<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
................................................................................
SAVE THE WORLD TECHNOLOGIES INC.
(Name of Small Business Issuer in its charter)
................................................................................
NEVADA 13-3919650
------ ----------
(State of incorporation) (I.R.S. Employer Identification No.)
................................................................................
1285 Avenue of the Americas, 35th Floor,
New York NY 10019-6028
(Address of principal executive offices) (Zip Code)
212-554-4197
(Issuer's telephone number)
................................................................................
Securities to be registered under Section 12(b) of the Act:
- --------------------------------------- ----------------------------------------
Title of each class to be so Name of each exchange on which each
registered: class is to be registered:
- --------------------------------------- ----------------------------------------
Common Stock, $.0001 par value NASD-BB
- --------------------------------------- ----------------------------------------
................................................................................
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.0001 PAR VALUE
................................................................................
(Title of class)
<PAGE>
TABLE OF CONTENTS
-----------------
PART I
Item 1. Description of Business 3
Item 2. Management's Plan of Operation 6
Item 3. Description of Property 6
Item 4. Security Ownership of Certain Beneficial Owners and Management 7
Item 5. Directors, Executive Officers, Promoters and Control Persons 7
Item 6. Executive Compensation 9
Item 7. Certain Relationships and Related Transactions 10
Item 8. Description of Securities 10
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters 12
Item 2. Legal Proceedings 12
Item 3. Changes in or Disagreements with Accountants on
Accounting and Financial Disclosure 12
Item 4. Recent Sales of Unregistered Securities 12
Item 5. Indemnification of Directors and Officers 13
PART III
Index of Exhibits
PART III
Item 1. Index to Exhibits 14
Signatures 15
2
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Save the World Technologies Inc. (the "Company") was incorporated under
the laws of the State of Nevada on February 20, 1996. To date, the Company's
principal activities have been carried out in Australia. The Company's principal
office in the United States is located at 1285 Avenue of the Americas, 35th
Floor, New York, NY 10019-6028. The Company's executive offices in Australia are
located at 19 Garden Grove, Carrara, Queensland, Australia 4211 and its
telephone number is 011-61-7-55945556. The Company's laboratory and nursery are
located at 4 Beechmont Road, Canungra, South East, Queensland, Australia.
The Company's objective is to bring together business and the
environment, under the vision of Save the World Technologies Inc., through the
acquisition, research, development and marketing of various technologies which
are ecologically sound and commercially valuable. The Company has the unique
opportunity to participate in commerce by advancing technologies with the goal
of improving the environment, making the Earth a better place in which to live.
Presently, the Company has two such technologies in place: (i) the Kiri Super
Trees; and, (ii) an Air Engine. While improving its present technologies, the
Company seeks opportunities to acquire additional technologies which meet its
stringent requirements.
KIRI SUPER TREES. Mr. Jeffrey Muller, President of the Company,
developed the exclusive intellectual property naming rights to the
tissue culture and cloning technology known as the Kiri Super Tree.
Additionally, the Company has the exclusive right to utilize the
cloning technology and tissue cultures, grow, develop, market and
distribute the Kiri Super Tree throughout the world through his unique
business plan.
Kiri Super Trees are believed to be one of the fastest growing
hardwood trees in the world and considered by many as the fastest. One
of the Company's trees is a genetically engineered clone of several
varieties and species of the original Kiri tree from the country of
Japan. The original Kiri tree has been a prized and expensive timber in
Japan for generations. Genetic engineering has produced cloned tissue
cultures of the Kiri Super Tree that are capable of reproducing this
tree disease-free and which can produce millable timber in only three
to five years. Both the tree and the cloning technology have been well
documented. The Company's version of the Kiri Super Tree is capable of
growing approximately one inch a day in the growing season up to thirty
five (35) feet high in its first year and approximately 60-80 feet high
tree in three to five years, subject to growing conditions.
Additionally, the trees could be suitable for harvesting in only three
to five years for hardwood timber and approximately two years for paper
products, and pulp or woodchip in approximately one year.
3
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The Kiri Super Tree has the ability to re-generate from
exactly the same stump eliminating the need for replanting. The tree's
unique characteristics allow for the potential of large yields of
hardwood timber and derivative products from each individual stump. As
such, it is also considered the perfect tree for reclamation,
reforestation and rehabilitation of damaged and mined land. The Kiri
Super Tree yields an attractive, lightweight but extremely strong
timber, which is resistant to fire, rotting, warping, twisting or
splitting. The Kiri Super Tree has the ability to produce superior
quality hardwood timber in a fraction of the time required by more
traditional sources of hardwood timber such as Oak or Ash. Whereas the
Kiri Super Tree can yield usable timber for furniture, plywood and
musical instruments in only three to five years, hardwood trees such as
Oak and Ash require approximately 40 years. Additionally, the Radiata
Pine, which is harvested for softwood timber reaches a height of only
23 to 26 feet after 5 years of growth. The hardwood of the Kiri Super
Tree potentially reaches a height of up to 80 feet of growth in the
same amount of time. Another advantage of the Kiri Super Tree is the
oversize leaves that absorb large amounts of carbon monoxide and
produce more oxygen than the average tree, which better helps the
earth's atmosphere. The large leaves of the Kiri Super Tree, which are
rich in nitrogen, provide superior ground cover and ultimately form a
mulch which improves, rather than depletes, the soil nutrients thus
reducing or eliminating the need for chemical fertilizers. Its deep
root system can also help desalination by lowering the water table,
thereby enabling other crops to be grown under the trees.
In order to satisfy the increasing world demand for wood
products (pulp, lumber, hardwood, plywood, veneer, etc.), the Company
seeks to market product derivatives from the trees throughout the
world. The United States Department of Commerce estimates that the
United States alone annually consumes approximately 220 million cubic
meters of plywood and veneer and 188 million cubic meters of hardwood.
Additionally, U.S. demand for wood products is currently growing an
estimated 2% per year. Australia, with a population of only 17 million,
imports approximately $2.4 billion of wood products per year. As such,
the Company intends to initially pursue markets in the United States,
Australia, the Middle East, Japan and South America. The Company has
already begun negotiating contracts with several countries, including
Australian local governments for the supply of seedlings of the Kiri
Super Tree and grown Kiri Super Trees for timber to Japan. Although
such contracts appear to be very promising, there can be no assurances.
Whereas the world demand for hardwood timber and tree
derivative products increases, and as the misuse and abuse of timbered
lands on a global scale are having disastrous effects on the planet's
ecosystem, the Kiri Super Tree perfectly satisfies the Company's
mandate of utilizing technology which is both commercially and
environmentally valuable.
The Company's physical facilities presently consists of its
Kiri Super Tree stock plantation located on a plot of land which is
approximately one hundred forty (140) acres. The address is Lot 2,
Carool Road, New South Wales, Australia, 2486. This is leased from
Saxonvale Pty. Ltd., a company owned by Jeffrey and Lynette Muller,
directors and officers of the Company. The lease is for a period of
five years plus a further five years option with an option to purchase.
4
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The Company also has a fully operational Kiri Super Tree cloning,
laboratory and nursery, plus 19 hothouses, factory and work shop
facilities which are located on 11 1/2 acres of property leased from
Mr. and Mrs. Muller. The property is located at 4 Beechmont Road,
Canungra, Queensland, Australia. The lease is for a period of two years
with an option for a further two years and an option to purchase.
AIR ENGINE. 0n 7th April, 1997, the Company purchased seventy percent
(70%) of the rights to a zero pollution air powered engine (which runs
exclusively on compressed air) from its owner, Mr. Terence Muller.
Terence Muller is the brother of Jeffrey Muller, President of the
Company. The Company hopes to continue improving its existing fully
operating air engine. Thereafter, the Company intends to commercially
produce the engine at what it believes will be competitive costs.
Additionally, the Company is currently undergoing the research and
development of a new rotor motor utilizing the air motor technology and
preparing to commence the selling of licensing agreements to major
cities internationally.
Research began more than twenty-five (25) years ago on the
development of the original system. A power generator/air motor system
was created by using two "2-stroke" lawnmower motors, one motor to run
an air compressor, the other to power a generator or alternator. This
original system was used to power the electricity for two (2) houses
continuously for a period of fourteen (14) months. The current version
of this engine converts the two (2) engines into one, thereby enabling
a normal combustion engine to run on compressed air through a series of
tanks, timed air injectors, non-return valves and air compressors. The
Company is currently developing an advanced rotor motor, which can be
made of metal, carbon fiber polymer material or similar material
reducing friction and wear. The new rotor motor's design reduces the
many parts necessary in a combustion engine to only a few. While the
Company is confident that this development will be successful, there
can be no assurances that this will be the case.
Current as well as future engines of this type, unlike normal
combustion engines, do not need water for the cooling system or spark
plugs, carburettors etc. because the engines run cool on compressed air
and there is no combustion. The engine can be used for most purposes
including machinery, power for generators (electricity), boat engines,
water pumping, air cooling, etc. It is anticipated that the Company
will initially market the engine for use in the marine, agricultural
and mining industries. Additionally, the Company anticipates that there
will be significant demand for this product in third-world countries,
due to the expense of traditional fuels. The Company anticipates that
its research and development of the new rotor air motor could be used
to power motor vehicles in the future, although there can be no
assurances.
Both systems had patents-pending lodged in the Commonwealth of
Australia, the original Provisional Spec. Patent Application being no.
PO 1346. The Company is preparing paperwork for its latest improved
version.
5
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GOVERNMENT REGULATIONS
The Company's goal is to manufacture and market its environmentally
safe products throughout the world. As such, importation and exportation
regulations may impact its activities, to some degree. A breach of such laws or
regulations may result in the imposition of penalties, fines, suspension or
revocation of licenses. The Company is not currently involved in any judicial or
administrative proceedings and believes that it is in compliance with all
applicable regulations.
Although it is impossible to predict, with certainty, the effect that
additional importation and exportation requirements may have on future earnings
and operations, the Company is presently unaware of any future regulations that
may have a material effect on the Company's financial position, but cannot rule
out the possibility.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
During the period from the Company's inception in February of 1996 to
March 31, 1999, the Company created revenues and produced a trading loss of
$20,700. The company funded the loss together with the costs of company
formation by the sale of 10,000 shares at $10 per share. The offering was exempt
from registration of limited offerings (not exceeding $1,000,000) as provided by
Rule 504 of Regulation D promulgated under the Securities Act of 1933, as
amended.
Over the next year, the Company intends to continue its development of
its Kiri Super Trees and Air Motor. In addition, the Company will continue to
seek opportunities to acquire and develop other ecologically sound technologies
that meet its requirements. The Company estimates that it will need
approximately $1,000,000 of capital to develop its technologies over the next
few years. Management does expect to fund future acquisitions and to develop its
technologies using cash flow from the sale of the Kiri Super Trees and sale of
licences of Air Motor and Kiri Super Tree technology.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's Kiri Super Tree stock plantation is located on a plot of
land of approximately one hundred forty acres. The address is Lot 2, Carool
Road, New South Wales, Australia, 2486. This property, valued at approximately
four million dollars, is leased from Saxonvale Pty. Ltd., a company owned by Mr.
and Mrs. Muller. The lease is for a period of five years with an option for
another five years and an option to purchase. The annual rental is calculated at
8% of its value.
6
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The Kiri Super-Tree cloning and laboratory and nursery facilities are
currently located on 11 1/2 acres of property leased from Mr. and Mrs. Muller.
The property is located at 4 Beechmont Road, Canungra, Queensland, Australia
4211. The lease is for a period of two years with an option for another two
years at an annual rental of 8% of its value, which includes an option to
purchase.
The Company has also leased office space at 1285 Avenue of the Americas, 35th
Floor New York NY 10019-6028 at a cost of $264.61 per month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables contain information, as of December 31st, 1999, of
all holders who, to the knowledge of the Company, were the beneficial owners of
five percent (5%) or more of the outstanding shares of the Common Stock of the
Company and of all Directors and Officers.
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN MEMBERS OF MANAGEMENT
========================== =============================== ===================== ===============
Name and Address of Amount and Nature of Percentage
Beneficial Owner Position held with Company Beneficial Owner of Class
========================== =============================== ===================== ===============
<S> <C> <C> <C>
Jeffrey A. Muller Director; President 7,000,100 shares 38.87%
19-21 Garden Grove of Common Stock
Carrara, Queensland
Australia
- -------------------------- ------------------------------- --------------------- ---------------
Lynette A. Muller Director; Secretary 7,000,099 shares 38.86%
19-21 Garden Grove of Common Stock
Carrara, Queensland
Australia
========================== =============================== ===================== ===============
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Set forth below are the names and ages of and the positions and offices
held by each of the Directors and Executive Officers of the Company.
POSITIONS AND OFFICES
- --------------------------------------------------------------------------------
NAME AGE WITH THE COMPANY
- --------------------------------------------------------------------------------
Jeffrey A. Muller 48 Director; President
Lynette A. Muller 48 Director; Secretary
7
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*JEFFREY A. MULLER, the Company's founder, is a Director of the Company
and also serves as its President. He has held these positions since the
Company's incorporation in February of 1996. In addition to Mr. Muller's
involvement with the Company, Mr. Muller also serves as Chairman of several
companies in the Muller Group in Australia. Mr. Muller has been the co-owner and
managing director of several private companies, including real estate investment
companies, since 1984.
*LYNETTE A. MULLER has served as a Director and the Company's Secretary
since its incorporation. Mrs. Muller has served as director in all companies in
the Muller Group in Australia. Mrs. Muller serves as Secretary, director and
co-owner of several companies, positions she has held since 1984.
EMPLOYEES
The Company has had over the past two years up to 18 consultants who
carry out cloning in the company laboratory, manage and run the tree nursery,
plant out and maintain the trees, as well as two engineers engaged for R & D on
the engine and administrative managing consultants who travel extensively for
the company world wide.
ITEM 6. EXECUTIVE COMPENSATION
There has been nil executive compensation to date:
--------------------------------------------------
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation (1)1 Long Term Compensation (1)
===================================== ===================================
AWARDS PAYOUTS
====================================================================================================================
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Compensation Award(s) Options/ Payouts Compensation
Position Year Salary ($) Bonus ($) ($) ($) SARs (#) ($) ($)
- ---------------- ------- ------------ ------------ ------------- ------------ ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JEFFREY A. 1996 - - - - - - -
MULLER
(Director and
President)
- ---------------- ------- ------------ ------------ ------------- ------------ ------------ ----------- --------------
LYNETTE A. 1996 - - - - - - -
MULLER
(Director and
Secretary)
</TABLE>
- ------------------------
1(1) To date, the Company has not yet paid any remuneration to its Directors or
Executive Officers. Compensation has not yet been determined.
8
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Kiri Super Tree nursery and plantation are located on approximately
one hundred and forty acres of land. This property is leased from Saxonvale Pty.
Ltd., a company owned by Mr. and Mrs. Muller. The lease is for a period of five
years with an option for a further five years with an option to purchase.
The Kiri Super-Tree cloning and showcase facilities nursery & hothouses
are located at Canungra in Queensland, Australia, on 11 1/2 acres of property
owned by Mr. and Mrs. Muller with an option for the Company to purchase.
The company entered into an agreement to acquire 70% of the rights and
ownership of the Air Motor from Mr. Terence Muller in April of 1997 for
$12,500,000 in stock. Mr. Terence Muller is the brother of Mr. Jeffrey A.
Muller, President of the Company, but is not part of the Muller Group of
Companies and is an arm's length transaction.
The tissue cultures, cloning technology and rights to grow, develop and
market the Kiri Super Tree was acquired from the Muller Group of Companies, in
October of 1996.
