VANCOUVER, Oct. 28 /PRNewswire-FirstCall/ - VRB Power Systems Inc. (TSX-
V: VRB) is pleased to announce that the company has entered into a revised
Implementation Agreement with its subsidiary Pinnacle VRB Ltd. ("Pinnacle")
that replaces the terms of the Implementation Agreement announced July 27,
2004.
Under the terms of the revised Agreement, VRB Power will acquire outright
all of the patents to the VRB technology except for the Australian patents.
Pinnacle will settle the outstanding debt owed to VRB Power for payment of AUD
$100,000 and pursuant to a prospectus offering, VRB Power will offer to sell
all of its shares in Pinnacle for AUD $.01 per share on a pro-rata basis to
existing Pinnacle shareholders. The detailed points of the proposed
transaction are as follows:
1. VRB Power
- Pursuant to a prospectus offering, VRB Power will offer to sell all
of its shares in Pinnacle for AUD $.01 per share on a pro rata
basis to existing Pinnacle shareholders. The offer will be fully
underwritten to purchase the balance of the shares not acquired by
Pinnacle shareholders on their pro-rata allotments. The Proceeds
from the sale of the Pinnacle stock will be relinquished to
Pinnacle as part of the transaction. The effect of this share sale
will be that VRB Power will cease to be a shareholder of Pinnacle.
- VRB Power will procure the written resignations of its directors on
the Board of Pinnacle.
- Pinnacle will receive 750,000 common shares of VRB Power and
750,000 share purchase warrants with each warrant entitling
Pinnacle to acquire an additional common share in VRB Power for a
price of $1.15 CAD per share for a period of 1 year. In addition to
the usual regulatory hold period of 4 months, all shares will be
subject to a contractual hold period as follows: 30% released for
sale after 4 months; 50% released for sale after 6 months; 75%
released for sale after 9 months; 100% released for sale after 12
months.
2. Pinnacle
- Pinnacle will agree to the termination of the African Licence
Agreement under which VRB Power is currently obliged to pay to
Pinnacle an annual licence fee of AUD $250,000 for a remaining term
of 20 years. Under the terms of the Agreement, VRB Power will be
released from it's obligation to pay the fee which became due at
the end of May 2004 upon completion of the transaction.
- Pinnacle will settle the outstanding debt owed to VRB Power for
payment of AUD $100,000.
- Pinnacle will irrevocably assign to VRB Power, with no retention of
rights, all patents relating to the VRB technology except for those
in Australia.
Additionally, each party will grant the other a first right of refusal to
acquire each others patents (as per the patents contemplated by this
transaction) for a 2 year period. Pinnacle shareholders will also be asked to
approve a transaction between Pinnacle and Sumitomo Electric Industries, Ltd.
of Japan ("SEI") relating to the licence agreement between Pinnacle and SEI
dated 14 April 2002 ("the Licence Agreement") whereby SEI is required to pay a
royalty calculated as 1.5% of the net sales price for each licensed product
supplied by SEI or any sub-licensee until 6 April 2006. In consideration for
SEI granting waivers of certain terms of the Memorandum of Agreement signed
between Pinnacle and SEI 14 April 2002 which removes restrictions relating to
a change in control of Pinnacle, Pinnacle is to waive the obligation of SEI to
pay the royalty pursuant to the Licence Agreement from 15 June 2004 until
termination on 6 April 2006.
The transaction includes but is not limited to the points outlined above,
which will be documented in detail in the notice of meeting to Pinnacle
shareholders. The transaction is subject to certain conditions precedent,
including Pinnacle obtaining the necessary shareholder approvals required
under the Corporations Act and ASX Listing Rules to implement the transaction.
It is currently expected that the necessary shareholder resolutions to
implement the transaction will be put to a meeting of Pinnacle shareholders in
early December 2004. It is also expected that Pinnacle's Annual General
Meeting will be held contemporaneously. The shareholder approval documents are
currently expected to be available in early November 2004.
To assist Pinnacle shareholders in deciding whether or not to approve the
transaction, an independent expert, Benson Partners, has been engaged by the
independent directors of Pinnacle to report on the fairness and reasonableness
of the transaction. A copy of the report will be included in the information
to be sent to Pinnacle shareholders to seek their approval of the transaction.
About VRB Power
Based in Vancouver, B.C. Canada, VRB Power Systems Inc. is an
electrochemical energy storage company that has commercialized the patented
Vanadium Redox Battery Energy Storage System ("VRB-ESS"). The VRB-ESS is a new
enabling technology that can effectively store electricity on demand. The
VRB-ESS can provide direct economic benefits to utilities and end users in
terms of improved power quality, reliability and energy efficiency. The
VRB-ESS is particularly well suited to load levelling (peak shaving),
electrical power arbitrage, grid stability enhancements, capital deferment and
Remote Area Power Supply (RAPS) applications. It is primarily focused on
stationary power sources such as utility substations, commercial buildings,
production facilities, telecommunication operations, cellular radio sites, and
renewable resource generation such as wind farms - creating the ability to
provide "firm" capacity. As a "green" technology, the VRB is characterized by
the lowest ecological impact of all energy storage technologies and is unlike
most other conventional energy storage systems that rely on toxic substances
such as lead, zinc or cadmium. VRB Power is publicly listed on the TSX Venture
Exchange ("VRB") and the OTC Pinksheets ("VRBPF").
Warning: The Company relies upon litigation protection for
"forward-looking statements"
"The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release"
Vince Sorace President, VRB Power Systems Inc.
For further information please contact:
VRB Power Systems Inc. at 604-697-8820.
Or visit the company's web site at http://www.vrbpower.com
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SOURCE VRB Power Systems Inc.
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