Document:

ex10.1

  
 EXECUTION VERSION
 

 

 

 

 

 

 

 

 

 AGREEMENT AND PLAN OF MERGER
 

 

 

 between
 

 

 SINOBIOPHARMA, INC.
 

 SINOBP, INC.,
 

 and
 

 SINOBP1, INC.
 

 

 

 Dated as of October  25, 2011
  
  
 

 

 

 

 

 

 

 

 1
 

 

 
 AGREEMENT AND PLAN OF MERGER
 

 

 AGREEMENT AND PLAN OF MERGER, dated as of October 25, 2011, between Sinobiopharma, Inc., a Nevada corporation ("SNBP"), and Sinobp, Inc., a Nevada corporation ("Parent"), and Sinobp1, Inc., a Nevada corporation ("MergerSub").  SNBP and MergerSub are hereinafter collectively referred to as the "Constituent Corporations."
 

 RECITALS
 WHEREAS, a special committee of the board of directors of SNBP has determined that it is advisable and in the best interests of SNBP and its shareholders to enter into a business combination by means of the merger of MergerSub with and into SNBP and has approved and adopted this Agreement and Plan of Merger (the "Agreement"); 
 

 WHEREAS, the boards of directors of Parent and MergerSub have determined that it is advisable and in the best interests of SNBP and its shareholders to enter into a business combination by means of the merger of MergerSub with and into SNBP and has approved and adopted this Agreement;
 

 WHEREAS, Parent has formed MergerSub as a wholly-owned subsidiary in the State of Nevada solely for the purpose of a merger of MergerSub with and into SNBP in which SNBP will be the surviving corporation (the “Business Combination”);
 

 WHEREAS, MergerSub and SNBP shall consummate the Business Combination, pursuant to which, among other things, (i) the outstanding common shares of SNBP, U.S. $.0001 par value (“Common Shares”) not held by More Big Group Limited, Combiform Therapeutics Ltd., Well Start International Ltd. and Lequn Lee Huang (collectively, the “Management Holders”) (such shares, the “Public Shares”), shall be converted into the right to receive the Per Share Amount (as defined herein), (ii) the Common Shares held by the Management Holders shall be cancelled without any payment therefor, and (iii) the Series A Preferred Stock of SNBP, U.S. $.0001 par value (“Preferred Shares”) shall be cancelled without any payment therefor.
 NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 ARTICLE I

THE BUSINESS COMBINATION
 
 1.1
 Business Combination.  Subject to the terms of this Agreement and in accordance with Nevada law, at the Effective Time (as hereinafter defined), MergerSub shall be merged with and into SNBP, the separate corporate existence 
 

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 of MergerSub shall cease and SNBP shall continue as the surviving corporation.  SNBP as the surviving corporation after the Business Combination is hereinafter sometimes referred to as the “Surviving Corporation.”  The name of the surviving corporation shall be “Sinobiopharma, Inc.”
 
 1.2
 Closing; Effective Time.  The closing of the Business Combination (the “Closing”) shall take place immediately after the satisfaction or waiver of each of the conditions set forth herein or at such other time as the parties hereto agree (the “Closing Date”).  The Closing shall take place at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, New York 10154, or at such other location as the parties hereto agree.  On the Closing Date, Parent and SNBP shall cause the Business Combination to be consummated by filing articles of merger with the Nevada Secretary of State and make all other filing or recordings required by Nevada law in connection with the Business Combination.  The Business Combination shall become effective at such time (the “Effective Time”) as the articles of merger are duly filed with the Nevada Secretary of State (or such later time as may be specified in the articles of merger).
 
 1.3
 Effect of the Business Combination.  From and after the Effective Time, the effect of the Business Combination shall be as provided in this Agreement, the articles of merger and the applicable provisions of Nevada law.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, agreements, powers and franchises of SNBP and MergerSub shall vest in the Surviving Corporation, and all debts, liabilities and duties of SNBP and MergerSub  shall become the debts, liabilities and duties of the Surviving Corporation.
 
 1.4
 Organizational Documents; Directors and Officers.  The certificate of incorporation of SNBP in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with Nevada law. The bylaws of SNBP in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended in accordance with Nevada law. From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with Nevada law, (i) the directors of SNBP at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of SNBP at the Effective Time, until their resignations or terminations, if any, shall be the officers of the Surviving Corporation.
 
 1.5
 Effect on Capital Stock.  By virtue of the Business Combination and without any action on the part of MergerSub, SNBP or the holders of any of the following securities:
 
 (a)
 Conversion of SNBP Securities.  At the Effective Time, (i) each Public Share issued and outstanding immediately prior to the Business Combination Effective Time (other than those described below) shall be converted automatically into the right to receive $0.22 in cash, without interest (the “Per Share Amount”), and (ii) each Common Share held by the 
 

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 Management Holders and each Preferred Share issued and outstanding immediately prior to the Effective Time shall be automatically cancelled without any payment therefor.  At the Effective Time, all Common Shares and Preferred Shares shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist.  The holders of certificates previously evidencing SNBP Securities outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such securities, except as provided herein or by law.  Each certificate previously evidencing one Public Share shall be exchanged for cash in an amount equal to the Per Share Amount upon the surrender of such certificate in accordance with the terms hereof.
 
 (b)
 Cancellation of MergerSub Common Stock.  Each share of common stock of MergerSub outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.
 
 (c)
 No Liability.  Notwithstanding anything to the contrary in this Section 1.5, none of Surviving Corporation or any party hereto shall be liable to any person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
 
 1.6
 Surrender of Certificates.  All Surviving Corporation shares issued upon the surrender of shares of MergerSub common stock in accordance with the terms hereof, shall be deemed to have been issued in full satisfaction of all rights pertaining to such securities, other than any additional rights pursuant to this Agreement, provided that any restrictions on the sale and transfer of such common stock shall also apply to the Surviving Corporation shares so issued in exchange.
 
 1.7
 Lost, Stolen or Destroyed Certificates.  In the event any certificates for any Public Shares shall have been lost, stolen or destroyed, the Surviving Corporation shall cause to be issued in exchange for such lost, stolen or destroyed certificates and for each such share, upon the making of an affidavit of that fact by the holder thereof, the Per Share Amount; provided, however, that Surviving Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Surviving Corporation with respect to the certificates alleged to have been lost, stolen or destroyed.
 
 1.8
 Taking of Necessary Action; Further Action.  If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of SNBP and MergerSub, the officers and directors of SNBP and MergerSub are fully authorized in the name of their respective corporations or otherwise to take, and 
 

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 will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
 
 1.9
 Withholding Rights.  Surviving Corporation shall be entitled to deduct and withhold from the cash otherwise deliverable under any and all provisions of this Agreement, such amounts as Surviving Corporation reasonably determines it is required to deduct and withhold with respect to such delivery and payment under the Code or any provision of state, local, provincial or foreign tax law.  To the extent that any amounts are so withheld all appropriate and available evidence of such deduction and withholding, including any receipts or forms required in order for the person with respect to whom such deduction and withholding occurred to establish the deduction and withholding and payment to the appropriate authority as being for its account with the appropriate authorities, shall be delivered to the person with respect to whom such deduction and withholding has occurred, and such withheld amounts shall be treated for all purposes as having been delivered and paid to the person otherwise entitled to the cash in respect of which such deduction and withholding was made by Surviving Corporation.
 
 1.10
 Shares Subject to Appraisal Rights.
 
 (a)
 Notwithstanding Section 1.5(a), Dissenting Shares (as defined below) shall not be converted into a right to receive the Per Share Amount and the holders thereof shall be entitled only to such rights as are granted by Nevada law.  Each holder of Dissenting Shares who becomes entitled to payment for such shares pursuant to Nevada law shall receive payment therefor from Surviving Corporation in accordance with Nevada law, provided, however, that, subject to Nevada law, (i) if any shareholder who asserts appraisal rights in connection with the Business Combination (a “Dissenter”) has failed to establish his entitlement to such rights as provided in Nevada law, or (ii) if any such Dissenter has effectively withdrawn his demand for payment for such shares or waived or lost his right to payment for his shares under the appraisal rights process under Nevada law the Public Shares held by such Dissenter shall be treated as if they had been converted, as of the Effective Time, into a right to receive the Per Share Amount.  SNBP shall give Parent prompt notice of any demands for payment received by SNBP from a person asserting appraisal rights, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands.  SNBP shall not, except with the prior written consent of Parent, make any payment with respect to, or settlement or offer to settle, any such demands.
 
 (b)
 As used herein, “Dissenting Shares” means any shares of SNBP Securities held by shareholders who are entitled to appraisal rights under Nevada law, and who have properly exercised, perfected and not subsequently withdrawn or lost or waived their rights to demand payment with respect to their shares in accordance with Nevada law.
 

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 1.11
 Payment Procedures.
 
 (a)
 Consideration.  Upon surrender of a certificate that, immediately prior to the Effective Time, evidenced the outstanding Public Shares, for cancellation to Surviving Corporation, together with such other customary documents as may be required by Surviving Corporation, the holder of such certificate for each such Public Share shall be entitled to receive in exchange therefor the Per Share Amount and the certificates evidencing the Public Shares so surrendered shall forthwith be cancelled.  Until surrendered as contemplated by this Section 1.12,  each certificate for each such Public Share shall be deemed at any time after the Effective Time to evidence only the right to receive upon such surrender the Per Share Amount. 
 
 (b)
 Paying Agent.  As of the Effective Time, the Parent shall deposit, or shall cause to be deposited, with a bank theretofore designated by SNBP and the Parent (the “Paying Agent”), for the benefit of the holders of Public Shares, for payment in accordance with this Article I, through the Paying Agent, cash in amounts equal to the consideration payable to the holders of Public Shares (such cash being hereinafter referred to as the “Payment Fund”).  The Paying Agent shall, pursuant to irrevocable instructions, deliver the cash contemplated to be paid and transferred to each holder of Public Shares pursuant to this Article I out of the Payment Fund. The Payment Fund shall not be used for any other purpose.
 
 (c)
 Payment Procedures.  Upon surrender of a certificate that, immediately prior to the Effective Time, evidenced outstanding Public Shares (other than Dissenting Shares) (a “Certificate”) for cancellation to the Paying Agent, together with such other customary documents as may be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor and for each such share the Per Share Amount.  Until surrendered as contemplated by this Section 1.12, each Certificate shall be deemed at any time after the Effective Time to evidence only the right to receive upon such surrender the Per Share Amount for each Public Share represented by the Certificate.
 
 (d)
 Termination of Payment Fund.  Any portion of the Payment Fund that remains undistributed to the holders of Public Shares for 30 days after the Effective Time shall be delivered to Surviving Corporation, upon demand, and any holders of Public Shares that have not theretofore complied with this Article I shall thereafter look only to Surviving Corporation for the consideration  to which they are entitled.
 

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 ARTICLE II
 REPRESENTATIONS AND WARRANTIES OF SNBP
 

 In this Agreement, any reference to any event, change, condition or effect being “material” with respect to any person means any material event, change, condition or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, operations or results of operations of such person and its subsidiaries, taken as a whole. In this Agreement, any reference to a “Material Adverse Effect” with respect to any person means any event, change or effect that is materially adverse to the condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of such person and its subsidiaries, taken as a whole.  Notwithstanding the foregoing, the definition of Material Adverse Effect shall not include events caused by general economic conditions.
 Except as set forth in the disclosure schedule delivered by SNBP to the Parent concurrently with the execution of this Agreement (the “SNBP Disclosure Schedule”), which shall identify exceptions by specific section references, SNBP hereby represents and warrants to the Parent, as follows:
 
 2.1
 Organization, Standing and Power. Each of SNBP, Donying Pharmaceutical Co., Limited, a British Virgin Islands company (“Dongying BVI”), Big Global Limited, a Hong Kong company (“Big Global”) and Dong Ying (Jiangsu) Pharmaceutical Co., Ltd. (“Dongying,” and together with Dongying BVI and Big Global, the “Subsidiaries”), is a corporation duly organized, validly existing and in good standing, and no certificates of dissolution have been filed under the laws of their respective jurisdictions of organization. Each of SNBP and its Subsidiaries has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on their respective businesses as presently conducted and to own, hold and operate their respective properties and assets as now owned, held and operated, except where the failure to be so organized, existing and in good standing or to have such authority and power, governmental licenses, authorizations, consents or approvals would not have a Material Adverse Effect on SNBP.  Neither SNBP nor any of the Subsidiaries is in violation of any of the provisions of its respective charter, bylaws or equivalent organizational documents.
 