The forgoing transactions between the Company and the members of
management are, and any future transactions will be, on terms no less favorable
to the Company than that which could be obtained from unaffiliated third
parties. In addition, no future transactions will be entered into between the
Company and members of management or principal shareholders unless such
transactions are approved by a majority of the Directors or principal
shareholders.
ITEM 8. DESCRIPTION OF SECURITIES
The following description is qualified in all respects by reference to
the Company's Certificate of Incorporation and all amendments thereto and the
Company's By-laws, copies of which are attached hereto as exhibits.
The Company's Certificate of Incorporation, as amended, currently
authorizes 20,000,000 shares of Common Stock, $.0001 par value. As of March 31
1999, eighteen million ten thousand (18,010,000) shares of the Company's Common
Stock were issued and are outstanding.
Of the eighteen million ten thousand (18,010,000) shares of Common
Stock outstanding, eighteen million shares of Common Stock were issued in a
private placement in February 1996, and were issued in reliance upon the
exemption afforded by Section 4(2) of the Securities Act of 1933, as amended.
These shares are subject to the one year holding period.
In addition, the Company had an offering pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933, as amended, from
which ten thousand (10,000) shares were sold @ $10.00 per share. These shares
will be eligible for resale in the public market and are exempt from federal
registration.
9
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DIVIDENDS. The Company has not declared any dividends since its
inception. Because the Company intends to retain future earnings to fund the
development and growth of its business it does not anticipate paying cash
dividends on the Common Stock in its foreseeable future. Any payment of
dividends in the future is at the sole discretion of the Board of Directors of
the Company. The Company's decision will be dependent upon the Company's
financial condition, results of operations and other factors the Board deems
relevant.
VOTING RIGHTS. Holders of shares of Common Stock will vote as a single
class together on all matters submitted to a vote of stockholders, with each
share of Common Stock entitled to one vote, except as otherwise provided under
the laws of the State of Nevada.
PREEMPTIVE RIGHTS. The holders of Common Stock are not entitled to
preemptive or subscription rights.
TRANSFER AGENT
The transfer agent is the Nevada Agency and Trust Company, 50 W.
Liberty Street, Suite 880, Reno NV 89501. The transfer agent for the shares of
Common Stock of the Company was OTC Corporate Transfer Service Co. The address
of the former transfer agent was OTC, 9 Field Avenue, Hicksville, New York NY
11801.
10
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PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The company is currently applying for listing on a public trading
market. As of February 20th, 1996, there were two holders of record of the
Company's Common Stock.
The Company is authorized to issue twenty million (20,000,000) shares
of Common Stock at $.0001 par value per share, of which eighteen million ten
thousand(18,010,000) shares of Common Stock were issued and outstanding as of
March 31, 1999.
ITEM 2. LEGAL PROCEEDINGS
There are currently no material pending legal proceedings as defined in
Item 103 of Regulation S-B.
ITEM 3. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on
accounting and financial disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The following information concerns sales of unregistered securities by
the Company during the last three year period without registering the Securities
under the Securities Act.
On February 20, 1996, the Company issued eighteen million (18,000,000)
shares of Common Stock, par value $.0001, for one thousand eight hundred dollars
($1,800.00). All eighteen million (18,000,000) shares were issued in reliance
upon the exemption from registration afforded by Section 4(2) of the Securities
Act of 1933, as amended.
11
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<TABLE>
<CAPTION>
============================ ======================== =============== ==================
NUMBER OF AGGREGATE
COMMON CONSIDERATION
PURCHASER DATE OF ISSUANCE SHARES PAID
- ---------------------------- ------------------------ --------------- ------------------
<S> <C> <C> <C>
Jeffrey A. Muller and February 20th, 1996 18,000,000 $1,800.00
Lynette A. Muller (1)2
(Joint Tenants)
- ---------------------------- ------------------------ --------------- ------------------
</TABLE>
The Company offered 100,000 shares at $10.00 per share of Common Stock.
This transaction is exempt from registration pursuant to Rule 504 of Regulation
D promulgated under the Securities Act of 1933, as amended. These shares had
been offered in a private placement. Ten thousand (10,000) of these shares had
been sold and issued as of May 1998.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the General Corporation Law of the State of Nevada
contains provisions entitling directors and officers of the Company to
indemnification from judgments, fines, amounts paid in settlement, and
reasonable expenses, including attorney's fees, as the result of an action or
proceeding in which they may be involved by reason of being or having been a
director or officer of the Company, provided such officers or directors acted in
good faith. There is provision in the by laws or the Certificate of
Incorporation of the Company for indemnification of Officers and Directors.
- ----------------------
2(1) Jeffrey A. Muller and Lynette Ann Muller are Directors and Officers of the
Company.
12
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
For information regarding this item, reference is made to the "Index of
Exhibits."
INDEX OF EXHIBITS
================================================================================
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ -----------------------------------------------------------------
3.I Articles of Incorporation
3.II By-Laws
10.1 2nd April 1997 Agreement with Mr. Terence E. Muller for 70%
ownership of the Air Motor
10.2 Lease with Saxonvale Pty. Ltd. for the Kiri Super Tree nursery
and plantation, located on approximately one hundred forty acres.
10.3 Lease with Mr. and Mrs. Muller for the Kiri Super-Tree cloning
and office facilities in Canungra.
13
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
SAVE THE WORLD TECHNOLOGIES INC.
(Registrant)
SIGNATURE TITLE DATE
/S/ Jeffrey A. Muller
- --------------------------
(Jeffrey A. Muller) Director and President March 8, 2000
/S/ Lynette Ann Muller
- --------------------------
(Lynette Ann Muller) Director and Secretary March 8, 2000
14
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[Hoiberg & Co.
Logo Here]
CHARTERED ACCOUNTANTS
BUSINESS ADVISORS
Suite 19, First Floor, Plaza Home Centre, 27 Evans Street
P.O. Box 701 Maroochydore Q 4558
Tel: 61 07 5443 7600
Fax: 07 5443 2435
Email:[email protected]
INDEPENDENT AUDITORS REPORT
The Board of Directors
Save the World Technologies Inc.
1285 Ave of the Americas, 35th Flr,
New York
NEW YORK 10019-6028
We have audited the accompanying balance sheet of Save The World Technologies
Inc. (a development stage enterprise) as at December 31, 1999 and the related
statements of operations, stockholder's equity and cash flows for the period
January 1, 1999 to December 31, 1999. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
During this fiscal quarter the company decided to disclose its assets at a more
realistic valuation. We are not experts in the valuation of intellectual
properties, but have instead relied upon the valuation of acknowledged experts
in this field appointed by the company.
In our opinion, except for our comments above, the financial statements referred
to above present fairly, in all material respects, the financial position of
Save The World Technologies Inc. as of December 31, 1999 and the results of its
operations and its cash flows for the period January 1, 1999 to December 31,
1999, in conformity with generally accepted principles.
/s/ Hoiberg & Co
..........................................
AUDITOR
January 29 2000
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANISATION:
-------------
The Company was incorporated on February 20, 1996 in the State of Nevada and to
engage initially in the financing of, or otherwise assist in the research,
development, design and marketing of technologies, patents and processes and the
acquisition of operating or start-up companies. The Company's fiscal year end is
December 31, 1999.
2. BASIS OF PRESENTATION:
----------------------
At present the Company is in its production, planting of its tree and
development of it's other technology's stage and its other activities to date
have been limited principally to the investigation and research of prospective
acquisition targets.
3. DEFERRED OPERATING COSTS:
-------------------------
The directors of the company have agreed to carry all organisational and
operating expenses until some time in the future. The directors agree that they
have no entitlement to claim such costs against the company until such time as
they present a full accounting to the company.
4. DEFERRED OFFERING COSTS:
------------------------
Expenses incurred in connection with the Rule 504 offering will be deferred
pending completion of the listing, at which time they will be charged against
the proceeds of the original offering. If the listing is not completed, the
deferred offering costs will be expensed immediately.
5. CAPITALISATION:
---------------
The Company is authorised to issue 20,000,000 common shares with a par value of
$0.0001. As of February 20,1996, the Company issued a total of 18,000,000 shares
of common stock to its President, and Chairman of the Board of Directors, Mr.
Jeffrey Muller and the Muller Group, for a total consideration of $1,800
(approximately $0.0001 per share). Since that time the company has sold a
further 10,000 shares to investors in the Rule 504 offering.
6. CONFLICTS OF INTEREST:
----------------------
Management of the Company has other business interests to which they devote a
small portion of their time. Mr. Jeffrey Muller (President and Chairman of the
Board of Directors) is a director of other companies at the present time.
The Company has paid no rent to date, as it is using space provided by Mr.
Muller.
7. COMMITMENTS & CONTINGENCIES:
----------------------------
There are no known commitments or contingencies, except as follows. The company
currently leases and operates a tree plantation and nursery on properties owned
by the Muller group of companies in Australia. When the Board of the Company
determines that the Company is in an appropriate financial condition, it is
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
the intention of the Company to purchase the plantation and nursery from the
relevant existing owner. These purchases will be at a current market valuation
at the time of acquisition and will be determined by an independent appraiser
and registered valuer.
8. POTENTIAL INABILITY TO SERVE PROCESS AND/OR ENFORCE JUDGEMENT ON
DIRECTORS:
----------------------------------------------------------------
Mr. Jeffrey Muller (President and Chairman of The Board of Directors) is a
citizen of Australia and a resident of Australia. No assurances can be given
that potential litigants and/or investors who wish to commence litigation
against Mr. Muller, will be capable of effecting valid service of process on Mr.
Muller or if litigation is commenced and judgement rendered against Mr. Muller
that such judgement would ever be enforced. Additionally, no assurances can be
given that any foreign court would enforce judgement secured in United States
Courts against Mr. Muller. The Company has not received any opinion of counsel
on these matters.
9. METHOD OF ASSET VALUATION:
--------------------------
The company has decided to reflect the valuation of its assets in its balance
sheet. After due consideration and having requested a valuation from
acknowledged experts in the field, the company has increased its balance sheet
disclosure to reflect a more market related valuation of its assets. The company
has chosen to discount by up to 50% the valuations prepared on its behalf.
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD FEBRUARY 20 1996 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional
Shares Amount Paid In Capital
<S> <C> <C> <C>
Date of Inception - February 20 1996
February 1996 Issuance of
Common Stock for Cash 18,000,000 $1,800 $nil
----------
Issuance of Section 504 Stock 10,000 $1 $99,999
Balance December 31, 1999 18,010,000 $1,801 $99,999
---------- ------ -------
</TABLE>
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1999 TO DECEMBER 31, 1999
Gross Income nil
Organisational Expenses nil
------------
NET (LOSS) $ nil
===========
See notes to financial statements
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
AS AT DECEMBER 31, 1999
ASSETS
CURRENT ASSETS:
Cash at Bank 351
Cash on hand 1,800
-------------
$ 2,151
FIXED ASSETS:
Cars and Machinery (at valuation) 150,000
Tissue Cultures in stock 350,000
Kiri Super Trees in stock 4,825,000
Plantation Stock (at valuation) 1,250,000
Laboratory Equipment (at valuation) 250,350
Established Kiri Super Trees (at valuation) 9,500,000
-------------
$ 16,325,350
INTELLECTUAL ASSETS
Kiri Super Tree Intellectual Property (to be revalued) 1
Air Engine Technology (at valuation) 150,000,000
-------------
$150,000,001
-------------
TOTAL ASSETS $166,327,502
- ------------ =============
LIABILITIES & STOCKHOLDERS EQUITY
LIABILITIES:
Loan - J & L Muller $ 20,700
-------------
$ 20,700
STOCKHOLDERS EQUITY:
Common Stock $0.0001 par value (Note 3)
Authorised 20,000,000 shares
Issued and Outstanding 18,010,000 $ 1,801
Additional Paid in Capital 99,999
-------------
$ 101,800
Loss Incurred from prior year trading $ 20,700
Asset Revaluation Reserve $166,184,302
Total Stockholder's Equity $166,306,802
-------------
TOTAL LIABILITIES & STOCKHOLDERS EQUITY $166,327,502
- ---------------------------------------- =============
<PAGE>
[Hoiberg & Co.
Logo Here]
CHARTERED ACCOUNTANTS
BUSINESS ADVISORS
Suite 19, First Floor, Plaza Home Centre, 27 Evans Street
P.O. Box 701 Maroochydore Q 4558
Tel: 61 07 5443 7600
Fax: 07 5443 2435
Email:[email protected]
INDEPENDENT AUDITORS REPORT
The Board of Directors
Save the World Technologies Inc.
1285 Ave of the Americas, 35th Flr,
New York
NEW YORK 10019-6028
We have audited the accompanying balance sheet of Save The World Technologies
Inc. (a development stage enterprise) as at September 30, 1999 and the related
statements of operations, stockholder's equity and cash flows for the period
January 1, 1999 to September 30, 1999. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
During this fiscal quarter the company decided to disclose its assets at a more
realistic valuation. We are not experts in the valuation of intellectual
properties, but have instead relied upon the valuation of acknowledged experts
in this field appointed by the company.
In our opinion, except for our comments above, the financial statements referred
to above present fairly, in all material respects, the financial position of
Save The World Technologies Inc. as of September 30, 1999 and the results of its
operations and its cash flows for the period January 1, 1999 to September 30,
1999, in conformity with generally accepted principles.
/s/ Hoiberg & Co
..........................................
AUDITOR
November 18, 1999
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
-------------------------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1999
------------------
1. ORGANISATION:
-------------
The Company was incorporated on February 20, 1996 in the State of Nevada and to
engage initially in the financing of, or otherwise assist in the research,
development, design and marketing of technologies, patents and processes and the
acquisition of operating or start-up companies. The Company's fiscal year end is
December 31, 1999.
2. BASIS OF PRESENTATION:
----------------------
At present the Company is in its production, planting of its tree and
development of it's other technology's stage and its other activities to date
have been limited principally to the investigation and research of prospective
acquisition targets.
3. DEFERRED OPERATING COSTS
------------------------
The directors of the company have agreed to carry all organisational and
operating expenses until some time in the future. The directors agree that they
have no entitlement to claim such costs against the company until such time as
they present a full accounting to the company.
4. DEFERRED OFFERING COSTS:
-----------------------
Expenses incurred in connection with the Rule 504 offering will be deferred
pending completion of the listing, at which time they will be charged against
the proceeds of the original offering. If the listing is not completed, the
deferred offering costs will be expensed immediately.
5. CAPITALISATION:
---------------
The Company is authorised to issue 20,000,000 common shares with a par value of
$0.0001. As of February 20,1996, the Company issued a total of 18,000,000 shares
of common stock to its President, and Chairman of the Board of Directors, Mr.
Jeffrey Muller and the Muller Group, for a total consideration of $1,800
(approximately $0.0001 per share). Since that time the company has sold a
further 10,000 shares to investors in the Rule 504 offering.
6. CONFLICTS OF INTEREST:
----------------------
Management of the Company has other business interests to which they devote a
small portion of their time. Mr. Jeffrey Muller (President and Chairman of the
Board of Directors) is a director of other companies at the present time.
The Company has paid no rent to date, as it is using space provided by Mr.
Muller.
7. COMMITMENTS & CONTINGENCIES:
----------------------------
There are no known commitments or contingencies, except as follows. The company
currently leases and operates a tree plantation and nursery on properties owned
by the Muller group of companies in Australia. When the Board of the Company
determines that the Company is in an appropriate financial condition, it is
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
-------------------------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1999
------------------
the intention of the Company to purchase the plantation and nursery from the
relevant existing owner. These purchases will be at a current market valuation
at the time of acquisition and will be determined by an independent appraiser
and registered valuer.
