LICENCE AGREEMENT By and between BIO-CARBON SOLUTIONS INTERNATIONAL INC Buyer, And 1776729 ONTARIO CORPORATION. Seller. Dated January 14, 2011
LICENCE
AGREEMENT
By and
between
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
Buyer,
And
1776729
ONTARIO CORPORATION.
Seller.
Dated January
14, 2011
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729 ONTARIO
CORPORATION
LICENCE
AGREEMENT
THIS
LICENCE AGREEMENT (the "Agreement") is entered into as of January 14, 2011, by
and between BIO-CARBON SOLUTIONS INTERNATIONAL INC, (formerly known as ELEMENTAL
PROTECTIVE COATINGS CORP) (“BCSI”), ("Buyer"), and 1776729 Ontario Corporation
(“Seller") (Buyer and Seller each a "Party" and together the
"Parties").
RECITALS
Buyer
desires to purchase a technology licence from Seller, on the following terms and
conditions, a licence for intellectual property (as further defined below) owned
by 1776729 Ontario Corporation an Ontario corporation (
"1776729”); and Seller desires to sell to Buyer, on the following terms and
conditions, the License.
NOW,
THEREFORE, in consideration of the recitals and the mutual covenants,
representations, warranties, conditions, and agreement hereinafter expressed,
the Parties hereby agree as follows:
ARTICLE
I
PURCHASE
AND SALE
1.1 The
Licence. Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined below), (We) the Seller shall sell and
deliver to Buyer, the Licence in perpetuity.
1.2
Consideration. The consideration that Buyer shall pay Seller 6 % of the gross
proceeds from the use of the licence, invoiced on December 31 of each
year
1.3
Closing; Co-operation. The Closing shall take place at the offices of the Seller
on or before January 14, 2011 (the “closing Date”). At the Closing
Date:
(a) Buyer
will provide a stock certificate duly registered in the name of the Seller or as
directed by seller for 4,000,000 (four million) shares of the Buyer’s Common
Stock with an aggregate value of $15,000 (the “BCSI shares”). Such shares will
be exempted from the 9 to 1 roll back contemplated by the Buyer.
Page 2 of
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
Each
Party shall reasonably co-operate, as to matters under such Party’s control, in
the satisfaction of conditions to the obligations of the Parties at the Closing;
provided, that the foregoing shall not require either Party to waive any
condition herein to its obligations at the Closing or to incur any substantial
cost not otherwise required hereunder.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLER
The
Seller hereby makes the following representations and warranties to Buyer, each
of which is true and correct on the date hereof and each of which shall survive
the Closing:
2.1 Power
and Authority. The Seller has the power and capacity to execute and deliver this
Agreement, to perform the obligations hereunder, and to consummate the
transactions contemplated hereby.
2.2
Enforceability. This Agreement has been duly executed and delivered by each
Seller and constitutes a legal, valid and binding obligation of the Seller,
enforceable against each Seller in accordance with its terms.
2.3 No
Violation. The execution and delivery of this Agreement by the Seller, the
performance by the Seller of his obligations hereunder and the consummation by
the Seller of the transactions contemplated by this Agreement will not (i)
contravene any provision of the articles of incorporation or bylaws of the
Seller, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any governmental
authority or of any arbitration award which is either applicable to, binding
upon or enforceable against the Seller, (iii) conflict with, result in any
breach of, or constitute a default (or an event which would, with the
passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right to terminate, amend, modify, abandon or
accelerate, any contract which is applicable to, binding upon or enforceable
against the Seller, (iv) result in or require the creation or imposition of any
lien upon or with respect to any of the property or assets of the Company, or
(v) require the consent, approval, authorisation or permit of, or filing with or
notification to, any governmental authority, any court or tribunal or any other
person, including any applicable filings with the U.S. Department of Justice
that may be required under the Xxxx-Xxxxx-Xxxxxx Act, and any filings with the
U.S. Securities and Exchange Commission (the "SEC").
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2.4
Intellectual Property. Both Buyer and Seller acknowledge that 1776729 Ontario
Corporation is engaged in the development of carbon offsets from forests based
on know-how in the form of experience and market knowledge for determining the
economic potential and value of traditional forest inventories as carbon
pools (or carbon storage properties) in connection with programs where verified
carbon offset credits are bought, sold or traded, including:
i. Knowledge
of and/or relationships with technology providers in various manufacturing
sectors who own technologies that can be used by carbon emitters to meet
emission reduction requirements;
ii. Knowledge
of and/or relationships with land owners in various countries with interests in
providing land bases for the development of biological sequestration offset
credits to meet emission reduction requirements;
iii. Knowledge of
and/or relationships with financial institutions with interest in providing
capital for the development of carbon sequestration tools or implementation of
novel technologies to meet emissions reduction requirements; and,
iv. Knowledge of
and/or relationships with purchasers of carbon offsets.
