Exhibit 10(2)
AMENDMENT TO REVISED
SINGLE WELL TECHNOLOGY
LICENSE AGREEMENT DATED
OCTOBER 27, 1986
This Amendment is made this 31st day of July, 1995, between IIT Research
Institute (hereinafter "IITRI"), an Illinois not for profit corporation with
principal Offices located at 00 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
U.S.A., and Fountain Oil Incorporated, a Delaware Corporation with principal
offices located at 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 X.X.X.
(hereinafter "Fountain"). This Amendment supersedes a similar Amendment
executed by the parties on June 7, 1995.
WITNESSETH
WHEREAS, IITRI and ORS Corporation, then an Oklahoma corporation, and
Uentech Corporation, an Oklahoma Corporation, were the original parties to an
agreement known as the "Revised Single Well Technology License Agreement"
("Agreement") as amended, entered into on October 27, 1986. Subsequent to the
execution of the Agreement on October 27, 1986, a series of mergers and other
corporate transactions resulted in ORS Corporation becoming Fountain Oil
Incorporated, with Uentech Corporation now a wholly-owned subsidiary of
Fountain; and
WHEREAS, IITRI and Fountain desire to amend the Agreement pursuant to
negotiations regarding certain future royalties and payments which were
previously agreed to by the parties to the Agreement: and
WHEREAS, Fountain, for itself and on behalf of its wholly-owned subsidiary
Uentech Corporation, desires to obtain a fully paid-up world-wide exclusive
license to the base technology as defined in the Agreement, including any
patents and know-how acquired by IITRI since October 27, 1986;
NOW THEREFORE, for and in consideration of the premises and mutual
covenants herein contained, IITRI and Fountain herewith agree to amend the
Agreement as follows:
1. All references to ORS Corporation shall be deleted and replaced where
appropriate as follows:
"Fountain Oil Incorporated"
2. Section 5. (a). Term and Termination
The parties hereto agree that the burden of reporting and making payments
under this Section 5. (a) is deleted in its entirety.
3. Section 6. Royalties and Payments
Section 6. Royalties and Payments, and the Amendment dated May 15, 1989,
shall be deleted in their entirety, and shall be replaced as follows:
"Section 6. Royalties and Payments. In consideration of the license
granted Fountain herein and for the period over which such license is in effect,
Fountain agrees to pay IITRI the sum of Sixty Thousand Dollars ($60,000.00),
plus Ten Thousand (10,000) shares of the restricted common stock, $.10 par
value, of Fountain Oil Incorporated, which receipt in full by IITRI shall
constitute a world-wide exclusive paid-up license with no further reporting,
payments or royalties due IITRI by Fountain under any section of this Agreement
for its duration."
4. IITRI has in progress Canadian Patent Application Serial No. 2,090,629
styled "ELECTRICAL HEATING SYSTEMS FOR LOW-COST RETROFITTING OF OIL XXXXX". As
additional consideration for the payment of funds and the issuance of shares by
Fountain, IITRI agrees to assign to Fountain or its designee, the above
referenced Patent Application, with all future processing costs to be borne by
Fountain.
5. In connection with the issuance of the restricted common shares to IITRI by
Fountain, IITRI hereby represents and warrants to and covenants with Fountain
(or, the "Company") as follows:
a. IITRI represents and warrants that IITRI:
(i) has received and read all reports filed by Fountain with the
Securities and Exchange Commission pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934, as amended, during the past twelve months:
(ii) has been given the opportunity to ask questions of Fountain and
its management concerning the Company, the Company's common stock, par value US
$0.10 per share ("Common Stock"), and other matters pertaining to IITRI's
proposed acquisition of shares of Common Stock ( the "Shares"), in order for
IITRI to evaluate the merits and risks of an acquisition of Common Stock, and
IITRI has received satisfactory responses to all such questions; and
(iii) by reason of the business and financial experience of its
directors, officers and employees, IITRI has the capacity to evaluate the
Company and the merits and risks of an acquisition of Common Stock and to
protect IITRI's interests in connection with the acquisition of the Shares and
transactions associated therewith.
b. IITRI agrees that, since the offer and issuance of the Shares by
the Company to IITRI have not been registered under the Securities Act of 1933,
as amended (the "Securities Act") in reliance upon a statutory exemption from
the registration requirements of the Securities Act and such shares will
therefore be "restricted securities" as defined by Rule 144 promulgated under
the Securities Act, IITRI will offer or resell the Shares only in compliance
with the provisions of the Securities Act and all other applicable securities
laws and regulations. IITRI will offer and resell Shares only if such Shares
are registered under the Securities Act or an exemption from such registration
is available. Rule 144 provides such an exemption if certain conditions are met
regarding (i) the availability of public information about the Company (all
reports required
during prior 12 months under the Securities Exchange Act of 1934 have been
filed); (ii) holding period (currently a minimum of two years but proposed rule
would reduce minimum period to one year); (iii) limitation on amount of
securities sold (greater of 1% of outstanding [in excess of 10 million] or
average weekly trading volume in any 3 month period); (iv) manner of sale
(brokers' transactions in which buy orders are not solicited and no more than
normal brokerage commissions are paid); and (v) filing of a notice of sale with
the SEC. Unless the Shares that are the subject of such offer or sale are
registered under the Securities Act or an exemption from registration is
available (in which latter case the Company shall have received an opinion of
IITRI's counsel who shall be experienced in securities law matters, in form and
substance reasonably satisfactory to Fountain, to such effect), the Company
shall not permit the transfer of the Shares. IITRI understands and agrees that
the Company may take such steps as it deems appropriate to ensure compliance
with the offer and resale restrictions imposed by the Securities Act or other
applicable laws and regulations or contained in this Agreement, including
instituting "stop transfer" instructions with respect to the Shares with the
transfer agent for the Common Stock and endorsing restrictive legends,
substantially in the form of Exhibit A hereto, on certificates representing the
Shares to be issued to IITRI.
c. IITRI represents and warrants that IITRI (i) is acquiring the
Shares for its own account for investment purposes and not with a view towards
the distribution thereof and (ii) does not have any contract, understanding,
or arrangement with any person to sell, transfer, or grant participation to such
person or any third person with respect to the Shares, and no other person has a
beneficial interest in the Shares.
d. IITRI agrees, to indemnify, protect, defend, and hold harmless the
Company, and its affiliates, officers, directors, stockholders, agents,
employees, attorneys, accountants, successors, and assigns from and against all
claims, actions, causes of action, damages, losses, costs, liabilities, and
expenses (including costs of investigation, defense, and attorneys' fees)
whatsoever which may result from a breach or an alleged breach of the
representations, warranties and agreements of IITRI contained herein; and the
Company agrees to indemnify, protect, defend and hold harmless IITRI and its
affiliates, officers, directors, stockholders, agents employees, attorneys,
accountants, successors, and assigns from and against all claims, actions,
causes of action, damages, losses, costs, liabilities, and expenses (including
costs of investigation, defense, and attorney's fees) whatsoever which may
result from a breach or an alleged breach of the representations, warranties and
agreements of the Company contained herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
fully executed as of the date first above written.
Fountain Oil Incorporated IIT Research Institute
0000 Xxxxxxxxxx, Xxx 000 10 West 35th Street
Houston, Texas 77084 Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxx Xxxxxx By: /s/ A R Valentino
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Title: Executive Vice President Title: Group Vice President
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