Exhibit 10.02
TECHNOLOGY SALE AGREEMENT
THIS AGREEMENT dated for reference the 20 day of February, 2002.
BETWEEN:
WILLIAM BAUMGARTNER,
of Unit 11 - 1126 Osprey Lane,
13th Avenue, Invermere,
British Columbia V0A 1K0
(hereinafter referred to as "Inventor")
OF THE FIRST PART
AND:
ESSENTIAL INNOVATIONS TECHNOLOGY CORPORATION, a
company duly incorporated under the laws of the State
of Nevada, and having its registered office at One
East First Street, Reno, Nevada, U.S.A., 89501
(hereinafter referred to as "Essential")
OF THE SECOND PART
WHEREAS:
A. Inventor has filed a Provisional Patent Application with the United States
Patent and Trademark Office in regard to a "Device for Intensive Aeration of
Waste Water" (herein the "Aeration Technology");
B. Essential is desirous of obtaining the worldwide rights to the Aeration;
C. Inventor has agreed to transfer all his right, title and interest in the
Aeration Technology, including any patents now or hereafter granted in any
country, free and clear of all liens, charges and encumbrances, subject to the
grant of a royalty to him;
D. The parties wish to enter into this Agreement to set forth their respective
rights and obligations.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants, terms and conditions contained herein, the parties covenant
and agree with each other as follows:
ARTICLE I - Definitions
1.01 In this Agreement the following words, phrases and expressions
shall have the following meanings:
(a) "Aeration Technology" means a process for, inter alia, the
efficient oxygenation of a liquid, such as waste water, or
bio-mass in municipal waste treatment plants, and for which a
Provisional patent Application has been filed in the United
States Patent and Trademark Office, a true copy of which
application is attached hereto as Schedule "A", and:
(i) any patent or patents now or hereafter granted in
regard thereto, including any and all renewals,
divisions, continuations, continuations-in-part,
reissues, extensions or additions of or to the
aforesaid patent; and
(ii) all designs, improvements, discoveries, concepts,
ideas, knowledge and inventions, whether or not
capable of industrial or intellectual property
protection under any applicable legislation, made or
conceived or reduced to practice by the Inventor, his
employees, agents or independent contractors or
consultants retained by him;
(b) "Gross Sales Proceeds" means the actual gross proceeds
received by Essential from third parties in the sale,
licensing, franchising or exploitation of the Aeration
Technology less any administrative costs, direct costs or
marketing costs or deductions in regard thereto; and
(d) "Know-how" means the technical information, knowledge and
expertise concerning the design, construction, operation and
use of the Aeration Technology, and all feasibility studies,
design engineering, construction drawings and operational
knowledge and conditions, plus all knowledge and information
in regard to the marketing of products derived from the
Aeration Technology.
ARTICLE 2 - SALE OF AERATION TECHNOLOGY AND ROYALTY INTEREST
2.01 Inventor hereby sells, transfers, assigns and conveys to Essential
all right title and interest in and to the Aeration Technology.
2.02 The parties shall co-operate in the development and marketing of
the Aeration Technology and in such regard shall inform each other of all
Know-how.
2.03 In consideration of the transfer of his interest in and to the
Aeration Technology Inventor shall be entitled to receive and Essential shall
pay to him a royalty of one percent (1%) of Gross Sales Proceeds (the
"Royalty").
2.04 Payment of Royalty: The Royalty shall be calculated on a calendar
quarter basis and paid, without set-off or counterclaim, for each quarter within
30 days of the end of such quarter. Any amounts not paid within 30 days shall
bear interest, calculated from the end of the quarter for which such payment was
due, at the prime lending rate charged by the Royal Bank of Canada to its most
credit worthy customers plus two percent (2%). To the extent that the revenue
received by Essential for the sale of the Aeration Technology or other
applications of the technology is in a form other than the lawful currency of
the United States of America, the Royalty shall be paid to Inventor in the
lawful currency of the United States of America based on published foreign
exchange rates (as constituted on the last day of the applicable quarter)
reasonably designated by Inventor. Essential shall be responsible for
maintaining books and records which accurately document its revenues and the
Royalty.
2.05 Report of Aeration Technology Sales: Within 30 days following the
close of the first calendar quarter in which there are any revenues generated
from the Aeration Technology, Essential shall provide Inventor with a written
report showing the sales in such quarter and the amount of Royalty payable with
respect thereto, certified by the accountant for Essential. Thereafter, within
30 days following the close of each calendar quarter, Essential shall provide
Inventor with a written report showing the amount of sales in such quarter and
the amount of Royalty payable with respect thereto.
2.06 Examination of Books and Records: Upon the written request of
Inventor and, except as otherwise provided below, at Inventor's expense,
Essential shall allow and make available (during reasonable times and with
reasonable advance notice so as to minimize interference with Essential's
business operations) its books and records to be examined and audited by an
independent firm of chartered accountants appointed for the purpose of
determining compliance with Royalty obligations under this Agreement. If such
audit discloses any discrepancy in the amount of Royalty paid, the appropriate
adjustment shall be made immediately thereafter. To the extent of an
overpayment, the amount due from Inventor shall be deducted from future
payments. In the event that any such examination or audit shall determine that
the Royalty actually paid for any period was less than 95% of the amount
properly payable, or was greater than the amount that should have been paid,
Essential shall pay the reasonable expenses actually incurred by Inventor in
connection therewith, in addition to all previously unpaid Royalties. Inventor
and its representatives shall not use or disclose such books and records, nor
any of the specific information contained therein, to any third parties except
as reasonably necessary if Essential is in breach of this Agreement.
