AGREEMENT TO PROVIDE
EXCLUSIVE GEOEXCHANGE PROJECT SERVICES
BETWEEN:
DIAMONDVIEW DEVELOPMENTS LTD.
("Owner")
AND
ESSENTIAL INNOVATIONS TECHNOLOGY CORP. (EITC)
114 West Magnolia Street, Suite 400-142
Bellingham, Wash.
98225
USA
AND
ESSENTIAL INNOVATIONS CORPORATION (EIC)
#101 - 5219 192nd Street
Cloverdale, B.C.
V3S 4P6
Canada
[handwritten initials]
AGREEMENT TO PROVIDE
EXCLUSIVE GEOEXCHANGE PROJECT SERVICES
Made this 7th day of April 2005.
BETWEEN:
DIAMONDVIEW PROJECTS
(Hereinafter collectively "Owner")
OF THE FIRST PART
- - And -
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.
(Hereinafter "EITC")
OF THE SECOND PART
- - And -
ESSENTIAL INNOVATIONS CORPORATION
(Hereinafter "EIC")
OF THE THIRD PART
AND WHEREAS the Owner is in the process of becoming a `Developer Owner' as
defined under the Strata Property Act of British Columbia (the "Act") and under
freehold title owns, administers, manages and controls the lands and serviced
lots (the "LANDS") being municipally known as Diamondview, in Westbank, B.C.,
and desires the planned Diamondview Strata Lot residential project on the lands
to be serviced and supplied with a fully installed Geoexchange ("GXC") Heating,
Ventilation and Air-Conditioning ("HVAC") heating and cooling system for each
individual lot and pursuant residence.
AND WHEREAS the Owner has, or intends to, turn over Exclusive right and
ownership to such service and supply of individual Geoexchange systems to each
of the residential Strata Lots.
AND WHEREAS the project is to be registered as a Strata Corporation under Part
2, Section (2) of the Strata Property Act (the "Act") and will comprise 70
Strata Lots (Phase One) together with certain common property comprising
dedicated amenity space and areas.
AND WHEREAS the Owner intends to grant the Exclusive right to Essential
Innovations to design, engineer, build, install and provide on-going service,
[handwritten initials]
maintenance and operation for a turnkey Geoexchange HVAC system consisting of
localized heat pumps within each ultimate residence with EI then functioning for
the Strata as an energy service provider with Geoexchange technology experience
and thereby acting as the Exclusive owner/operator of the Geoexchange System
assets comprising all of the related underground works, piping, pumps, fluids
and controls providing the overall ground loop or "geo-field" component.
AND WHEREAS the Owner wishes to now formally sell the Exclusive right of
ownership of the "geo-field" component of the Diamondview project to EITC with
EIC then solely responsible to exclusively provide all other equipment
requirements of the complete turnkey geothermal solution to the project, being
the completed Geoexchange Heating and Cooling System with EIC then assuming
operational control and ownership of the geo-field to then manage, oversee,
administer and provide future maintenance as required of the "geo-field"
servicing said project.
AND WHEREAS the Owner desires EIC to furnish Geoexchange energy ("Geoexchange
Services") as permitted in law and as may be from time to time be licensed,
governed or permitted in accordance with any applicable provincial or federal
laws and regulations).
AND WHEREAS EITC now having Exclusive ownership may at any time assign this
agreement to, or enter into a contractual relationship, partnership, joint
venture or mutually shared service contract provision with, on terms of its own
choosing, any local municipal, provincial or state electric utility provider,
whether private or public, to furnish said Geoexchange energy and equipment in
conjunction with or as an integral energy component linked together with the
electricity supplied and required to run the system and equipment and other
electrical necessities of the subject Premises.
AND WHEREAS EIC's Geoexchange Services may be provided and its future contract
with the Strata Corporation may be administered in conjunction with, or in
direct co-operation with, or under direct co-ownership with, the electric power
provider.
