Consulting Agreement
This Consulting Agreement (Agreement) is entered into this 12th day
of July, 1996 (the Effective Date), by and between SGI International,
a Utah corporation (SGI) and Professor Judith Ware (Consultant).
1. Performance by Consultant. Consultant agrees to provide consulting
services (the "Services") relating to the development of the OCET
Technology. Such Services will include consultation relative to the
performance, data, measurement, analysis, and recommendations as to the
development and improvement of the OCET Technology. The Services shall
also include, but not be limited to, advice, assistance, and information
supplied by Consultant, or developed with the use of any of Consultant's
information, equipment, personnel, goods or facilities. The specific
tasks will be agreed to in writing by Dr. Ernest Esztergar or Dr. David
Newman and Consultant.
2. Payment for Services.
a. Consulting Fee. SGI agrees to pay Consultant for the Services at the
rate of eighty five dollars ($85.00) per hour, not to exceed forty billable
hours per week. The compensation shall be prorated between payment in cash
and in stock as described herein. Fifty five dollars per hour of each
month's payment shall be paid in cash and the remainder ($30 per hour)
shall be paid in stock. The amount of stock shall be determined by dividing
the amount to be paid in stock by the closing bid price of SGI common stock
as of the date of the invoice submitted by Consultant. Consultant shall be
paid by SGI within fifteen (15) days of receipt of an acceptable invoice
from Consultant.
b. Expenses. Consultant shall be reimbursed for reasonable expenses,
including, but not limited to, travel, long distance telephone charges, and
mileage at the rate of $.30 a mile for all business travel.
c. Invoices. Consultant shall invoice SGI monthly for Services rendered
during each month. The invoice will describe the work performed during such
period, set out the hours of work by day and by task, and reflect the amount
and details of any expenses. Consultant agrees that SGI may audit the
billing and expense documentation for a period of one year from the date of
the invoice submittal. All invoices will be paid as described above.
3. Personal Service Contract. SGI and Consultant agree that the Services
will be performed personally by Consultant. If the services are not
performed by Consultant, then SGI has the right to terminate this Agreement
immediately.
4. Obligations of SGI. SGI agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required
by Consultant to complete the Services.
5. Term. This Agreement shall be effective and shall continue for a period
for one year. Absent termination in writing by either party within a thirty
day period prior to the end of each one year term, the Agreement shall
continue for an additional one year term.
6. Ownership. Consultant agrees that SGI is the owner of all right, title
and interest in the technical information and data (the "Technical
Information") relating to the processing of oil, resid and other carbonaceous
material and oil materials, and to the drying, cleaning and other processing
of coal, bitumen, crude as well as any developments or improvement related
thereto, and as well as any related process control technology, computational
techniques or related trade secrets or intellectual property. SGI shall also
own all other related material used by, developed for, or paid for, by it in
connection with the performance of any Services provided by Consultant before
or after the date set forth above.
7. Confidentially and Disclosure.
a. Disclosure. Consultant desires to have the Technical Information
disclosed to him to enable him to render the Services to SGI, including but
not limited to, the following: evaluation and development of SGI's OCET
Technology, which can be used, among other things, for precipitating
asphaltenes out of Resid and for converting bitumens and heavy oils to clean
solid fuels, transportation fuels, light distillates, and other uses. SGI
is prepared to make such Technical Information as it deems necessary
available to Consultant for the aforesaid purpose on the following
understanding:
For the purpose of the Agreement:
The term "Technical Information" shall not include any information which:
(i) is "publicly available" information. The phrase "publicly available"
information shall mean readily accessible to the public in written
publication, and shall not include information which is only available by a
substantial searching of the published literature, and information the
substance of which must be pieced together from a number of different
publications and sources;
(ii) is known to Consultant from sources other than SGI or its Affiliates
prior to the receipt of the same hereunder from SGI or its Affiliates;
(iii) is received by Consultant without restriction on disclosure from a
third party who is legally in possession of such information and has a
right to reveal the same to Consultant.
(iv) AAffiliate(s) of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.
(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with
the physical embodiment of the same whether copyrightable or not, related to
SGI's business.
Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit
of others subject to the obligation of Consultant set forth hereinafter.
b. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by
SGI.
c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, providing
Services to SGI.
8. Developments and Assignment.
a. Developments. Consultant recognizes that Developments have occurred
and/or are expected and likely to occur in the future as the result of the
performance of Consultant's Services, and Consultant covenants and agrees to
hold all Developments as a result of the performance of such Services or
based on SGI's Technical Information in trust for the use and benefit of
SGI, and hereby assigns and agrees to assign all such Developments to SGI.
b. Consultant Disclosure. Consultant shall promptly disclose in writing
to SGI any and all Developments made by Consultant, and or by any members of
his staff, incident to or as a result of the performance of such Services; and
Consultant hereby assigns and agrees to assign all of its right, title and
interest, in all such Developments to SGI. All such Developments shall be
treated as Technical Information of SGI and the obligations of Consultant
under this Agreement shall apply thereto. Consultant further agrees to and
does hereby assign to SGI all right, title and interest in and to the
intellectual property, rights, and processes or techniques embodying the
Developments, including all rights of copyright or rights to patent or use
as a trade secret such Developments, both within the United States and
throughout the world. The obligation of Sections 7 and 8 are continuing and
shall survive the termination of this Agreement.
