AGREEMENT OF PURCHASE AND SALE
Exhibit
10.1
The
Effective Date of this Agreement is February 2, 2009, This Agreement is between
Kinectrics Inc. ("Kinectrics") and W2 Energy Inc. (the "Company") (also referred
to singularly "Party" or collectively "Parties"). This Agreement records the
agreed terms and conditions pursuant to which Kinectrics will sell the Schedule
A assets (the "Unit") to the Company.
THE
UNIT:
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1.
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Upon
receipt of the Deposit by Kinectrics, the Company shall insure the Unit
and Kinectrics shall be named as an additional insured on such policy
until such time as the Sale Price has been paid to Kinectrics in full. A
certificate of such insurance shall be provided to Kinectrics prior to the
release of the Unit from
Site.
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2.
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In
no event shall the Company use the Unit for collateral. In no event shall
the Company place or cause the placement of any liens on either the Unit
or against Kinectrics.
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3.
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The
Unit is sold on an "as is-where is" basis with no guarantee, warranty or
representation, express or implied, as to condition or description of the
Unit, its merchantability, fitness for any purpose, or otherwise. The
Company acknowledges that the Unit is a demonstration unit and is not a
full scale commercial unit. The Company further
acknowledges that it has been informed that the Unit has been in an
idle and dismantled configuration for a prolonged period of time.
Kinectrics is not responsible for any personal injury or property damage
incurred as a result of use or handling of the
Unit.
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4.
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The
Company acknowledges that it has satisfied its due diligence with respect
to the Unit, and understands that the sale in the Purchase Phase is final.
The Company acknowledges that the purchase is based on the Company's own
judgment, and further acknowledges that any information given by
Kinectrics on the Units condition is given without any warranty as to its
completeness or correctness. The Company expressly disclaims any reliance
on information given by Kinectrics in making the purchase
decision.
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5.
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Kinectrics is not responsible for
the installation standards, safety or other potential liabilities
associated with the
transportation or use of the Unit.
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INSTALLATION
PHASE:
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1.
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The
Company shall pay Kinectrics a non-refundable deposit of ten percent (10%)
of the Sale Price or
thirty seven thousand five hundred dollars ($37,500.00) on
execution of this Agreement (the "Deposit"). This amount shall be applied
to the Sale Price of the Unit The installation phase shall begin upon
receipt of the
Deposit and continue for a period up to and including receipt of
the Initial Payment as set out in the Purchase Phase (the "Installation
Phase").
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2.
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The
Company shall allow a Personal Property Security Act lien (PPSA) to be
placed against the Unit by Kinectrics until such time as the Sale Price is
paid in full. The Company's only debtor Premier Capital agrees to
subordinate its loan to W2 Energy and, together with W2 Energy, sign such
documents as may be required in order to accommodate the PPSA. The Company
agrees not to remove the Unit outside of the jurisdictional boundaries of
the Province of Ontario Canada until the Company has paid Kinectrics in
full for the Unit.
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3.
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The
Deposit shall be paid and the PPSA put in place prior to the Unit being
removed from Site.
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4.
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The
Company shall remove the Unit from Kinectrics site, located at 000 Xxxxxxx
Xxx., Xxxxxxx, Xxxxxxx, Xxxxxx (the "Site") within ninety (90) days
following the Effective Date of this
Agreement
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5.
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The
Company shall assemble or arrange for assembly of the Unit ("Assembled
Unit"), making such modifications as may be necessary to bring the Unit
into operation.
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6.
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The
Company may elect to separately contract with Kinectrics, on a fee for
service basis, to undertake a mutually agreed scope of work for the
assembly of the Unit and Engineering support services at a location of its
choosing, provided the specifications and amenities of such space are
deemed by Kinectrics to be suitable for the required activities. All costs
associated with such services, assembly and operation of the Unit shall be
paid by the Company, including but not limited to obtaining required
permits and/or certificates of
authorization. Kinectrics will offer Engineering Support Services
to the Company under a separate services agreement, a sample of which is
attached to this Agreement as Schedule
B.
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1
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7.
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The
Company shall be liable for the Unit from the time it is loaded onto
transport at Site and such liability shall not cease except if the Unit is
returned to Kinectrics' control at its Site following the Installation
Phase.
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PURCHASE
PHASE:
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1.
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Kinectrics
agrees to sell the Unit, located at 000 Xxxxxxx Xxx., Xxxxxxx, Xxxxxxx,
Xxxxxx (the "Site"), and title thereto, to the Company for the sum of
three hundred and seventy five thousand dollars ($375,000.00) ("Sale
Price"), less the Deposit.
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2.
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The
remaining Sale Price of three hundred thirty seven thousand five hundred
dollars ($337,500) plus Taxes payable shall be paid by the Company in
installments as follows:
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a.