 2.2
 Subsidiaries. Except for the Subsidiaries, SNBP does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.  SNBP is the direct or indirect owner of all outstanding shares of capital stock of each of its Subsidiaries and all such shares are duly authorized, validly issued, fully paid and nonassessable. All of the outstanding shares of capital stock of each such Subsidiary are owned by SNBP free and clear of all liens, charges, claims or encumbrances or rights of others. There are no outstanding subscriptions, options, 
 

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 warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued capital stock or other securities of any such Subsidiary, or otherwise obligating SNBP or any such Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any such securities. 
 
 2.3
 Capital Structure.  The authorized capital stock of SNBP consists of (i) 2,490,000,000 common shares, $0.0001 par value, of which there were issued and outstanding as of the close of business as of the date hereof, [117,587,608] Common Shares, and (ii) 10,000,000 preferred shares, $0.0001 par value, of which there were issued and outstanding as of the close of business as of the date hereof, 1,000,000 Preferred Shares.  There are no other outstanding shares or voting securities and no outstanding commitments to issue any shares or voting securities after the date hereof.  All such outstanding securities are duly authorized, validly issued, fully paid and non-assessable and are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof, and are not subject to preemptive rights or rights of first refusal created by statute, the Articles of Incorporation of SNBP (the “Articles”) or any agreement to which SNBP is a party or by which it is bound.  There are no options, warrants, calls, rights, commitments or agreements of any character to which SNBP is a party or by which it is bound obligating SNBP to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of SNBP or obligating SNBP to grant, extend, change the price of, or otherwise amend or enter into any such option, warrant, call, right, commitment or agreement.  There are no contracts, commitments or agreements relating to the voting, purchase or sale of SNBP’s shares (i) between or among SNBP and any of its shareholders, and (ii) to the best of SNBP’s knowledge, between or among any of SNBP’s shareholders.  
 
 2.4
 Authority.  SNBP has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, subject only to the adoption of this Agreement by SNBP’s shareholders holding a majority of the Common Shares, as contemplated by Section 5.1.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of SNBP, subject only to the adoption of this Agreement by SNBP’s shareholders holding a majority of the Common Shares, as contemplated by Section 5.1. This Agreement, when duly executed and delivered, shall constitute the valid and binding obligation of SNBP enforceable against SNBP in accordance with its terms, except as enforceability may be limited by bankruptcy and other laws affecting the rights and remedies of creditors generally and general principles of equity. 
 
 2.5
 No Conflict.  The execution and delivery of this Agreement by SNBP does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, 
 

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 cancellation or acceleration of any obligation or loss of any benefit under (i) any provision of the Articles or bylaws of SNBP or any of the organizational documents of its Subsidiaries, as amended, or (ii) any material mortgage, indenture, lease, contract or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to SNBP or any of its Subsidiaries or any of their properties or assets, except where such conflict, violation, default, termination, cancellation or acceleration with respect to the foregoing provisions of (ii) would not have had and would not reasonably be expected to have a Material Adverse Effect on SNBP. 
 
 2.6
 Consents and Approvals.  No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality (“Governmental Entity”) is required by or with respect to SNBP or any of its Subsidiaries in connection with the execution and delivery of this Agreement, or the consummation of the transactions contemplated hereby and thereby, except for (i) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state securities laws and the securities laws of any foreign country; and (ii) such other consents, authorizations, filings, approvals and registrations which, if not obtained or made, would not have a Material Adverse Effect on SNBP and would not prevent, or materially alter or delay any of the transactions contemplated by this Agreement.
 
 2.7
 Absence of Certain Changes.  Since March 31, 2011 (the “Company Balance Sheet Date”), SNBP and each of its Subsidiaries has conducted its business in the ordinary course consistent with past practice and there has not occurred:  (i) any change, event or condition (whether or not covered by insurance) that has resulted in, or is reasonably likely to result in, a Material Adverse Effect on SNBP; (ii) any acquisition, sale or transfer of any material asset of SNBP or any of its Subsidiaries other than in the ordinary course of business and consistent with past practice; (iii) any change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by SNBP or any of its Subsidiaries or any revaluation by SNBP of any of its Subsidiaries’ assets; (iv) any declaration, setting aside, or payment of a dividend or other distribution with respect to the shares of SNBP, or any direct or indirect redemption, purchase or other acquisition by SNBP of any of its shares of capital stock; (v) any material contract entered into by SNBP or any of its Subsidiaries, other than in the ordinary course of business, or any amendment or termination of, or default under, any material contract to which SNBP or any of its Subsidiaries is a party or by which it is bound; (vi) any amendment or change to the Articles or bylaws of SNBP (if applicable); or (vii) any increase in or modification of the compensation or benefits payable, or to become payable, by SNBP or its Subsidiaries to any of its directors or employees, other than pursuant to scheduled annual performance reviews, provided that any resulting modifications are in the ordinary course of business and consistent with SNBP’s and its Subsidiaries past practices.  Neither SNBP nor its Subsidiaries has agreed since the Company Balance Sheet Date to take any of the actions described in the preceding clauses (i) through (vii) and are not currently 
 

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 involved in any negotiations to do any of the things described in the preceding clauses (i) through (vii).
 
 2.8
 Absence of Undisclosed Liabilities.  SNBP has no material obligations or liabilities of any nature (matured or unmatured, fixed or contingent) other than (i) those set forth or adequately provided for in the Balance Sheet included in SNBP’s Quarterly Report for the three month period ended March 31, 2011 (the “Company Balance Sheet”), (ii) those incurred in the ordinary course of business and not required to be set forth in the Company Balance Sheet under GAAP, (iii) those incurred in the ordinary course of business since the Company Balance Sheet date and not reasonably likely to have a Material Adverse Effect on SNBP, and (iv) those incurred in connection with the execution of this Agreement.
 
 2.9
 Litigation.  There is no private or governmental action, suit, proceeding, claim, arbitration, audit or investigation (“proceeding”) pending before any agency, court or tribunal, foreign or domestic, with respect to SNBP or any of its Subsidiaries, or, to the knowledge of SNBP, threatened against SNBP or any of its Subsidiaries, or any of their respective properties or any of their respective officers or directors (in their capacities as such) that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on SNBP. There is no injunction, judgment, decree, order or regulatory restriction imposed upon SNBP, its Subsidiaries or any of their respective assets or business, or, to the knowledge of SNBP, threatened against SNBP or any of its Subsidiaries, or any of their respective directors or officers (in their capacities as such), that would prevent, enjoin, alter or materially delay any of the transactions contemplated by this Agreement, or that would reasonably be expected to have a Material Adverse Effect on SNBP. 
 
 2.10
 Governmental Authorization.  SNBP and each of its Subsidiaries have obtained as of the date hereof each governmental consent, license, permit, grant, or other authorization of a governmental entity (i) pursuant to which SNBP or any of its Subsidiaries currently operates or holds any interest in any of its properties or (ii) that is required for the operation of SNBP’s or any of its Subsidiaries’ business or the holding of any such interest ((i) and (ii) herein collectively called “Company Authorizations”), and all of such Company Authorizations are in full force and effect, except where the failure to obtain or have any of such Company Authorizations or where the failure of such Company Authorizations to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on SNBP.
 
 2.11
 Title to Property.  SNBP and each of its Subsidiaries as of the date hereof has good and valid title to all of their respective properties, interests in properties and assets, real and personal, reflected in the Company Balance Sheet or acquired after the Company Balance Sheet Date (except properties, interests in properties and assets sold or otherwise disposed of since the Company Balance Sheet Date in the ordinary course of business), or in the case of leased properties and assets, valid leasehold interests in such properties or assets, free and clear of all 
 

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 mortgages, liens, pledges, charges or encumbrances of any kind or character, except (i) liens for current taxes not yet due and payable, (ii) such imperfections of title, liens and easements as do not and will not materially detract from or interfere with the use of the properties subject thereto or affected thereby, or otherwise materially impair business operations involving such properties, (iii) liens securing debt which is reflected on the Company Balance Sheet, and (iv) liens that in the aggregate would not have a Material Adverse Effect on SNBP. The property and equipment of SNBP and its Subsidiaries that are used in the operations of their businesses are in good operating condition and repair, except where the failure to be in good operating condition or repair would not have a Material Adverse Effect. All properties used in the operations of SNBP and its Subsidiaries are reflected in the Company Balance Sheet to the extent generally accepted accounting principles require the same to be reflected.
 
 2.12
 Intellectual Property Each of SNBP and its Subsidiaries own, or have a license to use or otherwise possess, legally enforceable and unencumbered rights to use, any patents, trademarks, trade names, service marks, domain names, copyrights, and any applications therefor, and all trade secrets, computer software programs, and tangible or intangible proprietary information or material, that are used in the business of SNBP and its Subsidiaries.
 
 2.13
 Taxes.
 
 (a)
 For purposes of this Agreement, the following terms have the following meanings: “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means (i) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any governmental entity (a “Tax authority”) responsible for the imposition of any such tax (domestic or foreign); (ii) any liability for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any Taxable period; and (iii) any liability for the payment of any amounts of the type described in (i) or (ii) as a result of being a transferee of or successor to any person, as a result of any express or implied obligation to indemnify any other person, including pursuant to any Tax sharing or Tax allocation agreement, as a result of being a responsible person, or otherwise. “Tax Return” means any return, statement, report or form (including, without limitation, claims for refunds or credits, estimated Tax returns and reports, withholding Tax returns and reports and information reports and returns) filed or required to be filed with respect to Taxes.
 
 (b)
  All Tax Returns required to be filed by or on behalf of SNBP and its Subsidiaries have been timely filed and all Tax Returns filed by or on behalf 
 

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 of SNBP and its Subsidiaries were (at the time they were filed) and are true, correct and complete in all respects; (b) all Taxes of SNBP and its Subsidiaries (whether or not reflected on any Tax Return) have been fully and timely paid, (c) no waivers or extensions of statutes of limitation have been given or requested with respect to SNBP or any of its Subsidiaries in connection with any Tax Returns or with respect to any Taxes payable by it; (d) no governmental entity in a jurisdiction where SNBP or any of its Subsidiaries do not file Tax Returns has made a claim, assertion or threat to SNBP or any of its Subsidiaries that it is or may be subject to taxation by such jurisdiction; (e) each of SNBP and its Subsidiaries has duly and timely collected or withheld, and paid over and reported to the appropriate Tax authority all amounts required to be so collected or withheld and paid over for all periods under all applicable laws; (f) there are no liens with respect to Taxes on SNBP or any of its Subsidiaries or any of its property or assets; (g) there are no Tax rulings, requests for rulings, or closing agreements relating to SNBP or any of its Subsidiaries for any period (or portion of a period) that would affect any period after the date hereof; and (h) any adjustment of Taxes of SNBP or any of its Subsidiaries made by a Tax authority in any examination that SNBP or any of its Subsidiaries is required to report to the appropriate Tax authority has been reported, and any additional Taxes due with respect thereto have been paid.
 
 (c)
 There is no pending proceeding with respect to any Taxes of SNBP or any of its Subsidiaries, nor, to the knowledge of SNBP, is any such proceeding threatened.
 