8. POTENTIAL INABILITY TO SERVE PROCESS AND/OR ENFORCE JUDGEMENT ON
----------------------------------------------------------------
DIRECTORS:
----------
Mr. Jeffrey Muller (President and Chairman of The Board of Directors) is a
citizen of Australia and a resident of Australia. No assurances can be given
that potential litigants and/or investors who wish to commence litigation
against Mr. Muller, will be capable of effecting valid service of process on Mr.
Muller or if litigation is commenced and judgement rendered against Mr. Muller
that such judgement would ever be enforced. Additionally, no assurances can be
given that any foreign court would enforce judgement secured in United States
Courts against Mr. Muller. The Company has not received any opinion of counsel
on these matters.
9. METHOD OF ASSET VALUATION
-------------------------
The company has decided to reflect the valuation of its assets in its balance
sheet. After due consideration and having requested a valuation from
acknowledged experts in the field, the company has increased its balance sheet
disclosure to reflect a more market related valuation of its assets. The company
has chosen to discount by up to 50% the valuations prepared on its behalf.
<PAGE>
<TABLE>
SAVE THE WORLD TECHNOLOGIES INC
-------------------------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
STATEMENT OF STOCKHOLDER'S EQUITY
---------------------------------
FOR THE PERIOD FEBRUARY 20 1996 (INCEPTION) TO SEPTEMBER 30, 1999
-----------------------------------------------------------------
<CAPTION>
Common Stock
Additional
Shares Amount Paid In Capital
<S> <C> <C> <C>
Date of Inception - February 20 1996
February 1996 Issuance of
Common Stock for Cash 18,000,000 $ 1,800 $ nil
----------
Issuance of Section 504 Stock 10,000 $ 1 $ 99,999
Balance September 30, 1999 18,010,000 $ 1,801 $ 99,999
---------- ---------- ----------
</TABLE>
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
-------------------------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
STATEMENT OF OPERATIONS
-----------------------
FOR THE PERIOD JANUARY 1, 1999 TO SEPTEMBER 30, 1999
----------------------------------------------------
Gross Income nil
Organisational Expenses nil
-----------
NET (LOSS) $ nil
===========
See notes to financial statements
<PAGE>
SAVE THE WORLD TECHNOLOGIES INC
-------------------------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
BALANCE SHEET
-------------
AS AT SEPTEMBER 30, 1999
------------------------
ASSETS
- ------
CURRENT ASSETS:
Cash at Bank 351
Cash on hand 1,800
-------------
$ 2,151
FIXED ASSETS:
Cars and Machinery (at valuation) 150,000
Tissue Cultures in stock 350,000
Kiri Super Trees in stock 4,825,000
Plantation Stock (at valuation) 1,250,000
Laboratory Equipment (at valuation) 250,350
Established Kiri Super Trees (at valuation) 9,500,000
-------------
$ 16,325,350
INTELLECTUAL ASSETS
Kiri Super Tree Intellectual Property (to be revalued) 1
Air Engine Technology (at valuation) 150,000,000
-------------
$150,000,001
-------------
TOTAL ASSETS $166,327,502
LIABILITIES & STOCKHOLDERS EQUITY
LIABILITIES:
Loan - J & L Muller $ 20,700
-------------
$ 20,700
STOCKHOLDERS EQUITY:
Common Stock $0.0001 par value (Note 3)
Authorised 20,000,000 shares
Issued and Outstanding 18,010,000 $ 1,801
Additional Paid in Capital $ 99,999
-------------
$ 101,800
Loss Incurred from prior year trading $ 20,700
Asset Revaluation Reserve $166,184,302
Total Stockholder's Equity $166,306,802
-------------
TOTAL LIABILITIES & STOCKHOLDERS EQUITY $166,327,502
- ---------------------------------------- ------------
<PAGE>
[Hoiberg & Co.
Logo Here]
CHARTERED ACCOUNTANTS
BUSINESS ADVISORS
Suite 19, First Floor, Plaza Home Centre, 27 Evans Street
P.O. Box 701 Maroochydore Q 4558
Tel: 61 07 5443 7600
Fax: 07 5443 2435
Email:[email protected]
November 18, 1999.
The Board of Directors
Save the World Technologies Inc.
1285 Ave of the Americas, 35th Flr,
New York
NEW YORK 1019-6028
Dear Sir,
We refer to your recent request in relation to the financial accounts for the
period ended September 30, 1999.
In regards to the matters raised, we respond as follows:
(1) The accounts have been prepared in accordance with generally accepted
accounting principles (GAAP).
(2) The amounts spent by the directors furthering the development of the
inventions have been either borne by the existing shareholders or
capitalised in the books of account.
We trust that this answers your queries as raised. Should you require any
further information, please do not hesitate to contact the writer.
Yours Faithfully,
/s/ Kevin Hoiberg
KEVIN HOIBERG
HOIBERG & CO
CHARTERED ACCOUNTANT
14
FEB 20 1996
DEAN HELLER, SECRETARY OF STATE
3563-96
ARTICLES OF INCORPORATION
OF
Save The World Technologies Inc.
The undersigned natural person, of the age of 21 or more, acting to form a
corporation under the corporate laws of the state of Nevada does hereby state
the following:
I. The name of the corporation shall be Save The World Technologies Inc.
II. The address of the initial registered office is 1155 W. 4th St. #214;
Reno NV 89503, County of Washoe. The name of its initial registered
agent at said address is The Company Corporation Agency, Inc.
III. The purpose for which the corporation is organized shall be: To engage
in any activity within the purposes for which corporations may be
organized, including the buying and selling of real estate and other
property and the borrowing and lending of money, under the Nevada
Business Corporation Act.
IV. The amount of total authorized capital stock of this corporation is
20,000,000 shares of common stock at $.0001 par value.
V. The name and address of the incorporator is:
Bonnie J. Bennett c/o The Company Corporation Three Christina Centre
201 N. Walnut Street, Wilmington DE 19801
VI. The number of directors constituting the initial board of directors is
one, and the name and address of the person who will serve as director
until the first annual meeting of the shareholders or until their
successors are elected are:
Lynette Muller 19 Garden Grove, Carrara, Queensland Australia 4211
VII. The duration of the corporation shall be perpetual.
VIII. Directors of the corporation shall not be liable to either the
corporation or its stockholders for monetary damages for a breach of
fiduciary duties unless the breach involves: (1) a director's duty of
loyalty to the corporation or its stockholders; (2) acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law; (3) liability for unlawful payments of dividends as
identified in NRS 78.300.
I, the undersigned, being the sole incorporator identified above, declare that I
have examined the foregoing this 14th day of February, 1996.
/s/ signature
------------------------
**********************
State of Delaware County of New Castle
THIS IS TO CERTIFY that on February 14, 1996 before me, a notary public,
personally appeared and who I am satisfied is the person named as incorporator
and executor of the foregoing Articles of Incorporation, and who by his/her
signature in any presence has acknowledged the same as his/her voluntary act.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
on the date given above.
REGINA CEPHAS
NOTARY PUBLIC DELAWARE
/s/ Regina Cephas Appointed February 11, 1995
--------------------- Term 4 Years
Notary Public
BY-LAWS
OF
SAVE THE WORLD TECHNOLOGIES, INC.
================================================================================
ARTICLE I - OFFICES
-------------------
The principal office of the corporation in the State of _______________
shall be established and maintained at ______________ in the County of
______________. The corporation may have such other offices, either within or
without the State of incorporation at such place or places as the Board of
Directors from time to time appoint Or the business of the Corporation may
require.
ARTICLE II - MEETING OF STOCKHOLDERS
------------------------------------
SECTION 1. ANNUAL MEETINGS. - Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State,
and at such time and date as the Board of Director; by resolution, shall
determine and as set forth in the notice of the meeting. In the event the Board
of Directors fails to so determine the time, date and place of the meeting, the
annual meeting of stockholders shall be held at the registered office of the
corporation on
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
may transact such other corporate business as shall be stated in the notice of
the meeting.
SECTION 2. OTHER MEETINGS. - Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State, as shall be stated in the notice of the meeting.
SECTION 3. Voting. - Each stockholder entitled to vote in accordance
with the terms and provisions of the Certificate of Incorporation and these
By-Laws shall be entitled to one vote, in person or by pro~, for each share of
stock entitled to vote held by such stockholder, but no proxy shall be voted
after three years from its date unless such proxy provides for a longer period.
Upon the demand of any stockholder, the vote for directors and upon any
questions be fore the meeting shall be by ballot. All elections for directors
shall be decided by plurality vote; all other questions shall be decided by
majority vote except as otherwise provided by the Certificate of Incorporation
or and laws of the State of _______________.
<PAGE>
SECTION 4. STOCKHOLDER LIST. - The officer who has charge of the stock
ledger of the corporation shall at least 10 days before each meeting at
stockholders prepare a complete alphabetically addressed list of the
stockholders entitled to vote at the ensuing election, with the number of shares
held by each. Said list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not specified, at the place where the meeting is to be held.
The list shall be available for inspection at the meeting.
SECTION 5. QUORUM. - Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a meeting, a majority in interest of the
stockholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote shall be present. At any such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
SECTION 6. SPECIAL MEETING. - Special meeting of the stockholders, for
any purpose, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the directors
or stockholders entitled to vote. Such request shall state the purpose of the.
proposed meeting.
SECTION 7. NOTICE OF MEETINGS. - Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than fifty days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. - No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the stockholders entitled to vote thereat.
SECTION 9. ACTION-WITHOUT MEETING. - Except as otherwise provided by
the Certificate of Incorporation, whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or the Certificate of Incorporation or
of these By-Laws, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action if
such meeting were held shall consent in writing to such corporate action being
taken.
<PAGE>
ARTICLE III - DIRECTORS
-----------------------
SECTION 1. NUMBER AND TERM. - The number of directors shall be
________________. The directors shall be elected at the annual meeting of
stockholders and each director shall be elected to serve until his successor
shall be elected and shall qualify. The number of directors may not be less than
three except that where all the shares of the corporation are owned beneficially
and of record by either one or two stockholders, the number of directors may be
less than three but not less than the number of stockholders.
SECTION 2. RESIGNATIONS. - Any director, member of a committee or other
officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. - If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL - Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.
SECTION 5. INCREASE OF NUMBER. - The number of directors may be
increased by amendment of these By-Laws by the affirmative vote of a majority of
the directors, though less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders, at the annual meeting or at a special
meeting called for that purpose, and by like vote the additional directors may
be chosen at such meeting to hold office until the next annual election and
until their successors are elected and qualify.
SECTION 6. COMPENSATION. - Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation thereof.
SECTION 7. ACTION WITHOUT MEETING. - Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting, ii prior of such action a written
consent thereto is signed by all members of the board, or of such committee as
the case way be, and such written consent is filed with the minutes of
proceedings of the board or committee.
<PAGE>
ARTICLE IV - OFFICERS
---------------------
SECTION 1. OFFICERS. - The officers of the corporation shall consist of
a President, a Treasurer, and a Secretary, and shall be elected by the Board of
Directors and shall hold office until their successors are elected and
qualified. In addition, the Board of Directors may elect a Chairman, one or more
Vice Presidents and such Assistant Secretaries and Assistant Treasurers as it
may deem proper. None of the officers of the corporation need be directors. The
officers shall be elected at the first meeting of the Board of Directors after
each annual meeting. More than two offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS. - The Board of Directors may
appoint such officers and agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such power and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. - The Chairman of the Board of Directors if one be
elected, shall preside at all meetings of the Board of Directors, and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. - The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except as
the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages, and other contracts in behalf of the
corporation. Except as the Board of Directors shall authorize the execution
thereof in some other manner, he shall execute bonds, mortgages, and other
contracts in behalf of the corporation, and shall cause the seal to be affixed
to any instrument requiring it, and when so affixed the seal shall be attested
by the signature of the Secretary or the Treasurer or an Assistant Secretary or
an Assistant Treasurer.
SECTION 5. VICE PRESIDENT. - Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him by the directors.
SECTION 6. TREASURER. - The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipt and disbursements in book belonging to the corporation. He shall deposit
all moneys and other valuables in the name and to the credit of the corporation
in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a band for the faithful discharge of his duties in such amount and
with such surety as the board shall prescribe.
SECTION 7. SECRETARY. - The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect to do so, any such notice may be given by any person
<PAGE>
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called provided in the By-Laws. He shall record
all the proceedings of the meetings of the corporation and of directors in a
book to be kept for that purpose and shall affix the seal to all instruments
requiring it, when authorized by the President, and attest the same.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES. - Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
---------
SECTION 1. CERTIFICATE OF STOCK. - Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the chairman or vice. chairman of the board of directors,
or the president or a vice-president and the treasurer or an assistant
treasurer, or the secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be authorized to issue
more than one class of stock or more than one series of any class, the
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof, and the qualifications,
limitations, or restrictions of such preferences and/or rights shall be set
forth in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, provided
that, there may be set forth an the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, a statement
that the corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights. Where a certificate is countersigned (1) by a transfer agent other than
the corporation or its employee, or (2) by a registrar other than the
corporation or its employee, the signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES. - New certificates of stock may be issued
in the plate of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost of destroyed certificate or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against it on
account of alleged loss of any such new certificate.
SECTION 3. TRANSFER OF SHARES. - The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other persons as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
SECTION 4. STOCKHOLDERS RECORDS DATE. - In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled
<PAGE>
to exercise any rights in respect of army change, conversion, or exchange of
stock, or for the purpose of any other lawful action, the Board of Directors may
fix, in advance a record date, which shall nor be more than sixty nor less then
ten days before the day of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting provided, however, that the Board of Directors may fix a new record date
for the adjourned meeting.
SECTION 5. DIVIDENDS. - Subject to the provisions of the Certificate of
Incorporation the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividends there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as time
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL - The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL STATE OF________________________________". Said seal may
be used by causing it or a o facsimile thereof to be impressed or affixed or
otherwise reproduced.
SECTION 7. FISCAL YEAR. - The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS. - All checks, drafts, or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the corporation shall be signed by officer or officers, agent or agents of
the corporation, and in such manner as shall be determined front time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. - Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly stated, and any notice so required shall be deemed to be sufficient if
given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
Whenever any notice whatever is requited to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation or these By-Laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed proper notice.
ARTICLE VI - AMENDMENTS
-----------------------
These By-Laws may be altered and repealed, and By-Laws may be made at
any annual meeting of stockholders or at any special meeting thereof if notice
thereof is contained in the notice of such special meeting by the affirmative
vote of a majority of the stock issued and outstanding or entitled to vote
thereat, or by the regular meeting of the Board of Directors, if notice of such
special meeting by the affirmative vote of a majority of the stock issued and
outstanding or entitled to vote thereat, or by the regular meeting of the Board
of Directors, if notice thereof is contained in the notice of such special
meeting.
AGREEMENT
This Agreement entered into as of the 2 day of April, 1997, by and
between Terrence Edward Muller ("Seller") and Save the World Technologies Inc.
("Buyer"), a Nevada corporation having its principal office at 120 Broadway,
Suite 3660, New York, NY 10271 is made with reference to the following facts.
A. Seller controls the ownership of certain plans, drawings, secret
know-how, technology, methodology, prototypes, machinery and equipment relating
to a single piston one cylinder motor complete with all associated fittings
together with a four cylinder 902 Kubota air converted motor and all associated
fittings and compressor known as the "Air Motor" (the "Air Motor") together with
certain inventions, letters patent, patent rights, and patent applications and
has adopted certain unregistered trademarks, service marks, logotypes, and trade
styles, for use therewith.