AND WHEREAS the Owner hereby agrees within the Owner's property Disclosure
statement, to formally cause the Strata Corporation, that within the entirety of
the lands of the Diamondview project to enter into an energy service contract
under an Operating Lease with EIC for such services to be provided, and to grant
or cause the Strata Corporation to provide a geoexchange loop field service
easement over its lands to allow EI to enter onto the project for the purpose of
service and maintenance and to cause the Strata Corporation to completely
restrict the use of greenhouse gas producing fossil fuels for primary heating
purposes and to totally restrict any others but EI from the supplying the Strata
Corporation with said Geoexchange energy and equipment.
AND WHEREAS the Owner agrees to cause the Strata Corporation within the Owner's
property Disclosure statement to grant a Specific Security Agreement, registered
under the Personal Property Security Act, to EIC to secure the Strata
Corporation's Operating Lease payment obligations to Owner and specifically to
give Owner the right to distain Strata Fee payments in the event of default.
[handwritten initials]
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of mutual
covenants and agreements hereinafter maintained, each of the parties hereto
agrees with the other as follows:
1.00 Definitions
"Act" means the Strata Property Act and Strata Property Regulations, which came
into force July 1, 2002 in the province of British Columbia.
"Agreement" means this agreement including recitals and any instrument or
Schedule supplemental or ancillary hereto.
"Common Property" means all of the lands and premises, other than the Strata
Lots, that form the Strata Corporation created as part of the registration of
the Strata Plan.
"Commissioning," means the completion and full operational start-up of the
entire Geoexchange heating and cooling system. Commissioning includes, water
purging, system balancing, controls functioning, air balancing and all other
equipment functioning to ideal and design performance levels.
"Closing," means the date of closing for the purchase of the Geoexchange System
at the Premises.
"Default," means any failure of the Strata Corporation, to meet the payment of
any of the monthly Operating Lease payments on the monthly due date set out in
this Agreement. In the absence of any explicit contract clause to the contrary,
the Due Date shall be the first calendar day of each month during the Term of
the Agreement.
"Easement", means an access easement.
"Operating Lease Payment" means the monthly fee charged to the Strata
Corporation, a common expense obligation, by EIC to the Strata Corporation for
the ongoing lease and supply and use of Geoexchange temperature transference
ground exchange systems for the provision of HVAC services in the Strata
Corporation and Strata Lot property, including all HVAC services to individual
strata lots and common property areas. These fees are those of an Operating
Lease.
"Geoexchange" ("GXC") means ground or water source heat pumps and all associated
ground connections, heat transfer systems, heat exchangers, piping, controls and
related equipment and technology using natural ground or ground water
temperature as an energy source.
"Geoexchange Equipment" means all EIC manufactured and supplied equipment
comprised but not limited to: the "GXC" and "HVAC" systems located in or on the
Strata Title Plan premises but specifically excluding the Geoexchange Energy
Distribution System. This equipment will be specifically defined and listed in a
Project and Agreement specific Schedule.
[handwritten initials]
"Geoexchange Services" means the services provided by EIC from time to time, and
will include, but not be limited to, ground loop or ground water or water source
earth energy temperature extraction or discharge, temperature transference,
services to the Strata Corporation Common Areas or to individual Units occupied
by Unit Owners or their tenant, as the case may be, in the Project as and where
applicable.
"HVAC" means Heating, Ventilation and Air Conditioning Equipment.
"Limited Common Property" means common property designated for the exclusive use
of the owners of one or more strata lots.
"Mechanical Service Unit" means the main mechanical room (if present or
required) containing EI's primary distribution equipment; headers for the
underground loop field; main circulation pumps; heat exchangers and other system
equipment.
"Operating Lease" means the legal nature of the "Contract". This will be
attached as a schedule to this agreement.
"Project" means the lands and lots, including all of the Strata Lots and common
areas comprising the Strata Plan.
"Residential Strata Lot" is a lot designated for or intended to be used
primarily as the location for the construction of a residence within a
designated time frame as described within the Disclosure statement issued by the
Owner to the property buyer.
"Special Security Agreement" means an agreement providing for the assignment of
the monthly Common Expense payments payable by the Strata Lot owners to the
Strata Corporation over to EIC in the event of any default of payment of the
monthly operating lease payments (Operating Lease Payments) by the Strata
Corporation under the terms of the Operating Lease. This shall be an agreement
made under the Personal Property Security Act and which may be registered at a
Personal Property Registry office in British Columbia.