2.6
Warranty of title to intellectual property
All of
the know-how thereof described in the preceding Section 2.5 are hereinafter
collectively referred to as the “Intellectual Property”. The
Seller (i) has full power and authority to enter into this Agreement
and to make the assignment as provided in Section 1, (ii) is not aware of any
violation, infringement or misappropriation of any third party's rights (or any
claim thereof) on the Know How, and, (iii) was not acting within the scope of
employment by any third party when conceiving, creating or otherwise performing
any activity with respect to any of the Know How.
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
2.7 Use
of the intellectual property
The buyer
acknowledges that the intellectual property has been developed by the seller and
its shareholders for the purpose of engaging in the development of carbon
offsets from forests or other biological ecosystems. 1776729 is a
specialized service firm focusing on the development of carbon sequestration
projects from forested ecosystems, anywhere in the world, to meet the need of
carbon emitters who purchase mandatory or voluntary carbon credits to reduce
their carbon footprints. 1776729s know how permits to address most of the
technical issues involved in regulated carbon projects to support the deployment
of a specialized advisory and value chain management services to clients who
wish to participate in the carbon development market. The
buyer’s participation may take place in three main forms: 1. Preparation
of the necessary documentation and proof for registering carbon offsets
specifically to meet the requirements of carbon trades from specific
landholdings, working either on behalf of landowners intent to increase revenues
from their properties or emitters intent on meeting their regulated
requirements; 2. Carbon monitoring services in order to ensure that our clients’
projects are compliant in their reporting to various jurisdictions where their
carbon offsets are registered; and, 3. Carbon financing for specific projects
where the Corporation will be able to forward sell carbon offsets to emitters or
carbon brokerage firms.
2.8. Share
beneficiaries. On closing:
The buyer
will emit from treasury 4,000,000 shares for its common stocks to 1776729
Ontario Corporation.
2.10 No
Commissions. No Seller has incurred an obligation for any finder’s or broker’s
or agent’s fees or commissions or similar compensation in connection with the
transactions contemplated hereby which the Company or the Buyer may be obligated
to pay.
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2.11 No
Restrictive Documents. The Seller is not subject to any charter, by-law,
mortgage, lien, lease, agreement, instrument, order, law, rule, regulation,
judgment or decree or any other restriction which would prevent consummation of
the transactions contemplated by this Agreement.
2.12
Financial Information Provided. The Buyer acknowledges that it is cognisant of
the financial condition of 1776729, having been provided with
audited Financial Statements of 1776729 Ontario Corporation. The
Seller is aware that BCSI is actively seeking a merger or acquisition candidate,
and that if BCSI successfully completes a merger or acquisition with a
successful or profitable company, its Shares may increase in value
substantially.
2.13
Acting as officers and directors of BCSI. The Buyer and the Seller
agree that: (i) Xxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxx will become directors of
BCSI; (ii) Xxx X Xxxxxxxx will become President and Chief Executive Officer of
BCSI; (iii) Xxxxxx X. Xxxxxxx will become Chief Operating Officer for
BCSI.
2.14
Option to purchase technology. The Buyer reserves the right to
purchase, subject to approval by the Seller, the Licence from the Seller at any
time for a purchase price of 29,000,000 shares of the Buyer’s common
stock.
2.15 License
restrictions. Except as otherwise
provided in section 2.7 above, Licensee shall not:
|
(i)
|
use
the Technology unless the Use complies with applicable
Laws;
|
|
(ii)
|
allow
the Use of the Technology by any third parties not authorized by the
Licensee; or
|
|
(iii)
|
otherwise
use the Technology except as authorized
herein.
|
Licensee
agrees to take all reasonable precautions to prevent third parties from using
the Technology in any way that would constitute a breach of this Agreement
including, without limitation, such precautions as Licensee would otherwise take
to protect its own intellectual property.
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby makes the following representations and warranties to Seller, each of
which is true and correct on the date hereof and each of which shall survive the
Closing:
3.1
Status. Buyer is a sophisticated, knowledgeable investor which is incorporated
in the State of Nevada. The Buyer has the power and authority to own and use her
assets and properties and to transact the businesses in which they are
engaged.