B. Buyer desires to purchase and Seller desires to Sell to Buyer
seventy percent (70%) of the right, title and interest of Seller in and to the
Air Motor, including all of its patent rights, unregistered trademarks and all
other property rights of any kind or character as hereinafter provided.
1.0 DEFINITIONS
1.01 AIR MOTOR. The term "Air Motor" shall mean all of Seller's
drawings, blueprints, sketches, diagrams, specifications, bills of material,
manufacturing cost records, cost estimates, engineering records, engineering
notes and notebooks, service manuals, service instructions, manufacturing
instructions, assembly instructions, testing instructions, operating
instructions, parts lists, know-how data, technology, methodology, prototypes,
programs, models, tools, pattern, and other physical and written descriptions
and embodiments, including parts, subsystems and subassemblies related to a
single piston one cylinder motor complete with all associated fittings together
with a four cylinder 902 Kubota air converted motor and all associated fittings
and compressor and a prototype machine for the production of an Air Motor, which
Seller has manufactured and tested which are possessed by Seller as of the date
hereof, together with any future improvements thereto or betterments thereof
whether made by Seller or Buyer.
1.02 MARKS. The tern "Marks" shall mean all of Seller's trademarks,
trademark lights, service marks, trade usages, logotypes all of which are
unregistered, and all other rights including goodwill worldwide relating to, or
indicating the source or origin or, the Air Motor.
1.03 PATENT RIGHTS. The term "Patent Rights" shall mean all concepts,
ideas, inventions, trade secrets, know-how (whether patentable or not) related
to the Air Motor, all patent applications, patents and other industrial property
rights throughout the world (including all substitutions, divisions,
continuations, continuations-in-part, renewals, reissues, extensions and the
like), all rights of action at account of past, present or future use of the Air
Motor, or any related rights to file for applications for patents and like
protection for inventions relating to the Air Motor in any country or
jurisdiction throughout the world, all international rights of priority
associated with the Air Motor and related rights, and all similar derivatives
rights of Seller relating to the Air Motor, including proceeds thereof.
1.04 COPYRIGHTS. The term "Copyrights" shall mean all of Seller's
copyrights, all of which are unregistered and all information, descriptive
material, computer programs, sales bulletins, catalogs, product literatures,
advertising materials, customer lists, prospect lists, outstanding quotations,
sales leads, and such other documents related to the Air Motor as may be of
assistance to Buyer connection with the promotion of sales of the Air Motor,
whether or not copyrighted or copyrightable.
<PAGE>
1.05 NET REVENUES. The term "Net Revenues" shall mean all revenues of
any kind or nature whatsoever, whether in cash or in kind, actually received by
or applied on behalf of Buyer or any person or entity which is an Affiliate or
licensee or sublicensee of the Air Motor from Buyer, from the sale, rental or
other disposition of products or processes utilizing the Air Motor (including
for this purpose spare or repair parts, modifications, improvements, and
attachments thereto) to any person or entity which is not an Affiliate of Buyer,
excluding, however, all interest, finance charges, import, export or customs
duties or similar sales and excise taxes, shipping charges, packing charges,
insurance or other separately related charges relating to transportation charges
paid by Buyer directly with respect to the sale; and less (i) genuine trade
discounts and quantity discounts, if any, allowed and taken and (ii) genuine
allowances or credits, if any, given to customers on account of settlement of
complaints, rejections or returns with respect to the sale or other disposition,
all as actually invoiced or billed to customers.
1.06 AFFILIATE. The term "Affiliate" means any corporation or other
business entity with respect to which Seller or buyer as the case may be,
directly or indirectly owns or controls the majority of the voting stock, or has
the right or power to control its operating management decision.
2.0 SALE OF AIR MOTOR AND OTHER INTANGIBLES
2.01 SALE OF ASSET. Subject to the terms and conditions hereunder,
Seller agrees to assign, sell, transfer, grant and convey and does hereby
assign, sell, transfer, grant and convey unto Buyer seventy percent (70%) of his
right, title and interest throughout the world in and to the Air Motor, Marks,
Patent Rights and Copyrights. Seller agrees to promptly execute and deliver all
papers and perform such other acts which are reasonably deemed necessary or
appropriate by Buyer to transfer to Buyer or perfect to Buyer the right title
and interest hereby conveyed, including separate assignments in the form of
Exhibit "A" attached hereto, all of the same being in from and substance
reasonably satisfactory to the counsel for Seller and Buyer. As the owner of
seventy percent (70%) of the Air Motor, Marks, Patent Rights and Copyrights,
Buyer has the right to grant licenses and sub-licenses thereunder but to protect
Seller's security interest, Buyer shall provide Seller promptly with a copy of
each such licenses or sub-licenses shall be on terms consistent with and subject
to the Buyer's obligations hereunder.
2.02 RESTRICTIONS ON SELLER. The sale herein is exclusive in all
respects and Seller agrees that during the term of this Agreement, neither
Seller nor any of its officers, employees, agents or Affiliates will, except as
expressly requested by Buyer otherwise required to carry out the provisions of
this Agreement.
a. Manufacture or sell the Air Motor or related equipment, either for its own
account or on behalf of any other person or organization; or
b. Provide technical information or assistance relating to the Air Motor to any
person or organizations other than Buyer or persons authorized by Buyer to
receive such information or assistance; or
c. Assist any other organization in engaging in the design, development,
engineering, manufacture or sale of the Air Motor or related equipment; or
d. Directly or indirectly reveal to anyone or utilize in any way the Air Motor
(i) except as required by this Agreement or (ii) as expressly requested by the
Buyer. This provision, however, shall not apply to information which is, or
through no fault of Seller becomes publicly available.
2.03 EMPLOYEE INVENTION AND SECRECY AGREEMENT. Seller undertakes that
it shall use its best efforts to obtain from each of his current employees, who
has spent any substantial time working on the Air Motor and/or who has any trade
secrets, confidential information or unpublished know-how relating to the Air
Motor and whose name appear on an Employee Invention and Secrecy Agreement
attached hereto as Exhibit "B", and deliver the same to Buyer as soon as
practicable after the date hereof; provided however; if any such employee has
heretofore entered into such an agreement with Seller, a copy thereof shall be
<PAGE>
so delivered by Seller to Buyer. Further, as soon as practicable after the date
of this Agreement, Seller shall mail to each of such persons listed on Exhibit
"B" the Notice in the form attached hereto as Exhibit "C", at the address of
such person last known to the Seller.
2.04 FUTURE ASSURANCES. Subject to the limitations set forth elsewhere
in this Agreement, Seller covenants and agrees to cooperate with Buyer, and upon
request from Buyer to execute and delivery such documents and take such action
as may be reasonably requested in order to fully carry out the intent and
purpose of this Agreement. Such cooperation shall include, but not be limited,
to: Prompt execution of all papers and performance of all other acts which are
reasonably necessary to transfer to Buyer or perfect in Buyer the right, title,
and interest in the assets hereby conveyed, including separate assignments in
the form of Exhibit "A" attached hereto; provided, however, that unless
otherwise agreed to by Seller, such cooperation shall be undertaken and given
during Seller's normal business hours, at its business office 19-21 Garden
Grove, Carrara QLD 4211, at no additional cost or expense to Buyer.
3.0 PAYMENT OF PURCHASE PRICE
3.01 PAYMENT OF VARIABLE PURCHASE PRICE. Subject to adjustment in
accordance with the provisions of Paragraph 3.05 hereof; the purchase price for
all of the assets sold shall be an amount equal to the total sums payable to
Seller pursuant to the provisions of this Paragraph 3.01. Subject to the terms
and conditions hereof; including termination, in payment of the purchase price
for the assets being conveyed hereunder, Buyer agrees to:
a. Pay Seller an amount equal to twenty eight thousand Australian dollars
(A$28,000); and
b. Issue and transfer 250,000 shares of Common Stock of Buyer to Seller within
30 days of the Agreement and a further 1,000,000 shares (making it a total of
1,250,000 shares) within 365 days of this Agreement.
4.0 SELLER'S COVENANTS
4.01 MARKETING ASSISTANCE. Seller covenants and agrees is requested by
during the term of this Agreement, to reasonably assist Buyer in obtaining
license agreements with third parties, under which such third parties would be
licensed to produce a motor in accordance with the Air Motor and the related
Patent Rights.
4.02 (a) PROSECUTION OF PATENT APPLICATIONS. Seller covenants and
agrees, at the Buyers expense, to prosecute all pending United States Patent
Applications (and foreign counterparts thereof; whether or not now pending) and
foreign patent applications and also any applications with respect to inventions
relating to the Air Motor and invented prior to the date hereof. Seller shall
not have the obligation to appeal any final determination of the Patent Examiner
except to the extent set forth below. Seller agrees to provide Buyer wit a copy
of every office action, amendment and other communication to or from Seller with
respect to such applications and Seller further agrees to provide Buyer with
reasonable prior notice in writing of all material decisions and elections of
Seller with respect to such applications. If so requested by Buyer counsel for
Seller shall collaborate with such other counsel as Buyer may designate. In the
event that Seller shall fail to perform any of its obligations under this
subparagraph with respect to such Continuing Applications, Buyer shall have the
right to direct or takeover such activities as Buyer in its sole discretion may
reasonably determine to be in its best interests. Thereupon, Seller agrees to
prosecute through appeal to the Patent Office Board of Appeals and the Court of
Customs and Patents Appeals (or alternatively, the United States district Court,
as may be appropriate under the circumstances), all Continuing Applications
finally rejected by the patent Examiner, including rejected claims reasonably
believed by Seller & Buyer to be allowable and which would provide material
<PAGE>
protective for the Air Motor as being practiced at the time or as expected by
Buyer to he practiced in the future. In the event that Seller decides not to
appeal any final rejection of any other patent application, Seller shall notify
Buyer in writing of Seller's decision within such available time as may be
reasonably necessary for Buyer to file and prosecute such appeal at its own
expense, and Seller shall cooperate with Buyer in doing so.
b. PROSECUTION OF ADDITIONAL PATENTS AND TRADEMARK REGISTRATION. Seller
shall cooperate with Buyer and shall furnish to Buyer its nominees, or patent
attorneys, any additional information or documents in the possession of Seller
which are necessary to enable Buyer to perform its obligations under Paragraph
5.03.
4.03 DEFENSE OF INFRINGEMENT SUITS. Buyer agrees to defend and Seller
agrees to cooperate fully and use its best efforts to assist Buyer in thee
defense of any suit, claim or other action by a third party alleging that the
Air Motor infringes any patents or other rights of such other third party, Buyer
shall timely pay all legal fees, direct out-of-pocket expenses, damages,
judgments & settlements reasonably incurred or entered into by it as a result of
such claims, suits or actions. All decisions regarding such claims, suits, or
actions shall be made by Buyer in its sale discretion, except that Buyer shall
provide reasonable prior notice of all such decisions and an opportunity for
Seller's counsel to collaborate and advise with respect to any settlement
thereof. Further, Seller shall have the right, as its own expense, to negotiate
separately with any third party and reach independent settlement with such third
party with respect to any payment or other settlement with respect to one
hundred percent (100%) of such third party's claim and in the event of any such
settlement Buyer shall have no right of offset and Seller shall have no
obligation of reimbursement with respect to settlement of that claim.
4.04 PROSECUTION OF INFRINGEMENT SUITS. Buyer shall provide reasonably
prompt notice to Seller upon becoming aware of possible infringement of any
Patent Rights by any such party. In any such event, except as provided below,
buyer shall have sole right, but not the obligation, to file and prosecute suit
at its own expense and to collect damages and other compensation, provided,
however, that Buyer shall report and make payment to Seller with respect to the
amount of any such recovery, net of all costs and expenses incurred therewith,
in accordance with the provisions of Paragraph 3.01c. as if the infringer were a
licensee. Buyer shall provide reasonable prior notice of all decisions With
respect to any infringement actions, and an opportunity for Seller's counsel to
collaborate and advise with respect thereto. If Buyer does not take action
against any third party infringer within a reasonable time, Seller then shall
have the sole right to do so in the name of Buyer, but at Seller's own expense,
and to collect damages and other compensation therefor.
4.05 ENGINEERING ASSISTANCE. If during the period from the date of this
Agreement until 12 months following the date on which the production prototype
machine identified in Paragraph 5.01 is placed in normal production operation,
any material design problems, errors or omissions become evident which cannot
reasonably be resolved by Buyer despite its efforts to do so, Seller agrees
upon written request from Buyer, to use its best efforts to provide the services
of a qualified engineer familiar with the Air Motor and machine design as may be
reasonably necessary under the circumstances, the costs be met by the Buyer.
4.06 COOPERATION BY SELLER. Seller agrees to cooperate with Buyer and
take any actions necessary so that Buyer may enjoy to the fullest extent the
benefits of this Agreement including, but not limited to, prompt execution of
all petitions, oaths. statements, specifications, declarations and other papers,
filings of substitute, divisional, continuing, reissue or additional patent
applications in the United States and/or foreign countries, filing of
applications for reissuance of letters of patent, filing of proceedings relating
to patent prosecution, interference, cancellation, opposition, infringement,
trade slander, priority contest, and breach of contract, and performance of such
other acts and rendering of such assistance and cooperation, including
<PAGE>
testifying, that are reasonably necessary for filing, prosecuting of
applications for registration of any Marks and Copyrights which Buyer may wish
to register from time to time, either in the United States Patent and Trademark
Office or any state or anywhere else in the world; provided, however, that (i)
any and all of such documents shall be prepared by Buyer at its cost and
expense, (ii) any and all such documents shall be in form and substance
reasonably satisfactory to Seller and its counsel, (iii) all such actions,
including depositions, but excluding testifying in other court proceedings
unless otherwise agreed to by the Seller, shall be performed at Seller's
principal place of business at 51 Sophie Avenue, Broadbeach Waters 4218, during
its normal business hours, and (iv) Buyer shall promptly reimburse Seller for
all out-of-pocket costs and expenses reasonably incurred by it in rendering such
cooperation, including attorneys' and accountants' fees and costs and traveling
expenses.
5.0 SELLERS COVENANTS
5.01 PRODUCTION PROTOTYPE MACHINE. Within twenty-four (24) months of
Seller's receipt of the Air Motor from Seller, Buyer shall expend such time,
effort and money (not to exceed $200,000) as may be reasonably required to
complete manufacture of a prototype machine utilizing the new design for the Air
Motor suitable for testing. Upon completion of the prototype, Buyer shall use
reasonable efforts (i) to commence testing thereof and to make such
modifications as Buyer may determine reasonably necessary to meet normal market
specifications, and (ii) to obtain a customer for said prototype machine or
cause the machine to be put into use by Buyer or any Affiliates producing Air
Motors for sale to customers. Nothing herein ,however, shall relieve Seller of
its obligations to render Engineering Assistance as required under Paragraph
4.05 hereof.
5.02 MARKETING. Promptly following the date on which payment becomes
due from Buyer's customer for the production prototype machine (whether under
Sale or lease) or, if the production prototype machine is put into use by Buyer
or an Affiliate, the date on which payment becomes due from the customer of
Buyer or its Affiliate for the Air Motor from the first commercial production
run of such machine, as the case may be (which date is hereafter referred to as
the "Prototype Machine Acceptance Date"), Buyer agrees to engage in reasonable
marketing efforts for the purpose of creating a market for the sale, lease or
license of additional machines, and to promote and popularize the Air Motor,
including the preparation and distribution of promotional literature for use in
the promotion of sales of products utilizing the Air Motor, the recruiting and
maintenance of a sales personnel force commensurate with Buyer's reasonable
projection of the market for the Air Motor and Net Revenues, and to continue to
engage in such efforts until the termination of this agreement, provided,
however, Buyer shall be entitled to submit to Seller promptly after the
Prototype Machine Acceptance Date and annually thereafter during the term of
this Agreement a detailed marketing plan which, if not disapproved with specific
objections by Seller within thirty(30) days, shall be deemed satisfactory. In
the event that the parties are unable to agree on the marketing plan, the matter
shall be submitted to arbitration in accordance with Paragraph 12.01. Buyer
agrees to use reasonable efforts to continually implement the marketing plan
during the period covered thereby and when necessary modify the same to reflect
changed marketing conditions, if any, and further agrees to keep Seller timely
informed of the nature, extent and results of all such sales and marketing
efforts.