"Strata Corporation" on the registration of a Strata Plan there is constituted a
corporation under the name "Strata Corporation No. (#) " Which manages the
affairs of the unit owners and administers the common property on the behalf of
the owners; established under section 2 of the Act.
"Strata Lot Owner(s)," means the owner(s) of the Strata Lots located within the
Project.
"Strata Plan" a Strata Plan is a plan of subdivision for purposes of
registration with the registrar of titles as defined in the Land Titles Act of
British Columbia and in the contact of this Agreement the plan of subdivision to
be filed at the appropriate Land Title Office to create the strata lots, common
property and Strata Corporation in conjunction with the Project.
"Strata Lot" means a lot shown on the Strata Plan; which is a space that is
situated within a building and described as a discreet physical unit in a Strata
Plan by reference to floors, walls and ceilings.
[handwritten initials]
"Term" means the duration of term of the Geoexchange Operating Lease Agreement
2.00 Exclusive Ownership and Provision of Geoexchange Services
The Owner as Project developer wishes to grant the Exclusive right to provide
Geoexchange services to the Diamondview project to EITC for the building of a
complete Geoexchange System with EIC then having ownership and operational
control of the geo-field to supply the entire Strata development, as an
independent energy service Company to hold and own and to provide geo-field
leasing and services under an operating lease agreement. The system will be
built in accordance with Drawings and Specifications prepared by the EIC
engineering team. EIC agrees to assume full and legal responsibility for the
completion and commissioning of the system and to becoming sole title owner and
to assume full ownership responsibility, including all risks of performance and
full liability for future performance and major repair and replacement, of the
entire geo-field, as per the appropriate product and/or equipment warranty. The
Owner will make available to the Strata Lot owners and to the Strata Corporation
and all occupants of the Project, in accordance with an Operating Lease and the
Owner's terms and conditions therein as set out herein in accordance with the
Operating Lease Geoexchange Contract to be attached hereto in the future.
For this Exclusive right to provide geothermal energy services to the
Diamondview project EITC agrees to issue to the Owner an equitable stock and
option package in EITC, whilst the Owner in turn then agrees to place "certain
disclosure" in the lot sale disclosure statement to mandate the exclusive use of
EIC geothermal equipment and services, and to mandate a monthly lot holding fee
prior to construction and then the on-going monthly lease payment to EIC for the
use of the geothermal loop field installed and operated by EIC on each
individual residential site. Please refer to Schedule "F" for complete details
on the transaction between parties.
The Geoexchange energy services will be those services as governed by the
Operating Lease contract between the Strata Corporation and EIC as set out in
Schedule "A" hereto "Geoexchange Operating Lease Contract" and such additional
services as may be determined and negotiated by the Owner from time to time,
subject to terms and conditions which may require Strata Corporation approval.
These Operating Lease contract services will include:
a) Administration of the ground loop or ground water earth energy
temperature extraction and discharge systems, including all
piping, loops, lateral and vertical grouted pipes and bore
holes and temperature transference systems,
b) Fluids management (in GXC Loop-field) only,
3.00 Exclusive Right to Provide Geoexchange Services and Restrictive
Covenants
The Owner will disclose in the property disclosure statement that the Strata
Corporation has agreed to enter into a binding Operating Lease contract with EI,
attached as Schedule "A" hereto, for a Term of 25 years and to grant the sole
and exclusive right to
[handwritten initials]
own and operate the Geo-loop field (temperature) to the Premises, subject to the
terms and conditions of the Operating Lease.
4.00 Access
The Owner will cause the Strata Corporation to enter into an operating lease
"Operating Lease Geoexchange Contract " which will grant to EIC and its
authorised agents without charge in law all rights as can be granted by the
Strata Corp. for unimpeded access, at all reasonable times to those portions of
the Strata Corporation and common areas or strata lots, as may be necessary, for
the provision of the Geoexchange Services from the entrance point of the
property line of the Premises continuously to each existing or future equipment
station within each strata lot, common area or amenity space in the project
where GXC HVAC equipment is installed.
