any further
shares in
the capital of the Company issued by the Company from time to
time
during the currency, and pursuant to the terms and conditions,
of
this
Agreement;
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"Short
Term Loan Agreement" means the agreement in the form of the
Agreed
Draft to
be entered into between NewGen and the Company for the
provision
of short
term finance by NewGen to the Company;
"Subsidiary" of any Person means any corporation, association,
partnership, limited liability company, joint venture vehicle or
other
business
entity, whether now existing or hereafter formed or created, of
which more
than 20% of the total voting power of equity interests
(including
membership and partnership interests) entitled (without regard
to the
occurrence of any contingency) to vote in the election of
directors,
representatives, managers or trustees thereof is at the time
owned or
controlled, directly or indirectly, by: (1) such Person, (2)
such
Person and
one or more Subsidiaries of such Person, or (3) one or more
Subsidiaries of such Person; and
"Territories" means those countries and geographic areas specified
in
Clause
4.1.
Interpretation
In this
Agreement, save where the context otherwise requires:
1.1.1 The singular includes the plural and
vice versa and reference to any
gender
includes a reference to all other genders;
1.1.2 Headings and the use of bold typeface
shall be ignored;
1.1.3 References to any enactment shall
include references to such enactment as
it may,
after the date of this Agreement, from time to time be amended,
supplemented or re-enacted;
1.1.4 A reference to a Clause, Sub-Clause,
Paragraph, Sub-Paragraph or Schedule
is, unless
indicated to the contrary, a reference to a Clause, Sub-Clause,
Paragraph
or Schedule of this Agreement;
1.1.5 A reference to a balance sheet or
profit and loss account includes a
reference
to any note forming part of it;
1.1.6 Unless otherwise expressly provided,
expressions defined in the Companies
Act have
the meanings there given to them;
1.1.7 A reference to a person includes a
reference to a firm, a body corporate,
an
unincorporated association or to a person's executors or
administrators;
1.1.8 A reference to a "party" is to a
party to this Agreement for the time
being and
a reference to the "parties" is, unless otherwise stated to the
contrary,
a reference to all parties to this Agreement for the time
being;
and
1.1.9 References to writing shall include
any modes of reproducing words in a
legible
and non-transitory form.
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2. SUBSCRIPTION AND
PURCHASE OF SHARES
2.1 Subscriptions
NewGen
shall subscribe for 500 Shares for cash at par.
2.2 Allotment, Issue and
Transfer
The Shares
to be allotted and issued in accordance with Sub-Clause 2.1
shall be
allotted and issued fully paid at Completion free from all
Encumbrances and with all the rights attaching to them pursuant to
the New
Articles.
2.3 Waiver of Pre-Emption
The
Shareholders and the Company hereby waive any rights or
restrictions
which may
exist in the New Articles or otherwise which might prevent the
allotment
of the Shares to NewGen pursuant to Sub-Clause 2.1.
2.4 Application
By signing
and exchanging this Agreement NewGen:
2.4.1
applies for and accepts with effect from Completion the Shares
subscribed for by it pursuant to Clause 2.1, subject to the
Memorandum of Association of the Company and the New Articles;
2.4.2
authorises the Company to place its name upon the register of
members at Completion in respect of all such Shares; and
2.4.3
requests that one share certificate for all such Shares be issued
to
it.
2.5 Arrangements for
Completion
Completion
shall take place at the offices of KSB Law, Elan House, 5-11
Fetter
Lane, London, EC4A 1QD immediately following the signing of
this
Agreement
or at such other time and place as the parties may agree.
2.6 Obligations at
Completion
At Completion:
2.6.1 the
statutory and minute books and share certificate books of the
Company will be made available for inspection by each party;
2.6.2 an
extraordinary general meeting of the Company shall be duly
convened and held at which the Resolution(s) shall be passed;
2.6.3
NewGen shall pay to the Company for immediate value in London
in
cleared funds the subscription monies for the Shares agreed to
be
subscribed and accepted by it;
2.6.4
NewGen and the Company shall enter into the License Agreement
for
the Territories; and
2.6.5
NewGen and the Company shall enter into the Short Term Loan
Agreement in the agreed form.
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2.7 Board Meeting
The
following business will be transacted at a meeting of the Board
of
Directors
of the Company held at Completion:
2.7.1 The
Company will allot and issue the Shares subscribed for by
NewGen
referenced in Sub-Clause 2.1, shall deliver to NewGen a share
certificate for the Shares to which it is entitled and shall
enter
NewGen in the register of members of the Company in respect of
such
Shares;
2.7.2 Mr
Clifford Hazel and Mr Ian Williamson shall be appointed
Directors
of the Company, Mr John King will be appointed Managing Director
of
the Company and a Director, such that the Board of Directors of
the
Company shall consist of Messrs. Dawson, Greystoke, Hazel, King
and
Williamson; Mr Williamson and Mr Hazel may be substituted with
other
representatives of NewGen should NewGen desire. Mr King may be
substituted with a newly-hired Managing Director after a period
of
training and transition, subject to approval by the
Shareholders.