 2.14
 Material Contracts.
 
 (a)
 SNBP has filed with the Securities and Exchange Commission in one or registration statements or reports filed with such agency (the “SEC Reports”), each contract, agreement, lease, commitment or otherwise (each, a “Material Contract”) to which SNBP or any of its Subsidiaries is a party.
 
 (b)
 Each Material Contract is a legal, valid and binding agreement, and is in full force and effect, and (a) none of SNBP or any of its Subsidiaries is in breach or default of any Material Contract to which it is a party in any material respect; (b) no event has occurred or circumstance has existed that (with or without notice or lapse of time), would (i) contravene, conflict with or result in a violation or breach of, or become a default or event of default under, any provision of any Material Contract or (ii) permit SNBP, its Subsidiaries or any other person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Material Contract; (c) neither SNBP nor any of its Subsidiaries has received notice of the pending or threatened cancellation, revocation or termination of any Material Contract to which it is a party; and (d) there are no renegotiations of, or attempts to renegotiate, or outstanding rights to renegotiate, any material terms of any Material Contract.
 

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 2.15
 Compliance With Laws.  To SNBP’s knowledge, each of SNBP and its Subsidiaries has complied with, are not in violation of, and have not received any notices of violation with respect to, any statute, law or regulation with respect to the conduct of its business, or the ownership or operation of its business, except for such violations or failures to comply as would not be reasonably expected to have a Material Adverse Effect on SNBP.
 
 2.16
 Foreign Corrupt Practices Act.  Neither SNBP, nor to SNBP’s knowledge, its Subsidiaries, nor any director, officer, key employee, or other person associated with or acting on behalf of SNBP or its Subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any governmental entity from corporate funds; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment in connection with the operations of SNBP or its Subsidiaries.  Neither SNBP nor its Subsidiaries, nor any director, officer, key employee, or other person associated with or acting on behalf of SNBP or its Subsidiaries has committed any acts or omissions which would constitute a breach of relevant criminal laws, including but not limited to corruption laws.
 
 2.17
 Brokers’ and Finders’ Fees. SNBP has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions or investment bankers’ fees or any similar charges in connection with this Agreement or any transaction contemplated hereby.
 
 2.18
 Vote Required.  The affirmative vote of SNBP’s shareholders holding a majority of the Common Shares (subject to any provision in SNBP’s Articles requiring a higher voting threshold) is the only vote of the holders of any of SNBP’s capital stock necessary to approve this Agreement and the transactions contemplated hereby. 
 
 2.19
 Board Approval.  A Special Committee of the Board of Directors of SNBP has (i) approved this Agreement and the Business Combination, (ii) determined that this Agreement and the Business Combination are advisable and in the best interests of the stockholders of SNBP and are on terms that are fair to the shareholders and (iii) intends to recommend that the shareholders of SNBP approve this Agreement and consummation of the Business Combination.
 

 ARTICLE III
 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB
 Except as set forth in the disclosure schedule delivered by Parent and MergerSub to SNBP concurrently with the execution of this Agreement (the “Parent Disclosure Schedule”), which shall identify exceptions by specific section references, Parent and MergerSub hereby jointly and severally represent and warrant to SNBP, as follows:
 

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 3.1
 Organization, Standing and Power. Each of Parent and MergerSub is a corporation duly organized, validly existing and in good standing, and no certificates of dissolution have been filed under the laws of their respective jurisdictions of organization. Each of Parent and MergerSub has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on their respective businesses as presently conducted and to own, hold and operate their respective properties and assets as now owned, held and operated, except where the failure to be so organized, existing and in good standing or to have such authority and power, governmental licenses, authorizations, consents or approvals would not have a Material Adverse Effect on Parent or MergerSub.  Neither Parent nor MergerSub is in violation of any of the provisions of its respective charter, bylaws or equivalent organizational documents.
 
 3.2
 Subsidiaries. Except for MergerSub, Parent does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.  Parent is the direct owner of all outstanding shares of capital stock of MergerSub and all such shares are duly authorized, validly issued, fully paid and nonassessable. 
 
 3.3
 Capital Structure.  The authorized capital stock of Parent consists of 10,000 shares, $0.01 par value, of which there were issued and outstanding as of the close of business as of the date hereof, [10,000] common shares.  There are no other outstanding shares or voting securities and no outstanding commitments to issue any shares or voting securities after the date hereof.  All such outstanding common shares are duly authorized, validly issued, fully paid and non-assessable and are free of any liens or encumbrances.
 
 3.4
 Authority.  Each of Parent and MergerSub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, subject only to the adoption of this Agreement by Parent’s and MergerSub’s shareholders holding a majority of the outstanding shares of Parent and MergerSub, as contemplated by Section 5.1.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of each of Parent and MergerSub, subject only to the adoption of this Agreement by Parent’s and MergerSub’s shareholders holding a majority of the outstanding shares of Parent and MergerSub, as contemplated by Section 5.1. This Agreement, when duly executed and delivered, shall constitute the valid and binding obligation of each of Parent and MergerSub, enforceable against each of Parent and MergerSub in accordance with its terms, except as enforceability may be limited by bankruptcy and other laws affecting the rights and remedies of creditors generally and general principles of equity. 
 
 3.5
 No Conflict.  The execution and delivery of this Agreement by each of Parent and MergerSub does not, and the consummation of the transactions 
 

 14
 

 

 
 contemplated hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under (i) any provision of the Articles or bylaws of Parent or MergerSub or any of the organizational documents, as amended, or (ii) any material mortgage, indenture, lease, contract or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Parent or MergerSub or any of their properties or assets, except where such conflict, violation, default, termination, cancellation or acceleration with respect to the foregoing provisions of (ii) would not have had and would not reasonably be expected to have a Material Adverse Effect on Parent or MergerSub. 
 
 3.6
 Consents and Approvals.  No consent, approval, order or authorization of, or registration, declaration or filing with, any governmental entity is required by or with respect to Parent or MergerSub in connection with the execution and delivery of this Agreement, or the consummation of the transactions contemplated hereby and thereby, except for (i) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state securities laws and the securities laws of any foreign country; and (ii) such other consents, authorizations, filings, approvals and registrations which, if not obtained or made, would not have a Material Adverse Effect on Parent or MergerSub and would not prevent, or materially alter or delay any of the transactions contemplated by this Agreement.
 
 3.7
 Brokers’ and Finders’ Fees. Neither Parent nor MergerSub has incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions or investment bankers’ fees or any similar charges in connection with this Agreement or any transaction contemplated hereby.
 
 3.8
 Vote Required.  The affirmative vote of Parent’s and MergerSub’s shareholders holding a majority of the outstanding shares of Parent and MergerSub is the only vote of the holders of any of Parent’s or MergerSub’s capital stock necessary to approve this Agreement and the transactions contemplated hereby. 
 
 3.9
 Board Approval.  The Board of Directors of each of Parent and MergerSub has (i) approved this Agreement and the Business Combination, (ii) determined that this Agreement and the Business Combination are advisable and in the best interests of the stockholders of Parent or MergerSub, as the case may be, and are on terms that are fair to the shareholders and (iii) intends to recommend that the shareholders of Parent or MergerSub, as the case may be, approve this Agreement and consummation of the Business Combination.
 

 15
 

 

 
 ARTICLE IV
 CONDUCT PRIOR TO THE EFFECTIVE TIME
 
 4.1
 Conduct of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, each of Parent and SNBP agrees (except to the extent expressly contemplated by this Agreement or as consented to in writing by the other party), to carry on its and, in the case of SNBP, its Subsidiaries’ business, in the ordinary course in substantially the same manner as heretofore conducted, to pay and in the case of SNBP, to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other obligations when due, and to use all reasonable efforts consistent with past practice and policies to preserve intact its, and in the case of SNBP, its Subsidiaries’, present business organizations, use its reasonable best efforts consistent with past practice to keep available the services of its, and in the case of SNBP, its Subsidiaries’ present officers and key employees and use its reasonable best efforts consistent with past practice to preserve its, and in the case of SNBP, its Subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, and in the case of SNBP, its Subsidiaries, to the end that its and its Subsidiaries’ goodwill and ongoing businesses shall be unimpaired at the Effective Time.  Each of Parent and SNBP agrees to promptly notify the other of any material event or occurrence not in the ordinary course of its business and in the case of SNBP, the business of its Subsidiaries, and of any event that would have a Material Adverse Effect on Parent or SNBP.
 
 4.2
 Restrictions on Conduct of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as expressly contemplated by this Agreement, neither Parent nor SNBP shall do, cause or permit any of the following, or in the case of SNBP, allow, cause or permit any of its Subsidiaries to do, cause or permit any of the following, without the prior written consent of the other:
 
 (a)
 Charter Documents. Cause or permit any amendments to its Articles, by-laws or other equivalent organizational documents;
 
 (b)
 Dividends; Changes in Capital Stock. Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock;
 
 (c)
 Material Contracts. Enter into any new material contract, or violate, amend or otherwise modify or waive any of the terms of any existing material contract, other than (i) in the ordinary course of business consistent with 
 

 16
 

 

 
 past practice, (ii) upon prior consultation with, and prior written consent (which shall not be unreasonably withheld) of the other parties to this Agreement;
 
 (d)
 Issuance of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue, any such shares or other convertible securities;
 
 (e)
 Intellectual Property.  Transfer or license to any person or entity any rights to any intellectual property other than the license of non-exclusive rights to intellectual property in the ordinary course of business consistent with past practice;
 
 (f)
 Dispositions. Sell, lease, license or otherwise dispose of or encumber any of its properties or assets which are material, individually or in the aggregate, to its and, in the case of SNBP, its Subsidiaries’ business, taken as a whole, except in the ordinary course of business consistent with past practice;
 
 (g)
 Indebtedness. Except in its ordinary course of business, incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others in excess of $500,000 in the aggregate;
 
 (h)
 Payment of Obligations. Pay, discharge or satisfy in an amount in excess of $100,000 in any one case, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the ordinary course of business, other than the payment, discharge or satisfaction of liabilities reflected or reserved against in its financial statements;
 
 (i)
 Capital Expenditures. Make any capital expenditures, capital additions or capital improvements except in the ordinary course of business and consistent with past practice that do not exceed $250,000 individually or in the aggregate;
 
 (j)
 Acquisitions. Acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire any assets which are material, individually or in the aggregate, to its and, in the case of SNBP, its Subsidiaries’ business, taken as a whole, or acquire any equity securities of any corporation, partnership, association or business organization;
 
 (k)
 Taxes.  In the case of SNBP or its Subsidiaries, make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Return or any amendment to a Tax Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes, 
 

 17
 

 

 
 or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
 
 (l)
 Accounting Policies and Procedures.  Make any change to its financial accounting methods, principles, policies, procedures or practices, except as may be required by GAAP, Regulation S-X promulgated by the SEC or applicable statutory accounting principles;
 
 (m)
 Other. Take or agree in writing or otherwise to take, any of the actions described in Sections 4.2(a) through (l) above, or any action which would make any of its representations or warranties contained in this Agreement untrue or incorrect or prevent it from performing or cause it not to perform its covenants hereunder.
 ARTICLE V
 COVENANTS
 
 5.1
 Shareholder Approval.  As soon as is reasonably practicable after the date hereof, each of SNBP, Parent and MergerSub shall in accordance with Nevada law and their respective articles of incorporation and by-laws obtain the written consent in lieu of a special meeting of shareholders of a sufficient number of its outstanding common shares in favor of the adoption of this Agreement and the approval of the Business Combination.
 