5.00 Owner's Obligations
The Owner agrees to cause the Strata Corporation to enter into an Operating
Lease "Operating Lease Geoexchange Contract "upon registration of the Strata
Plan. The Owner agrees to cause the Strata Corporation to give a Special
Security Agreement to EIC. Once the Operating Lease and Special Security
Agreement have been entered into, the Owner is forever released from any further
liabilities with respect to the GXC HVAC system.
The Owner will cause the Strata Corporation to register a Specific Security
Agreement (SSA) to be registered at the Personal Property Registry office under
the Personal Property Security Act (PPSA) securing EIC's rights of assignment of
Common Expense fees to EIC as security for the payment of EIC Operating Lease
fees by the Strata Corporation in the event of Default. This right will be
limited in quantum to those amounts strictly owing to EIC under the terms of the
Operating Lease and EIC shall have no right to hold or claim any excess amounts
of Common Expense Fees. It will be EIC's obligation to register its security
interests in the Personal Property Registry and the Land Titles Office.
6.00 Tampering
The Owner will neither use nor authorize the use by any other person or entity
of the geo-loop Distribution System as long as it is in control of the Project
as Owner Developer.
7.00 Strata Corporation
It is specifically agreed that the Project will be registered under a Strata
Plan and a Strata Corporation will be created. The Owner become an Owner
Developer, under the terms of the Act, and will forthwith cause the Strata
Corporation to enter into, execute and be bound by an Operating Lease contract
and to further execute a separate document to grant a Specific Security
Agreement to EIC requiring an assignment of Common Expense Fees to EIC in the
event of any default under the Operating Lease.
[handwritten initials]
7.1 Monthly Operating Lease Payment
The Owner shall cause the Strata Corporation to enter into an
Operating Lease which will require the Strata Corp to pay to
EIC a monthly charge and such additional amounts for all
applicable provincial and federal sales and goods and services
taxes as required by law in British Columbia.
8.00 Assigns
This Agreement including, without limitation, any renewals thereof will enure to
the benefit of and be binding and the parties hereto and their respective heirs,
executors, administrators, successors and assigns. The parties agree to execute
any other instruments and further document which may be necessary to carry out
the purpose and intent of this Agreement.
9.00 Waiver
No provision of this Agreement will be deemed waived by a course of conduct and
no waiver will be effective unless such waiver is in writing signed by all
parties and stating specifically that it was intended to modify this Agreement.
10.00 Laws
This Agreement will be governed in accordance with the laws of the jurisdiction
in of British Columbia, Canada and the Parties attorn to the exclusive
jurisdiction of the Courts of the Province of British Columbia. This agreement
and the Operating Lease will for legal purposes be signed in the Province of
British Columbia.
11.00 Authority
The Owner hereby represents and warrants to EIC that it has the authority to
enter into this Agreement and will later have authority to act under the Strata
Property Act in the capacity of Owner Developer and will execute the agreements,
operating lease and all other documentation as required to effect the
transaction.
12.00 Notice
Any notice or communication hereunder will be in writing and sent by registered
mail to the other party, delivered personally or transmitted by facsimile to the
following addresses:
To ______________ ("Owner"):
Diamondview Developments Ltd.
To:
[handwritten initials]
Essential Innovations Corporation
#101 - 5219 192nd Street
Surrey, B.C.
V3S 4P6
Fax: (604) 574 9597
Any such notice will be effective on the seventh (7th) day of uninterrupted
postal service after the postmark date if mailed by registered post, on the day
received if delivered personally and, on the third business day following the
date of transmission, if sent by fax. E-mail Notices are not permitted.
