1
Exhibit 2
33
2
THIS AGREEMENT is made on the 4th day of November 1996
BETWEEN:
AMERICAN PHOENIX GROUP, INC.
of Suite 1260, 5 Park Plaza
Irvine, California 92714
UNITED STATES OF AMERICA
("APG")
and
RUBYWELL PTY, LTD.
ACN 063 609 432
c/- 20th Floor
307 Queen Street
Brisbane, Queensland 4000
AUSTRALIA
("Company")
and
MARINE TURBINE AUSTRALIA PTY, LTD.
ACN 002 317 277
of c/- McGlynn & Partners
11th Floor, 82 Elizabeth Street
Sydney, New South Wales 2000
AUSTRALIA
("MTA")
WHERE:
1
3
A. The Company and MTA agree that MTA will pay a royalty to APG on the sale of
boats produced by MTA.
B. The parties acknowledge that APG and the Company have entered into an
agreement where the Company has assigned to APG a promissory note in the
sum of USD $1,500,000 in consideration for the debt owed by MTA to APG.
C. The royalty is paid by MTA in consideration for the forgiveness of the
balance of any outstanding loans and capital advances due by MTA to APG
including monies owing by the Company to APG arising from the assignment to
the Company of a debt due by Consortium Investment Group Pty Ltd ACN 070
220 950 ("CIG") to APG in the sum of $1,000,000 and the re-acquisition by
the Company of shares in MTA from APG.
D. It is acknowledged that the Company estimates that a further sum of
$10,000,000 is required to commercialize products to be produced by MTA.
E. The Company believes that MTA can obtain funds from other sources and APG
does not wish to invest further capital funds but wishes to retain an
interest in the venture.
NOW THIS AGREEMENT WITNESSES AS FOLLOWS THAT:-
1. Definitions and Interpretation
1.1 Words importing the singular number include the plural and vice-versa
and words importing any gender include all other genders.
1.2 Headings are for reference only and shall not effect the construction
of this Agreement.
1.3 A reference to a party if more than one is to them jointly and
severally.
1.4 Any reference to a statute ordinance code or other law, includes all
regulations and other instruments and all consolidations, amendments,
re-enactments or replacements.
1.5 All Schedules are included as part of this Agreement.
2
4
1.6 Any reference to "dollars" or "$" is a reference to United States
currency.
1.7 The following words shall have meaning given to them:-
"APG" means American Phoenix Group, Inc. of Suite 1260, 5 Park Plaza,
Irvine, California 92714 United States of America.
"CIG" means Consortium Investment Group Pty, Ltd. ACN of c/- Webb &
Co, 381 Tooronga Road East Hawthorn Victoria 3123 Australia.
"Company" means Rubywell Pty, Ltd. ACN 063 609 432 c/- 20th Floor, 307
Queen Street, Bisbane, Queensland 4000 Australia.
"MTA" means Marine Turbine Australia Pty, Ltd. ACN 002 317 277 of c/-
McGlynn & Partners, 11th Floor, 82 Elizabeth Street, Sydney, New South
Wales 2000 Australia.
"Shares" means all shares held by APG in MTA.
2. Consideration
It is agreed as follows that:-
2.1 The Company and MTA agree to the granting of a royalty to APG on the
basis of three per cent (3%) of sales made by the Company and/or MTA
of boats produced utilizing the turbine propulsion unit which would be
expected to generate for APG $600,000 for the year ended 31 December
1998, $1,500,000 for the year ended 31 December 1999 and $2,400,000
for the year ended 31 December 2000.
2.2 The Company now acquires all Shares from APG, and APG agrees to
transfer the Shares to the Company in consideration for ONE HUNDRED
DOLLARS ($100).
3. Acknowledgement
3
5
The Company acknowledges that the debt owed by MTA by way of a loan account
by MTA to APG has been satisfied by the assignment of a promissory note for
USD $1,500,000.
4. APG agrees that it will not be directly or indirectly engaged, concerned or
interested whether on its own behalf or as a Director substantial
shareholder (within the meaning of the law) consultant or agent of or
employee of any enterprise, corporation, firm, trust, joint venture or
syndicate which is engaged, interested or concerned in or carrying on
anywhere in Australia any enterprise or undertaking substantially similar
to that undertaken by the Company or MTA in relation to the terms of this
Agreement that would adversely affect the Company.
5. Termination
The Company and MTA acknowledge that APG shall be entitled to terminate
this Agreement immediately by notice in writing to the Company and MTA upon
the happening of any of the following acts:-
5.1 The Company or MTA committing or permitting to occur any persistent
breach or default in the due and punctual observance and performance
of any of its covenants, duties and obligations, or any of the
covenants, duties or obligations to be performed by a consultant
appointed by the Company or MTA.
5.2 The Company or MTA makes or has made or appointed in relation to it or
is:-
5.2.1 An order for its winding up (except for the sole purpose of
reconstruction or amalgamation).
5.2.2 An order for the appointment of a provisional liquidator.
5.2.3 An assignment for the benefit of or composition with its
creditors.
5.2.4 Unable to pay its debts within the meaning of the Law.
5.2.5 An official manager or receiver is appointed pursuant to the
Law.