3.2 Power
and Authority. Buyer has all requisite power and authority to execute and
deliver this Agreement, to perform her obligations hereunder, and to consummate
the transactions contemplated hereby. Buyer have taken all action necessary to
authorize its execution and delivery of this Agreement, the performance of her
respective obligations hereunder and the consummation of the transactions
contemplated hereunder.
3.3
Enforceability. This Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms.
3.4 No
Violation. The execution and delivery of this Agreement by Buyer, the
performance by Buyer of her obligations hereunder and the consummation by Buyer
of the transactions contemplated by this Agreement will not (i) contravene any
provision of the articles of incorporation or bylaws of Buyer, (ii) violate or
conflict with any law, statute, ordinance, rule, regulation, decree, writ,
injunction, judgment or order of any governmental authority or of any
arbitration award which is either applicable to, binding upon or enforceable
against Buyer, (iii) conflict with, result in any breach of, or constitute a
default (or an event which would, with the passage of time or the giving of
notice or both, constitute a default) under, or give rise to a right to
terminate, amend, modify, abandon or accelerate, any contract which is
applicable to, binding upon or enforceable against Buyer, (iv) result in or
require the creation or imposition of any lien upon or with respect to any of
the property or assets of Buyer, or (v) require the consent, approval,
authorization or permit of, or filing with or notification to, any governmental
authority, any court or tribunal or any other person, except any applicable
filings required under the Xxxx-Xxxxx-Xxxxxx Act, and any filings with the SEC
and other filings required to be made by Buyer.
Page 7 of
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3.5 The
BCSI shares.
The
Seller understands that the BCSI shares have not been, and it is not anticipated
that the same will be, registered under the U.S. Securities Act of 1933, as
amended (the "'33 Act"), nor pursuant to the provisions of the securities or
other laws of any other applicable jurisdictions, in reliance upon the exemption
for private offerings contained in Section 4(2) of the '33 Act, Regulation D
promulgated thereunder, and the laws of such jurisdictions. The Seller is
fully aware that the BCSI Shares are to be issued to it in reliance upon such
exemptions based upon its representations, warranties and agreements. The Seller
is fully aware of the restrictions on sale, transferability and assignment
of the Shares, that BCSI has not agreed to qualify these for sale, and that the
Seller must therefore bear the economic risk of his investment in the Company
for an indefinite period of time because the Shares have not been registered
under the '33 Act and, therefore, cannot be offered or sold unless they are
subsequently registered under the '33 Act or an exemption from such registration
is available.
The
Seller represents that the BCSI Shares are being acquired by it for investment
and not with a view to, or for resale in connection with, any distribution of
stock within the meaning of the '33 Act. By such representation, the Seller
means “that I am acquiring the BCSI shares for my own account for investment and
that no one else has any beneficial ownership in the BCSI shares, nor are they
subject to any pledge or lien”. Further, Seller understands that the BCSI Shares
will not be registered under the Act by reason of a specific exemption provided
therein, the availability of which depends upon the bona fide nature of its
investment’s intent as expressed herein. The Seller recognizes that the BCSI
Shares are being issued to it in reliance upon these representations.
Accordingly, until the BCSI shares are registered under the '33 Act, they must
be held indefinitely unless they are subsequently registered under the '33 Act
or an exemption from such registration is available. The Seller further
understands that any routine sales of the Shares made in reliance upon Rule 144
can be made only in limited amounts in accordance with the terms and conditions
of that Rule, and in the event that Rule 144 is not applicable or is unavailable
for any reason, Registration under the Act or compliance with Regulation A or
some other exemption will be required.
Page 8 of
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
Before it
makes any disposition of any of the BCSI shares, whether by sale, gift, pledge,
charitable donation or otherwise, the Seller agrees to give to BCSI written
notice describing briefly the manner of such proposed disposition. No such
disposition shall be made unless and until the BCSI shares have been registered
under the Act, or such proposed disposition does not require Registration under
the Act by reason of a specific exemption contained therein. In the event that
the Seller proposes to dispose of any portion of the BCSI shares pursuant to
such an exemption, it must furnish to BCSI an opinion of counsel stating
specifically which exemption from Registration under the Act is claimed and that
such exemption is available for the proposed transaction under the
circumstances, and BCSI shall have advised the transfer agent for its common
stock that such counsel and such opinion are satisfactory to
it.