13.00 Indemnities and Warranties and Liabilities
Upon receiving the grant from the Owner of the Exclusive right to own and
operate the geo-field on the Diamondview site and the completion of execution of
the Operating Lease by the Strata Corporation, EIC will assume full liability
for the geo-field distribution system and will fully indemnify the ("Owner") for
all matters relating to the design, construction, supply and future operation of
said geo-field. This indemnity will cover all matters relating to the design and
construction and operation of the geo-field, including sufficiency of
construction, completion of construction, accounts relating to the construction,
any financial or tax obligations (except for any failure of ("Owner") to have
failed to remit any due or relevant applicable GST or Provincial Sales Taxes, if
any, during the pre-construction and construction period up to an including the
Commissioning of the geo-field distribution system). Upon completion of the
geo-field by EIC and execution of the Operating Lease, EIC will assume the
rights, privileges and full ownership obligations of the geo-field, including
the right to exert any and all Warranty Claims, and to exert rights of contract
as EIC will be recognized as the original contracting party for the supply of
design and construction services and ("Owner") will irrevocably and completely
waive all rights relating to same to EIC. These rights waived by Owner will
include the right to exert any claim against the design engineer(s) or
consultants or their Professional Liability Insurance carrier(s) for any failure
to design or provide services in accordance with industry standards,
professional practice standards or related maters, any of which might result in
system failure or less than satisfactory performance of the installed geo-field
distribution system. In the event any consultant, professional, contractor,
designer, supplier, trade, or installation party makes or exerts any defence in
law against any warranty or liability claim by EIC based upon EIC's standing as
the original contracting party, then ("Owner") has the obligation, at the sole
expense of EIC, to participate in any such claim, at the behest of EIC and in
full cooperation with EIC. EIC shall indemnify ("Owner") for all third party
costs for such participation. EIC will be responsible for all of the costs of
registration of its Operating Lease, including the costs of any charges, taxes,
license fees or related expenses whatsoever due and payable as a result of the
assumption of ownership and the registration of the Operating Lease and Special
Security Agreement in the Province of British Columbia. The full risks, reward
and obligations of ownership remain with EIC as the energy service provider and
Lessor and owner of the system and operator under the terms of the Operating
Lease, without limitation or restriction.
[handwritten initials]
14.00 Headings
The headings appearing, in this Agreement have been inserted solely for the
convenience of the parties and will be of no force and effect in the
construction of the provisions of this Agreement.
15.00 Entire Agreement
This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings
whether written or oral relative hereto.
16.00 Authority
The parties who execute this Agreement hereby represent and warrant that they
have the authority to enter into this Agreement, that the individual signing
this Agreement has the authority to so sign and to bind with respect to the
terms of this Agreement.
18.00 Validity
This is a firm contract and contains no subjects aside from the requirement for
final construction designs for each of the residences on the property that may
or may not then fall within the cost estimates derived from certain assumptions
expected for homes of a particular square footage using certain construction
materials. It is agreed that such variance may occur within individual home
design, and that the Owner will deem this reasonable if necessary and that these
are additional costs the Owner will agree to bear.
19.0 Equipment Caveat
The Owner agrees that it WILL mandate in the lot disclosure statement that each
lot-purchaser and homebuilder/homeowner MUST purchase geothermal heat pumps
manufactured and/or supplied by EIC. Also, the Owner agrees that it WILL mandate
that each of the homeowner's MUST use the services of the residential mechanical
design and installation team at EIC for each home to be constructed. The
geothermal loop field within the subdivision project has been exclusively
designed and installed by EIC and is set-up for optimized working conditions
with geothermal heat pumps manufactured by EIC. The mechanical design and
installation within each home is also critical to assure the best system
operating conditions possible, and EIC brings with it expertise like none other
in the local marketplace, in terms of mechanical system design and ducting
installation systems for geothermal heat pumps.
20.0 Emission Credits
Upon registration of system ownership and until such time that the Operating
Lease has run its course, EIC will at all times have and not only be the sole
owner of the geo-field installed at or on the premises of the Owner but at all
times will also be the sole owner of and have exclusive rights to any Greenhouse
Gas, Carbon Dioxide or other pollution related Credits which may or may not be
applicable at any time on the site due to the energy efficiency or energy
reduction capacity of the geothermal heat pumps exclusively
[handwritten initials]
sold and provided to the homeowner by EIC. Any updating or improvement to the
technology by EIC of the system owned by EIC which results in further
conventional energy usage reduction resulting in any further Credits, will be to
the sole account of EIC and EIC shall have the unrestricted right of ownership
or trade of such Credits resulting form the efficiency of its equipment, system,
design and continuing usage at and on the Owner's premises.