5.03 IMPROVEMENTS AND ADDITIONAL PATENTS. Buyer shall promptly disclose
to Seller all improvements to the Air Motor by Buyer and, Buyer at its sole cost
and expense, shall promptly prepare, file and prosecute applications to register
any additional applications for letters patent which provide material protection
for the Air Motor and related equipment products and processes, as being
practiced at that time or as expected by Buyer to be practiced in the future in
the United States and such foreign countries as Buyer may reasonably determine
are likely to have market condition that warrant obtaining such protection.
Buyer agrees, at its sole cost and expense, to prosecute through appeal to the
Patent Office Board of Appeals and the Court of Customs and Permit Appeals (or
alternatively, the United States District Court, as may be appropriate under the
circumstances), all such patent applications finally rejected by the Patent
Examiner including rejected claims reasonably believed by Seller or buyer to be
allowable and which would provide material protection for the Air Motor as being
practiced at the time or as expected by Buyer to be practiced in the figure.
Buyer agrees to provide Seller with a copy of every Office Action, amendment and
other communications to or from Buyer with respect to such applications. If so
requested by Seller, counsel for Buyer shall collaborate with such other counsel
as Seller may designate. In the event that Buyer shall fail to perform any of
<PAGE>
its obligations under this subparagraph, Seller shall have the right to direct
or take over such activities in the name and on behalf of Buyer as Seller in its
sole discretion may reasonably determine to be in its best interests. Thereupon,
buyer shall reimburse Seller for the reasonable expenses actually incurred by
Seller for prosecuting such applications. In the event that Buyer decides not to
appeal any final determination of the Examiner, Seller shall have the right to
file and prosecute such appeal at its own expense. Seller, at its cost and
expense, shall in good faith have the right to obtain such protection in any
country in which buyer elects not to do so, and Buyer shall cooperate with
Seller in doing so.
5.04 MAINTENANCE OF PATENT RIGHTS. Buyer agrees not to abandon, and
agrees to pay all taxes and fees necessary to maintain and renew, issued patents
which provide material protection for the Air Motor as being practiced in the
future in the United States, and in all other countries where the Air Motor is
being marketed or intended to be marketed in the future by Buyer and the
marketing demand warrants such action. In the event Buyer elects not to pay any
maintenance fee or file for renewal of any Patent rights because that are not
being practiced at the time or expected to be practiced in the future, or
because of lack of market demand Buyer shall notify Seller, in writing, of
Buyer's intention sufficiently in advance of the date by which such payment or
filing is due to afford Seller a reasonable opportunity to pay such fee or file
such renewal, and Buyer shall cooperate with Seller in doing so.
5.05 SECRECY AND NON-COMPETITION. During the term of this Agreement,
Buyer and its Affiliates will provide the same degree of protection for all
trade secrets communicated to Buyer by Seller and identified at that time as
"Seller Trade Secrets" as Buyer exercises with respect to its own information of
similar character and importance. Further, in the event of the termination of
this Agreement for any reason, Buyer will not engage in or participate with
anyone in the manufacture, sale, lease or distribution of machines utilizing any
aspect of the Air Motor which utilizes any of the Seller Trade Secrets included
in the Air Motor, except as otherwise specifically provided in Paragraph
3.01(b). This through no fault of Buyer becomes, publicly available, or is
disclosed by Buyer to customers or potential customers, licensees or
sublicensees in the normal course of business. In furtherance of this provision,
Buyer shall use its best efforts to obtain from each of its employees or agents
(present or future) who will spend substantial time working on the Air Motor
and/or who will have any trade secrets, confidential information or unpublished
know-how relating to the Air Motor and Employee Invention and Secrecy Agreement
substantially in the form of the Employee Invention and Secrecy Agreement
attached hereto as Exhibit "B", and shall include appropriate secrecy provisions
in all contracts with its customers, licensees and sublicensees of the Air Motor
or parts thereof, of which agreements Seller, as secured party hereunder, shall
be a beneficiary.
6.0 WARRANTIES
6.01 WARRANTIES BY SELLER. Seller expressly warrants and represents
Buyer that: a) Seller has the power, right and authority to enter into and
perform its obligations under this Agreement. All necessary action has been
taken to authorize the execution, delivery and performance of this Agreement.
This Agreement when duly signed by Seller will be a binding obligation of
Seller, enforceable in all respects; b) Seller is the owner of Patent rights,
and Copyrights, and to the best of its knowledge the Marks. including all common
law, statutory and other right therein, free and clear of any rights or claims
or licenses of others, and has not entered into any agreement or contracts
authorizing others to use the Patent Rights, Marks and Copyrights and Seller has
not requested any person or entity to cease or modify any activity or product or
to take out a license for such activity or product by reason of past, present or
prospective infringement of any Patent Rights, Marks or Copyrights; c) to the
best of Seller's knowledge the existing patents included in the Patent Rights
are valid and enforceable; d) to the best of Seller's knowledge, use of the
Marks, Copyrights and the manufacture, use and sale of the Air Motor will not
constitute unfair competition or trade secret infringement; e) there is no
pending or threatened litigation related in any way to the validity, use or
<PAGE>
enforceability of any of the Marks, Patent Rights or Copyrights, and all of the
right, title and interest in and to the Air Motor, marks and Copyrights acquired
by Buyer under this Agreement are free and clear of all liens, encumbrances, or
other claims of creditors of Seller; f) upon execution and delivery of the
Agreement and the documents identified herein, Seller will have conveyed to
Buyer good and clear title to the Air Motor, Patents, and Copyrights, and to the
best of its knowledge the Marks, free and clear of all liens and encumbrances;
g) Seller has entered into no contracts or other obligations with respect to the
Air Motor except those specifically set forth on Exhibit D, the benefits of
which have been assigned to Buyer, and Seller has not and will not enter into
any agreement or other obligation which in any way limits or would limit the
rights of Buyer to the Air Motor, Patents, Marks and Copyrights; h) this
Agreement and all obligations and undertakings by Seller hereunder are in
compliance with the laws of the State of NEVADA and all other applicable laws
included in Article (bulk sales) of The Uniform Commercial Code, all orders and
inquiries of which Seller is aware as of the date hereof regarding possible
sale, lease, or license of the Air Motor have been disclosed to Buyer in
writing; j) all test results, complaints and other data and communications known
to Seller as of the date of this Agreement, evidencing any defect or problem in
the Air Motor with respect to the design, manufacturability, operation, yields,
production efficiencies, reliability, customer acceptance, governmental
acceptance or approval has been sought, failed to approve the Air Motor Produced
thereby.
6.02 WARRANTIES BY BUYER. Buyer represent and warrants to Seller as
follows: a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, United States; b) All necessary
and corporate actions have been taken to authorize the execution, delivery and
performance of this Agreement by Buyer; and c) This Agreement when duly signed
by Seller and Buyer will be a binding obligation of buyer enforceable in
accordance with its terms.
7.0 TERMINATION.
7.01 TERMINATION FOR DEFAULT OF BUYER. This Agreement may be terminated
by Seller in the event; (a) Buyer fails to make any payment as provided under
Paragraph 3.01 hereof provided however, Seller shall have first given written
notice to Buyer specifying such failure and Buyer shall not have cured such
failure within thirty (30) days after receipt of such notice; or (b) Buyer shall
fall to substantially and continuously satisfy its promotion and exploitation
obligations under Paragraph 3.02 after written notice to buyer specifying such
failure except on account of a material breach by Seller of a material breach by
Seller of a material warranty hereunder; or ,c) Buyer shall fail to perform any
other obligation under this Agreement (excluding obligations under paragraph
5.02), provided, however, Seller shall have first given written notice to Buyer
specifying such failure and Buyer shall have not cured such failure with thirty
(30) days after receipt of such notice, and further provided, that is such
failure by its nature is not readily curable within such initial time period but
Buyer has undertaken good faith efforts to cure such failure, Buyer shall have
an additional twenty-one (21) days within which to complete such action,
provided the default may be reasonably expected to be cured within said
additional 21 Days. All cure periods shall be extended during the pendency of
any bona fide dispute between Seller and Buyer as to whether the required
performance giving rise to the claimed default is due or owing. provided,
however, any bona fide dispute between Seller and Buyer as to the invalidity of
any patents not at the time judicially determined to be invalid will be
controlled by Paragraph 3.05.
7.02 MISCELLANEOUS TERMINATION BY SELLER. Seller shall have the right
to terminate the Agreement upon written notice to Buyer in the event that; (a)
Buyer files a voluntary petition under any Chapter of Bankruptcy Code or similar
insolvency law of any jurisdiction or proposes a dissolution or liquidation (SEC
11 U.S.C. @ 365(e), discussed briefly @ 11.21.01 supra); or (b) Buyer has filed
against it any petition under any Chapter of the Bankruptcy Code or similar
insolvency law of any jurisdiction, which petition is not dismissed within (See
N. 1 supra); or (c) Buyer, within three years after the date of delivery of the
Air Motor as described in Paragraph 2,04, has not commenced volume production of
machines utilizing the Air Motor or booked significant revenues from licenses or
Marks, Patent Rights or Copyrights relating to the Air Motor, provided, however,
that said 3 year period shall be extended for successive additional periods if
Buyer has met the requirements of Paragraph 5.02 during the 3 year period or
<PAGE>
each subsequent extension period, as the case may be; or (d) Buyer on or before
the 3 year anniversary of delivery date described in paragraph 2.04 has not
achieved the Prototype Machine Acceptance Date or has not received an accepted
order which would cause such Date to bet attained by Buyer within a reasonable
time thereafter. In connection with subparagraphs (c) and (d) above Buyer and
Seller agree to meet in good faith and exchange information and views with the
respect to the present and projected production of machines utilizing the Air
Motor and the present and projected market for the Air Motor. It is further
provided that should the provisions of subparagraphs (a) or (b) above be invalid
or unenforceable under then applicable provisions of the Bankruptcy Code or any
similar insolvency law of any jurisdiction, the Trustee in Bankruptcy or Debtor
in Possession of Buyer shall continue to have the same rights and obligations to
perform under this Agreement by such Trustee or Debtor in Possession shall have
the right to terminate this Agreement on 30 days' written notice or such ether
reasonable period of time as may be determined by the court then having
jurisdiction over Buyer.
7.03 TERMINATION BY BUYER. Buyer may terminate this Agreement on
written notice to Seller in the event that:
(a) having complied with Paragraphs 5.01 and 5.02 above, Buyer is
unable to commence production of machines utilizing the Air Motor due to (i)
insufficient pre-production orders, (ii) design defects which are uncorrectable
by the means specified in paragraph 4.05 above, (iii) the issuance of injunction
in any action by a third party against Buyer, provided Buyer shall have fully
satisfied its obligations under Paragraph 4.03 above, or (iv) any other reason
attributable to the design, proprietary position, performance or conduct of
Seller, provided Buyer shall have first given 10 days prior written notice to
Seller specifying its intention to terminate this agreement pursuant to the
provisions of this subparagraph (a); or
(b) Seller shall fail to perform any other obligation under this
Agreement provided, however, Buyer shall have first given written notice to
seller specifying such failure and Seller shall not have cured such failure
within 60 days after receipt of such notice, and further provided, that if such
failure by its nature is net readily curable within such initial time period but
Seller has undertaken good faith efforts to cure such failure, Seller shall have
an additional 60 days. All cure periods shall be extended during the pendency of
any bona fide dispute as to whether the required performance giving rise to the
claim default is due or owing, provided, however, any disputes as to the
invalidity of any patents not at the time judicially determined to be invalid
will be controlled by Paragraph 3.05.
(c) In the event that Buyer, despite its best efforts to fully satisfy
its obligations under Paragraphs 5.01, on or before the anniversary of the
delivery date described in Paragraph 2.04, has not achieved the Prototype
Machine Acceptance Date or has not received an accepted order which would cause
such date to be attained by Buyer within a reasonable time thereafter.
8.0 RIGHTS UPON TERMINATION
8.01 TERMINATION BY SELLER. In addition to any other rights it may have
in law or equity, Seller shall have the following rights upon termination of
this Agreement.
(a) In the event that Seller terminates this Agreement because Buyer
has failed to comply with the performance standards set forth in Paragraph 5.01
or in accordance with the provisions of Paragraphs 7.02 (c) or 7.02 (d) and
Seller elects to terminate this Agreement: (i) title to the Air Motor, Marks,
Patent Rights and Copyrights, to the extent and in the form delivered by Seller
to Buyer, together with drawings of betterments, modifications and improvements
to any production prototype machine built by Buyer, will automatically be deemed
to be acquired or required by Seller upon the effective date of termination of
this Agreement without compensation being or becoming due to Buyer, (ii) Buyer,
at its sole cost and expense, shall promptly thereafter return to Seller all
equipment, machines and documents relating to the Air Motor which buyer
<PAGE>
originally received from Seller, and (iii) subject to the provisions of
Paragraph 8.01(d), the provisions of article 2.0 shall then apply to Buyer in
the same manner as specified therein to be applicable to Seller and Seller shall
have the option to purchase any such machines built by Buyer including the new
prototype machine for an amount equal to the reasonable value thereof, as agreed
by the parties or determined by arbitration in accordance with Paragraph 12.01.
and to purchase any patents or patent applications relating to betterments,
modifications or improvements to any production prototype machine built by Buyer
for an amount equal to all Buyer's costs of obtaining and maintaining such
patents or patent applications. Any such purchase of patent rights shall be
subject to existing rights of Buyer's customers and licensees. Unless exercised
by Seller within thirty (30) days after the afflictive date of termination by
written notice to Buyer, this option shall expire. In the event the parties are
unable to agree to a reasonable price within said thirty (30) day period the
question of price shall he submitted to arbitration. The existence of such a
bona fide dispute, however, shall not delay the delivery of such machines to
Seller by Buyer. After such a termination, Buyer, its affiliates, licensees and
sublicensees will immediately cease and desist from using, manufacturing and
exploiting the Air Motor and Marks.
(b) In the event Buyer does not substantially and continuously satisfy
its promotion and exploitation obligations as set forth in Paragraph 5.02 hereof
except on account of a material breach by Seller of a warranty hereunder, and
Seller elects to terminate this Agreement in accordance with the provisions of
Paragraph 7.01(b) hereof, Seller upon the effective date of the termination of
this Agreement will be deemed to have acquired a fully paid royalty free,
world-wide license from Buyer to manufacture, use and exploit the Air Motor,
Patent Rights, Marks and Copyrights including the right to grant sublicenses
thereunder, which shall be exclusive except as to Buyer's then excluding
licensees and sublicensee; but only as applied to machines and cartons utilizing
the Air Motors sold or leased or licensed by Buyer prior to the effective date
of the termination. In all other respects the provisions of (a) above shall be
applicable.
