Document:

Unassociated Document

    

      RIGHT
        OF FIRST OFFER AGREEMENT

      

      THIS
        RIGHT OF FIRST OFFER AGREEMENT (“Agreement”) is made as of November ___, 2005,
        by and among ITEC ENVIRONMENTAL GROUP, INC., a Delaware corporation (“ITEC”) and
        TIGER PAW CAPITAL CORP., incorporated in Canada (“Tiger Paw”).

      

      RECITALS

       

      WHEREAS,
        Tiger
        Paw
        is purchasing shares of Common Stock pursuant to that certain Common Stock
        Purchase of even date herewith (the “Purchase Agreement”).

       

      WHEREAS,
        ITEC and Tiger Paw desire to document a mutual understanding with respect
        to the
        grant to Tiger Paw of a right of first offer relating to entering into a
        joint
        venture arrangement in certain territories pursuant to the terms
        herein.

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual agreements, covenants
        and provisions hereinafter set forth, the parties hereto agree as
        follows:

      

      AGREEMENT

      

      1. Right
        of First Offer.
        In
        the
        event ITEC contemplates implementation and commercialization of the ITEC’s
proprietary
        the
        ECO2TM
        System
recycling
        and cleaning technology
        (the
“Technology”) in any of the countries set forth in Exhibit
        A
        attached
        hereto (the “Territory”), in each case ITEC shall give written notice thereof
        (the “Offer Notice”) to Tiger Paw. If Tiger Paw has
        an
interest
        in implementing and commercializing the Technology in such portion of the
        Territory, Tiger Paw shall give written notice to ITEC of Tiger Paw’s interest
        (the “Response Notice”) within twenty one (21) days of receipt of the Offer
        Notice. For a period of ninety (90) days (the “Offer Period”), the parties will
        negotiate in good faith an agreement setting forth the terms and conditions
        upon
        which ITEC and Tiger Paw or its assigns would engage in such implementation
        and
        commercialization. During the Offer Period, ITEC will not enter into an
        agreement providing for implementation and commercialization of the Technology
        in such portion of the Territory or commit to enter into or enter into a
        letter
        of intent with respect any such agreement with any third party. If
        Tiger
        Paw and ITEC are unable to reach agreement during the Offer Period, ITEC
        shall
        have the right to enter into an agreement with a third party on terms and
        conditions not more favorable than those offered to Tiger Paw. 

      

      2. Miscellaneous.

      

      (a) This
        Agreement may not be amended, terminated or otherwise modified unless evidenced
        in writing and signed by the ITEC and Tiger Paw concerning all matters relating
        to this Agreement and is binding upon and shall inure to the benefit of all
        of
        the parties hereto and their respective heirs, legal representatives, successors
        and assigns.

      

      (b) All
        notices under this Agreement shall be given in writing in the manner and
        at the
        addresses provided in the Purchase Agreement.

      

      (c) This
        Agreement shall be governed and construed in accordance with the laws of
        the
        State of California, without regards to conflicts of laws. 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (d) The
        provisions hereof shall inure to the benefit of, and be binding upon, the
        successors, assigns, heirs, executors and administrators of the parties hereto.
        Nothing in this Agreement, express or implied, is intended to confer upon
        any
        party other than the parties hereto or their respective successors and assigns
        any rights, remedies, obligations or liabilities under or by reason of this
        Agreement, except as expressly provided in this Agreement

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        and delivered as of the day first written above.

       

      
        	 	 	 	 
	
                ITEC
                  ENVIRONMENTAL GROUP, INC.,
a Delaware corporation 

              	TIGER
                PAW CAPITAL CORP.,
incorporated
                in Canada
	
              	 	 	
              
	
                By:
                  

                 

              	 
                
                

              	By:
                	
                 

                
                  

                

                
                

                 

              
	Name:	 

                
	Name:
                	 

                

              
	
                Title:
                  

              	 

                
	Title:
                	 

                

              

      

      
 

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      EXHIBIT
        A

       

      Countries

       