21.00 Limitations
This document has been generated from preliminary data provided by the land
developer and other parties related to the Diamondview project site, and are for
the exclusive use of the Diamondview project. Information provided by others to
EIC has not been independently verified. EIC has relied in good faith on this
information and does not accept responsibility for deficiencies or inaccuracies
with any and all information provided by others.
[handwritten initials]
IN WITNESS WHEREOF the parties have executed and delivered this Agreement THIS
7th DAY OF APRIL 2005.
FOR: DIAMONDVIEW DEVELOPMENTS LTD.
NAME: /s/ Glen Campbell
I/We have authority to bind the Corporation
POSITION: Principal
NAME: /s/ Paul Yu
I/We have authority to bind the Corporation
POSITION: Principal
FOR: ESSENTIAL INNOVATIONS TECHNOLOGY CORP.
NAME: /s/ Jason McDiarmid
I/We have authority to bind the Corporation
POSITION: President
FOR: ESSENTIAL INNOVATIONS CORPORATION
NAME: /s/ Steve Wuschke
I/We have authority to bind the Corporation
POSITION: President
[handwritten initials]
SCHEDULE "A"
PROPERTY LEGAL DESCRIPTION
TO BE PROVIDED BY ("Owner")
[handwritten initials]
SCHEDULE "B"
Ground Exchanger Specifications
1. General Provisions
1.1.1 To provide a complete geothermal loop field as shown on the drawings,
and according to certain specifications and the requirements as agreed
to within the Agreement
1.1.2 The Owner is to apply, obtain and pay for all required permits,
licenses and inspections.
1.1.3 Each individual homeowner or building contractor shall provide as-built
drawings to Essential Innovations, whether done in-house or by
employing the mechanical engineering consultant.
2 Equipment and Materials
2.1.1 All materials, components, and equipment forming the geothermal
loop-field shall meet the requirements of CSA Standard C448-02.
2.1.2 All materials, components and equipment forming the geothermal
loop-field shall be free of defects and debris.
3. Piping Material and Fittings for the Ground Heat Exchanger
3.1.1 High-density polyethylene (HDPE) is the only acceptable material for
piping used to form the ground heat exchanger. The HDPE pipe must be
CSA approved, and abide by the requirements of CSA Standard B137.1, and
CSA Standard C448. HDPE fittings shall be made with the same resin
compounds as the HDPE pipe. The same manufacturer shall be used for
both pipe and fittings.
3.1.2 The wall thickness / pressure rating of all HDPE pipe shall be SDR 11 /
Series 160.
3.1.3 An IGSHPA Accredited Installer or a certified Geothermal Service
Contractor will and must install HDPE pipe through Essential
Innovations.
3.1.4 Socket- and butt-fusion are the only acceptable processes for fusing
HDPE pipe and its fittings, and the fusion process must follow
manufacturer's written instructions.
3.1.5 Elbow fittings are to be installed where a sharp bend would occur
otherwise.
4. Ground Heat Exchanger Piping
4.1.1 While on-site, HDPE piping shall be capped or have temporary plugs
installed to ensure that no debris, soil, and small animals have
entered the pipe prior to any fusion or installation into the ground or
water.
[handwritten initials]
5. Vertical Ground Heat Exchanger Systems
5.1.1 Manufactured U-bends will be used to construct the U-tubes.
5.1.2 U-tubes will be piped together in parallel circuit configurations.
Parallel systems will be used in all vertical ground heat exchangers.
5.1.3 Ground loops shall be pressurized with water during grouting and
backfilling to avoid pipe collapse.
5.1.4 Grouting of the entire vertical borehole shall be done by pressure
pumping through a tremie pipe in accordance with IGSHPA guidelines and
with all provincial and local requirements. Grout material may contain
smooth, small rocks, but not sharp, jagged rocks or large rocks that
may puncture the HDPE pipe.
Additional grout may be required due to settling of the initial grout. The
contractor shall monitor each borehole and provide additional grout where
necessary.
