Agreement
This Agreement is entered into as of the 1st day of February, 1999,
by and among American Coating Technologies, Inc,. ("ACT"), S.R. & T,
Partnership, a general partnership ('SRT"), Alvin A. Snaper
("Snaper"), Taylor Family Limited Partnership ("Taylor) and Rothwell
Trust ("Rothwell"), sometimes referred to hereafter collectively as
the "Parties," and individually as "Party," as the context may
require.
A. Whereas, SRT was formed pursuant to a written agreement dated May
6,1998 (SRT Partnership Agreement) by Snaper, Taylor and Rothwell to
own, finance and market that certain diamond coating technology
represented by U.S. Patent; dated October 19, 1993, #5,254,237,
developed by Snaper, including all supplemental improvements thereto
and/or to the Plasma Arc Apparatus for producing diamond semiconductor
devices or machine tool coatings, in all applications, including
without Stations the following: Low Temperature Titanium Nitride,
Cobalt Nitride, Chromium Nitride Ferroeletric Coatings, Picsoeectric
Coatings, Diamond Hard Coatings, Diamond Semiconductor Substrates (the
"Technology");
B. Whereas ACT was incorporated with The knowledge and consent of
SRT, Snaper, Taylor and Rothwell to be the vehicle through which the
purposes of SRT were to be accomplished, i.e., to own, finance and
market the Technology;
Now, Therefore, in consideration of the mutual obligations of the
Parties set forth below, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
1. SRT, Snaper, Taylor and Rothwell hereby transfer, convey and
assign ACT ACT all of their right title and interest and to the
Technology.
2. As consideration for said transfer of rights to the Technology,
ACT agrees to and hereby does transfer 2,750,000 shares of its common
stock to Snaper, 1,125,000 shares of its common stock to Taylor, and
1,125,000 of its common stock to Rothwell for a total of 5,000,000
shares; in addition, ACT shall pay to Snaper, Taylor and Rothwell,
each, on an annual basis, due and payable on the 15th day of February
for each year hereafter for fifty-one (51) years from the date hereof
,a royalty equal to 1.667 percent (1.667%) (for a total royalty of
5.001%) of the total gross revenues (without any deductions
whatsoever) derived in any way by ACT and/or its subsidiaries, sister
corporations, affiliates and assigns, from the Technology (whether
from royalties, rentals, sales, service contracts, consulting
contracts and/or any other source) during the calendar year.
3. SRT. Snaper, Taylor and Rothwell acknowledge this agreement
modifies the terms of the SRT Partnership Agreement, including without
limitation the fact that the transfer of rights in the Technology to
ACT by SRT, Snaper, Taylor and Rothwell is unconditional
4. ACT agrees that Snaper's interest in ACT shall not be diluted to
less than 51 % of the outstanding stock unless and until ACT has
completed one or more public underwritings, or otherwise obtains
financing, raising not less than a cumulative $2,000,000 at
approximately $13 to $15 per share.
5. SRT, Snaper, Taylor and Rothwell agree that the SRT Partnership
Agreement shall be considered and hereby is amended to comport with
the previsions and effect of this agreement
6. The Parties acknowledge that they have been advised and afforded
the opportunity to seek the advice of independent legal counsel with
respect hereto.
7. Should any Party breach any term hereof the other Parties shall be
entitled to recover their costs of enforcing the terms hereof,
including without limitation their attorney's fees.
9. This agreement shall inure to the benefit of and be binding upon
the Parties, their heirs assigns and successors in interest, and shall
he construed in accordance with, and enforced in the Courts of the
State of Utah.
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9. The individuals signing below represent and warrant that they have
full power and authority to sign this agreement for and on behalf of
themselves and/or the entities for which they are signing this
agreement.
In Witness Whereof the Parties set their hands as of the date first
set forth above.
American Coating Technologies, Inc.
By: Stephan W. Brockbank
President
By: David W. Taylor
Secretary
S.R. & T Partnership
By: Alvin A. Snaper
Taylor Family Limited Partnership
By:
General Partner
Rothwell Trust
By:
Trustee
