AMENDMENT TO INVENTION TRANSFER AGREEMENT
Exhibit
10.17
AMENDMENT
TO INVENTION TRANSFER AGREEMENT
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AMENDMENT
TO INVENTION TRANSFER AGREEMENT dated as of August 1, 2007 by and among
each of VIDATECH Kft, a corporation organized under the laws of the Republic
of
Hungary (hereinafter, “Vidatech”); Power of the Dream Ventures, Inc., a Delaware
corporation (hereinafter, “PDV”); Xxxxx Xxxxx and Xxxxxx Xxxxx, residents of the
Republic of Hungary (each, unless otherwise specifically identified, an
“Inventor and, collectively, the “Inventors”). Each of Vidatech, PDV
and the Inventors is, unless otherwise specifically identified, a “Party” and,
collectively, the “Parties.”
R
E C I T A L
S:
WHEREAS,
the Parties entered into an Invention Transfer Agreement on May
24,
2007 (the “Invention Transfer Agreement”), pursuant to which PDV’s wholly-owned
subsidiary, Vidatech, obtained from the Inventors an assignment of patent
rights
in a certain hydroelectric energy producing technology based on converting
river
flow into electrical energy with slow-turning generating machines (the “River
Power Technology”) as well as a right to commercialize the River Power
Technology domestically and internationally; and
WHEREAS,
in exchange for the grant of these rights to PDV and Vidatech, the
Inventors each received 50,000 shares of unregistered common stock, $.0001
par
value per share, for an aggregate of 100,000 shares of PDV (hereinafter,
the
“PDV Shares”) as well as the right to share in the revenues generated from the
commercialization of the River Power Technology, all as provided in the
Invention Transfer Agreement; and
WHEREAS,
the Invention Transfer Agreement provides, mistakenly, through a
cultural and language misunderstanding, that the shares are “registered,” but
rather the Invention Transfer Agreement should have reflected their actual
understanding that the PDV shares were not registered with the U.S. Securities
& Exchange Commission (“SEC”), but that PDV would have an express obligation
to register the PDV Shares with the SEC on a Form SB-2 for subsequent resale;
and
WHEREAS,
although legally satisfying the requirements of Regulation S, as
promulgated under the Securities Act of 1933, as amended (the “Act”), the
Invention Transfer Agreement lacked the express requisite representations
and
warranties necessary for a third party to render a legal opinion in connection
with the issuance and delivery of the PDV Shares to the Inventors;
and
WHEREAS,
it is the Parties intention through the execution and delivery of
this
Amendment to confirm and clarify their prior understanding, although inartfully
expressed in English in the Invention Transfer Agreement, that: (i) the PDV
Shares were not, at the time of the execution and delivery of the Invention
Transfer Agreement, registered were the SEC, but were being offered and sold
to
the Inventors pursuant to a registration exemption afforded by Regulation
S, as
promulgated under the Act; (ii) provide the express representations and
warranties required for a third party to render a legal opinion regarding
the
issuance and delivery of the PDV Shares to the Inventors pursuant to Regulation
S; and (iii) clarify that PDV would expressly undertake to
register the PDV Shares in the U.S. on a Form SB-2 for subsequent
resale in the U.S.
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NOW,
THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, IT IS HEREBY AGREED that the Invention Transfer
Agreement is herein modified as follows:
1. PDV
Shares Issued and Sold to
Inventors. The Inventors acknowledge
and agree that the PDV Shares issued and sold to them on May 24, 2007 were
not
registered under the Act in the United States, and that the PDV Shares were
offered and sold to them in reliance upon the registration exemption provided
by
Regulation S, as promulgated under the Act.
2. PDV
Undertaking to Register the PDV Shares on a Form SB-2 at its Cost and
Expense. PDV confirms its undertaking
and obligation to file a registration statement for the PDV Shares of the
Inventors with the SEC on a Form SB-2, the costs and expenses of which
registration statement shall be borne by PDV. PDV will do all things
that are commercially reasonable and within its power to cause the Form SB-2
to
be filed and to become effective and to permit the Inventors’ resale of their
PDV Shares in the U.S. as soon as practicable.
3. Representations,
Warranties and Covenants of the
Inventors. In connection with their
purchase of the PDV Shares from PDV as provided in the Invention Transfer
Agreement, the Inventors hereby, jointly and severally, acknowledge, represent,
warrant and covenant to PDV and Vidatech that:
(a) the
PDV Shares were offered and sold to the Inventors in reliance on the exemptions
from the registration requirements of the Act provided by the provisions
of
Regulation S as promulgated under the Act, and that the PDV Shares may not
be
resold in the United States or to a US Person as defined in Regulation S,
except
pursuant to an effective registration statement or an exemption from the
registration provisions of the 1933 Act as evidenced by an opinion of counsel
acceptable to the Company, and that in the absence of an effective registration
statement covering the PDV Shares or an available exemption from registration
under the 1933 Act, the PDV Shares must be held indefinitely. The
Inventors further acknowledges that neither this Amendment nor the Invention
Transfer Agreement is intended as a plan or scheme to evade the registration
requirements of the Act;
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(b) Each
of the Inventors is a resident of the Republic of Hungary;
(c) None
of the Inventors is a “US Person” as that term is defined in Rule 902 of
Regulation S, as more fully set forth in Section 4 of this
Amendment;
(d) Neither
of the Inventors is, and on the date that they receive the PDV Shares will
be,
an affiliate of the Company;
(e) that
all offers and sales of the PDV Shares shall be made in compliance with all
applicable laws of any applicable jurisdiction and, particularly, in accordance
with Rules 903 and 904, as applicable, of Regulation S or pursuant to
registration of the PDV Shares under the Act or pursuant to an exemption
from
registration. In any case, none of the PDV Shares have been and will
be offered or sold by the Inventors to, or for the account or benefit of
a U.S.