[handwritten initials]
SCHEDULE "C"
EI Minimum Maintenance Specifications for "Strata":
"Strata" is responsible for purchasing the following maintenance terms from
Essential Innovations in regards to the actual Heat Pump installations in each
of the homes:
1. A maintenance check-up, by a licensed refrigeration mechanic
or EI approved equivalent, shall be conducted. The interval
between check-ups shall be no longer than six (6) months. A
three (3) month interval between maintenance check-ups is
recommended.
2. During each maintenance check-up, the following items are to
be completed for the water-to-air heat pumps:
o Air filter changes
o Clean condensate drip pan and clean/flush its
condensate pipe (algaecide may be required)
o Vacuum air-side of coil and internal areas where dirt
may accumulate (care must be taken not to damage the
aluminum fins)
o Clean fan, plenum above fan coil, and wall panels of
any dirt/mold accumulation
o Check hose connections and associated pipes for leaks
o Check fan coil for excessive noise and vibration
3. During each annual maintenance check-up, recording of
performance measurement data is required. This data shall
include volts, amps and water temperature difference. This
data shall be compared to the information on each heat pump
unit's data plate and the data taken at the original equipment
start-up. The measurement data shall be reported to EI.
4. During each annual maintenance check-up, the electrical
operation of contactors, relays and reset switches will be
checked, while ensuring all wires are connected tight. As
well, the fan will be checked for imbalance and bent blades.
The verification of these components shall be provided to EI.
A maintenance check sheet will be provided at the completion
of the project, which will include the above items, as well as
additional maintenance items for up keeping the system to its
utmost potential.
EI Maintenance Responsibilities:
EI will repair, replace and maintain all buried pipes, headers and distribution
feeds, all in ground valves, monitor switches, flow control regulators and check
valves at its sole and exclusive cost, as required. All fluid within the pipes
will be maintained by EI exclusively.
[handwritten initials]
SCHEDULE "D"
Geo-Field Installation
SCOPE OF WORK BY ESSENTIAL INNOVATIONS
Essential Innovations is to provide the following services to each of the
property sites in the Diamondview project under the Agreement:
1. Engineering, design, material and installation services for the entire
geofield component (Complete ground works for Geoexchange system
(ground heat exchanger configuration to be determined);
2. The entire drilling component required to complete the required
vertical loop geofield component (Ground Works per Phase will include
complete vertical closed loop exchanger or such number of 200 - 300 ft
drilled wells on a matrix that allow for associated civil and
structural ground works including: Typical Matrix is based on 20 ft.
spacing. The HDPE pipe shall be supplied by Essential Innovations and
is SDR 11, 448 Standard, 1 inch with a 50+ year Warranty.
3. All trenching and dewatering costs for Horizontal ground works. This
involves using a small backhoe for a few days and is normally
coordinated among other on site activities. Dewatering is not likely
required but no costs were involved in this proposal for this event.
4. Labour to commission the drilling, oversee the drilling, install the
loop pipe, manage the mixing and feeding the grout into the boreholes,
fusing the headers, purging the loop field and running the series of
horizontal headers to the expected location of the building foundation
[handwritten initials]
SCHEDULE "E"
Interior Installation (to be paid by Homeowner to Essential Innovations)
SCOPE OF WORK or FUTURE REQUIREMENT OF HOMEOWNER
Documentation supplied by Homeowner
The Homeowner will provide to Essential Innovations the following documentation
before drilling of a geo-field shall commence on each individual property site:
o Site layout drawings in electronic (AutoCAD or equivalent),
and paper format depicting footprint area of the building.
o Approved mechanical and electrical drawings for the homesite
inclusive of all HVAC components specific to this project.
o Essential Innovations will calculate detailed heat loss/heat
gain calculations for the proposed building, however, as a
minimum; the customer-supplied drawings will include complete
dimensional and tolerance specifications.
o All permits and approvals required
Equipment purchased by Homeowner from Essential Innovations
The Homeowner will purchase exclusively from Essential Innovations and
therefore provide all HVAC mechanical equipment including:
o Individual ground-source heat pump(s) in each residence,
thermostatically controlled; Heat Pumps will be supplied by
Essential Innovations - EI Elemental units (Price sheet
attached)
o Units will be provided at less than dealer cost and with
shipping terms of payment to be negotiated to fit construction
schedule (see attached price list).