4
6
5.3 A trustee in bankruptcy is appointed of the Company or MTA or a
composition is made with its creditors.
5.4 Any execution or process of the court is issued against or levied upon
the Company or MTA for a sum of more than TWO THOUSAND DOLLARS
($2,000).
6. Assignment
6.1 The Company or MTA may not assign any of its rights or powers under
this Agreement without the prior written consent of APG.
6.2 APG may assign any benefit under this Agreement in its sole
discretion.
7. Further Assurances
The parties shall, and shall use their respective reasonable endeavors to
procure from themselves and from any necessary third parties to do, execute
and perform all such further agreement, deeds, documents, assurances, acts
and things as may be necessary or desirable to give full effect to the
provisions of this Agreement without limiting the generality of the
foregoing, any re-execution or amendment of this Agreement so as to bind
the parties to the terms and conditions stated in this Agreement.
8. Time of the Essence
Any date or period mentioned in this Agreement relating to any act, matter
or thing to be performed by the Company or MTA may be extended by APG
failing which as regards any such date or period, time shall be of the
essence of this Agreement.
9. Entire Agreement
This Agreement constitutes the entire agreement between the parties with
respect to the matters dealt with in this Agreement and supersedes any
previous agreement between the parties in relation to such matters.
10. Variations
5
7
No variation, modification, waiver or amendment of any provision of this
Agreement, nor consent to any departure by any party to this Agreement
shall in any event be of any force or effect unless the same shall be
confirmed in writing (in one or more copies), signed by the parties, and
then such variation, modification, waiver or consent shall be effective
only to the extent for which it may be made or given.
11. Waiver
11.1 No failure to exercise and no delay in exercising on the part of APG
any right, power or privilege under this Agreement shall operate as a
waiver nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise or the exercise of
any other right, power or privilege.
11.2 The rights and remedies provided in this Agreement are cumulative and
not exclusive of any rights or remedies otherwise provided by law.
12. Notices
12.1 Any notice, demand or other communication given or made under this
Agreement shall be in writing and shall be deemed duly given or made
if delivered or sent by post, or facsimile transmission to the address
of the parties set out in this Agreement. Any party may change its
address or facsimile transmission numbers for the purposes of this
Agreement by giving notice in writing of such change to the other
party.
12.2 Any notice, demand or other communication shall be deemed, in the
absence to the contrary, to have been received by the party to whom it
was sent:
12.2.1 In the case of hand delivery, upon the date of such delivery.
12.2.2 In the case of prepaid post, on the second day next following
the date of despatch.
12.2.3 In the case of facsimile transmissions, at the time of
transmission, provided that, following the transmission, the
sender receives the transmission confirmation report.
6
8
Unless in any such case it would be deemed to have been
received on a day which is not a business day in the place
addressed, or after 5:00 p.m. on a business day, in which
event it shall be deemed to have been received on the next
business day.
13. Severability
Notwithstanding that any provision of this Agreement may prove to be
illegal or unenforceable pursuant to any statute or rule of law or for any
other reason those provisions are deemed omitted without affected the
legality of the remaining provisions and, the remaining provisions of this
Agreement shall continue in full force and effect.
14. Governing Law
This Agreement and the rights and obligations of the parties shall be
construed and take effect in accordance with and be governed by the laws of
the State of Victoria and each party expressly submits to the non-exclusive
jurisdiction of the courts of that State and of all courts competent to
hear appeals from those courts.
15. Counterparts
This Agreement may be executed in one or more counterparts each of which
shall be deemed an original but all of which shall together constitute one
and the same Agreement.
16. EXECUTED as an Agreement on the date first written
SIGNED for and on behalf of )
AMERICAN PHOENIX GROUP, INC. ) ____________________________________
in the presence of: ) Signature
____________________________________ ____________________________________
Signature of Witness Name
____________________________________ ____________________________________
Name of Witness (BLOCK LETTERS) Position
7
9
SIGNED for and on behalf of )
RUBYWELL PTY, LTD. ACN 002 ) ____________________________________
317 277 in the presence of: ) Signature
____________________________________ ____________________________________
Signature of Witness Name
____________________________________ ____________________________________
Name of Witness (BLOCK LETTERS) Position
SIGNED for and on behalf of )
MARINE TURBINE AUSTRALIA )
PTY, LTD ACN 002 317 277 ) ____________________________________
in the presence of: ) Signature
____________________________________ ____________________________________
Signature of Witness Name
____________________________________ ____________________________________
Name of Witness (BLOCK LETTERS) Position
8
10
THIS DEED is made on the day of 1996
BETWEEN:
RUBYWELL PTY, LTD.
ACN 063 609 432
c/- 20th Floor
307 Queen Street
Brisbane, Queensland 4000
AUSTRALIA
("Assignor")
and
AMERICAN PHOENIX GROUP, INC.
of Suite 1260, 5 Park Plaza
Irvine, California 92714
UNITED STATES OF AMERICA
("Assignee")
WHERE:
A. The assignor is the holder of a Promissory Note in its favor for
$1,500,000.