The
Seller agrees that until such time as the BCSI shares are qualified for sale,
each certificate representing any of such shares shall bear on its face a legend
in substantially the following form:
"These
securities have not been registered under the Securities Act of 1933, as
amended. They have been acquired for investment and not with a view to the
distribution thereof. They may not be sold or transferred in the absence of an
effective Registration Statement under that Act without an opinion of counsel
satisfactory to the Company that such Registration is not
required."
3.6
Anti-Money Laundering. The Seller represents and covenants that neither it nor
any person controlling, controlled by, or under common control with her, nor any
person having a beneficial interest in her, is an individual or organization, or
entity listed on the List of Specially Designated Nationals and Blocked
Persons (the “OFAC Control List”) maintained by the U.S. Office of Foreign
Assets Control (“OFAC”) and that it is not acquiring the BCSI Shares and will
not acquire any BCSI Shares on behalf of or for the benefit of any
individual, organization or entity listed on the OFAC Control List. A copy of
the OFAC Control List may be viewed at
xxxx://xxx.xxxxxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/x00xxx.xxx
Page 9 of
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3.6
Legality of Funds. The Buyer represents that:
(a) the
Purchase Price nor any part thereof was not and is not directly or indirectly
derived from any activities that contravene U.S. federal or state laws and
regulations or any international laws and regulations, including but not limited
to anti-money laundering laws and regulations, and
(b) when
and if the Buyer liquidates its interest in the 1776729 shares, that the
proceeds of such sale will not be used to finance any illegal
activities.
3.7
PATRIOT Act Compliance. If the Buyer is an entity that invests on behalf of
others, the Buyer , in addition to and not by way of limiting any of the
forgoing, represents and certifies that it is aware of the requirements of the
PATRIOT Act of 2001 and the rules and regulations promulgated thereunder, and
other applicable anti-money laundering measures in any jurisdiction
(collectively the “AML Rules”), and that it has adopted anti-money laundering
policies and procedures reasonably designed to verify the identity of its
beneficial owners or underlying investors, as the case may be, and their
respective sources of funds. Such policies and procedures are properly enforced,
and are consistent with such AML rules.
The Buyer
further warrants and certifies that, to the best of its knowledge, its
beneficial owners or investors, as the case may be, are not individuals,
entities or countries that may subject the Company or any of its affiliates to
criminal or civil violations of any AML Rules. The Buyer further acknowledges
that it is to furnish a copy of its anti-money laundering policies and
procedures to the Company when requested.
Among its
other obligations, the Buyer agrees to promptly notify the Company if any of the
foregoing representations and certifications become inaccurate at any future
time.
The Buyer
further represents that:
(a) it is
not a Senior Foreign Political Figure (“SFPF”), a member of the immediate family
of any SFPF, a and/or any Close Associate of any SFPF residing in a
non-cooperative country or territory or jurisdiction that has been designated by
the U.S. Secretary of the Treasury as warranting special measures due to primary
anti-money laundering concerns; and
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
(c) it is
not resident in, or organized or chartered under the laws of, a jurisdiction
that has been designated by the U.S. Secretary of the Treasury under Sections
311 and 312 of the USA PATRIOT Act as warranting special measures due to primary
money-laundering concerns; and
(d) it is
not a Foreign Shell Bank (“FSB”) as that term is defined in the USA PATRIOT Act;
and
(e) the
Purchase Price did not originate from, nor will it be routed through, an account
maintained at an FSB, or a bank organized or chartered under the laws of a
jurisdiction deemed to be a non-cooperative country or territory
(“NCCT”).
The Buyer
understands the meaning and legal consequences of all of the foregoing
representations and warranties, which are true and correct as of the date
hereof, and will be true and correct as of the Closing Date. Each such
representation and warranty shall survive the Closing Date.
3.8
Brokers, Finders. Buyer has not incurred any obligation for any finder’s or
broker’s or agent’s fees or commissions or similar compensation in connection
with the transactions contemplated hereby.
3.9
Restrictive Documents. Buyer is not subject to any charter, by-law, mortgage,
lien, lease, agreement, instrument, order, law, rule, regulation, judgment or
decree or any other restriction which would prevent consummation of the
transactions contemplated by this Agreement.
ARTICLE
IV
CONDITIONS
PRECEDENT TO BUYER’ OBLIGATIONS
The
obligations of Buyer at the Closing shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions (unless waived in
writing by Buyer):
4.1
Accuracy of Representations and Warranties. The Seller’s representations and
warranties set forth in Article II shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects on the Closing Date as though such representations and warranties were
made at and as of such date and time. Seller’s representations and warranties as
set forth in Article IIA shall have been true and correct in all material
respects when made.