 5.2
 Form 8-K. At least five (5) days prior to Closing, SNBP shall prepare a draft Form 8-K announcing the Closing (“Merger Form 8-K”), which shall be in a form reasonably acceptable to Parent. Prior to Closing, Parent and SNBP will prepare the press release announcing the consummation of the Business Combination hereunder (“Press Release”). Simultaneously with the Closing, Surviving Corporation shall file and distribute the Press Release. 
 ARTICLE VI
 ADDITIONAL AGREEMENTS
 
 6.1
 Access to Information
 
 (a)
 Except as prohibited by applicable law, each of Parent and SNBP shall afford the other and its accountants, counsel and other representatives (the “Representatives”), reasonable access during normal business hours during the period prior to the Effective Time to (i) all of such party’s and, in case of SNBP, its Subsidiaries’ properties, books, contracts, commitments and records, and (ii) all other information concerning the business, properties and personnel of such party and, in the case of SNBP, its Subsidiaries as the other party may reasonably request.  Each of Parent and SNBP agrees to provide to the other and its accountants, counsel and other representatives copies of internal financial statements promptly upon request.
 

 18
 

 

 
  

 (b)
 Subject to compliance with applicable law, from the date hereof until the Effective Time, each of Parent and SNBP shall confer on a regular and frequent basis with one or more representatives of the other party to report operational matters of materiality and the general status of ongoing operations.
 
 (c)
 No information or knowledge obtained in any investigation pursuant to this Section 6.1 shall affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Business Combination.
 
 (d)
 Each of Parent and SNBP shall provide the other, and SNBP shall cause each of its Subsidiaries to provide Parent, and its Representatives, reasonable access, during normal business hours during the period prior to the Effective Time, to all of such party’s and, in the case of SNBP, its Subsidiaries’ Tax Returns and other records and workpapers relating to Taxes, and shall also provide the following information upon the request of the other party:  (i) a schedule of the types of Tax Returns filed by Parent or SNBP, as applicable, and in the case of SNBP, each of its Subsidiaries in each taxing jurisdiction, (ii) a schedule of the year of the commencement of the filing of each such type of Tax Return, (iii) a schedule of all closed years with respect to each such type of Tax Return filed in each jurisdiction, (iv) a schedule of all Tax elections filed in each jurisdiction by Parent or SNBP, as applicable, and, in the case of SNBP,  each of its Subsidiaries, and (v) receipts for any Taxes paid to foreign Tax authorities.
 
 6.2
 Public Disclosure. Unless otherwise permitted by this Agreement, Parent and SNBP shall consult with each other before issuing any press release or otherwise making any public statement or making any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, and neither shall issue any such press release or make any such statement or disclosure without the prior approval of the other (which approval shall not be unreasonably withheld), except as may be required by law, in which case the party proposing to issue such press release or make such public statement or disclosure shall use its commercially reasonable efforts to consult with the other party before issuing such press release or making such public statement or disclosure.
 
 6.3
 Consents; Cooperation.
 
 (a)
 Each of Parent, MergerSub and SNBP shall promptly apply for or otherwise seek, and use its reasonable best efforts to obtain, all consents and approvals required to be obtained by it for the consummation of the Business Combination.  SNBP shall use its reasonable best efforts to obtain all necessary consents, waivers and approvals under any of its Material Contracts in connection with the Business Combination for the assignment thereof or otherwise.
 

 19
 

 

 
  

 6.4
 Legal Requirements. Each of Parent, MergerSub and SNBP will, and in the case of SNBP, SNBP will cause its respective Subsidiaries to, take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on them with respect to the consummation of the transactions contemplated by this Agreement and will promptly cooperate with and furnish information to any party hereto necessary in connection with any such requirements imposed upon such other party in connection with the consummation of the transactions contemplated by this Agreement and will take all reasonable actions necessary to obtain (and will cooperate with the other parties hereto in obtaining) any consent, approval, order or authorization of, or any registration, declaration or filing with, any governmental entity or other person, required to be obtained or made in connection with the taking of any action contemplated by this Agreement.
 
 6.5
 Best Efforts and Further Assurances. Each of the parties to this Agreement shall use its commercially reasonable best efforts to effectuate the transactions contemplated hereby and to fulfill and cause to be fulfilled the conditions to closing under this Agreement. Each party hereto, at the reasonable request of another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of this Agreement and the transactions contemplated hereby.
 ARTICLE VII
 CONDITIONS TO THE BUSINESS COMBINATION
 
 7.1
 Conditions Precedent to the Obligation of the Parent to Consummate the Business Combination
 The obligations of Parent to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Effective Time of each of the following condition (any of which may be waived, in writing, by Parent):
 
 (a)
 Business Combination Proposal.  The Business Combination Proposal shall have been duly approved and adopted by the stockholders of SNBP, Parent and MergerSub by the requisite vote under Nevada Law and their respective articles of incorporation and by-laws.
 
 (b)
 Documents.  The following documents shall have been delivered to the Parent, in a form acceptable to Parent:
 
 (i)
 executed Articles of Merger to be filed in accordance with Nevada law as of the Effective Time;
 
 (ii)
 a certificate of good standing or equivalent under Nevada law for SNBP;
 

 20
 

 

 
  

 (iii)
 such other documents as the Parent may reasonably request for the purpose of (i) evidencing the accuracy of any representation or warranty of SNBP and its Subsidiaries pursuant hereto, (ii) evidencing the performance by SNBP and its Subsidiaries of, or the compliance by SNBP and its Subsidiaries with, any covenant or obligation required to be performed or complied with by SNBP and its Subsidiaries, (iii) evidencing the satisfaction of any condition referred to in this Section 7.1, or (iv) otherwise facilitating the consummation of any of the transactions contemplated by this Agreement.
 
 (c)
 Representations, Warranties and Covenants. (i) The representations and warranties of SNBP in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Effective Time as though such representations and warranties were made on and as of such time (provided that those representations and warranties which address matters only as of a particular date shall be true and correct as of such date) and (ii) SNBP shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it as of the Business Combination Effective Time.
 
 (d)
 Secretary’s Certificate.  Parent shall have been provided with a Secretary’s Certificate, dated the Closing Date, certifying attached copies of (A) the Articles of Incorporation and by-laws of SNBP, (B) the resolutions of the Special Committee of the Board of Directors of SNBP approving this Agreement and the transactions contemplated hereby; and (C) the incumbency of each authorized officer of SNBP signing this Agreement and/or any other agreement or instrument contemplated hereby to which SNBP, Parent or MergerSub is a party.
 
 (e)
 Certificate of Officer.  Parent shall have been provided with a certificate executed on behalf of SNBP by its Executive Chairman and Chief Executive Officer certifying that the conditions set forth in Section 7.1 shall have been fulfilled.
 
 (f)
 Injunctions or Restraints on Conduct of Business. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint provision limiting or restricting SNBP’s or its Subsidiaries’ conduct or operation of the business of SNBP or its Subsidiaries following the Business Combination shall be in effect, nor shall any proceeding brought by an administrative agency or commission or other governmental entity, domestic or foreign, seeking the foregoing be pending.
 
 (g)
 No Proceedings.  Since the date of this Agreement, there must not have been commenced or threatened against the Parent, MergerSub, SNBP, 
 

 21
 

 

 
 SNBP’s Subsidiaries, or against any affiliate thereof, any proceeding (which proceeding remains unresolved as of the Effective Time) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the transactions contemplated hereby.
 
 (h)
 No Material Adverse Changes. There shall not have occurred any Material Adverse Effect on SNBP, or any change that has a Material Adverse Effect on SNBP.
 
 (i)
 Governmental Approvals. SNBP and its Subsidiaries shall have timely obtained from each governmental entity all approvals, waivers and consents, if any, necessary for consummation of the Business Combination or in connection with this Agreement and the Business Combination, including such approvals, waivers and consents as may be required under the Nevada law or the law of the People’s Republic of China.
 
 7.2
 Conditions Precedent to the Obligation of SNBP to Consummate the Business Combination . The obligations of SNBP to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any of which may be waived, in writing, by SNBP:
 
 (a)
 Business Combination Proposal.  The Business Combination proposal shall have been duly approved and adopted by the stockholders of SNBP, Parent and MergerSub by the requisite vote under Nevada Law and their respective articles of incorporation and by-laws.
 
 (b)
 Representations, Warranties and Covenants. (i) The representations and warranties of Parent and MergerSub in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Effective Time as though such representations and warranties were made on and as of such time and (ii) Parent, and MergerSub shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by them as of the Effective Time.
 
 (c)
 Certificate of Officer.  SNBP shall have been provided with a certificate executed on behalf of Parent by its Chief Executive Officer and Chief Financial Officer certifying that the conditions set forth in Section 7.2 shall have been fulfilled.
 
 (d)
 Documents.  SNBP shall have received in a form acceptable to SNBP (i) executed Articles of Merger to be filed in accordance with Nevada law as of the Effective Time, (ii) certificates of good standing or equivalent under Nevada law for Parent and MergerSub, and (iii) such other documents as SNBP 
 

 22
 

 

 
 may reasonably request for the purpose of (A) evidencing the accuracy of any representation or warranty of the Parent or MergerSub pursuant to Section 7.1(c), (B) evidencing the performance by the Parent and MergerSub of, or the compliance by the Parent and MergerSub with, any covenant or obligation required to be performed or complied with by the Parent and MergerSub, (C) evidencing the satisfaction of any condition referred to in this Section 7.2, or (D) otherwise facilitating the consummation of any of the transactions contemplated by this Agreement.
 
 (e)
 Injunctions or Restraints on Conduct of Business. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint provision limiting or restricting Parent’s conduct or operation of the business of Parent and its subsidiaries following the Business Combination shall be in effect, nor shall any proceeding brought by an administrative agency or commission or other governmental entity, domestic or foreign, seeking the foregoing be pending.
 
 (f)
 No Material Adverse Changes. There shall not have occurred any Material Adverse Effect on Parent or MergerSub, or any change that has a Material Adverse Effect on Parent or MergerSub.
 
 (g)
 No Proceedings.  Since the date of this Agreement, there must not have been commenced or threatened against the Parent, MergerSub, SNBP, SNBP’s Subsidiaries, or against any affiliate thereof, any proceeding (which proceeding remains unresolved as of the Effective Time) (a) involving any challenge to, or seeking damages or other relief in connection with, any of the transactions contemplated hereby, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the transactions contemplated hereby.
 
 (h)
 Governmental Approvals.  Parent and MergerSub shall have timely obtained from each governmental entity all approvals, waivers and consents, if any, necessary for consummation of the Business Combination or in connection with this Agreement and the Business Combination, including such approvals, waivers and consents as may be required under the Nevada law.
 ARTICLE VIII
 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
 
 8.1
 No Survival.  The representations and warranties of SNBP, Parent and MergerSub contained in this Agreement, or any instrument delivered pursuant to this Agreement, shall terminate at the Effective Time, and only the covenants to be performed in whole or in part after the Effective Time and this Article VIII shall survive the Effective Time.
 

 23
 

 

 
 ARTICLE IX
 TERMINATION, AMENDMENT AND WAIVER
 
 9.1
 Termination. At any time prior to the Effective Time, whether before or after approval of the matters presented in connection with the Business Combination by the stockholders of SNBP, Parent and MergerSub this Agreement may be terminated:
 
 (a)
 by mutual consent of Parent and SNBP;
 
 (b)
 by either Parent or SNBP, if, without fault of the terminating party, the Closing shall not have occurred on or before November 30, 2011, or such later date as may be agreed upon in writing by the parties hereto (the “Final Date”); 
 
 (c)
 by Parent, if SNBP breaches any of its representations, warranties or obligations hereunder to an extent that would cause the condition set forth in Section 7.1 not to be satisfied and such breach shall not have been cured within ten (10) business days of receipt by SNBP of written notice of such breach (and Parent has not willfully breached any of its covenants hereunder, which breach is not cured);
 
 (d)
 by SNBP, if Parent breaches any of its representations, warranties or obligations hereunder to an extent that would cause the condition set forth in Section 7.2 not to be satisfied and such breach shall not have been cured within ten (10) business days of receipt by Parent of written notice of such breach (and SNBP has not willfully breached any of its covenants hereunder, which breach is not cured); or
 
 (e)
 by either Parent or SNBP if any permanent injunction or other order of a court or other competent authority preventing the consummation of the Business Combination shall have become final and nonappealable.
 