Person or within the United States until after the end of a one year period
commencing on the date on which this Amendment is accepted by the Company
(the
“Distribution Compliance Period”), except pursuant to an
effective registration statement as to the PDV Shares or an applicable exemption
from the registration requirements of the Act.
(f) The
PDV Shares have not been offered to the Inventors in the United States and
the
decision to purchase the PDV Shares as well as the execution and delivery
of
this Amendment on behalf of the Inventors were not in the United States when
such decisions were made and this Amendment was executed and
delivered;
(g) None
of the Inventors will engage in any activity for the purpose of, or that
could
reasonably be expected to have the effect of, conditioning the market in
the
United States for any of the PDV Shares; and
(h) None
of the Inventors, nor any of their affiliates will directly or indirectly
maintain any short position, purchase or sell put or call options or otherwise
engage in any hedging activities in any of the Common Stock of the Company
until
after the end of the Distribution Compliance Period, and acknowledges that
such
activities are prohibited by Regulation S.”
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1.
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A
new Section 8s hereby added to the Agreement, which shall read,
in its
entirety, as follows:
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“8
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Regulation
S – Definition of US
Person.
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Rule
902
(k)(1): "U.S. person" means:
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Any
natural person resident in the United
States;
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Any
partnership or corporation organized or incorporated under the
laws of the
United States;
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Any
estate of which any executor or administrator is a U.S.
person;
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Any
trust of which any trustee is a U.S.
person;
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Any
agency or branch of a foreign entity located in the United
States;
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Any
non-discretionary account or similar account (other than an estate
or
trust) held by a dealer or other fiduciary for the benefit or account
of a
U.S. person;
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Any
discretionary account or similar account (other than an estate
or trust)
held by a dealer or other fiduciary organized, incorporated, or
(if an
individual) resident in the United States;
and
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Any
partnership or corporation if:
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Organized
or incorporated under the laws of any foreign jurisdiction;
and
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Formed
by a U.S. person principally for the purpose of investing in securities
not registered under the Act, unless it is organized or incorporated,
and
owned, by accredited investors (as defined in Rule 501(a)) who
are not
natural persons, estates or trusts.
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Rule
902(k)(2): The following are not "U.S. persons":
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Any
discretionary account or similar account (other than an estate
or trust)
held for the benefit or account of a non-U.S. person by a dealer
or other
professional fiduciary organized, incorporated, or (if an individual)
resident in the United States;
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ii.
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Any
estate of which any professional fiduciary acting as executor or
administrator is a U.S. person if:
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A.
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An
executor or administrator of the estate who is not a U.S. person
has sole
or shared investment discretion with respect to the assets of the
estate;
and
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B.
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The
estate is governed by foreign law;
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Any
trust of which any professional fiduciary acting as trustee is
a U.S.
person, if a trustee who is not a U.S. person has sole or shared
investment discretion with respect to the trust assets, and no
beneficiary
of the trust (and no settlor if the trust is revocable) is a U.S.
person;
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An
employee benefit plan established and administered in accordance
with the
law of a country other than the United States and customary practices
and
documentation of such country;
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Any
agency or branch of a U.S. person located outside the United States
if:
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The
agency or branch operates for valid business reasons;
and
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B.
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The
agency or branch is engaged in the business of insurance or banking
and is
subject to substantive insurance or banking regulation, respectively,
in
the jurisdiction where located; and
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The
International Monetary Fund, the International Bank for Reconstruction
and
Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension
plans.
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2. Except
as amended by this Amendment, the remaining terms and provisions of the
Invention Transfer Agreement remain unchanged.
[The
remainder of this page has been left blank intentionally. The
signature of the parties appear on the next succeeding
page.]
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IN
WITNESS WHEREOF, each of the Company, Vidatech and the Inventors have
executed this Amendment, agreeing to be bound by the terms hereof, as of
the day
and year first-above written.
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POWER
OF THE DREAM VENTURES, INC.
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By:
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/s/
Viktor Rozsnyay
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Name:
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Viktor Rozsnyay, President | |||
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VIDATECH
Kft
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By:
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/s/
Xxxxxx Xxx, Xx.
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Name:
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Xxxxxx Xxx, Xx. Managing Director | |||
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INVENTORS:
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| By: |
Xxxxxx
Xxxxx
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Name:
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/s/ Xxxxxx Xxxxx | ||||
| By: |
/s/
Xxxxx Xxxxx
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| Name: | Xxxxx Xxxxx | ||||
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