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4.2
Performance of Agreement. Seller shall have fully performed and complied with
all covenants, conditions, and other obligations under this Agreement to be
performed or complied with by them at or prior to the Closing.
ARTICLE
V
CONDITIONS
TO SELLER’S OBLIGATIONS
The
obligations of Seller at the Closing shall be subject to the satisfaction at the
Closing of the following conditions unless waived in writing by
Seller):
5.1
Accuracy of Representations and Warranties. Buyer’s representations and
warranties set forth in Article III shall have been true and correct in all
material respects when made, and shall be true and correct in all material
respects on the Closing Date as though such representations and warranties were
made at and as of such date and time.
5.2
Performance of Agreement. Buyer shall have fully performed and complied with all
covenants, conditions, and other obligations under this Agreement to be
performed or complied with by it at or prior to the Closing.
ARTICLE
VI
ADDITIONAL
COVENANTS OF THE PARTIES
6.1
Public Disclosure. Prior to Closing, neither Party to this Agreement shall make
any public disclosure of the terms hereof or the transactions contemplated
hereby without the prior written consent of the other Party, except as required
by law. If the Closing does not occur, Buyer, and if the Closing does occur,
Seller shall not disclose to any third person any confidential information
relating to the Company without the prior written consent of the other
Party.
6.2
Further Assurances. From and after the Closing, the Parties shall do such acts
and execute such documents and instruments as may be reasonably required to make
effective the transactions contemplated.
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
7.1
Notice. All notices, requests, demands, and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given and made upon being delivered either by courier or fax delivery
to the Party for whom it is intended, provided that a copy thereof is deposited,
postage prepaid, certified or registered mail, return receipt requested, in the
United States mail, bearing the address shown in this Section 9.1 for, or such
other address as may be designated in writing hereafter by, such
Party:
If to
Buyer:
Bio-Carbon
Solutions International Inc
000 Xxx
Xx, Xxxxx 0000,
Xxxxxxx,
Xxxxxxx X0X 0X0.
Xxxxxx
If to
Seller:
1776729
Ontario Corporation
000 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxx Xxx
Xxxxx, XxxxxxxX0X 0X0
Xxxxxx
7.2
Entire Agreement. This Agreement hereto embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings
relative to such subject matter.
7.3
Assignment; Binding Agreement. This Agreement and various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon Buyer, its
successors, and permitted assigns and Seller, their legal representatives,
successors, and permitted assigns. Neither this Agreement nor any of
the rights, interests, or obligations hereunder shall be transferred,
delegated, or assigned (by operation of law or otherwise) by either of the
Parties hereto without the prior written consent of the other Party, except that
Buyer shall have the right to transfer and assign its rights hereunder to
purchase the Shares and any other rights or benefits afforded to it by this
Agreement to any entity which at the time of such transfer and assignment is
controlled by Buyer.
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7.4
Counterparts. This Agreement may be executed simultaneously in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
7.5
Headings; Interpretation. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement. Each reference in this Agreement to
an Article, Section unless otherwise indicated, shall mean an Article or a
Section of this Agreement. References herein to "days", unless otherwise
indicated, are to consecutive calendar days. All Parties have participated
substantially in the negotiation and drafting of this Agreement and agree that
no ambiguity herein should be construed against the draftsman.
7.6
Expenses. Seller (and not the Company) shall pay all costs and expenses incurred
on behalf of themselves or the Company in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, fees and
expenses of attorneys, investment bankers and accountants.
7.7
Remedies Cumulative. All rights and remedies of the Parties under this Agreement
are cumulative and without prejudice to any other rights or remedies under
Law.
7.8
Governing Law. This Agreement shall in all respects be construed in accordance
with and governed by the substantive laws of the Province of Ontario, Canada
without reference to its conflict of law rules.
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STOCK
PURCHASE AGREEMENT
BIO-CARBON
SOLUTIONS INTERNATIONAL INC
1776729
ONTARIO CORPORATION
IN
WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed as of the date Aim above written.
Buyer:
BIO-CARBON
SYSTEMS INTERNATIONAL INC
By: /s/
Xxxx X. Xxxxxx, President
Seller:
1776729
ONTARIO CORPORATION
By: /s/
Xxx X. Xxxxxxxx
Name:
Xx. Xxx X Xxxxxxxx
Title:
President
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