(c) In the event that Seller terminates this Agreement on account of
the default by Buyer of any sums due and owing to Seller hereunder in accordance
with the provisions of Paragraph 7.01(a) hereof or for any other reason in
accordance with the provisions of subparagraph 7.0l(c) or in accordance with
the provisions of subparagraphs 7.02(a) and 7.02(b) hereof the provisions of (a)
above shall be applicable and, in addition, Seller, as secured creditor, shall
have such other remedies as may then be available to it under law of in equity
including the exercise of its security interest granted herein.
(d) In the event of any termination of this Agreement by Seller in
accordance with the provisions of subparagraphs 8.0l(b) or (c) above, but not
subparagraph (a), Buyer shall have the right to complete the manufacture of any
machines in the process of design, manufacture or delivery and to sell the same,
provided, however, the proceeds thereof shall be subject to the rights of Seller
(i) to recover sums then due and owing to it, and (ii) Buyer shall continue to
have the obligation to report and pay over to Seller the sums due thereon
determined in accordance with the provisions of Paragraph 3.01. Further, in the
event the provisions of subparagraphs (b) or (c) above are applicable upon
Seller's termination of this Agreement, Buyer shall have the right to continue
to receive royalties under any existing licenses or similar agreement with third
parties, subject however, to the obligation to report and pay to Seller the sums
due determined under the provisions of Paragraph 3.01 hereof.
8.02 TERMINATION BY BUYER. In the event Buyer elects to terminate this
Agreement in accordance with the provisions of subparagraphs 7.03(a),(b) or
(c), the provisions of subparagraphs 8.01(a) and 8.01(d) shall be applicable in
the same manner as therein specified to be applicable upon a termination of this
Agreement by Seller and Buyer shall have such other remedies as may then be
available to it under the law.
<PAGE>
9.0 GENERAL LIMITATIONS.
9.01 NO AGENCY, PARTNERSHIP OR JOINT VENTURE. This Agreement does not
render, and nothing herein contained shall be construed to render Buyer or
Seller as an agent for the other or liable for any debts, obligations or
liabilities of the other now existing or to be incurred in the performance of
this Agreement. Nothing in this Agreement shall be deemed or construed to
constitute or create between the parties hereto, a partnership or joint venture.
10.0 NOTICES.
10.01 NOTICES. Except as provided elsewhere in this Agreement, all
statements, payment and documents required or permitted by this Agreement to be
provided or given to either party shall be deemed to have been so provided or
given upon the mailing thereof postage paid by first-class mail, and all notices
required hereunder shall be deemed to have been given upon the mailing thereof
by postage paid certified mail, return receipt requested addressed to such party
as its following address or at such other addresses and to the attention of such
other officers or individuals as it may from time to time designate in writing
to the other party:
If to Seller:
Terrence Edward Muller
51 Sophie Avenue
Broadbeach Waters 4218
If to Buyer:
Save The World Technologies, Inc.
19 Garden Grove
Carrara Qld, 4211
11.0 ENTIRE AGREEMENT.
11.0 ENTIRE AGREEMENT. This Agreement shall represent the entire
agreement by and between Buyer and Seller and all previous agreements between
Buyer and Seller are hereby terminated and superseded. This Agreement shall not
be modified except by an Agreement in writing signed by both parties hereto.
12.0 MISCELLANEOUS.
12.01 ARBITRATION. In the event that the parties are unable to reach
any future agreement specifically provided for herein within thirty (30) days of
commencement of a request for such agreement by either party, the matter shall
be finally settled by arbitration pursuant to the rule then in effect of the
American Arbitration Association. The arbitration shall take place in Australia
if commenced by Seller, or in America (U.S.A.) if commenced by Buyer. Such
arbitration shall not include any issue with respect to breach of this
Agreement, specific performance, damages, injunctive relief or any equitable
relief, all of which may be resolved by an action in law or equity in a court of
appropriate jurisdiction at any time.
12.02 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable for any reason, such provision is fully separable, and shall
thereupon be separated from, the remaining provisions of this Agreement, and the
remaining provisions are nevertheless validated and enforceable as if such of
the provisions held invalid or unenforceable were not a part of this Agreement.
<PAGE>
12.03 INDEMNIFICATION. In the event that any claim or debt is asserted
against Buyer by reason of Seller's failure to pay, satisfy or discharge any
debt relating to the Air Motor, Seller agrees to indemnify Buyer and hold it
harmless against any and all liabilities, damages, losses or other expenses,
including without limitation, attorneys' fees, court costs, judgements and
amounts paid in settlement of such claim or debt.
12.04 HEADINGS. Headings and captions of this Agreement are included
for purposes of convenient reference only and shall not be construed as
limiting, expanding or modifying in any way a text of any paragraph or section.
12.05 PATENT MARKING. Buyer agrees to mark all products sold or leased
under this Agreement with applicable patent numbers in accordance with the law
of the country or countries the law of which applies.
12.06 USE OF MARKS. Buyer shall have the non-exclusive right, but not
the obligation, to use the Marks, but the purchase price shall not be reduced if
Buyer elects not to use the Marks, or if Buyer is prevented from using the Marks
because such infringes prior rights.
12.07 WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall not
affect in anyway derogate the full right to require such performance at anytime
thereafter; nor shall the waiver by either party of a breach of any provision
thereof be held to be a waiver of the provision itself.
12.08 GOVERNING LAW. This Agreement shall be governed by construed in
accordance with the laws of the Commonwealth of Australia.
12.09 ASSIGNMENT AND BENEFIT. Neither party shall have the right to
assign its rights or to delegate its duties hereunder without prior written
consent of the other party, but in the case of an assignment of fights or to
delegate its duties hereunder without the prior written consent of the other
party, but in the case of an assignment of rights such consent will not be
unreasonably withheld. Such consent of either party shall not be required in any
such assignment by Buyer or Seller to any of its affiliates, but such an
assignment shall not relieve Seller or Buyer, as the case may be, of any of its
obligations hereunder. Subject to the above, this Agreement shall be binding
upon, and inure to the benefit of the successors and assigns of the parties
hereto. Buyer may assign its rights to any subsidiary of the Buyer without
consent of Seller.
12.10 COUNTERPARTS. This Agreement shall be executed in duplicate with
one executed copy to be retained by Seller and the other by Buyer.
EXECUTED as a bind contract by their duly authorized officers or
representatives.
Terrence Edward Muller Save The World Technologies, Inc.
/S/ Terrence Edward Muller /S/ Jeffrey Muller
- ---------------------------- ------------------------------------
By: Jeffrey Muller, President
COMMERCIAL TENANCY
AGREEMENT
(FIRST EDITION) revised
================================================================================
PARTIES
Landlord:
Tenant:
Date:
THIS AGREEMENT COMPRISES THE REFERENCE SCHEDULE
AND COMMERCIAL TENANCY AGREEMENT CONDITIONS.
INSTRUCTIONS TO COMPLETE
Commercial Tenancy Agreement
DO NOT USE THIS DOCUMENT
* FOR RESIDENTIAL TENANCIES.
* FOR PREMISES COVERED BY THE RETAIL SHOP LEASES ACT.
* WHERE THE INITIAL TERM EXCEEDS 3 YEARS.
* WHERE REGISTRATION UNDER THE LAND TITLE ACT IS REQUIRED.
If including an option to renew, the Tenant should be advised to seek legal
advice about having the tenancy registered to protect its rights under the
option.
Where the Initial term plus options exceeds 6 years and the premises form part
of the Landlord's title, the tenancy may require approval as a subdivision and
legal advice should be sought.
Unless amended, this agreement provides for rent to be reviewed based on
increases in the Consumer Price Index, it is not suitable for use where rent is
to be reviewed to market or otherwise.
The only outgoings recoverable in this agreement are local government rates,
fire services levies, insurance, cleaning and garden maintenance. Unless
amended, this agreement is not suitable for use where additional outgoings are
to be paid by the Tenant.
The Agreement must be submitted to the Office of State Revenue for stamping
within 30 days of signing.
REFERENCE SCHEDULE
Ensure that all items are completed.
ITEM 1: Full name/s of the owner/s of the property and their address.
If the Landlord is a company, include ACN. DO NOT use a
business name.
ITEM 2: Full name/s of the tenant. If the Tenant is a company, include
its ACN. DO NOT use a business name.
ITEM 3: The Premises must be clearly identified e.g. "Suite 3, 45 John
Street, Spring Hill" etc. If not able to be identified by
name, a sketch plan must be attached to the Agreement and the
address must be included at Item 3.
ITEM 5: Insert the period of the further tenancy, e.g. "6 months" or
"1 year" or "not applicable".
ITEM 7: Insert the date on which the rent is to be adjusted by the CPI
or "Not applicable".
ITEM 8: The permitted Use should be stated clearly and concisely.
ITEM 9: Insert the percentage of outgoings the Tenant is to pay, e.g.
"25% or "100%" or "Not applicable".
PAGE 1 OF 8
<PAGE>
AGREEMENT made (date) 22nd October 1996
PARTIES The person named in Item 1 of the Reference Schedule ("LANDLORD")
AND The person named in item 2 of the Reference Schedule ("TENANT")
REFERENCE SCHEDULE
Item 1 LANDLORD Saxonvale Pty Ltd
ADDRESS Suite 19 Plaza home Centre
27 Evans Rd Marochydere
PH: 0754437600 FAX:
Item 2 TENANT Save the World Technologies Inc.
ADDRESS 1155 West Forth St No 214 Reno NV 89503
PH: FAX:
Item 3 PREMISES Lot 2 to 4 Carool Rd
Carool N.S.W.
(annex a plan if available)
Item 4 TERM (1) periodic monthly tenancy; or
(2) 5 years commencing on 1st November 1996
and ending on 31st October 2001
OPTION FOR 5 years with an option to purchase
Item 5 FURTHER TERM
Item 6 RENT $320,000.00
Three hundred and twenty thousand dollars
ANNUAL RENT
Item 7 REVIEW DATES End of term 31-10-2001
item 8 PERMITTED USE Forestry - Resort Facility
Item 9 PERCENTAGE OF OUTGOINGS Rental includes all outgoings
Item 10 DEPOSIT $ nil
Item 11 LANDLORD'S AGENT C.J.I. Real Estate Group
ADDRESS 130 Bundall Rd
Bundall Qld.
PAGE 2 OF 8
<PAGE>
SPECIAL CONDITIONS
PAGE 3 OF 8
<PAGE>
EXECUTED AS AN AGREEMENT.
EXECUTION BY LANDLORD
THE COMMON SEAL OF Saxonvale Pty Ltd. ACN 010892841
AS LANDLORD
was affixed in accordance with its articles
of association in the presence of:
Lynette Anne Muller
- ----------------------------- -----------------------------------
Director/Secretary Director
SEAL OF SAXONVALE HERE
- ------------------------------------------ -----------------------------------
Name of Director/Secretary (BLOCK LETTERS) Name of Director (BLOCK LETTERS)
SIGNED by /S/ Lynette Muller
AS LANDLORD -------------------------------------
in the presence of
/s/ Noel Milwett 130 Bundall Rd Bundall
- ------------------------- --------------------------------
Signature of Witness Address of Witness
Noel Milwett
- --------------------------
Name of Witness (BLOCK LETTERS)
================================================================================
EXECUTION BY TENANT
THE COMMON SEAL OF Save The World Technologies, Inc.
AS TENANT
was affixed in accordance with its articles
of association in the presence of:
JEFFREY A. MULLER
- ------------------------------- -------------------------------
Director/Secretary Director
- --------------------------------------- -----------------------------------
Name of Director/Secretary (BLOCK LETTERS) Name of Director (BLOCK LETTERS)
SIGNED by /S/ J. MULLER
AS TENANT -----------------------------
in the presence of
/s/ Noel Milwett 130 Bundall Rd Bundall
- ------------------------- --------------------------------
Signature of Witness Address of Witness
Noel Milwett
- -------------------------------
Name of Witness (BLOCK LETTERS)
PAGE 4 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT
CONDITIONS
(FIRST EDITION) revised (C)Copyright
REIQ
The Real Estate Institute
of Queensland
IT IS AGREED
1. DEFINITIONS AND INTERPRETATION
1.1 Terms in Reference Schedule Where a term used in this Agreement appears
in bold type in the Reference Schedule, that term has the meaning shown
opposite it in the Reference Schedule.
1.2 DEFINITIONS
Unless the context otherwise requires:
(1) "AGREEMENT" means this document, including any Schedule or Annexure
to it;
(2) "BUSINESS DAY" means a day that is not a Saturday, Sunday or any
other day which is a public holiday or a bank holiday in the place
where an act is to be performed or a payment is to be made;
(3) "CLAIM" includes any claim or legal action and all costs and
expenses incurred in connection with it;
(4) "LAND" means the land on which the Premises are situated;
(5) "LANDLORD'S PROPERTY" means any property owned by the Landlord in
the Premises or on the Land and includes the property identified in
any inventory annexed to this Agreement;
(6) "PREMISES" means the premises described in Item 3 of the Reference
Schedule and includes the Landlord's Property in the premises:
(7) "REIQ" means Real Estate Institute of Queensland Ltd;
(8) "SERVICES" means all utilities and services in the Premises;
(9) "TENANCY" means the tenancy between the Landlord and the Tenant
created by this Agreement;
(10) "TENANTS EMPLOYEES" means each of the Tenant's employees,
contractors agents, customers, subtenants, licensees or others (with
or without invitation) who may be on the Premises, the Building or
the Land;
(11) "TENANT'S PROPERTY" includes all fixtures and other articles in the
Premises which are not the Landlord's; and
(12) "TERM" means either a periodic monthly tenancy or the period of
months or years described in Item 4(2) of the Reference Schedule as
applicable, commencing on the date in item 4 in the reference
schedule.
1.3 INTERPRETATION
(1) Reference to:
(a) one gender includes each other gender;
(b) the singular includes the plural and the plural includes the
singular;
(c) a person includes a body corporate;
(d) a party includes the party's executors, administrators,
successors and permitted assigns; and
(e) a statute, regulation or provision of a statute or regulation
("STATUTORY PROVISION") includes:
(i) that Statutory Provision as amended or re-enacted from time
to time; and
(ii) a statute, regulation or provision enacted in replacement
of that Statutory Provision.
(2) All monetary amounts are in Australian dollars, unless otherwise
stated.
(3) If a party consists of more than one person, this Agreement binds
them jointly and each of them severally.
(4) Headings are for convenience only and do not form part of this
Agreement or affect its interpretation.
(5) A party which is a trustee is bound both personally and in its
capacity as a trustee.
(6) "INCLUDING" and similar expressions are not words of limitation.
(7) Where a word or expression is given a particular meaning, other
parts of speech and grammatical forms of that word or expression
have a corresponding meaning.
(8) If an act must be done on a specified day which is not a Business
Day, the act must be done instead on the next Business Day.
(9) Where this Tenancy permits or requires the Landlord to do something,
it may be done by a person authorised by the Landlord.
(10) Section 105 and 107 of the PROPERTY LAW ACT 1974 do not apply to
this Tenancy.
2 TERM AND HOLDING OVER
2.1 TERM
The Landlord lets the Premises to the Tenant for the Term.
PAGE 5 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
2.2 MONTHLY TENANCY
If the Tenant continues to occupy the Premises after the Term with the
Landlord's consent then:
(1) the Tenant does so as a monthly tenant on the same basis as at the
last day of the Term; and
(2) either party may terminate the monthly tenancy by giving to the
other 1 month's notice expiring on any day.
3. RENT AND RENT REVIEWS
3.1 RENT
The Tenant must:
(1) pay the Rent by equal monthly instalments in advance on the first
day of each month;
(2) pay the first instalment on the signing of this agreement;
(3) if necessary, pay the first and last instalments apportioned on a
daily basis; and
(4) pay all instalments as the Landlord directs.