B. The Assignor has agreed to assign the Promissory Note to the Assignee.
NOW THIS DEED WITNESSES AS FOLLOWS THAT:-
1. Assignment
In consideration of the debt owed by Marine Turbine Australia Pty, Ltd. ACN
002 317 277 ("MTA") to the Assignee the Assignor as beneficial owner
assigns to the Assignee absolutely all of the Assignor's right title and
interest in the Promissory Note together with all interest which has
accrued which or may accrue in the future on the Promissory Note.
1
11
2. Covenants
The Assignor covenants with the Assignee (and its successors and assigns)
as follows that:-
2.1 The Promissory Note is still due and owing in full.
2.2 The Assignor has the full power to assign the Promissory Note to the
Assignor.
2.3 The assignment of the Promissory Note under this Deed shall be taken
by the Assignee (and its successors and assigns) free and clear of any
mortgages, pledges, liens, charges or any other encumbrances or claims
or interest of any other persons.
2.4 The Assignor shall do all acts and things including without limitation
the execution of all such documents as may be reasonably required by
the Assignee to give effect to the assignment contemplated by this
Deed.
3. Power of Attorneys
The parties agree as follows:-
3.1 The assignor for valuable consideration (the receipt of which is
acknowledged) irrevocably appoints the Assignee as the attorney of the
Assignor in the name of the Assignor to:-
3.1.1 Demand, sue for receive and give effectual discharges for the
Promissory Note.
3.1.2 Conduct and legal proceedings in relation to the Debt including
proceedings on appeal as effectually as the Assignor could or
might.
3.1.3 For the purpose from time to time appoint any substitute
delegate or sub attorney.
2
12
3.2 The Assignee shall indemnify the Assignor against all costs and
expenses incurred in connection with anything done by the Assignee as
the attorney for the Assignor pursuant to this Clause.
4. Governing Law
This Deed shall be governed by and construed in accordance with the laws of
Victoria, Australia and the Assignor submits to the non-exclusive
jurisdiction of its courts.
EXECUTED as a Deed on the date first written
SIGNED for and on behalf of )
RUBYWELL PTY, LTD. ACN 002 ) ____________________________________
317 277 in the presence of: ) Signature
____________________________________ ____________________________________
Signature of Witness Name
____________________________________ ____________________________________
Name of Witness (BLOCK LETTERS) Position
SIGNED for and on behalf of )
AMERICAN PHOENIX GROUP, INC. ) ____________________________________
in the presence of: ) Signature
____________________________________ ____________________________________
Signature of Witness Name
____________________________________ ____________________________________
Name of Witness (BLOCK LETTERS) Position
3
13
PROMISSORY NOTE
$1,500,000 USD
FOR VALUE RECEIVED, the undersigned, _________________ of 126 Morrison Drive,
___________________________ ("Maker") promises to pay to the order of Rubywell
Pty Ltd. ("Holder") at such place as the Holder may designate in writing to the
undersigned the principal sum of $1,500,000 (One Million Five Hundred Thousand
United States Dollars) together with interest on the principal sum from date of
this Promissory Note until paid, at the rate of 0.0% (zero percent) per annum as
follows:
1. One (1) installment of principal in the amount of $150,000 (One Hundred and
Fifty Thousand United States Dollars) to be effected on or before November
30, 1996,
2. One (1) installment of principal in the amount of $350,000 (Three Hundred
and Fifty Thousand United States Dollars) to be effected on or before
December 31, 1996,
3. One (1) installment of principal in the amount of $500,000 (Five Hundred
Thousand United States Dollars) to be effected on or before January 31,
1997,
4. One (1) installment of principal in the amount of $500,000 (Five Hundred
Thousand United States Dollars) to be effect on or before February 28,
1997.
Unless extended by the mutual written consent of the Parties. The entire
principal amount shall be paid on that date.
Payments shall be applied first to any accrued interest and the balance to
principal.
All or any part of the principal sum may be prepaid at any time and from time to
time without penalty.
In the event of any default by the undersigned in the payment of principal or
interest when due or in the event of the suspension of actual business,
insolvency, assignment for the benefit of creditors, adjudication of bankruptcy,
or appointment of a receiver, of or against the undersigned, the unpaid balance
of the principal sum of this Promissory Note shall at the option of the holder
become immediately due and payable.
The Maker and all other person who may become liable for the payment of this
Promissory Note severally waive demand, presentment , protest, note of dishonor
or nonpayment, notice of protest, and any and all lack of diligence or delays in
collection which may occur, and expressly consent and agree to each and any
extension
4
14
or postponement of time of payment of this Promissory Note from time to time at
or after maturity or other indulgence, and waive all notice of such.
This Promissory Note may be assigned by either party giving to the other notice
in writing of the assignment.
In case suit or action is instituted to collect this note, or any portion of
this note, the Maker promises to pay such additional sum, as the court may deem
reasonable, legal fees in said proceedings.
This note is made and executed under, and is in all respects governed by the
laws of the State of Victoria, Australia, however, the parties agree to submit
to the jurisdiction of the State of California in the United States of America.
_____________________________
Managing Director
5