o Water-Water Heat Pumps for Domestic Hot Water, Swimming Pools
and Hot Tubs. Sizes to be determined.
o Ground heat exchanger central circulating pumps;
o All Domestic hot and cold water piping and associated
equipment
o Heat pump condensate drain piping
Exclusive Services supplied by Essential Innovations to the Homeowner
Essential Innovations will exclusively provide the following services
to the Homeowner:
o Site installation of equipment supplied by Essential
Innovations to include installation of geothermal heat pump
and controls. Installation will be coordinated with Essential
Innovations to ensure that they are solely responsible for the
heat pump installation.
o Any Geoexchange design modifications to initial specifications
to be supplied by Essential Innovations.
o All electrical services and connections and hook-ups required
for all Heat Pump equipment.
o All electrical power and power supply required to run Heat
Pump equipment.
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o All requisite plumbing required for the geothermal heat pump
installation;
o Geothermal system commissioning;
o Control wiring
o All associated piping, pipe insulation, all duct work and
sheet metal work, duct insulation as required;
o Testing, balancing and commissioning
Any additional thermostats and zone controllers desired by the homeowner are
$500/zone installed.
Installation services will be quoted and determined on a job-by-job basis, but
will be charged at better than fair market value.
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SCHEDULE "F"
Term Sheet: Diamondview Project
Parties to the Transaction:
Diamondview Developments Ltd. ("DDL")
Essential Innovations Technology Corp. ("EITC")
Essential Innovations Corporation ("EIC")
To DDL from EITC:
225,000 shares of 144 common stock issued to DDL based on a $1.00 fair market
value (comes with a 1 year hold period)
If after 1 year from the initial date of issuance, the value of the
shares is lower than $1.00 in the ensuing publicly traded market, the
Company agrees it will issue to DDL such number of common shares of the
Company as is necessary to achieve the current determined value of
$225,000 thereby keeping the transaction equivalent with the initial
perceived transaction value.
75,000 options @ $0.75/share March 31, 2010
75,000 options @ $1.00/share March 31, 2010
To EIC from DDL:
DDL agrees to put into their lot disclosure statement, language to the effect
that "EIC is the sole and exclusive provider of Geothermal Systems and Services
to the Diamondview project. When you (the buyer) purchase a lot in the
Diamondview project you (the buyer), hereby commit to an on-going monthly fee
payment to EIC for a term of 25 years, for the use of the geothermal loop field
EI installs on each of the homesites, and you (the buyer) additionally commit
exclusively to the utilization of a geothermal heat pump in your residence for
heating and cooling purposes, such geothermal heat pump to be both manufactured
by EIC and installed by EIC and only EIC, unless specifically and otherwise
determined by EIC.
Schedule of Homeowner Operating Lease Payment to EIC:
Up to and including 60,000 BTUh Design Load: $ 175/mth
Up to and including 78,000 BTUh Design Load: $ 225/mth
Up to and including 96,000 BTUh Design Load: $ 250/mth
Up to and including 120,000 BTUh Design Load: $ 275/mth
Also DDL agrees to put in their disclosure statement that each lot buyer will be
subject to a monthly holding fee on the lot they purchased equal to $125/month
that will be payable to EIC each and every month from the date of purchase until
such time that construction is complete on their residence, at which point the
full 100% monthly geothermal loop field payment would begin based on the
appropriate and corresponding BTUh rate.
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Diamondview residents will purchase geothermal heat pumps and associated
equipment from EIC based on a .55 multiplier from the EIC price list. In home
equipment installation services will be quoted and determined on a job-by-job
basis, and will be charged to the homeowner at better than fair market value.
First Right of Refusal on Future Available Lots for Development
Based on current discussions between the DDL and EIC, it is expected that in all
likelihood there may be additional single-family lots available in the next
phase of the Diamondview project on a lower parcel of land under their control.
In this case, assuming that there are further lots for development, then DDL
agrees that EIC is also hereby given the first right of refusal for the heating
and cooling component of that phase of the project to act in the role of
Geothermal provider for these future lots should they wish to do so.
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