3.2 DEFINITIONS
In clause 3.3:
(1) "INDEX NUMBER" means the Consumer Price Index (All Groups) for
Brisbane published by the Australian Bureau of Statistics. If that
Index no longer exists, "Index Number" means an index that the
president of the REIQ decides best reflects changes in the cost of
living in Brisbane: and
(2) "REVIEW DATE" means a date stated in the Reference Schedule on which
the rent is to be reviewed
3.3 RENT REVIEW
(1) APPLICATION
This clause 3.3 applies if Review Dates are inserted in item 7 of
the Reference Schedule.
(2) REVIEW
The Rent must be reviewed on each Review Date to an amount
represented by A where:
B
A = --- x D
C
Where B = the Index Number for the quarter ending immediately before
the relevant Review Date;
Where C = the Index Number for the quarter 1 year before the quarter
in B; and
Where D = the Rent payable immediately before the Review Date.
4. OUTGOINGS
4.1 TENANT TO PAY OUTGOINGS
(1) The Tenant must pay the Landlord the whole, or where a percentage is
stated in Item B of the Reference Schedule that percentage of the
Outgoings for the Premises, or the property of which the Premises is
part as applicable.
(2) Outgoings are payable to the Landlord within 14 days of production
to the Tenant of a copy of the Landlord's assessment notice or
account.
4.2 OUTGOINGS
For the purposes of this clause Outgoings means the following charges
levied or expenses payable in respect of the Premises or property of
which the Premises is part:
(1) rates and other charges levied pursuant to a law (other than land
tax);
(2) insurance premiums payable by the Landlord;
(3) the cost of cleaning any areas adjacent to the Premises that are
used by the Tenant; and
(4) maintaining any gardens on the Land.
5. USE OF THE PREMISES
5.1 PERMITTED USE
The Tenant must only use the Premises for the Permitted Use.
5.2 RESTRICTIONS ON USE
The Tenant must not:
(1) disturb the occupants of adjacent premises;
(2) display any signs without the Landlord's consent which must not be
unreasonably withheld;
(3) overload any Services;
(4) damage the Landlord's Property;
(5) alter the Premises, install any partitions or equipment or do any
building work without the Landlord's prior consent;
(6) do anything that may invalidate the Landlord's insurance or increase
the Landlord's premiums; or
(7) do anything illegal on the Premises,
6. MAINTENANCE AND REPAIR
6.1 REPAIR
The Tenant must;
(1) keep the Premises in good repair and condition except for fair wear
and tear, inevitable accident and inherent structural defects; and
(2) fix any damage caused by the Tenant or the Tenant's Employees.
6.2 CLEANING AND MAINTENANCE
The Tenant must:
(1) keep the Premises clean and tidy; and
(2) keep the Tenant's Property clean and maintained in good order and
condition.
6.3 LANDLORD'S RIGHT TO INSPECT AND REPAIR
(1) The Landlord may enter the Premises for inspection or to carry out
maintenance repairs or building work at any reasonable time after
giving notice to the Tenant. In an emergency the Landlord may enter
at any time without giving the Tenant notice.
(2) The Landlord may carry out any of the Tenant's obligations on the
Tenant's behalf if the Tenant does not carry them out on time. If
the Landlord does so the Tenant must promptly pay the Landlord's
costs.
PAGE 6 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
7. ASSIGNMENT AND SUBLETTING
7.1 The Tenant must obtain the Landlord's consent before the Tenant assigns,
sublets or deals with its interest in the Premises.
7.2 The Landlord must give its consent if:
(1) the Tenant satisfies the Landlord that the new tenant is financially
secure and has the ability to carry out the Tenants obligations
under this Tenancy:
(2) the new tenant signs any agreement and gives any security which the
Landlord reasonably requires;
(3) the Tenant complies with any other reasonable requirements of the
Landlord;
(4) the Tenant is not in breach of the Tenancy; and
(5) the Tenant pays the Landlord's reasonable costs of giving its
consent.
8. TENANT'S RELEASE AND INDEMNITY
8.1 The Tenant occupies and uses the Premises at its own risk. The Tenant
also carries out building work in the Premises at its risk.
8.2 The Tenant releases the Landlord from and Indemnifies it against all
Claims for damages, loss, injury or death:
(1) If it:
(a) occurs in the Premises;
(b) arises from the use of the Services in the Premises; or
(c) arises from the overflow or leakage of water from the Premises:
except to the extent that it is caused by the Landlord's deliberate act
or negligence; and
(2) if it arises from the negligence or default of the Tenant or the
Tenant's Employees, except to the extent that it is caused by the
Landlord's deliberate act or negligence.
8.3 The Landlord must do everything reasonable to ensure the Services operate
efficiently during normal working hours but the Landlord is not liable if
they do not.
8.4 The Tenant releases the Landlord from and indemnifies the Landlord
against any Claim or costs arising from anything the Landlord is
permitted to do under this Tenancy.
9. DEFAULT AND TERMINATION
9.1 DEFAULT
The Tenant defaults under this Tenancy if:
(1) the Rent or any money payable by the Tenant is unpaid for 14 days;
(2) the Tenant breaches any other term of this Tenancy:
(3) the Tenant assigns its property for the benefit of creditors; or
(4) the Tenant becomes an externally-administered body corporate within
the meaning of the Corporations Law.
9.2 FORFEITURE OF TENANCY
If the Tenant defaults and does not remedy the default when the Landlord
requires it to do so, the Landlord may do any one or more of the following:
(1) re-enter and take possession of the Premises;
(2) by notice to the Tenant, terminate this Tenancy;
(3) by notice to the Tenant, convert the unexpired portion of the Term
into a tenancy from month to month;
(4) exercise any of its other legal rights:
(5) recover from the Tenant any loss suffered by the Landlord due to the
Tenant's default.
10. TERMINATION OF TERM
1O.1 TENANT'S OBLIGATIONS
At The end of the term the Tenant must:
(1) vacate the Premises and give them back to the landlord in good
repair and condition;
(2) remove all the Tenant's Property from the Premises;
(3) repair any damage caused by removal of the Tenant's Property and
leave the Premises clean; and
(4) return all keys, security passes and cards held by it or the
Tenant's Employees.
10.2 FAILURE TO REMOVE TENANT'S PROPERTY
If the Tenant does not remove the Tenants Property at the end of the
Term, the Landlord may:
(1) remove and store the Tenant's Property at the Tenant's risk and
expense; or
(2) treat the Tenant's Property as abandoned, in which case title in the
Tenant's Property passes to the Landlord who may deal with it as it
thinks fit without being liable to account to the Tenant.
11. DAMAGE AND DESTRUCTION
11.1 RENT REDUCTION
If the Premises are damaged or destroyed and as a result the Tenant
cannot use or gain access to the Premises then from the date that the
Tenant notifies the Landlord of the damage or destruction the Landlord:
(1) must reduce the Rent and any other money owing to the Landlord by a
reasonable amount depending on the type and extent of damage or
destruction; and
(2) cannot enforce clause 6.1 against the Tenant; until the Premises are
fit for use or accessible.
11.2 TENANT MAY TERMINATE
The Tenant may terminate this Lease by notice to the Landlord unless the
Landlord:
(1) within 3 months of receiving the Tenant's notice of termination,
notifies the Tenant that the Landlord will reinstate the Premises:
and
(2) carries out the reinstatement works within a reasonable time.
PAGE 7 of 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
11.3 EXCEPTIONS
Clauses 11.1 and 11.2 do not apply where:
(1) the damage or destruction was caused by or contributed to, or arises
from any wilful act of the Tenant or the Tenant's Employees; or
(2) an insurer under any policy effected by the Landlord refuses
indemnity or reduces the sum payable under the policy because of any
act or default of the Tenant or the Tenant's Employees.
11.4 LANDLORD MAY TERMINATE
If the Landlord considers the damage to the Premises renders it
impractical or undesirable to reinstate the Premises or the Building, it
may terminate this Lease by giving the Tenant at least 1 month's notice
ending on any day of the month. At the end of that month's notice, this
Lease ends.
11.5 DISPUTE RESOLUTION
(1) Any dispute under this clause 11 must be determined by an
independent qualified Valuer appointed by the president of the REIQ
at the request of either party.
(2) in making the determination, the Valuer acts as an expert and the
determination is final and binding on both parties.
(3) The cost of the determination must be paid by the parties equally
unless otherwise decided by the Valuer.
11.6 LANDLORD NOT OBLIGED TO REINSTATE
(1) Nothing in this Lease obliges the Landlord to reinstate the Building
or the Premises or the means of access to them.
(2) When reinstating the Building or the Premises, the Landlord is
entitled to change their design, fabric, character or dimensions to
comply with any law or lawful requirement.
11.7 ANTECEDENT RIGHTS
Termination under this clause 11 does not effect either parties' accrued
rights before termination.
12. STAMP DUTY
12.1 The Tenant must pay all stamp duty and other government imposts payable
in connection with this Agreement and all other documents and matters
referred to in this Agreement when due or earlier if requested in writing
by the Landlord.
13. OPTION FOR FURTHER TENANCY
13.1 If a further term has been inserted in item 5 of the Reference Schedule
and the Tenant:
(1) wishes to lease the Premises for the further term;
(2) gives notice to that effect to the Landlord not less than 3 months
before and not more than six months before the Term expires: and
(3) has not breached this Tenancy; the Landlord must grant a further
tenancy "FURTHER TENANCY") to the Tenant on the same terms as this
Tenancy except for the Rent.
13.2 (1) The Rent for the Further Tenancy will be an amount to be agreed
between the Landlord and Tenant and failing agreement 3 months
before the Term expires the market rent for the Premises determined
by an independent qualified Valuer (acting as an expert) nominated
by the president of the REIQ at the request of either party.
(2) The Valuer's determination is final and binding on the parties.
(3) The Valuer's costs must be paid by the Landlord and Tenant equally.
Either party may pay the Valuer's cost and recover one-half of the
amount paid from the other party.
13.3 Before transferring any interest in the Land, the Landlord must obtain a
signed deed from the transferee containing covenants in favour of the
Tenant that the transferee will be bound by the terms of this Lease and
will not transfer its interest in the Land unless it obtains a similar
deed from its transferee.
13.4 This clause 13 will be omitted from the Further Tenancy.
14. DEPOSIT AND COMMISSION
14.1 The Tenant must pay the Deposit to the Landlord's Agent on signing this
Agreement.
14.2 The Deposit must be applied against the Rent payable by the Tenant on the
commencement of the Term.
14.3 The Landlord agrees to pay the Agent's commission to the Landlord's Agent
and authorises the Agent to draw the commission on the commencement of
the Term from money received from the Tenant in payment of Rent.
15. NOTICES
15.1 Any notice required to be given to any person under this Agreement must
be:
(1) in writing: and
(2) given in accordance with section 257 of the "Property Law Act 1974"
PAGE 8 OF 8
COMMERCIAL TENANCY
AGREEMENT
(FIRST EDITION) revised
================================================================================
PARTIES
Landlord:
Tenant:
Date:
THIS AGREEMENT COMPRISES THE REFERENCE SCHEDULE
AND COMMERCIAL TENANCY AGREEMENT CONDITIONS.
INSTRUCTIONS TO COMPLETE
Commercial Tenancy Agreement
DO NOT USE THIS DOCUMENT
* FOR RESIDENTIAL TENANCIES.
* FOR PREMISES COVERED BY THE RETAIL SHOP LEASES ACT.
* WHERE THE INITIAL TERM EXCEEDS 3 YEARS.
* WHERE REGISTRATION UNDER THE LAND TITLE ACT IS REQUIRED.
If including an option to renew, the Tenant should be advised to seek legal
advice about having the tenancy registered to protect its rights under the
option.
Where the Initial term plus options exceeds 6 years and the premises form part
of the Landlord's title, the tenancy may require approval as a subdivision and
legal advice should be sought.
Unless amended, this agreement provides for rent to be reviewed based on
increases in the Consumer Price Index, it is not suitable for use where rent is
to be reviewed to market or otherwise.
The only outgoings recoverable in this agreement are local government rates,
fire services levies, insurance, cleaning and garden maintenance. Unless
amended, this agreement is not suitable for use where additional outgoings are
to be paid by the Tenant.
The Agreement must be submitted to the Office of State Revenue for stamping
within 30 days of signing.
REFERENCE SCHEDULE
Ensure that all items are completed.
ITEM 1: Full name/s of the owner/s of the property and their address.
If the Landlord is a company, include ACN. DO NOT use a
business name.
ITEM 2: Full name/s of the tenant. If the Tenant is a company, include
its ACN. DO NOT use a business name.
ITEM 3: The Premises must be clearly identified e.g. "Suite 3, 45 John
Street, Spring Hill" etc. If not able to be identified by
name, a sketch plan must be attached to the Agreement and the
address must be included at Item 3.
ITEM 5: Insert the period of the further tenancy, e.g. "6 months" or
"1 year" or "not applicable".
ITEM 7: Insert the date on which the rent is to be adjusted by the CPI
or "Not applicable".
ITEM 8: The permitted Use should be stated clearly and concisely.
ITEM 9: Insert the percentage of outgoings the Tenant is to pay, e.g.
"25% or "100%" or "Not applicable".
PAGE 1 OF 8
<PAGE>
AGREEMENT made (date) 26th March 1997
PARTIES The person named in Item 1 of the Reference Schedule ("LANDLORD")
AND The person named in item 2 of the Reference Schedule ("TENANT")
REFERENCE SCHEDULE
Item 1 LANDLORD Jeffrey A. Muller and Lynnette Anne Muller
ADDRESS 19 Garden Grove
Carrara
PH: 55945556 FAX:
Item 2 TENANT Save the World Technologies Inc.
ADDRESS 1155 West Forth St No 214 Reno NV 89503
PH: FAX:
Item 3 PREMISES Laboratory, Hot houses, offices, residence
& machinery together with nursery
4 Beechmont Road, Canungra 4285 QLD.
(annex a plan if available)
Item 4 TERM (1) periodic monthly tenancy; or
(2) 2 years commencing on 1st April 1997
and ending on 31st March
OPTION FOR 2 years with option to purchase at $2 million 2,000,000
Item 5 FURTHER TERM
Item 6. RENT $160,000 per year
One hundred and sixty thousand dollars
ANNUAL RENT
Item 7 REVIEW DATES End of 1st term
item 8 PERMITTED USE Commercial/rural facilities
Item 9 PERCENTAGE OF OUTGOINGS nil
Item 10 DEPOSIT $ nil
Item 11 LANDLORD'S AGENT C.J.I. Real Estate Group
ADDRESS 130 Bundall Rd
Bundall Gold Coast 4217
PAGE 2 OF 8
<PAGE>
SPECIAL CONDITIONS
PAGE 3 OF 8
<PAGE>
EXECUTED AS AN AGREEMENT.
EXECUTION BY LANDLORD
THE COMMON SEAL OF Jeffrey A. Muller Lynette Anne Muller
AS LANDLORD
was affixed in accordance with its articles
of association in the presence of:
- ------------------------------- -----------------------------------
Director/Secretary Director
- ----------------------------------------- -----------------------------------
Name of Director/Secretary (BLOCK LETTERS) Name of Director (BLOCK LETTERS)
SIGNED by /S/ Lynette Muller /s/ Jeffrey Muller
AS LANDLORD ---------------------------------------------------------------
in the presence of
/s/ Noel Milwett 130 Bundall Rd Bundall
- ---------------------------- --------------------------------
Signature of Witness Address of Witness
Noel Milwett
- -----------------------------
Name of Witness (BLOCK LETTERS)
================================================================================
EXECUTION BY TENANT
THE COMMON SEAL OF Save The World Technologies, Inc.