      Asian,
        North Asian, East Asian, Central Asia, South Asian, West Asian, and Southeast
        Asian countries, including but not limited to: 

      

      
        	
                Australia

                India

                Macau
                  

                Hong
                  Kong 

                Singapore
                  

                Maldives
                  

                Bahrain
                  

                Bangladesh
                  

                Taiwan
                  

                South
                  Korea 

                Lebanon
                  

                Japan
                  

                Sri
                  Lanka 

                Israel
                  

                Philippines
                  

                Vietnam
                  

                North
                  Korea 

                Nepal
                  

                Pakistan
                  

                People's
                  Republic of China 

                Thailand
                  

                Indonesia
                  

                Kuwait
                  

                Armenia
                  

                Syria
                  

                Azerbaijan
                  

              	
                Turkey
                  

                Cyprus
                  

                Georgia
                  

                Cambodia
                  

                Egypt
                  

                Qatar
                  

                Malaysia
                  

                East
                  Timor 

                Myanmar
                  

                Brunei
                  

                Jordan
                  

                Uzbekistan
                  

                Iraq
                  

                Tajikistan
                  

                Bhutan
                  

                Afghanistan
                  

                Iran
                  

                Yemen
                  

                United
                  Arab Emirates 

                Laos
                  

                Kyrgyzstan
                  

                Oman
                  

                Saudi
                  Arabia 

                Turkmenistan
                  

                Russia
                  

                Kazakhstan
                  

              

      

      

      
        
           

        

        
          3Unassociated Document

    

      
        International
          Frontier Resources Corporation

      

       

      November
        23, 2005

      

      Eternal
        Energy Corp.

      Attention:
        Mr. Brad Colby

      

      Via:
        Email

      

      Dear
        Brad, 

      

      Re:
        Farmout Offer - UKCS Quad 14

      

      Further
        to our recent discussions this letter agreement will set forth the basic
        terms
        and conditions of International Frontier Resources Corporation (“IFR”) offer to
        Eternal Energy Corp. (“EEC”) to farmin on UKCS Quad 14, blocks 14/23 (SE/4)
        14/28a and 14/29b (255 sq km) herein after referred to as “Quad 14
        acreage”.

      

      Quad
        14 - Background

      

      The
        Quad
        14 acreage has been, or is in the process of, being converted to a traditional
        license from a promote license. In our discussion you indicated that EEC
        is
        interested in participating in the drilling a commitment well on the Quad
        14
        acreage. In this regard IFR advises as follows; 

      

      
        	 	
                ·

              	
                The
                  license is currently held Palace Exploration UK - 90% and Challenger
                  Minerals - 10%. The Quad 14 acreage is subject to a 3% royalty
                  payable to
                  Walter Oil & Gas UK. 

              

      

      

      
        	 	
                ·

              	
                IFR
                  and Palace have entered into an agreement under the terms of which
                  IFR has
                  the right to acquire up to a 40% interest in the Quad 14
                  acreage.

              

      

      

      
        	 	
                ·

              	
                Palace
                  shall seek DTI approval to register the IFR interest in the Quad
                  14
                  acreage on title. 

              

      

      

      
        	 	
                ·

              	
                Palace
                  and Challenger own a 3-D seismic survey over the Quad 14 acreage.
                  The 3-D
                  survey is owned Palace/Challenger -50% and Encana, now Nexen, 50%.
                  The
                  cost for IFR to purchase a copy of the 3-D seismic is US$9,000
                  per point.
                  

              

      

      

      
        	 	
                ·

              	
                Challenger
                  has been appointed operator and Challenger will contract ADTI to
                  drill the
                  first well on the Quad 14 acreage on a turn key basis at an estimated
                  D&A cost of USD$10 million. For clarity ADTI will act as drilling
                  operator and will drill the test well to contract depth and acquire
                  logs
                  for an estimated turn key cost of US$10 million.
                  

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                ·

              	
                Palace
                  is prepared to participate for up to a 50% interest and Challenger
                  will
                  participate for 10% of the cost to drill the commitment well on
                  the Quad
                  14 acreage.