 9.2
 Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent, MergerSub or SNBP, or their respective officers, directors, stockholders or affiliates, except to the extent that such termination results from the breach by a party hereto of any of its representations, warranties or covenants set forth in this Agreement.  Nothing herein shall relieve any party from liability in connection with a breach by such party of the representations, warranties or covenants of such party to this Agreement.
 
 9.3
 Expenses and Termination Fees
 
 (a)
 Subject to subsections (b) and (c) of this Section 9.3, whether or not the Business Combination is consummated, all costs and expenses (including 
 

 24
 

 

 
 transfer and other similar Taxes) incurred by any party in connection with this Agreement and the transactions contemplated hereby (including, without limitation, the fees and expenses of its advisers, accountants and legal counsel) shall be paid by the party incurring such expense.
 
 (b)
 If Parent terminates this Agreement pursuant to Section 9.1(c) then SNBP shall promptly reimburse Parent for all of the out-of-pocket costs and expenses incurred by Parent in connection with this Agreement and the transactions contemplated hereby (including, without limitation, the fees and expenses of its advisors, accountants and legal counsel).
 
 (c)
 If SNBP terminates this Agreement pursuant to Section 9.1(d) Parent shall promptly reimburse SNBP for all of the out-of-pocket costs and expenses incurred by SNBP in connection with this Agreement and the transactions contemplated hereby (including, without limitation, the fees and expenses of its advisors, accountants and legal counsel).
 
 9.4
 Amendment. The boards of directors of the parties may cause this Agreement to be amended at any time by execution of an instrument in writing signed on behalf of each of the parties hereto.
 
 9.5
 Extension; Waiver. At any time prior to the Effective Time any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
 ARTICLE X
 GENERAL PROVISIONS
 
 10.1
 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the parties at the following address (or at such other address for a party as shall be specified by like notice):
 
 (a)
 if to Parent, to:
  
 SINOBP, Inc.
A-29 Huangpu Science Building
 2 Huangpu Rd. Nanjing City, China
 

 25
 

 

 
 Attn: Legun Lee Huang
 Facsimile No.:86-2583202848
 Telephone No.:86-2586228290
 with a copy (which shall not constitute notice to Parent) to:

Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention:  Mitchell S. Nussbaum, Esq.
Facsimile No.:  (212) 407-4000
Telephone No.: (212) 407-4990
 
 (b)
 if to SNBP, to:
 Sinobiopharma, Inc.
8 Zhang Tian Road
Nantong City, Jiang Su Province
People’s Republic of China 226009
 
 10.2
 Interpretation. When a reference is made in this Agreement to Exhibits or Schedules, such reference shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The phrase “made available” in this Agreement shall mean that the information referred to has been made available if requested by the party to whom such information is to be made available. The phrases “the date of this Agreement”, “the date hereof”, and terms of similar import, unless the context otherwise requires, shall be deemed to refer to October    . 2011. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 
 10.3
 Counterparts. This Agreement may be executed in one or more counterparts, including by facsimile, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.
 
 10.4
 Entire Agreement; Nonassignability; Parties in Interest. This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto, including the Exhibits and Disclosure Schedules (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof; (b) are not intended to confer upon any other person any rights or remedies hereunder; and (c) shall not be assigned, except by operation of law as a 
 

 26
 

 

 
 result of the Business Combination pursuant to Section 1.3 or as otherwise specifically provided.  No representations, warranties, inducements, promises or agreements, oral or written, by or among the parties not contained herein shall be of any force of effect.
 
 10.5
 Severability. If any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
 
 10.6
 Remedies Cumulative; Specific Performance. 
 
 (a)
 Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
 
 (b)
 It is accordingly agreed that the parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.
 
 10.7
 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the laws that might otherwise govern under applicable principles of conflicts of law. Each of the parties hereto irrevocably consents to the exclusive jurisdiction of any court located within the State of Nevada in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of Nevada for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction and such process.
 
 10.8
 Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
  
 [SIGNATURE PAGE FOLLOWS]
 

 27
 

 

 
 IN WITNESS WHEREOF, Parent, MergerSub and SNBP have caused this Agreement and Plan of Merger to be executed and delivered by their respective directors or officers, thereunto duly authorized, all as of the date first written above.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 28
 

 

 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
 

 

 

 

 SINOBIOPHARMA, INC.
 

 

 By:  _____________________
 Name:  Du Wang, PhD
 Title:  Director
 

 

 

 

 SINOBP, INC.
 

 

 By: ______________________
 Name: Lequn Lee Huang
 Title:  President, Secretary and Treasurer
 

 SINOBP1, INC.
 

 

 By: ______________________
 Name: Lequn Lee Huang
 Title:  President, Secretary and Treasurer
 

 

 
 
  
 
 
 29Unassociated Document

Exhibit 10.10

 

amended and restated

Technology License Agreement

This amended and restated Technology License Agreement (“Agreement”) is entered into as of June 15, 2011, and shall fully restate that Technology License Agreement dated May 4, 2009, by and between:

Cyclone Power Technologies, Inc., a Florida Corporation, having its offices located at 601 NE 26th Court, Pompano Beach, Florida 33064, represented in this Agreement by Harry S. Schoell, CEO (“Cyclone” or the “Licensor”)

and

Renovalia Energy, S.A., a company incorporated under Spanish Law, having its offices located at Avenida de los Reyes Católicos, 135 Villarobledo, 02600 Albacete, represented in this Agreement by Juan Domingo Ortega (“Renovalia” or the “Licensee”).

Hereinafter the Licensor and the Licensee will be jointly referred to as the “Parties”.

Recitals

 

	
I.

	
WHEREAS, Cyclone has developed and patented a heat-regenerative external combustion Rankine cycle engine system which characteristics are detailed in clause 1 of this Agreement (hereinafter referred to as the “Licensed Technology” as detailed in clause 1.1 below);

 

	
II.

	

WHEREAS, Cyclone wishes to license Renovalia the Licensed Technology for the particular purposes and subject to the terms and conditions set forth in this Agreement;

	
III.

	

WHEREAS, Renovalia is the developer of solar power plants throughout the world, and wishes to license the Licensed Technology subject to the terms and conditions set forth in this Agreement;

 

	
IV.

	

WHEREAS, the parties entered into the original Technology License Agreement on May 4, 2009, but because of changing conditions, wish to hereby amended and restate that license agreement fully hereby.

 

NOW THEREFORE, for good and valuable consideration, and subject to the terms, conditions, representations and warranties contained more fully herein, the parties agree as follows:

I. Specific License Terms

 

	
1

	
Interpretation

 

	
1.1

	
In this Agreement, except where a different interpretation is necessary in the context, the words and expressions set out below shall have the following meanings:

	
Application

	
Solar Thermal Power Plants

 

	
Commencement Date

	
The date of this Agreement.

 

 

  

1

  

	
Confidential Information

 

 

 

	
All information which is imparted or obtained under or in connection with this Agreement on, before or after the Commencement Date in confidence (whether in writing, verbally or by other means and whether directly or indirectly) or is of a confidential nature, relating to the business or prospective business, current or projected plans or internal affairs of the Parties, including in particular, but not limited to, the terms of this Agreement, all know-how, trade secrets, products, operations, processes, product information and unpublished information relating to the Parties’ intellectual property rights or other rights, and any other commercial, financial or technical information
relating to the business or prospective business of either of the Parties.

 

	
Licensed Technology

	Licensor’s proprietary technology related to its heat regenerative, external combustion engine and shall include any information, inventions, innovations, discoveries, improvements, ideas, know-how, show-how, developments, methods, designs, reports, charts, drawings, diagrams, analyses, concepts, technology, records, brochures, instructions, manuals, programs, manufacturing techniques, expertise, inventions whether or not reduced to practice or the subject of a patent application, test-protocols, test results, descriptions, parts lists, bills of materials, documentation whether in written or electronic format, prototypes, molds, models, assemblies, and any similar
intellectual property and information, whether or not protected or protectable by patent or copyright, any related research and development information, inventions, trade secrets, and technical data in the possession of Licensor that is useful or is needed in the design or manufacture of the Licensed Products and that the Licensor has the right to provide to Licensee and has so provided to Licensee by signing this Agreement. 

This includes without limitation, U.S. Patent #7,080,512, entitled Heat Regenerative Engine, other patents pending US and foreign patents (all listed in Schedule B), all patents that may issue under this patent application and their divisions, continuations, continuation-in-parts, reissues, reexaminations, inventor’s certificates, utility models, patents of addition, extensions, as well as certain research and development information, inventions, know-how, and technical data that relate to and/or are disclosed in said patent application, and any other patent applications, patents divisions, continuations,
continuation-in-parts, reissues, reexaminations, inventor’s certificates, utility models, patents of addition, extensions that may issue or be filed that relate to said Licensed Product and/or said patent application.  A list of the patents and patent applications regarding the Licensed Technology is provided as Schedule B hereof.

 

  

2

  

	
Licensed Products

 

	
All engine sizes and models of the Licensed Technology for the specific Application.

	
Patents

	
Those detailed in Schedule B.

 

	
Quarter

	
Each consecutive period of three months during the Term ending March 31, June 30, September 30 and December 31, commencing on the Commencement Date.

 

	
Rights

	
Non-exclusive for the rights granted herein.

 

	
Royalty

	
The royalties detailed in clause 5 below and Schedule A.

 

	
Term

	
The term of this Agreement as set out in clause 2.

 

	
Territory

	
Worldwide, provided Licensee may not manufacture License Products in countries where Licensor at the time of the manufacture does not have patent protection or has not filed patent applications.

 

	
1.2

	
The clause and paragraph headings and the table of contents used in this Agreement are inserted for ease of reference only and shall not affect construction.

 

	
1.3

	
The Schedules to this Agreement are incorporated into this Agreement. In the event of any inconsistency between the main body of this Agreement and the Schedules, the main body shall prevail. References in this Agreement and the Schedules to the parties, the Introduction, Schedules and clauses are references respectively to the parties, the Introduction and Schedules to and clauses of this Agreement.

 

	
1.4

	
Specific references to any Spanish legal term or legal concept shall in respect of any jurisdiction other than Spain be deemed to include that which most approximates in that jurisdiction to such Spanish legal term or legal concept.

 

	
1.5

	
References to persons shall include bodies corporate, unincorporated associations and partnerships, in each case whether or not having a separate legal personality.

 

	
1.6

	
References to the word “include” or “including” (or any similar term) are not to be construed as implying any limitation and general words introduced by the word “other” (or any similar term) shall not be given a restrictive meaning by reason of the fact that they are preceded or followed by words indicating a particular class of acts, matters or things.

 

	
1.7

	
Except where the context specifically requires otherwise, words importing one gender shall be treated as importing any gender, words importing individuals shall be treated as importing corporations and vice versa, words importing the singular shall be treated as importing the plural and vice versa, and words importing the whole shall be treated as including a reference to any part thereof.

 

	
1.8

	
If any condition or covenant contained in this Agreement requires a party to it not to do an act or thing it shall be a breach of any such condition or covenant to permit such act or thing to be done, provided restricting or avoiding such actions is reasonably within such party’s control.

 

  

3

  

	
1.9

	
References to statutory provisions, enactments or Laws shall include references to any amendment, modification, extension, consolidation, replacement or re-enactment of any such provision, enactment or Law (whether before or after the date of this Agreement), to any previous enactment which has been replaced or amended and to any regulation, instrument or order or other subordinate legislation made under such provision, enactment or Law, unless any such change imposes upon any party any liabilities or obligations which are more onerous than as at the date of this Agreement.