2.7.3 Mr
Greystoke shall be appointed Secretary of the company;
2.7.4 The
registered office of the Company shall be confirmed as Elan
House, 5-11 Fetter Lane, London, EC4A 1QD;
2.7.5
NewGen shall appoint the auditors of the Company;
2.7.6 The
Company shall confirm the adoption of December 31 of each year
as its accounting reference date;
2.7.7 The
Company shall adopt the Agreed Accounting Practices and
Policies;
2.7.8 The
Company shall appoint Royal Bank of Scotland plc as its bankers
in accordance with the terms of the mandate produced at the
meeting;
2.7.9 The
Company shall approve and execute each of the Service
Agreements;
2.7.10 The
Company shall approve and execute the License Agreement; and,
2.7.11 The
Company shall enter the Short term Loan Agreement.
3. THE BUSINESS
3.1 Nature of Business
3.1.1 The
business of the Company shall comprise the exploitation of all
NewGen technology in the field of fuel technology, including:
(i)
bio-fuels, including biodiesel and ethanol-based fuels and
other
"alternative" fuels, (ii) conventional fuels, (iii) fuel
additives
and technology and the sale and distribution of such products
and
(iv) the manufacture and distribution of biodiesel and ethanol
and
any alternative fuel (the "Business") in the Territories
3.1.2 Each
of the Shareholders undertakes to each of the other
Shareholders to use all reasonable endeavours to promote the
interests of the Company in connection with the Business.
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3.2 Undertakings with regard to
Conduct of Business
3.2.1 Each
of the Shareholders undertakes to each of the other
Shareholders:
(A) to exercise
its respective rights and powers under this
Agreement and as a holder of Shares to ensure, so far as it
lawfully can, that the provisions of this Agreement are
complied with; and
(B) to procure,
so far as it is able to do so, that any director
appointed by it shall so act and vote in relation to the
affairs of the Company (subject always to the fiduciary duties
of such Directors to the Company) to ensure that the Business
and all the affairs of the Company are carried on in a proper
manner and bona fide in the best interests of the Company.
(C) A reference
to a meeting of the Board of Directors shall mean
a meeting of the Board of Directors in which a quorum is
present. For the purposes of all actions to be taken or
approved by the Board of Directors, at least one director or
officer of AG Partners and at least one director or officer of
NewGen shall be necessary to constitute a quorum for the
transaction of business.
3.2.2 The
Company shall comply with the requirements and standards
relating to the conduct of the Business and of its affairs set
out
in Sub-Clause 3.2.1(B).
4. THE TERRITORIES
4.1 The Company has the
exclusive right to carry out the Business in the
countries
and regions set out below (the "Territories"):
- Europe
(excluding Germany)
-
Scandinavia and the Nordic Region
- The
Middle East, Pakistan and India
- The
ASEAN region (Indonesia, Malaysia, Philippines, Singapore,
Thailand,
Brunei
Darussalam, Vietnam. Lao People's Democratic Republic,
Burma/Myanmar and Cambodia)
-
Australia
and will,
by virtue of the License Agreement, receive an exclusive
license
to use the
technology in the Territories, in return for payment of the
royalties
set out in the License Agreement.
4.2 If NewGen or any of the
other Shareholders identifies an opportunity in
the
Territories, it will notify the Company of such an opportunity and
the
opportunity will be evaluated by the Company. If the opportunity
is
progressed, it will be progressed by and will take place within the
ambit
of the
Company
4.3 The Territories can be
expanded following the demonstration of attainment
of
performance objectives in the Territories as agreed from
time-to-time
by the
Shareholders..
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5. GENERAL
UNDERTAKINGS
5.1 Undertakings of the
Company
The
Company undertakes to each of the Shareholders that:
5.1.1
Compliance with Agreement
It will duly and punctually perform, enforce and comply with all
its
rights and obligations pursuant to this Agreement, and the
Memorandum of Association of the Company and the New Articles.
5.1.2
Information
Each of the Shareholders shall be entitled to examine the books
and
accounts of the Company and shall be supplied with all
information,
including copies of all published accounts, directors' reports
and
notices of meetings of the Company and all other circulars and
notices issued or given to members of or those dealing with the
Company relating to the Business or otherwise to the affairs
and
financial or other position of the Company. The Shareholders and
the
Company agree that, for this purpose, the Directors shall be
entitled to pass any
information relating to the Company, its
Business or affairs to any Shareholder, and neither the
Shareholder
nor the Company shall raise any objection to such passing of
information nor allege any breach of any duty of confidence to
the
Company as a result of such action.
5.1.3
Audits and Review
Any Shareholder may from time to time require that (at its own
cost)
an audit or review of the Business and any other affairs of the
Company is carried out, and shall in such case be entitled to
designate a person to carry out such audit or review on its
behalf.