              

      

      

      
        	 	
                ·

              	
                Should
                  the DTI accept Palace’s request for a traditional license Palace will be
                  required to drill one firm well on the Quad 14 acreage within two
                  years
                  from the date a traditional license is issued.

              

      

      

      IFR
        is
        prepared to farmout 15% of the Quad 14 commitment well under the following
        terms
        and conditions;

      

      
        	 	
                1.

              	
                On
                  or before January 5, 2006 EEC shall place US$90,000.00 in an escrow
                  account at Tupper Jonsson & Yeadon offices in Vancouver BC. In the
                  event EEC completes the farmin transaction contemplated in clause
                  2 hereof
                  the escrow funds shall be paid to Palace Exploration UK as payment
                  for 10%
                  of the 3-D seismic costs (US$9,000 X
                  10).

              

      

      

      
        	 	
                2.

              	
                On
                  or before February 5, 2006 EEC shall provide an irrevocable letter
                  of
                  credit for US$1,500,000.00 in favor of Palace Exploration (UK)
                  Limited in
                  trust with Tupper Jonsson & Yeadon. This amount represents 15% of the
                  estimated turn key dry hole costs of US$10,000,000.00. In the event
                  EEC
                  does not provide a letter of credit in the amount of US$1,500,000.00
                  on or
                  before February 5, 2006 the escrow funds of $US90,000.00 referred
                  to in
                  clause 1 hereof shall be released from escrow and paid to IFR as
                  a non
                  performance penalty and EEC shall have no further rights under
                  this
                  agreement.

              

      

      

      
        	 	
                3.

              	
                EEC
                  agrees to pay 15% of the commitment well D&A turn key costs, estimated
                  at US$10 million, 15% of the production testing costs estimated
                  at US$1
                  million per drill stem test and 15% of all completion and all other
                  costs
                  incurred to the flow line outlet valve to earn a 10% interest in
                  the Quad
                  14 acreage. 

              

      

      

      
        	 	
                4.

              	
                EEC
                  agrees to pay its 10% share of a 3% GORR payable to Walter Oil
& Gas
                  UK. 

              

      

      

      
        	 	
                5.

              	
                EEC
                  agrees to be bound by the terms and conditions of the IFR - Palace
                  farmin
                  agreement and Joint Operating
                  Agreement.

              

      

      

      
        	 	
                6.

              	
                EEC
                  agrees to pay its 10% share of the annual traditional license fees
                  from
                  February 5th,
                  2006 onward. 

              

      

      

      
        	 	
                7.

              	
                EEC
                  agrees to keep the terms of this letter agreement confidential
                  unless
                  required to disclose pursuant to regulatory authorities rules and
                  regulations. 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	 	
                8.

              	
                EEC
                  will provide IFR and Palace with a copy of any public announcement
                  prior
                  to issuance. 

              

      

      

      
        	 	
                9.

              	
                The
                  parties hereto agree to execute any future documentation required,
                  including a formal Farmin and Joint Operating Agreement to effect
                  the
                  terms and conditions contained herein.

              

      

      

      
        	 	
                10.

              	
                IFR
                  shall use its best efforts to have EEC novated into the Joint Operating
                  Agreement.

              

      

      

      
        	 	
                11.

              	
                IFR
                  shall use its best efforts to have EEC recognized on title by the
                  DTI, in
                  the event EEC is not recognized by the DTI then IFR and EEC shall
                  enter
                  into a mutually acceptable title Trust Agreement.
                  

              

      

       

      

      This
        offer is open for your acceptance until December 1, 2005, by signing and
        returning a copy of this letter by fax to 403-215-2788. Upon execution of
        this
        letter agreement the parties hereto agree to enter into a mutually acceptable
        formal agreement incorporating the basic terms and conditions contained herein.
        

      

      

      Yours
        truly, 

       

      /s/
        Pat Boswell

      Pat
        Boswell

      President
        

      

      

      Agreed
        to
        and accepted this 29th day of November, 2005

      

       

      Per:
        /s/
        Bradley M. Colby

      Eternal
        Energy Corp.

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