c. Assignment. Consultant shall execute and/or require his agents, servants
or employees to execute all applications, assignments, or other instruments
of any kind which SGI, at SGI's expense, shall deem proper or necessary to
apply for, obtain and enforce letters patent and/or copyrights of the United
States or of any foreign country or otherwise to protect SGI's interest in
such Developments.
d. Retention. Unless otherwise authorized in writing by SGI, all documents,
drawings and writings provided to Consultant by SGI hereunder or developed
by Consultant hereunder, and all copies thereof shall be returned promptly
to SGI upon completion or termination of Services.
9. Warranties. Consultant hereby warrants that he will carry out his work
in accord with generally accepted practices.
10. Termination. This Agreement shall be effective on the Effective Date
and continue in full force and effect until terminated in writing by either
party during a thirty (30) day period prior to the end of the term of the
Agreement.
11. Independent Contractor. Consultant is and at all times during the term
of this Agreement shall be an independent contractor providing professional
consulting services to SGI. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the
parties. Consultant shall have no power to commit or bind SGI in any manner
whatsoever.
12. Limitation of Liability. In no event shall either of the parties
hereto be liable to the other for the payment of any consequential, indirect,
or special damages, including lost profits.
13. Injunctive Relief. It is hereby understood and agreed that damages
are an inadequate remedy in the event of a breach by Consultant of this
Agreement and that any such breach by Consultant will cause SGI great and
irreparable injury and damage.
Accordingly, Consultant agrees that SGI shall be entitled, without waiving
any additional rights or remedies otherwise available to SGI at law or in
equity or by statute, and without posting any bond for injunctive and other
equitable relief in the event of a breach or intended or threatened breach
by Consultant of this Agreement.
14. Assignment.
a. Consent Required. Consultant shall not assign or subcontract the whole
or any part of this Agreement without SGI's written consent, which can be
withheld for any reason.
b. Subcontracting. Any subcontract made by Consultant with the consent of
SGI, which must be obtained before Consultant enters into any subcontract,
shall incorporate by reference all of the terms of this Agreement. Consultant
agrees to guarantee the performance of any subcontractor used in the
performance of the Services.
15. Conflicting Assignments. During the term of this Agreement, Consultant
shall not accept conflicting assignments, which would put Consultant in a
position where he would be rendering advice or providing information to any
party who might be a potential competitor of SGI presently or in the future,
nor shall Consultant provide any advice, which might disclose any
Developments or Technical Information related to the OCET Technology.
16. Disputes. If any dispute of any kind arises between the parties with
respect to the Consultant's performance under this Agreement, then the
dispute shall be submitted to arbitration in San Diego, California to the
American Arbitration Association (AAA). The dispute shall be submitted to
an arbitrator selected from a panel of arbitrators submitted to the parties
by the AAA. If the parties fail to agree on an arbitrator, the AAA shall
appoint an arbitrator and in the absence of such appointment, the parties
may request an appointment by making an application to the San Diego
Superior Court to order an appointment. Reasonable discovery, including but
not limited to depositions and interrogatories, shall be allowed in any such
arbitration. The decision of the arbitrator shall be binding to the same
extent as if the award were made by a court of competent jurisdiction.
17. Notices. Any and all notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given or received when
delivered personally or forty-eight (48) hours after being mailed, via first
class, postage prepaid, to the addresses set forth immediately below of the
parties hereto or to such other addresses as either of the parties hereto
from time to time designate in writing to the other party.
SGI: SGI International
1200 Prospect, Suite 325
La Jolla,
California
90037 Attn.: Joseph A. Savoca
Consultant: Professor Judith Ware
2539 Woodlands Way
Oceanside, CA 92054
18. Applicable Law. The provisions of this Agreement shall be construed
and enforced in accordance with the laws of the State of California.
19. Entire Agreement and Amendments. This Agreement constitutes the
entire understanding and agreement between the parties relating to the
subject matter hereof and supersedes any prior written or oral understanding
or agreement between the parties relating to the subject matter hereof.
This Agreement shall not be amended, altered, or supplemented in any way
except by an instrument in writing, signed by the duly authorized
representative of the parties, that expressly references this Agreement.
Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed
a waiver of that party's right thereafter to enforce each and every provision
of the Agreement and shall not otherwise affect the validity of this Agreement.
Severability. If any provision of this Agreement is finally determined to
be contrary to, prohibited by, or invalid under applicable laws or
regulations, such provision shall become inapplicable and shall be deemed
omitted from this Agreement. Such determination shall not, however, in any
way invalidate the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
in the year first above written.
SGI Consultant
SGI International,
a Utah Corporation
/s/
By: ================== /s/
By: =====================
Joseph A. Savoca Professor Judith Ware
Exhibit 4.27