Such person (which may, but need not be, the Shareholder itself,
the
Auditors or an adviser, consultant or contractor of the
Shareholder)
shall be entitled (subject to the provisions of Clause 13 ):
(A) to visit and
inspect any premises of the Company and to
discuss the affairs, finances and accounts of the Company with
its officers and employees; and
(B) to inspect
and request and to copy and to retain copies of any
books, records or other documents relating to the Business or
any other affairs of the Company
and the Company shall afford such access and co-operation as may
be
reasonable in the circumstances to facilitate the carrying out
of
such audit or review.
5.1.4 Notice Requirements
From and after the date of this
Agreement:
(A)
The Company
shall provide written notice to the Shareholders
promptly (in any event within 10 days) after it shall become
aware
of the occurrence of any of the following:
(i) the
commencement of any Proceeding or labor dispute by any
Person against or affecting the Company or any of its
Subsidiaries, which, if determined adversely to the Company or
any of its Subsidiaries, might reasonably be expected to have
a Material Adverse Effect on the Company or any of its
Subsidiaries;
10
<PAGE>
(ii) any default under
any indebtedness of the Company or any of
its Subsidiaries which entitles the lenders thereunder to
accelerate the obligations of such borrower; and
(iii) the receipt by the Company or any of its Subsidiaries, of
(A)
any notice or claim to the effect that the Company or any of
its Subsidiaries is or may be liable to any Person as a result
of the Release by the Company, any of its Subsidiaries or any
other Person of any Hazardous Material into the environment
and (B) any notice alleging any violation of any
Environmental, Health and Safety Law by the Company or any of
its Subsidiaries if, in either case, such notice or claim
relates to an event which could reasonably be expected to
subject the Company or any of its Subsidiaries to Liabilities
in excess of (pound)45,000.
(B)
Upon request of
the any Shareholder, the Company shall, and shall
use its best efforts to cause its Subsidiaries to, provide such
further information (including copies of any pleadings,
notices,
correspondence or such other documents) regarding the status of
any
of the events set forth under Sub-Clauses (i) - (iii) above,
that
the Shareholders deem are reasonably necessary to enable the
Shareholders and their respective advisors, accountants and
counsel
to evaluate such matters.
5.1.5 Conduct of Business
From and after the date of this Agreement
the Company shall, and shall use its
best efforts to cause each of its
Subsidiaries to, take all actions required to
ensure that the Company and each of its
Subsidiaries (i) remain duly registered
and qualified to conduct business under the
laws of the jurisdiction of its
incorporation and to qualify and remain
qualified to conduct business in each
jurisdiction in which the nature of its
operations requires it to be so
qualified and (ii) at all times maintain
its existence in full force and effect
and preserve and insofar as such matters
are within the control of the Company
or its Subsidiaries, keep or cause to be
preserved and kept, all rights material
to the Business.
5.1.6 Compliance with Laws
From and after the date of this Agreement,
the Company shall, and shall use its
best efforts to cause each of its
Subsidiaries to, take all actions required to
ensure that the Company and each of its
Subsidiaries:
(A)
obtain all
Requisite Regulatory Approvals, Permits and
authorizations necessary to conduct the Business;
(B)
conduct its
operations with respect to the Business in material
compliance with all Laws and restrictive covenants applicable to
the
Business; and
(C)
not directly or
indirectly conduct the Business in, make any
investment in any Person with material business operations in,
or
export any intellectual property provided to the Company under
the
License Agreement to, any country with which NewGen would be
prohibited from conducting trade, business or export activities
pursuant to any U.S. Law or regulation relating to export
controls
or trade sanctions or embargoes ("Prohibited Conduct"). NewGen
shall
use reasonable efforts to keep Company up-to-date on the
countries
affected by any such prohibition.
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5.1.7 Payment of Obligations
From and after the date of this Agreement,
the Company shall, and shall use its
best efforts to cause each of its
Subsidiaries to, pay or discharge or cause to
be paid or discharged (i) all taxes imposed
upon the Company or any of its
Subsidiaries, or on any of its properties
or assets or in respect of any of its
franchises, business, income or property,
before any penalty or interest accrues
thereon and (ii) all claims (including,
without limitation, claims for labor,
services, materials and supplies) for sums
which have become due and payable and
which by law have or may result in any lien
or encumbrance upon any of the
property or assets of the Company or any of
its Subsidiaries, prior to the time
when any penalty or fine shall be incurred
with respect thereto, except in each
case for so long as the Company or its
Subsidiaries is contesting any such taxes
claimed by appropriate means.
5.1.8 Maintenance of Property
From and after the date of this Agreement,
the Company shall, and shall use its
best efforts to cause each of its
Subsidiaries to: (i) take all actions required
to ensure that all property and assets of
the Company or any of its Subsidiaries
used in the Business be maintained