 

	
2

	
Term

 

	
2.1

	
This Agreement comes into force on the Commencement Date and, subject to the provisions of clause 5 shall continue for an initial period of Ten (10) years from the Delivery Date, as defined in Section 4 below (“Initial Period”).

 

	
2.2

	
After the Initial Period, the Agreement shall be renewed for two terms of five (5) year renewal periods unless terminated by either party serving not less than six (6) months written notice on the other, after the Initial Period or any of the renewal periods (“Term”).

 

	
2.3

	
The Parties agree that should the Delivery Date not occur within twenty-four (24) months of the date of this Amendment, either Party may terminate this Agreement without any further liability to the other Party.

 

	
3

	
Indemnification

 

	
3.1

	
Each party shall at all times (notwithstanding the termination of this Agreement) be liable for, indemnify and hold harmless the other party (together with its officers, servants and agents) from and against any and all claims, liability, loss, damages, fines, costs, legal costs, professional and other expenses of any nature whatsoever incurred or suffered by the second party arising out or in connection with the first party’s activities under this Agreement (including breach of this Agreement) or out of defects (whether obvious or hidden) of the Licensed Technology.

 

	
3.2

	
The Licensor shall indemnify the Licensee against all legal expenses arising out of any claim that the Licensee's use of the Patents or the Licensed Products or the Licensed Technology in accordance with the provisions of this Agreement infringes the rights of any third party in the Territory.

 

  

4

  

 

	
4

	

Initial Project

 

	
4.1

	
Delivery Date:

 

	
  

	
(a)

	
The Licensor will design a prototype 5HP/3kW Cyclone Engine (“Cyclone Solar I”), the exact specifications of which has previously been agreed to by the Parties in writing..

 

	
  

	
(b)

	
The Licensor will deliver to the Licensee the design plans and bill of matierals  for the Cyclone Solar I (the “Deliverables”) once development of the engine has been completed and tested for performance and durability based upon the commercially reasonable criteria established by Licensor (the “Delivery Date”).

 

	
4.2

	
Subject to the fulfilment of the conditions set out in section 4.1:

 

	
  

	
(a)

	
Production by Licensee of the Cyclone Solar I engines, or alternatively, purchase from Licensor of production versions of the final Cyclone Solar I engines will commence as soon as possible, but in no event later than two (2) years from Delivery Date. Should such production or purchase of these engines not commence within said timeframe, this Agreement may be terminated by any party. The Parties agree that any of them shall in no event be liable to the other for any amount in case of termination of this Agreement based on the circumstances set out in this clause.

 

	
4.3

	
Rights over the Cyclone Solar I:

 

	
  

	
(a)

	
The Parties agree that the Licensee will have non-exclusive rights to manufacture, use and commercialize the Cyclone Solar I in thermo solar units, and therefore hereby grants to the Licensee a non-exclusive worldwide license to manufacture, modify, use and commercialize the Cyclone Solar I for these specific Applications during the Term.

 

	
4.4

	
As established in section 4.1 above, in case the final design (as agreed by both parties) of the Cyclone Solar I is not functional, under the exclusive decision of the Licensee, the Licensee will have the right to immediately terminate this Agreement by sending a written notice of termination to the Licensor. The Parties agree that in no event shall either party be liable to the other party for any amount in case of termination of this Agreement based on the circumstances set out in this clause. Additionally, in the case this Agreement is terminated based upon the circumstances set forth in this clause, Licensee shall immediately return to Licensor all Confidential Information relating to the Licensed Technology and Licensed Products, and shall immediately cease from using any such
Confidential Information or Licensed Technology in the development of its solar thermal units.

 

	
5

	
Payment and Royalty

 

	
5.1

	
In consideration of the rights granted to the Licensee under this Agreement, the Licensee must pay to the Licensor:

 

	
  

	
(a)

	
a Royalty fee per unit built/sold as per Schedule A,

 

  

5

  

	
  

	
(b)

	
payments shall take place on a quarterly basis in US Dollars taking into account the number of units built/sold in the previous Quarter.

 

	
5.2

	
Minimum Royalties:

 

	
  

	
(a)

	
Minimum Royalties shall be negotiated between the parties in good faith in the second year after the Delivery Date.

 

	
5.3

	
Development Fees:

 

	
  

	
(a)

	
As of the date of this Amendment, Licensee has paid to Licensor $250,000 in non-refundable Development Fees. No additional Development Fees shall be due hereunder.

 

	
6

	
Publicity

 

	
6.1

	
Both parties shall participate in the elaboration, approval and issuance of a press release announcing any events and achievements occurring pursuant to this Agreement, to be reasonably agreed by both parties in good faith and without delay.

 

	
7

	
Notice

 

	
7.1

	
Any communication to be given in connection with this Agreement shall be in writing in English and shall be delivered in accordance of clause 12.3 of the Standard Terms and Conditions and to the address of the relevant party referred to in this clause.

 

	 	
Cyclone Contacts:

	
 

	
  

	
Technology:

	
Harry Schoell, CEO, 954-943-8721, harry@cyclonepower.com

	
  

	
Operational:

	
Frankie Fruge, COO, 954-943-8721, frankie@cyclonepower.com

	
  

	
Legal:

	
Christopher Nelson, 305-439-5559, chris@cyclonepower.com

 

	
  

	Renovalia Contacts:	
 

	
  

	
Technology:      

	
Jaime Galobart, CEO, 34-915-90-4070,

jaime.galobart@renovaliaenergy.es

	
  

	
Operational:

	
Same

                                                         

In Witness Whereof, the parties have caused this Technology License Agreement, comprised of these Specific License Terms and the attached Standard Terms and Conditions to be executed by their duly authorized officers on the respective dates hereinafter set forth.

Cyclone Power Technologies, Inc.                                                       Renovalia Energy S.A.

By: /s/ Christopher Nelson                                                                By: /s/ Jaime Galobart Sanchez-Marco

Name: Christopher Nelson                                                                             Name: Jaime Galobart Sanchez-Marco

Title:    President                                                                                              Title: Chief Executive Officer

Date:    June 30, 2011                                                                                       Date: June 30, 2011

 

  

6

  

II. Standard Terms and Conditions

	
1.

	
Grant of License

	
1.1

	
Licensor grants to Licensee a worldwide non-transferable (except for transfer to Renovalia Group Companies) and non-exclusive license to use the Licensed Technology and to use, commercialize, manufacture or modify the Licensed Products in the Territory as set forth in the Specific License Terms (the “License”). Licensee may utilize the Licensed Technology and the License Products for its own Applications, or may sell them to other parties, provided they are ultimately used only for the specified Applications.

 

	
1.2

	
Except for transfer to Renovalia Group Companies, this License may not be transferred or sublicensed to a third party without the prior written consent of the Licensor.

	
1.3

	
The Term of this License is set forth in the Specific License Terms.

 

	
2.

	
License Fees and Royalty

	
2.1

	
Licensee will pay to Licensor the Development Fees and License Fees set forth in the Specific License Terms.

           

	
2.2

	
Licensee will pay to Licensor the Royalties as the rate specified in the Specific License Terms, or any addendums or amendments, within 20 days after the first day of each calendar Quarter hereafter during the Term of this Agreement. All Royalties shall be paid in U.S. funds.  Minimum Annual Royalties, as set forth in the Specific License Terms, shall also be calculated on a quarterly basis, and any difference between actual Royalties earned and the Minimum Annual Royalties due (pro-rated quarterly) shall be paid within 20 days of the end of the calendar Quarter.

        

	
2.3 

	
If Licensor does not receive from Licensee the full amounts due on or before the day upon which such amounts are due and payable, such outstanding amounts will thereafter bear interest until payment at the maximum rate permissible by applicable law, but in no event to exceed 16% per annum.  Amounts received by Licensor will first be credited against any unpaid interest and accrual of such interest will be in addition to and without limitation of any and all additional rights or remedies that Licensor may have under this Agreement or at law or in equity.  Licensee agrees to pay all reasonable expenses in connection with the collection of any late payment.

  

	
3.

	
Reports and Audit

       

3.1           Licensee agrees to make and provide written reports to Licensor concurrently with making each Royalty payment due in Section 2.  Each report will state the number of Licensed Products manufactured, sold or otherwise put into use during the preceding three calendar months and on which a Royalty is payable as provided in Section 2.

  

7

  

3.2           Licensor (or its authorized representative) may, upon reasonable notice and during Licensee’s normal business hours no more than two times per year during the term of this Agreement, request to the Licensee, which request may not be unreasonably denied or delayed, for the purposes of auditing, copies of books of account, documents, records, papers and files relating specifically to Licensee’s manufacture, use and sale of the Licensed Product (“Licensee Documents”). Licensee Documents will be made available to Licensor (or its authorized representative) solely for such auditing
purpose.  Licensor will bear the expense of any such audit unless such audit reveals that royalties and fees paid by Licensee pursuant to this Agreement for any payment period are less than 90% of what should have been paid by Licensee during such payment period.  In such event the costs of the audit, including any required travel, will be borne by Licensee, in addition to and without limitation of any other rights or remedies Licensor may have.  Prompt payment of any amounts found due and owing Licensor, including audit fees and expenses due Licensor under this Section, will be made by Licensee.

3.3           Licensor will punctually inform Licensee of the status of the Patents, the patent applications detailed in Schedule B and any future patent applications regarding the Licensed Technology, an in any event will report to the Licensee Quarterly regarding the status of said Patents and patent applications.

	
4.

	
Representations and Warranties.

Licensor represents and warrants to Licensee that:

4.1           Licensor is the owner of the Licensed Technology and has the right to grant the License to Licensee. Licensor is the sole and beneficial owner of the Licensed Technology, the Patents and patent applications described in Schedule B hereof, which provides a complete and accurate listing of the Licensor’s issued and pending Patents at the time of this Agreement.

4.2           The Licensor has no specific reason to believe at this time that any patent applications listed on Schedule B would not be approved and issued by the appropriate patent authority.

4.3           Licensor is not involved in any suits, litigation or other claims contesting the validity or ownership of any of the Licensed Technology, the patents or patent applications, and knows of no such claims at this time pending or anticipated.

4.4           To the knowledge of Licensor, the activities, processes, methods, products, services, used, manufactured or supplied by the Licensor to the Licensee on or before the date of this Agreement did not at the time used, manufactured or supplied, nor at the date of this Agreement, nor does Licensor have any current specific reason to believe they are likely in the future to infringe or make unauthorized use of the rights of any person.

4.5           To the knowledge of the Licensor none of the Licensed Technology or the Patents are subject to any encumbrance held by any person not affiliated with the Licensor, and the Licensor has not authorized or otherwise expressly or impliedly permitted any use whatsoever of the Licensed Technology or the Patents in the Territory that would conflict with the rights of the Licensee.

  

8

  

4.6           Licensor warrants that, provided the Licensed Products are built by Licensee following their specifications and are utilized under the specific conditions for which they have been designed (inclusive of solar/steam temperature, condensing temperature, and parts durability), that the License Products will ultimately function as represented. The Parties both agree and understand, however, that the Licensed Technology is new technology, and the Cyclone Solar I is a new engine that has never before been built; and therefore, both parties will be required to provide additional engineering and development to assure that these
products will perform as required by Licensee. This warranty must be interpreted in light of the stage of development that the Licensed Technology currently exists.

4.7           THIS SECTION IS LICENSOR’S ONLY WARRANTIES CONCERNING THE LICENSED PRODUCTS, LICENSED TECHNOLOGY AND PATENTS, AND IS MADE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED.

4.8           Licensee and Licensor each represent and warrant to the other that it has full power and authority to enter into this Agreement.