AS TENANT
was affixed in accordance with its articles
of association in the presence of:
Lynette A. Muller JEFFREY A. MULLER
- ------------------------------------ -----------------------------------
Director/Secretary Director
/s/ Lynette A. Muller
- ----------------------------------------- -----------------------------------
Name of Director/Secretary (BLOCK LETTERS) Name of Director (BLOCK LETTERS)
OR
SIGNED by /S/ Lynette Muller /s/ Jeffrey Muller
AS TENANT -----------------------------------------------------------------
in the presence of
/s/ Noel Milwett 130 Bundall Rd Bundall
- --------------------------- --------------------------------
Signature of Witness Address of Witness
Noel Milwett
- ----------------------------
Name of Witness (BLOCK LETTERS)
PAGE 4 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT
CONDITIONS
(FIRST EDITION) revised (C)Copyright
REIQ
The Real Estate Institute
of Queensland
IT IS AGREED
1. DEFINITIONS AND INTERPRETATION
1.1 Terms in Reference Schedule Where a term used in this Agreement appears
in bold type in the Reference Schedule, that term has the meaning shown
opposite it in the Reference Schedule.
1.2 DEFINITIONS
Unless the context otherwise requires:
(1) "AGREEMENT" means this document, including any Schedule or Annexure
to it;
(2) "BUSINESS DAY" means a day that is not a Saturday, Sunday or any
other day which is a public holiday or a bank holiday in the place
where an act is to be performed or a payment is to be made;
(3) "CLAIM" includes any claim or legal action and all costs and
expenses incurred in connection with it;
(4) "LAND" means the land on which the Premises are situated;
(5) "LANDLORD'S PROPERTY" means any property owned by the Landlord in
the Premises or on the Land and includes the property identified in
any inventory annexed to this Agreement;
(6) "PREMISES" means the premises described in Item 3 of the Reference
Schedule and includes the Landlord's Property in the premises:
(7) "REIQ" means Real Estate Institute of Queensland Ltd;
(8) "SERVICES" means all utilities and services in the Premises;
(9) "TENANCY" means the tenancy between the Landlord and the Tenant
created by this Agreement;
(10) "TENANTS EMPLOYEES" means each of the Tenant's employees,
contractors agents, customers, subtenants, licensees or others (with
or without invitation) who may be on the Premises, the Building or
the Land;
(11) "TENANT'S PROPERTY" includes all fixtures and other articles in the
Premises which are not the Landlord's; and
(12) "TERM" means either a periodic monthly tenancy or the period of
months or years described in Item 4(2) of the Reference Schedule as
applicable, commencing on the date in item 4 in the reference
schedule.
1.3 INTERPRETATION
(1) Reference to:
(a) one gender includes each other gender;
(b) the singular includes the plural and the plural includes the
singular;
(c) a person includes a body corporate;
(d) a party includes the party's executors, administrators,
successors and permitted assigns; and
(e) a statute, regulation or provision of a statute or regulation
("STATUTORY PROVISION") includes:
(i) that Statutory Provision as amended or re-enacted from time
to time; and
(ii) a statute, regulation or provision enacted in replacement
of that Statutory Provision.
(2) All monetary amounts are in Australian dollars, unless otherwise
stated.
(3) If a party consists of more than one person, this Agreement binds
them jointly and each of them severally.
(4) Headings are for convenience only and do not form part of this
Agreement or affect its interpretation.
(5) A party which is a trustee is bound both personally and in its
capacity as a trustee.
(6) "INCLUDING" and similar expressions are not words of limitation.
(7) Where a word or expression is given a particular meaning, other
parts of speech and grammatical forms of that word or expression
have a corresponding meaning.
(8) If an act must be done on a specified day which is not a Business
Day, the act must be done instead on the next Business Day.
(9) Where this Tenancy permits or requires the Landlord to do something,
it may be done by a person authorised by the Landlord.
(10) Section 105 and 107 of the PROPERTY LAW ACT 1974 do not apply to
this Tenancy.
2 TERM AND HOLDING OVER
2.1 TERM
The Landlord lets the Premises to the Tenant for the Term.
PAGE 5 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
2.2 MONTHLY TENANCY
If the Tenant continues to occupy the Premises after the Term with the
Landlord's consent then:
(1) the Tenant does so as a monthly tenant on the same basis as at the
last day of the Term; and
(2) either party may terminate the monthly tenancy by giving to the
other 1 month's notice expiring on any day.
3. RENT AND RENT REVIEWS
3.1 RENT
The Tenant must:
(1) pay the Rent by equal monthly instalments in advance on the first
day of each month;
(2) pay the first instalment on the signing of this agreement;
(3) if necessary, pay the first and last instalments apportioned on a
daily basis; and
(4) pay all instalments as the Landlord directs.
3.2 DEFINITIONS
In clause 3.3:
(1) "INDEX NUMBER" means the Consumer Price Index (All Groups) for
Brisbane published by the Australian Bureau of Statistics. If that
Index no longer exists, "Index Number" means an index that the
president of the REIQ decides best reflects changes in the cost of
living in Brisbane: and
(2) "REVIEW DATE" means a date stated in the Reference Schedule on which
the rent is to be reviewed
3.3 RENT REVIEW
(1) APPLICATION
This clause 3.3 applies if Review Dates are inserted in item 7 of
the Reference Schedule.
(2) REVIEW
The Rent must be reviewed on each Review Date to an amount
represented by A where:
B
A = --- x D
C
Where B = the Index Number for the quarter ending immediately before
the relevant Review Date;
Where C = the Index Number for the quarter 1 year before the quarter
in B; and
Where D = the Rent payable immediately before the Review Date.
4. OUTGOINGS
4.1 TENANT TO PAY OUTGOINGS
(1) The Tenant must pay the Landlord the whole, or where a percentage is
stated in Item B of the Reference Schedule that percentage of the
Outgoings for the Premises, or the property of which the Premises is
part as applicable.
(2) Outgoings are payable to the Landlord within 14 days of production
to the Tenant of a copy of the Landlord's assessment notice or
account.
4.2 OUTGOINGS
For the purposes of this clause Outgoings means the following charges
levied or expenses payable in respect of the Premises or property of
which the Premises is part:
(1) rates and other charges levied pursuant to a law (other than land
tax);
(2) insurance premiums payable by the Landlord;
(3) the cost of cleaning any areas adjacent to the Premises that are
used by the Tenant; and
(4) maintaining any gardens on the Land.
5. USE OF THE PREMISES
5.1 PERMITTED USE
The Tenant must only use the Premises for the Permitted Use.
5.2 RESTRICTIONS ON USE
The Tenant must not:
(1) disturb the occupants of adjacent premises;
(2) display any signs without the Landlord's consent which must not be
unreasonably withheld;
(3) overload any Services;
(4) damage the Landlord's Property;
(5) alter the Premises, install any partitions or equipment or do any
building work without the Landlord's prior consent;
(6) do anything that may invalidate the Landlord's insurance or increase
the Landlord's premiums; or
(7) do anything illegal on the Premises,
6. MAINTENANCE AND REPAIR
6.1 REPAIR
The Tenant must;
(1) keep the Premises in good repair and condition except for fair wear
and tear, inevitable accident and inherent structural defects; and
(2) fix any damage caused by the Tenant or the Tenant's Employees.
6.2 CLEANING AND MAINTENANCE
The Tenant must:
(1) keep the Premises clean and tidy; and
(2) keep the Tenant's Property clean and maintained in good order and
condition.
6.3 LANDLORD'S RIGHT TO INSPECT AND REPAIR
(1) The Landlord may enter the Premises for inspection or to carry out
maintenance repairs or building work at any reasonable time after
giving notice to the Tenant. In an emergency the Landlord may enter
at any time without giving the Tenant notice.
(2) The Landlord may carry out any of the Tenant's obligations on the
Tenant's behalf if the Tenant does not carry them out on time. If
the Landlord does so the Tenant must promptly pay the Landlord's
costs.
PAGE 6 OF 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
7. ASSIGNMENT AND SUBLETTING
7.1 The Tenant must obtain the Landlord's consent before the Tenant assigns,
sublets or deals with its interest in the Premises.
7.2 The Landlord must give its consent if:
(1) the Tenant satisfies the Landlord that the new tenant is financially
secure and has the ability to carry out the Tenants obligations
under this Tenancy:
(2) the new tenant signs any agreement and gives any security which the
Landlord reasonably requires;
(3) the Tenant complies with any other reasonable requirements of the
Landlord;
(4) the Tenant is not in breach of the Tenancy; and
(5) the Tenant pays the Landlord's reasonable costs of giving its
consent.
8. TENANT'S RELEASE AND INDEMNITY
8.1 The Tenant occupies and uses the Premises at its own risk. The Tenant
also carries out building work in the Premises at its risk.
8.2 The Tenant releases the Landlord from and Indemnifies it against all
Claims for damages, loss, injury or death:
(1) If it:
(a) occurs in the Premises;
(b) arises from the use of the Services in the Premises; or
(c) arises from the overflow or leakage of water from the Premises:
except to the extent that it is caused by the Landlord's deliberate act
or negligence; and
(2) if it arises from the negligence or default of the Tenant or the
Tenant's Employees, except to the extent that it is caused by the
Landlord's deliberate act or negligence.
8.3 The Landlord must do everything reasonable to ensure the Services operate
efficiently during normal working hours but the Landlord is not liable if
they do not.
8.4 The Tenant releases the Landlord from and indemnifies the Landlord
against any Claim or costs arising from anything the Landlord is
permitted to do under this Tenancy.
9. DEFAULT AND TERMINATION
9.1 DEFAULT
The Tenant defaults under this Tenancy if:
(1) the Rent or any money payable by the Tenant is unpaid for 14 days;
(2) the Tenant breaches any other term of this Tenancy:
(3) the Tenant assigns its property for the benefit of creditors; or
(4) the Tenant becomes an externally-administered body corporate within
the meaning of the Corporations Law.
9.2 FORFEITURE OF TENANCY
If the Tenant defaults and does not remedy the default when the Landlord
requires it to do so, the Landlord may do any one or more of the following:
(1) re-enter and take possession of the Premises;
(2) by notice to the Tenant, terminate this Tenancy;
(3) by notice to the Tenant, convert the unexpired portion of the Term
into a tenancy from month to month;
(4) exercise any of its other legal rights:
(5) recover from the Tenant any loss suffered by the Landlord due to the
Tenant's default.
10. TERMINATION OF TERM
1O.1 TENANT'S OBLIGATIONS
At The end of the term the Tenant must:
(1) vacate the Premises and give them back to the landlord in good
repair and condition;
(2) remove all the Tenant's Property from the Premises;
(3) repair any damage caused by removal of the Tenant's Property and
leave the Premises clean; and
(4) return all keys, security passes and cards held by it or the
Tenant's Employees.
10.2 FAILURE TO REMOVE TENANT'S PROPERTY
If the Tenant does not remove the Tenants Property at the end of the
Term, the Landlord may:
(1) remove and store the Tenant's Property at the Tenant's risk and
expense; or
(2) treat the Tenant's Property as abandoned, in which case title in the
Tenant's Property passes to the Landlord who may deal with it as it
thinks fit without being liable to account to the Tenant.
11. DAMAGE AND DESTRUCTION
11.1 RENT REDUCTION
If the Premises are damaged or destroyed and as a result the Tenant
cannot use or gain access to the Premises then from the date that the
Tenant notifies the Landlord of the damage or destruction the Landlord:
(1) must reduce the Rent and any other money owing to the Landlord by a
reasonable amount depending on the type and extent of damage or
destruction; and
(2) cannot enforce clause 6.1 against the Tenant; until the Premises are
fit for use or accessible.
11.2 TENANT MAY TERMINATE
The Tenant may terminate this Lease by notice to the Landlord unless the
Landlord:
(1) within 3 months of receiving the Tenant's notice of termination,
notifies the Tenant that the Landlord will reinstate the Premises:
and
(2) carries out the reinstatement works within a reasonable time.
PAGE 7 of 8
<PAGE>
COMMERCIAL TENANCY AGREEMENT CONDITIONS
11.3 EXCEPTIONS
Clauses 11.1 and 11.2 do not apply where:
(1) the damage or destruction was caused by or contributed to, or arises
from any wilful act of the Tenant or the Tenant's Employees; or
(2) an insurer under any policy effected by the Landlord refuses
indemnity or reduces the sum payable under the policy because of any
act or default of the Tenant or the Tenant's Employees.
11.4 LANDLORD MAY TERMINATE
If the Landlord considers the damage to the Premises renders it
impractical or undesirable to reinstate the Premises or the Building, it
may terminate this Lease by giving the Tenant at least 1 month's notice
ending on any day of the month. At the end of that month's notice, this
Lease ends.
11.5 DISPUTE RESOLUTION
(1) Any dispute under this clause 11 must be determined by an
independent qualified Valuer appointed by the president of the REIQ
at the request of either party.
(2) in making the determination, the Valuer acts as an expert and the
determination is final and binding on both parties.
(3) The cost of the determination must be paid by the parties equally
unless otherwise decided by the Valuer.
11.6 LANDLORD NOT OBLIGED TO REINSTATE
(1) Nothing in this Lease obliges the Landlord to reinstate the Building
or the Premises or the means of access to them.
(2) When reinstating the Building or the Premises, the Landlord is
entitled to change their design, fabric, character or dimensions to
comply with any law or lawful requirement.
11.7 ANTECEDENT RIGHTS
Termination under this clause 11 does not effect either parties' accrued
rights before termination.
12. STAMP DUTY
12.1 The Tenant must pay all stamp duty and other government imposts payable
in connection with this Agreement and all other documents and matters
referred to in this Agreement when due or earlier if requested in writing
by the Landlord.
13. OPTION FOR FURTHER TENANCY
13.1 If a further term has been inserted in item 5 of the Reference Schedule
and the Tenant:
(1) wishes to lease the Premises for the further term;
(2) gives notice to that effect to the Landlord not less than 3 months
before and not more than six months before the Term expires: and
(3) has not breached this Tenancy; the Landlord must grant a further
tenancy "FURTHER TENANCY") to the Tenant on the same terms as this
Tenancy except for the Rent.
13.2 (1) The Rent for the Further Tenancy will be an amount to be agreed
between the Landlord and Tenant and failing agreement 3 months
before the Term expires the market rent for the Premises determined
by an independent qualified Valuer (acting as an expert) nominated
by the president of the REIQ at the request of either party.
(2) The Valuer's determination is final and binding on the parties.
(3) The Valuer's costs must be paid by the Landlord and Tenant equally.
Either party may pay the Valuer's cost and recover one-half of the
amount paid from the other party.
13.3 Before transferring any interest in the Land, the Landlord must obtain a
signed deed from the transferee containing covenants in favour of the
Tenant that the transferee will be bound by the terms of this Lease and
will not transfer its interest in the Land unless it obtains a similar
deed from its transferee.
13.4 This clause 13 will be omitted from the Further Tenancy.
14. DEPOSIT AND COMMISSION
14.1 The Tenant must pay the Deposit to the Landlord's Agent on signing this
Agreement.
14.2 The Deposit must be applied against the Rent payable by the Tenant on the
commencement of the Term.
14.3 The Landlord agrees to pay the Agent's commission to the Landlord's Agent
and authorises the Agent to draw the commission on the commencement of
the Term from money received from the Tenant in payment of Rent.
15. NOTICES
15.1 Any notice required to be given to any person under this Agreement must
be:
(1) in writing: and
(2) given in accordance with section 257 of the "Property Law Act 1974"
PAGE 8 OF 8
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0
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