ACQUISITION AGREEMENT
This Acquisition Agreement (the "Agreement") is made and entered
into as of this 4th day of November, 1996, by and between Virtual Technologies,
Inc., a Nevada corporation, with its principal offices located at 0000 X. Xxxxxx
Xx., Xxxxxxx, Xxxxxxx 00000, hereinafter referred to as "Buyer", and Dominion
Capital Pty., Ltd., an Australian corporation, with its principal offices
located at 0 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, Xxxxxxxxx 0000, hereinafter
referred to as "Seller".
RECITALS
WHEREAS, Seller owns the sales, distribution, marketing and
manufacturing rights, world wide to the Solpower product, Soltron, the fuel
enhancing product.
WHEREAS, Seller desires to sell and Buyer desires to purchase the
exclusive sales, distribution, marketing and manufacturing rights to the
Solpower product, Soltron, encompassing the Xxxxx Xxxxxxxx xxxxxx (Xxxxxx
Xxxxxx, Xxxxxx and Mexico) owned by Seller on the terms and subject to the
conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the Recitals and the conditions
and representations hereinafter set forth, the parties agree as follows:
1. SELLER, hereby agrees to:
A. Deliver the exclusive sales, distribution, marketing and
manufacturing rights for the Solpower product, Soltron,
encompassing the North America market (United States,
Mexico and Canada).
B. Provide up to $1 million on an "as needed" basis. These
funds shall be used for operational costs and for the
development and construction of manufacturing facilities
in the metropolitan Phoenix (Arizona) area.
C. Offer, on a first right of refusal basis, and possible
contract basis, additional products and services to be
considered and consequently offered by the Buyer. The
acceptance or rejection of said products and services is
to be at the discretion of the Buyer.
D. Purchase the 3,520,000 shares for $440,000 of the Buyers
Company's Common Stock as offered in the 504 Offering,
dated November 4, 1996.
2. BUYER, hereby agrees to:
A. Purchase the exclusive sales, distribution, marketing and
manufacturing rights to the Solpower product, Soltron,
encompassing the North American Market (United States,
Mexico and Canada). For these rights, Buyer, agrees to
issue 5,000,000 (five million) Shares of its Common Stock.
These shares shall be issued in the name of Seller and/or
its nominees.
B. Based solely on the gross sales figures of the Solpower
product, Soltron in the North American Market, Buyer shall
offer Stock Options to be issued in the name of the Seller
and/or its nominees, as follows:
If gross sales for the product reach $10,000,000 (ten
million), then Seller and/or its nominees shall have the
option to purchase 1,500,000 (one million five hundred
thousand) shares at $.20 (twenty cents) per share.
If gross sales for the product reach $15,000,000 (fifteen
million), then Seller and/or its nominees shall have the
option to purchase 2,000,000 (two million) shares at $.25
(twenty five cents) per share.
If gross sales for the product reach $20,000,000 (twenty
million), then Seller and/or its nominees shall have the
option to purchase 2,500,000 (two million five hundred
thousand) shares at $.30 (thirty cents) per share.
If gross sales for the product reach $50,000,000 (fifty
million), then Seller and/or its nominees shall have the
option to purchase 5,000,000 (five million) shares at $.30
(thirty cents) per share.
If gross sales for the product reach $100,000,000 (one
hundred million), then Seller and/or its nominees shall
have the option to purchase 10,000,000 (ten million)
shares at $.32 (thirty two cents) per share.
C. See Item 1.B. above. Compensate Seller for the funds they
provide by way of Convertible Preferred Shares. These
Preferred Shares shall have conversion rights of 100
Common Shares for every one Preferred Share. Seller and/or
its nominees shall receive 25,000 (twenty five thousand)
Preferred Shares for every $100,000 (one hundred thousand)
provided.
D. See Item 1.C. above. Based solely on the gross sales
figures of any new products and/or services that Seller
brings to Buyer, Buyer shall offer Stock Options to be
issued in the name of the Seller and/or its nominees, as
follows:
If gross sales for the product reach $10,000,000 (ten
million), then Seller and/or its nominees shall have the
option to purchase 1,500,000 (one million five hundred
thousand) shares at $.40 (forty cents) per share.
If gross sales for the product reach $15,000,000 (fifteen
million), then Seller and/or its nominees shall have the
option to purchase 2,000,000 (two million) shares at $.50
(fifty cents) per share.
If gross sales for the product reach $20,000,000 (twenty
million), then Seller and/or its nominees shall have the
option to purchase 2,500,000 (two million five hundred
thousand) shares at $.75 (seventy five cents) per share.
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If gross sales for the product reach $50,000,000 (fifty
million), then Seller and/or its nominees shall have the
option to purchase 5,000,000 (five million) shares at $.75
(seventy five cents) per share.
If gross sales for the product reach $100,000,000 (one
hundred million), then Seller and/or its nominees shall
have the option to purchase 10,000,000 (ten million)
shares at $1.00 (one dollar) per share.