4.9           Licensee and Licensor each represent and warrant to the other that neither the execution nor delivery of this Agreement, nor the consummation of the transactions contemplated herein, will constitute a violation or breach of the warranting party’s constituent documents or violate, conflict with, result in any breach of any material provisions of or constitute a default under any other contract or commitment made by it, any law, rule or regulation, or any order, judgment or decree, applicable to or involving it.

4.10           Licensee and Licensor each represent, covenant and agree to the other that it will comply with all applicable international, federal, state and local laws, regulations or other requirements, and agrees to indemnify the other party against any liability arising from its violation of or noncompliance with laws or regulations while using the Licensed Technology.

4.11           Licensee and Licensor each represent and warrant to the other that no order, consent, filings or other authorization or approval of or with any court, public board or governmental body is required for the execution, delivery and performance of this Agreement by it.

4.12           Licensee represents to Licensor that neither it nor its affiliated companies are currently or previously involved in any litigation or threatened litigation concerning patent infringement, unauthorized use of intellectual property, breach of a license agreement, or other similar claims.

4.13           Both parties represents to the other party that no events specific to the first party have occurred, or to its knowledge are pending, that have impaired or may impair materially the financial condition or viability of the first party, or otherwise make the performance of its financial and operational duties hereunder impossible or impractical.

  

9

  

 

	
5.

	
Indemnification of Infringers

5.1.           Each Party shall, without delay, inform the other Party if it becomes aware of a possible Infringement, unauthorized use, misappropriation, ownership claim, threatened infringement or other such claim (collectively, an “Infringement”) by a third party with respect to the Licensed Products and/or the Licensed Technology, and will provide the other Party with any evidence available of such Infringement.

5.2           If either Party desires to take any action against any Infringement, such Party shall first notify the other Party hereto and consult with such notified Party regarding such action. If the notified Party desires to participate in such action, the Parties shall then jointly and cooperatively pursue such action, in which event the parties agree that that they shall be responsible on a pro-rata basis to contribute to the costs of all enforcement to protect the Licensed Technology or the Licensed Products and shall contribute to all expenses incurred in any action taken to protect them from any Infringement or to defend any claim
against the Parties or the Licensed Technology or the Licensed Product (“Infringement Action”), including all attorney, paralegal, accountant or other professional fees from the notice of such action through all trial and appellate levels.

5.3           Contribution by any party and, eventually, recovery by such party of damages, royalties, license fees and other recoveries from any Infringement Action shall be equal to such party’s pro-rata contribution to expense.

5.4           The Parties shall cooperate with each other in good faith and provide all advice and assistance reasonably requested by each other in pursuit of such Infringement matters. It is provided that either Party may at any time decide not to participate further in such action, in which case any further costs shall be borne by the Party which continues to pursue the Infringement Action, and all damages, royalties, license fees and other recoveries shall be received by such Party.

5.5           If a Party declines to participate in any Infringement Action, the other Party shall then have the right to pursue such action alone and, in its sole and absolute discretion, will decide what decisions should be taken with respect to any such Infringement, whether or not litigation should be pursued against an alleged infringer, the jurisdiction in which any such litigation should be pursued, whether or not litigation should be settled or pursued to final resolution against an alleged infringer, and the terms of settlement. In this case, that Party shall bear all costs of and receive all damages, royalties, license fees and
other recoveries from such action. Notwithstanding the foregoing, if a Party declines to participate in such an action or withdraws from such an action, such Party shall nevertheless, at the request of the other Party, cooperate with the other Party, at the cost of the other Party and subject to any reasonable conditions (including indemnification against counterclaims by the third party), to the extent which may be necessary to enable the other Party to pursue such action effectively, including without limitation joining such action as an indispensable party.

5.6.           Each Party will execute all necessary and proper documents, take such actions as is reasonably necessary to allow the other Party to institute and prosecute any Infringement Actions and will otherwise use its commercially reasonable efforts to cooperate in the institution and prosecution of such Actions. Each Party prosecuting any such Infringement Actions will keep the other Party reasonably informed as to the status of such actions.

  

10

  

	
6.

	
Improvements

6.1           Both parties will timely inform the other party, in writing, of any improvements, changes, advances and/or modifications to the Licensed Products or Licensed Technology, and the purpose(s) therefore, made by said party.

6.2           Any and all such improvements, changes, advances and/or modifications to the Licensed Products (including any components thereof) or Licensed Technology made by Licensee (“Licensee Improvements”) shall become the property of Licensor; however, Licensee shall have a continuing non-exclusive right to use these Licensee Improvements under the terms of this License.

6.3           If such Licensee Improvements under 6.2 change the character of the Cyclone Engine I, or a component thereto, to the extent that it is uniquely identifiable and separately patentable as different engine or engine component, the parties shall share the rights, title and interest to such new engine improvement patent. If Licensee Improvements lead to an invention that is not an external combustion Rankine cycle engine or component thereof, such new invention belongs to Licensee, provided Licensor had no part in the development of such new invention.

6.4           The party or parties who own the right, title and interest to the Licensee Improvements, as set forth herein, shall also own any and all patent applications resulting from or relating to any such Improvements and/or modifications, whether filed in the United States or countries other than the United States, related to said Improvements and/or modifications; and in and to any and all patents which may be issued/granted on any and all said applications and any and all reissues thereof. To the extent that the parties cannot mutually agree on the ownership of the rights created hereunder, the parties shall submit the matter first
to mediation and then to arbitration, as set forth in Section 12.9 of this Agreement. The mediator or arbitrators assigned to this matter will have special expertise or understanding of mechanical engineering, thermal dynamics, engine technology, or other scientific knowledge, as well as knowledge of patent law, to make an informed decision on the merits of this matter.

6.5           The parties covenant and agree that, at the other party’s request, it will cause to be executed and delivered any applications, affidavits, assignments, and other instruments as may be deemed necessary or desirable to secure for or vest in the other party, its successors, legal representatives, or assigns, all right, title, and interest in and to any application, patent, or other right or property covered by this Section, including the right to apply for and obtain patents in foreign countries under the provisions of the International Convention.

6.6           Licensor does have and will continue to have sole and absolute discretion to make decisions with respect to the procurement and prosecution of the patents and patent applications for the Licensed Technology, including the right to abandon any such patent application, provided such decision would not adversely affect the rights of Licensee granted in this Agreement, and provided further that such patents do not apply to improvements or inventions that belong to Licensee as per Sections above. Licensor shall keep Licensee informed and updated as to matters of patent approval, prosecution and abandonment.

  

11

  

	
6.7

	
      In case of:

(a)           Licensor’s abandonment of or any failure to obtain or maintain an issued patent originating from any of the patents or patent applications, and such abandonment or failure has not been remedied, or good faith efforts towards remedying have not been made, within 90 days; and/or

(b)           A final, non-appealable holding or decision by a court of law that any such issued patent is invalid or unenforceable,

Then, provided that the loss of such patent reasonably threatens to make the Licensed Technology or Licensed Products unmarketable or unusable when considered in light of all other issued or pending patents and other intellectual rights for the engine and its multiple components, the Licensee may terminate this Agreement.

If either party believes in good faith that its rights have been materially adversely affected under this Section 6 of the Agreement, the parties shall attempt to reach a reasonable modification to the terms of this Agreement, and if such negotiations fail, the parties shall bring the matter first to mediation and then arbitration as per Section 12.9 of this Agreement to determine the appropriate modification.

6.8           Licensee will not contest the validity or enforceability of any of Licensor’s patents that issue from or as a result of any of the patents or patent applications for the License Technology or any continuations, _stoppels_ or continuations-in-part of such applications, always that these respect the content of this Section 6.  With respect to patents that have been determined to belong to Licensee as established in this Section or by agreement of the parties or mediation/arbitration as per the above Sections, Licensor will not contest the validity or enforceability of any of such patents or patent applications or
any continuations, _stoppels_ or continuations-in-part of such applications.

	
7.

	
Default and Termination

7.1.           Either party may terminate this Agreement immediately, without prejudice to its other rights, by providing written notice to the other if:

(a)           any of the parties is in default of any material obligation under this Agreement, then the other party may give written notice thereof to the other party. If within 30 days after the date of such notice (or longer period of time if otherwise specifically provided under this Agreement) such default is not cured, and mediation or arbitration is not otherwise required, then this Agreement will automatically terminate at the discretion of the non-defaulting party.

(b)           any bankruptcy or insolvency proceedings under any federal or state bankruptcy or insolvency code or similar law, whether voluntary or involuntary, is properly commenced by or against any of the parties; or

  

12

  

(c)           any party admits in writing to being insolvent, its inability to pay its debts as they come due or ceases to so pay, or makes an assignment for the benefit of creditors; or

(d)           a trustee or receiver is appointed for any or all of the party’s assets.

7.3           Licensee may terminate this Agreement immediately, without prejudice to its other rights, by providing written notice to the Licensor:

(a)           if Licensor unilaterally modifies the rights of the Licensee hereunder without Licensee’s written approval; or

(b)           if Licensor ceases to carry on its business, or ceases to protect its Patents and Licensed Technology hereunder.

7.4           Either party may terminate this Agreement at the end of the Initial Period by giving six (6) months written notice to the other party.

	
8.

	
Effects of Termination

8.1           If the Licensor has defaulted on any material obligation under this Agreement, due not to fault of the Licensee, and such breach is not timely cured as provided in this Agreement:

(a)           this Agreement may be terminated by the Licensee and Licensee shall be able to use the Licensed Technology for the Licensed Products without paying Royalties; however, all Fees and Royalties due up to the date of termination shall become due and payable within 30 days; and

(b)           the Licensor must within a reasonable time required by the Licensee, execute all documents necessary, including powers of attorney, in order to maintain the Licensee’s License and rights under this Agreement, and refrain from making any acts or omissions which would damage or reduce the exercise of the Licensee’s license and rights under this Agreement, provided that such documents, acts or inactions shall not in any manner expand the rights of the Licensee as provided in this Agreement.

8.2           Upon expiration or termination of this Agreement, not due to the Licensor’s breach of any of its obligations under this Agreement, any remaining portion of any unpaid Fee outstanding and all accrued Royalties and other sums due hereunder will become due and payable within 30 days of such expiration or termination.

8.3           Except as set forth in Section 8.1 above, upon expiration or termination of this Agreement for any reason, Licensee shall not thereafter make, use, sell, offer to sell, or import the Licensed Products or use the Licensed Technology for any purpose. Licensed Products in use may continue to be used by Licensee or any third parties, but no new products may be manufactured, sold or placed into use by Licensor or any third parties.

8.4           Immediately after the expiration or termination of this Agreement in case of breach by the Licensee of any of its obligations of this Agreement, or by expiration of the Term:

  

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(a)           All rights of Licensee granted hereunder will terminate and automatically revert to Licensor, and Licensee will discontinue all manufacturing of the Licensed Technology and will no longer have the right to manufacture, sell or put into use the Licensed Technology or any variation or simulation thereof for any purpose whatsoever;

(b)           Licensee will be permitted to sell and dispose of its remaining inventory of Licensed Products on hand or in process on the date of such termination or expiration, for a period of ninety (90) days following the date of such expiration or termination (the “Sale Period”). Licensee expressly agrees that it will not market or sell any Licensed Product after the end of the Sale Period;

(c)           All sums owed by Licensee to Licensor will become due and payable immediately;

(d)           Licensee will not use Confidential Information to manufacture, use or sell Licensed Products anywhere in the world; and

(e)           Licensee will not retain rights whatsoever to any of Licensor’s Licensed Technology.

	
9.

	
Survival of Termination

9.1           Termination or expiration of this Agreement shall not affect the rights or liabilities of either party accrued prior to and including the date of termination or expiration, and/or any terms intended expressly or by implication to survive termination or expiry.