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Twenty
percent (20%) of the Sale Price or Seventy five thousand dollars
($75,000.00) payable on the earlier of July 1, 2009; and thirty (30) days
following written notice from the Company of its intention to move into
the Purchase Phase (the "Initial Payment");
and
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b.
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Twenty
percent (20%) of the Sale Price or or Seventy five thousand dollars
($75,000.00) payable thirty (60) days after the Initial Payment (the
"Second Payment"); and
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c.
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Twenty
five percent (25%) of the Sale Price or ninety three thousand and seven
hundred fifty dollars ($93,750.00) payable sixty (60) days after the
Second Payment (the "Third Payment");
and
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d.
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Twenty
five percent (25%) of the Sale Price or ninety three thousand and seven
hundred fifty dollars ($93,750.00) plus all applicable Taxes 60 days after
the Third Payment date (the "Final
Payment").
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3.
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The
Company shall be permitted to remit early payment in full for the Unit at
any time during the Purchase Phase without
penalty.
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4.
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Unencumbered
transfer of title and ownership of the Unit to the Company shall occur
following Kinectrics' receipt of the Final Payment. Immediately upon
transfer of such title and ownership to the Company, the Company agrees to
indemnify and save Kinectrics harmless from any and all risk, claims for
damages or injuries to any parties howsoever arising out
of or associated with the Unit.
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TERMINATION
AND REPOSSESSION:
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1.
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Kinectrics
may terminate this Agreement for default at any time prior to payment of
the Sale Price in full. Upon receipt of notice of such termination, the
Company shall immediately cease its use of the Unit and it shall be
returned to Site at the Company's cost, Installments paid up to the date
of termination (with the exception of the Deposit) will be returned to the
Company less any amounts owing to Kinectrics related to the Unit and its
return to Site.
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2.
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The
Company shall not in any way impede Kinectrics' right to protect and/or
take possession of its Unit in the event of such termination and in such
event, the Company waives any and all interest in the Unit, including
improvements.
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GENERAL:
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1.
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All
taxes applicable to the transactions of this Agreement are extra and shall
be paid by the Company.
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2.
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Kinectrics
agrees to not compete with the Company in the plasma field for gas to
liquid processes.
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3.
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The
Company agrees to grant Kinectrics preferred supplier status for
development of future renewable energy applications of the Unit on a fee
for service basis.
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4.
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Any
attendance at Site by the Company is at the Company's own risk and the
Company indemnifies and holds Kinectrics harmless for any and all
liability for all damage or injury caused by the Company to any
person(s).
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5.
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All
expenses or liability associated with removal of the Unit
from Site shall be at the sole expense and liability of the Company,
including but not limited to removal and transport of the Unit in
accordance with all applicable laws or regulations governing the
disassembly, preparation, packaging, lifting and
transportation.
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6.
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The
Parties to this Agreement agree and acknowledge that this Agreement does
not create a license, partnership, joint venture, or any other
relationship between the Parties save the relationship set out herein
before and solely for the limited purposes
herein.
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2
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7.
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Upon
signing this Agreement the Company agrees to assume all risk arising out
of its use of the Unit and to indemnify and hold harmless Kinectrics, its
employees, agents and others acting in concert with it harmless and free
from and against any claims, losses, or damages, whether in respect of
personal injury, property damage, or other harm arising out of this
Agreement.
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8.
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The
currency of this Agreement is Canadian
dollars.
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9.
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This
Agreement shall be governed by the laws of the Province of
Ontario.
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W2
Energy, Inc.
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Kinectrics Inc. | ||||
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by:
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/s/ Xxxx XxXxxxx | by: | /s/ Xxxxx Xxxxxx | ||
| Name: | Xxxx XxXxxxx | Name: | Xxxxx Xxxxxx | ||
| Title: | CEO | Title: | CEO | ||
| Date: | Feb. 2, 2009 | Date: | Feb. 2, 2009 | ||
| I have the authority to bind the corporation | I have the authority to bind the corporation | ||||
3
SCHEDULE
A
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1.
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DC
powered graphite electrode plasma furnace mounted on three transportable
steel skids,containing:
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i)
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Pilot
scale reactor (furnace) unit
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ii)
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Power
supply
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iii)
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Control
console
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iv)
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Electrode
mast
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v)
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Cooling
water tank
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vi)
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Two
pumps
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vii)
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Spare
electrodes
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viii)
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Screw
auger
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2.
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Internal
Combustion Engine Generator, Caterpillar Model 3408 TA, rated at 250 kW,
600 V, 3-phase,
mounted in 40-ft trailer
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3.
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Additional
ancillary equipment contained in 40-ft trailer containing the Internal
Combustion Engine
Generator
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4