3. Anti-Dilution Provision - In the event that Buyers Corporation
shall at any time subdivide the outstanding shares of common stock,
or shall issue a stock dividend on its outstanding stock, the
conversion price in effect immediately prior to such subdivision or
the issuance of such dividend shall be proportionately decreased,
and in the case the corporation shall at any time combine the
outstanding shares of common stock, the conversion price in effect
immediately prior to such combination shall be proportionately
increased, effective at the close of business on the date of such
subdivision, dividend or combination, as the case may be.
4. Term of Contract - The term of this Contract shall be 5 (five)
years. This Agreement shall be in force upon the signing of this
Agreement by Buyer and by Seller, and can only be canceled for good
cause by notice in writing, by either party, with a thirty (30) day
notice of cancellation. The compensation obligations of Buyer and
Seller arising under this Agreement shall survive termination of
this Agreement.
5. Confidential Information
A. Confidential Information shall mean all information
relating to Buyer's business provided by Buyer to Seller
and identified in writing as confidential at the time, or
within fifteen (15) days, of the disclosure. Confidential
Information does not include any material or information
Buyer which has been or may hereafter be acquired by
Seller from any third person not under binder of secrecy
to Buyer, which is made public by Buyer, or which is
otherwise in the public domain.
B. Seller shall not in any manner communicate the
Confidential Information of Buyer to any third party
without Buyer's written consent. Seller shall not use the
Confidential Information except for the purpose of
providing services for the benefit of Buyer. Seller shall
treat the Confidential Information with at least the same
care in which Seller uses in the protection of Seller's
own proprietary information.
6. Independent Parties - Buyer and Seller are independent parties and
nothing contained herein shall be construed to mean otherwise. Any
incidence of agency of other relationship shall be specifically
outlined and attached hereto. Seller is not an employee or officer
of Buyer and further indemnifies Buyer against any claim by any
Federal or State Agency regarding the payment or withholding of
employment related taxes on fees or commissions paid by Buyer in
accordance with this Agreement.
7. Requisite Authority - Each party represents to the other party that
all necessary corporate and/or such other approvals and
authorizations needed to make this Agreement enforceable have been
obtained by the undersigned. Each party will provide the other with
documentation
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regarding such approvals and authorizations within five (5) days
upon request by the other party.
8. Liability/Indemnification - Seller/Buyer shall in no way be held
responsible or liable to Seller/Buyer or any other party for the
performance of Seller/Buyer or the failure of Seller/Buyer in any
capacity whatsoever in which the Seller/Buyer operates, including
any and all contracts which Seller/Buyer may have with other
parties. Seller/Buyer shall defend and hold harmless Seller/Buyer
against any and all liability, claim, or demand on account of
property loss or damage or others arising out of or in any manner
connected with the performance of this Agreement, whether such
injury, loss, or damage shall be caused by the negligence of
Seller/Buyer, its employees, or any other party for whom
Seller/Buyer is responsible, and Seller/Buyer, at its own expense,
shall defend any and all actions based thereon and shall pay all
attorney's fees and all costs and all other expenses arising
therefrom; provided however, that this indemnity shall not cover
any liability for damages caused by or resulting from any
negligence of Seller/Buyer, his representatives, employees, or
agents.
9. No Assignment - Neither party shall assign this Agreement or any
rights or obligations under this Agreement without the prior
written consent of the other party. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of the respective
parties hereto and their heirs, personal representatives,
successors and assigns.
10. Amendment or Modification - This Agreement may be amended or
modified by, and only by, a written instrument executed by all
signing parties.
11. Nonwaiver - The waiver of one breach or default hereunder shall not
constitute the waiver of any subsequent breach or default.
12. Severability - In the event any one or more provisions of this
Agreement are determined to be invalid or unenforceable, such
provision or provisions shall be deemed severable from the
remainder of this Agreement and shall not cause the invalidity of
the remainder of this Agreement.
13. Governing Law - This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona.
14. Arbitration - Any controversy, claim, or dispute between the
parties directly or indirectly concerning this Agreement or the
breach thereof, or the subject matter hereof, including questions
concerning the scope and applicability of this arbitration clause,
shall be finally settled by arbitration in Scottsdale, Arizona in
accordance with the rules then pertaining to the American
Arbitration Association with regard to commercial arbitration.
15. Entire Agreement - This Agreement and the Exhibits hereto, as
signed by the parties, sets forth the entire Agreement and
understanding of the parties and merges all prior discussions and
writings between them with regard to the services to be provided
under this Agreement.
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The parties have executed this Agreement as of the date first set
forth above.
Dominion Capital Pty, Ltd. Virtual Technologies, Inc.
/s/ Xxxxx Xxxx /s/ Xxxx Xxxxxxxx
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By: Xxxxx Xxxx By: Xxxx Xxxxxxxx
WITNESSED:
By: /s/ Xxxxx Xxxxxxxx on this 4th day of November, 1996.
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***Note: All dollar figures are represented in United States Dollars.***
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