9.2           Sections 4, 5, 6, 10 and 11 will survive the expiration or termination of this Agreement.

	
10.

	
Risk of Loss

10.1           Licensee will acquire and maintain at its sole cost and expense throughout the term of this Agreement, Comprehensive General Liability Insurance (hereinafter collectively, “Comprehensive Insurance”) underwritten by an insurance company qualified to cover liability associated with activities in the Territory of this Agreement. This insurance coverage will provide liability protection as reasonably and prudently determined by Licensee, with Licensor named as an additional insured party on the general liability coverage and as loss payee on the property
coverage.  Licensee will furnish to Licensor certificates issued by the insurance company(ies) setting forth the amount of the Comprehensive Insurance, the policy number(s), the date(s) of expiration, and a provision that Licensor will receive thirty (30) days written notice prior to termination, reduction or modification of the coverage.  Licensee’s purchase and maintenance of the Comprehensive Insurance or furnishing of the certificates of insurance will not relieve Licensee of any of its obligations or liabilities under this Agreement.

10.2           In the event of cancellation of any insurance required to be carried by Licensee under this Agreement, Licensor will be notified thirty (30) days prior to cancellation of same.  Additionally, notwithstanding anything else to the contrary, in the event Licensee’s insurance is canceled and replacement Comprehensive Insurance meeting the requirements set forth above is not in place within ninety (90) days, then Licensor will have the right to terminate this Agreement.

  

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10.3           Licensee assumes responsibility for any commitments, obligations, or representations made by it in connection with the use of the Licensed Products and Confidential Information to manufacture, sell, market or advertise the Licensed Products, and Licensor will have no liability to Licensee, or any third parties, with respect to economic and/or personal injury, including wrongful death, caused by or resulting from the use of the Licensed Products, or unauthorized use of Licensed Technology and/or Confidential Information, by Licensee, its agents, employees, or customers. Licensor shall assume liability for injury or economic
damages caused by design defects in the License Products, to the extent that such design defects were not expressly defined or created by the Licensee.

10.4           Licensee agrees to indemnify, defend and hold harmless Licensor, its shareholders, officers, directors, employees, affiliates, successors and assigns from and against any and all expenses, damages, proceedings, direct or consequential claims, liabilities, suits, actions, causes of action of any character or nature, penalties, fines, judgments or expenses (including all attorneys’ fees), arising out of, or related to Licensee’s use, sale, manufacture, importation, offer to sell, distribution, disposal of, operation, etc. of the Licensed Product and/or attributable to Licensee’s use of the Licensed Technology
and/or Licensee’s performance in breach of this Agreement. Licensor agrees to indemnify, defend and hold harmless Licensee, its shareholders, officers, directors, employees, affiliates, successors and assigns from and against any and all expenses, damages, proceedings, claims, liabilities, suits, actions, causes of action of any character or nature, penalties, fines, judgments or expenses (including all attorneys’ fees), arising out of, or related to design defects in the License Products, to the extent that such design defects were not expressly defined or created by the Licensee.  This indemnity provision will survive the expiration or termination of this Agreement.

10.5           Licensee acknowledges that Licensor’s liability for direct damages arising out or related to Licensee’s use, sale, manufacture, importation, offer to sell, distribution, disposal of, operation, etc. of the Licensed Product regardless of the form of action (i.e., whether in contract or tort, including without limitation, negligence or strict liability) will not exceed the Fees and Royalties paid by Licensee to Licensor.  LICENSEE ALSO ACKNOWLEDGES THAT IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGE, LOSS OR EXPENSE, EVEN IF LICENSOR HAS BEEN
ADVISED OF THEIR POSSIBLE EXISTENCE.

	
11.

	
Confidentiality

11.1           Confidential Information means information in oral and/or written form that (a) relates to the Licensed Technology, including, without limitation past, present and future research, development, business activities, products, and services, and (b) has been identified, either orally or in writing, as confidential by either party. Confidential Information shall also mean information provided by the any of the parties to the other regarding its technology, systems engineering, business and marketing plans, and any other materials identified, either orally or in writing.

11.2           The receiving party may use the Confidential Information only for the purpose of producing the Licensed Products or as otherwise indicated or contemplated by this Agreement. The receiving party will not, at any time, use the Confidential Information in any other fashion, form, or manner for any other purpose.

  

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11.3           The receiving party agrees not to disclose the Confidential Information in any manner to anyone other than persons within its organization who have a need to know for the purpose set forth above and who have acknowledged in writing the obligations hereunder and have agreed to abide by the terms hereof.  Under no circumstances will the receiving party disclose the Confidential Information to any third party.

11.4           Any Confidential Information in whatever form is the property of the disclosing party and will remain so at all times. The receiving party may not copy any Confidential Information for any purpose without the express prior written consent of the disclosing party, and if consent is granted, any such copies will retain such proprietary rights notices as appear on the original thereof.  Any copies of the Confidential Information that the disclosing party may have permitted the other party to make, or other written materials incorporating Confidential Information, will be the sole property of the disclosing party and
must be returned to it or destroyed upon the first to occur of (a) termination or expiration of this Agreement or (b) request by the disclosing party.

11.5           Nothing in this Section will prohibit or limit the receiving party’s use of information it can demonstrate is (i) previously known to the receiving party, (ii) independently developed by the receiving party, (iii) acquired by the receiving party from a third party not under similar nondisclosure obligations to the disclosing party, or (iv) which is or becomes part of the public domain through no breach by the receiving party of this Agreement.

11.6           The receiving party acknowledges that the Confidential Information disclosed and/or made available to it hereunder is owned solely by the disclosing party and that the threatened or actual breach of this Agreement would cause irreparable injury to the disclosing party, for which monetary damages would be inadequate.  Accordingly, the receiving party agrees that the disclosing party is entitled to an immediate injunction enjoining any such breach or threatened breach of this Agreement.  The receiving party agrees to be responsible for all costs, including attorneys’ fees, incurred by the disclosing
party in any action enforcing the terms of this Section.

11.7           The receiving party will promptly advise the disclosing party in writing of any unauthorized use or disclosure of Confidential Information of which the receiving party becomes aware and will provide reasonable assistance to the disclosing party to terminate such unauthorized use or disclosure.

	
12.

	
Miscellaneous

12.1           Nothing contained in this Agreement will be construed as conferring by implication, estoppels, or otherwise, upon any party licensed hereunder, any license or other right under any patent except the licenses and rights expressly granted herein.

12.2           Licensee will conspicuously mark directly on each Licensed Product it manufactures or sells that the Licensed Product is covered by the Licensor’s patent, the numbers and other identifying information for which will be provided to Licensee.

  

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12.3           All notices required by this Agreement will be in writing and sent by certified mail, return receipt requested, by hand or overnight courier, to the addresses set forth on the initial page, with copies to the Legal Contacts set forth in the Specific License Terms, unless either party will at any time by notice in writing designate a different address.  Notice will be effective three days after the date officially recorded as having been deposited in the mail or upon receipt by hand delivery or the next day by overnight courier.

12.4           Except as provided in this Agreement the Parties shall not assign, convey, encumber, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other party and any such purported assignment will be invalid, provided however, any of the Parties may assign this Agreement and all rights hereunder without the other’s prior written consent in the event of an acquisition, merger or some other business combination of the other party.

12.5           No term of this Agreement will be deemed waived, and no breach of this Agreement excused, unless the waiver or consent is in writing signed by the party granting such waiver or consent.

12.6           If any term or provision of this Agreement is determined to be illegal or unenforceable, such term or provision will be deemed stricken, or modified to correct such provision, and all other terms and provisions will remain in full force and effect.

12.7           This Agreement represents the entire agreement of the parties replacing any earlier agreements concerning the same matters.  It may only be modified by a subsequent writing signed by the parties hereto. This Agreement amends and restates in its entirety the Technology License Agreement between the parties hereto, dated as of May 4, 2009, which previous agreement shall be void as of the date of this Agreement.

12.8           Each party is acting as an independent contractor and not as an agent of the other party.  Nothing contained in this Agreement will be construed to confer any authority upon either party to enter into any commitment or agreement binding upon the other party.

12.9           In the event of any dispute arising out of or in connection with the present contract, the parties agree to submit the matter to settlement proceedings under the ICC ADR (mediation) Rules. If the dispute has not been settled pursuant to the said Rules within 60 days following the filing of a Request for ADR, or within such other period as the parties may agree in writing, such dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules of
Arbitration.

(a)           The number of mediators shall be one (1), and arbitrators shall be three (3).

(b)           The place of mediation or arbitration shall be New York, New York, USA.

(c)           The language to be used in the mediation or arbitral proceedings shall be English.

(d)           It is the intent of the Parties that, barring extraordinary circumstances, arbitration proceedings will be concluded within 120 days from the date the arbitrator(s) are appointed. The arbitral tribunal may extend this time limit in the interests of justice. Failure to adhere to this time limit shall not constitute a basis for challenging the award.

 

  

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(e) The institution of mediation or arbitration proceedings hereunder shall not limit a party’s right to seek a temporary restraining order or injunction from any court of competent jurisdiction before a tribunal has been constituted of after such time upon order of the tribunal.

  

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SCHEDULE A – ROYALTIES

	  	  	 	
Royalty (US$) per Collective Number of Units Built/Sold

	 
	
Size

	
Type

	 	
1 to 5,000

	 	 	
5,001 to 10,000

	 	 	
10,001 to 50,000

	 	 	
Over 100,000

	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 
	
5HP

	
SC

	 	 	45	 	 	 	36	 	 	 	27	 	 	 	18	 
	  	
SS

	 	 	41	 	 	 	32	 	 	 	23	 	 	 	14	 
	
 

10HP

	
SC

	 	 	50	 	 	 	41	 	 	 	32	 	 	 	23	 
	  	
SS

	 	 	45	 	 	 	36	 	 	 	27	 	 	 	18	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
100HP

	
SC

	 	 	108	 	 	 	95	 	 	 	81	 	 	 	68	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
300HP

	
SC

	 	 	180	 	 	 	162	 	 	 	144	 	 	 	126	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
300HP +

	
SC

	 	
TBD

	 	 	
TBD

	 	 	
TBD

	 	 	
TBD

	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
SC = Supercritical

	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
SS = Sub-Supercritical

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

  

1

  

 

SCHEDULE B – PATENTS

US Patents

Heat Regenerative Engine (US Patent No. 7,080,512 B2)

Heat Regenerative Engine (Continuation) (US Patent No. 7,856,822 B2)

Steam Generator in a Heat Regenerative Engine (US Patent No. 7,407,382)

Engine Reversing and Timing Control Mechanism (US Patent No. 7,784,280 B2)

Centrifugal Condenser (US Patent No. 7,798,204 B2)

Valve Controlled Throttle Mechanism (US Patent No. 7,730,873 B2)

Pre-Heater Coil in a Heat Regenerative Engine (US Patent No 7,856,823 B2)

Engine Shrouding with Air to Air Exchanger (Ser. No. 11/879,586)

Spider Bearing (Ser. No. 11/879,589)

Waste Heat Engine (Ser. No. 12/291,001)

 

International Patents on Heat Regenerative Engine

European Union                                Australia                                South Africa                                Canada

Russia                                China                                Korea                                Indonesia

Mexico                                           Japan (pending)                                           India
(pending)                                           Brazil (pending)

 

  

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 Specifications for S-1 Engine

For

Renovalia Energy

6  Cylinder = 4.71 cu in.

1"Bore X 1" Stroke

6.47 Hp gross   5.1 hp net   

Dimensions: 10 inch diameter X 9 inches high (not including Combustion Chamber or Condenser)

2500 RPM 

Cutoff (Co) 5%       

Clearance Volume (Cv) 3%  

Exhaust at 80%

2000  PSI      

Temperature 1000f ( 538c)    

 

3

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