ARTICLE 3 - PATENT TRANSFERS
3.01 Essential shall be entitled to a transfer of any patents issued
and the right to receive and apply for any future patents and to utilize and
exploit the Aeration Technology throughout the world.
ARTICLE 4 - PATENTS AND TRADEMARKS
4.01 Inventor warrants, represents and covenants with Essential that
the Inventor is the owner of the Aeration Technology and technical information,
theory, knowledge, process and expertise concerning the design, construction and
use of the Aeration Technology and that he has the right to sell, transfer,
assign and convey the rights to the Aeration Technology to Essential.
4.02 Any modification, improvement or variance of the Aeration
Technology created through the efforts of Inventor and which is patentable may
be patented by Inventor but such application and any subsequent patent therefore
shall form part of the Aeration Technology.
4.03 Essential shall pay and be responsible for any maintenance fees
payable to the United States Patent and Trademark Office and shall be
responsible for the same in any jurisdiction in which it elects to apply for
patent protection and which may be required to maintain any patents hereafter
issued during the term of this Agreement.
4.04 Inventor agrees to use his best efforts to obtain a United States
patent for the Aeration Technology and in such regard agrees to diligently
proceed with the prosecution of the patent application and to respond in a
timely manner to all "Office Actions" received from the United States Patent and
Trademark Office.
4.05 Inventor agrees to cooperate fully with Essential in the filing of
all necessary documents and applications to protect the Aeration Technology in
such other jurisdictions as Essential may consider appropriate.
ARTICLE 5 - INFRINGEMENT
5.01 If a patent is issued for the Aeration Technology and subsequent
thereto any person other than Inventor, Essential or an authorized licensee of
Essential, is utilizing technology which appears to infringe any patents or
trademarks issued with respect to the Aeration Technology Essential shall at its
expense take all reasonable steps to terminate or enjoin the apparent
infringement thereof and the Inventor agrees to cooperate in such proceedings
and perform all acts and execute all documents, and participate in any suit to
terminate or enjoin such infringement as may be necessary or desirable, and in
such event any damage award or settlement shall enure to the sole benefit of
Essential.
5.02 If Essential fails to comply with article 5.01 aforesaid within
sixty (60) days after receiving written notice from Inventor of such apparent
infringement, then Inventor shall have the right to take all steps, proceedings
and actions in his own name and sole discretion as he may deem advisable to
terminate or enjoin the apparent infringement and in such event Essential hereby
transfers and assigns to Inventor all claims, actions or right to action to
institute any suit and shall cooperate and participate in any such suit or
proceedings to terminate or enjoin such infringement, and in such event any
damage award or settlement shall enure to the sole benefit of Inventor.
ARTICLE 6 - NON COMPETITION
6.01 Inventor shall not market, sell or distribute or utilize the
Aeration Technology, whether as an individual, with a firm, association,
syndicate, corporation, partnership or other enterprise, whether as principal,
agent, shareholder, officer, director, employee, or in any manner whatsoever or
permit its name to be used or employed with any such business.
ARTICLE 7 - WARRANTIES AND REPRESENTATIONS OF INVENTOR
7.01 Inventor warrants and represents to Essential as follows:
(a) he has developed the Aeration Technology and owns, possesses
and has title to such and all documentation, designs,
flowsheets and related materials free and clear of all liens,
charges and encumbrances ;
(b) he has not granted or agreed to grant any license or right or
entered into any other agreement whereby he is obliged to give
any other person, firm or corporation any rights to utilize or
sell the Aeration Technology; and
(c) this Agreement has been duly and properly executed by him and
is binding upon him.
ARTICLE 8 - WARRANTIES AND REPRESENTATIONS OF ESSENTIAL
8.01 Essential warrants and represents to Inventor as follows:
(a) Essential is a company duly incorporated under the laws of
Nevada in good standing in accordance with the laws of such
jurisdiction and shall remain so during the term of this
Agreement;
(b) it shall use its best and reasonable efforts to utilize and
exploit the Aeration Technology in accordance with the terms
and conditions of this Agreement;
(c) it shall comply with all applicable laws, orders and
regulations relating to the utilization of the Aeration
Technology and, where required by applicable laws, become
registered in such jurisdictions where it may exploit the
Aeration Technology; and
(d) all projects utilizing the Aeration Technology shall be done
in a professional manner that maintains the reputation and
integrity of Inventor and the Aeration Technology.
ARTICLE 9 - GENERAL PROVISIONS
9.01 This Agreement shall be governed by and construed in accordance
with the laws of the Province of British Columbia and the parties agree that any
legal proceedings for the enforcement of any rights or obligations under this
Agreement or arising therefrom shall be commenced and prosecuted in the Supreme
Court of British Columbia at Vancouver, British Columbia.
9.02 Any notice required or permitted to be given hereunder shall be in
writing and shall be delivered personally or mailed by registered mail, postage
prepaid, to the parties at their addresses set out on the first page hereof or
such other address as a party may advise the other in writing, and any such
notice shall be effective on the date of receipt thereof.
9.03 This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first written above.
SIGNED, SEALED AND DELIVERED by )
WILLIAM BAUMGARTNER in the )
Presence of )
)
)
/s/ Jason McDiarmid ) /s/ William Baumgartner
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Signature ) WILLIAM BAUMGARTNER
)
Jason McDiarmid )
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Name )
)
1839 Laronde Dr. )
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Address )
)
S. Surrey / B.C. V4A 8R6 )
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)
President )
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Occupation )
THE CORPORATE SEAL of )
THE ESSENTIAL INNOVATIONS )
TECHNOLOGY CORPORATION was )
affixed hereto in the presence of: )
) C/S
/s/ Jason McDiarmid )
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Authorized Signatory )
)
President )
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