PURCHASE AGREEMENT
This Agreement is made as of the 26th day of May 2003.
Between:
XXXXXXX XXXXXXXXXXX, Ph.D., Engineer, and
M.A. TURBO/ENGINE LTD. a British Columbia company with offices at
0000-0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0
(herein collectively called the "Vendor")
Of the First Part
And:
RIVAL TECHNOLOGIES INC., a British Columbia company with offices at
#000-000 Xxxx Xxxxx, Xxxx Xxxxxxxxx, XX, Xxxxxx X0X 0X0
(herein called the "Purchaser")
Of the Second Part
WHEREAS:
The Vendor owns a 100% interest in a continuous water injection technology
used to lower emissions and improve fuel efficiency for diesel engines;
The Vendor has agreed to sell and transfer 100% of the technology to the
Purchaser, on the terms and conditions hereinafter contained.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of ten
dollars ($10) paid to Vendor, plus the representations, warranties,
covenants and agreements herein (the receipt and sufficiency of which is
hereby acknowledged by each of the parties), the parties agree as follows:
1. DEFINITIONS
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1.1 "Technology #1" (Automotive Technology) means continuous water
injection technique for engines in the automotive, rail
transportation and power generation industries (trucks, cars, buses,
trains, power plants) excluding the marine industry. This includes
all inventions, discoveries, designs, ideas, works, documents,
drawings, patents, compilations of information and databases,
analyses, experiments, test results, data, data structures,
technology, reports, domain names, know-how, formulas, methods,
processes, techniques, hardware, software, and documentation
therefore, specifications, source code listings, models, products
and prototypes relating to reducing non-marine engine emissions and
fuel consumption, and includes any modifications or improvements
thereto, whether patentable or not, which are conceived, developed,
created, generated or reduced to practice by the Vendor.
1.2 "Technology #2" (Marine Technology) means the application of the
Technology to marine engines, installed on ferries, boats, merchant
vessels and other marine transportation sources.
2. PURCHASE AND SALE
-----------------
2.1 The Vendor hereby agrees to sell, transfer and assign 100% of
Technology #1 to the Purchaser at Closing, for the Purchase Price,
subject to the terms and conditions of this Agreement. Technology #1
will be transferred free and clear of all encumbrances, save and
except the Royalty set forth in section 7 of this Agreement.
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2.2 The Vendor hereby agrees to sell, transfer and assign 20% of
Technology #2 to the Purchaser at Closing, for the Purchase Price,
subject to the terms and conditions of this Agreement.
3. PURCHASE PRICE
--------------
3.1 The Purchase Price for Technology #1 shall be the common shares
(the "Shares") of the Purchaser, issued in accordance with Schedule
"C" hereto at a deemed value of $.001 per share, and subject to the
terms and conditions of this Agreement.
3.2 The Purchaser agrees to provide funding for Technology #1 of two
hundred and thirty thousand dollars ($230,000) to M.A. Turbo/Engine
Ltd., to be funded and used in accordance with Schedules A and B.
3.3 The Purchase Price for Technology #2 shall be the common shares
(the "Shares") of the Purchaser, issued in accordance with Schedule
"C" hereto at a deemed value of $.001 per share, plus one hundred
thousand dollars ($100,000), subject to the terms and conditions of
this Agreement.
4. CLOSING
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4.1 The closing for Technology #1 shall take place on or before
June 6, 2003, at which time the Shares will be issued and Technology
#1 transferred. The closing documents shall be held in escrow by the
Purchaser's counsel until such time as the Purchaser's funding
commitment is completed, after which the closing documents will be
released to the parties. If the Purchaser is unable to complete its
funding commitment on or before December 31, 2004, this portion of
the Purchase Agreement is terminated and Technology #1 will be
returned to the Vendor and the corresponding portion of Shares to the
Purchaser.
4.2 The closing for Technology #2 shall take place on or before
March 01, 2004, at which time the Purchaser shall pay the Vendor one
hundred thousand dollars ($100,000) and a twenty percent (20%) interest
in Technology #2 will transferred to the Purchaser. If for any reason
the Purchaser is unable to pay one hundred thousand dollars ($100,000)
on or before March 1, 2004, this portion of the Purchase Agreement is
terminated and Technology #2 will be returned to the Vendor and the
corresponding portion of Shares will be returned to the Purchaser.
5. OPTION ON TECHNOLOGY #2
-----------------------
5.1 The Vendor hereby grants to the Purchaser the option to acquire the
remaining 80% of Technology #2 (Marine Technology) for the purchase
price of five hundred thousand dollars ($500,000). This option may be
considered after January 01, 2005. The parties agree that upon
exercise of the option, the Marine Technology be transferred to the
Purchaser free and clear of all encumbrances.
6. SPECIAL CONDITIONS.
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6.1 Parties agree that after Technology #1 is developed and demonstrated,
the Purchaser will enter into a consulting agreement with M.A. Turbo/
Engine Inc., whereby this company will
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supervise the manufacturing, installation and further research and
development of Technology #1.
6.2 If at some stage of the Financing Schedule the Purchaser is unable
to continue the funding, those funds advanced to that date by the
Purchaser would not be required to be repaid by the Vendor.
7. ROYALTY
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7.1 The Purchaser shall pay to Xxxxxxx Xxxxxxxxxxx a royalty equal to
seven percent (7%) of gross profit from sales of the Technology #1,
payable within thirty (30) days of the end of each calendar quarter.
For the purpose of this clause "gross profit" means sales revenue
less sales commissions, discounts and cost of goods sold.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
8.1 The Vendor represents and warrants to the Purchaser that:
a) The Vendor owns 100% of Technology #1 and Technology #2, free and
clear of encumbrances;
b) There are no actions, suits, proceedings, judgments or executions
pending or threatened against or affecting the Vendor.
c) M.A. Turbo/Engine Ltd. is duly incorporated, organized and validly
subsisting under the laws of the Province of British Columbia;
d) M.A. Turbo/Engine Ltd. has obtained board of director approval
and all corporate authorizations for the execution and performance
of this Agreement and any agreements referred to or contemplated
herein;
e) The execution and delivery of this Agreement and any of the
agreements referred to or contemplated herein, will not conflict
with or result in the breach of any agreement to which the Vendor
is a party.
8.2 The Purchaser represents and warrants to Vendor that:
a) It is duly incorporated, organized and validly subsisting under the
laws of the Province of British Columbia;
b) It has obtained board of director approval and all corporate
authorizations for the execution and performance of this Agreement
and any agreements referred to or contemplated herein;
c) The execution and delivery of this Agreement and any of the
agreements referred to or contemplated herein, will not conflict
with or result in the breach of any agreement to which it is a
party, nor violate or result in the breach of the laws of any
applicable jurisdiction.
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9. COVENANTS
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9.1 Independent Advice - All parties acknowledge that they have been
advised to obtain and have obtained independent legal advice with
respect to this Agreement and that they have not relied in any way
upon advice or representations relating to this Agreement made by
any other party.
9.2 Governing Law - This Agreement shall be governed by and construed
in accordance with the laws of the Province of British Columbia.
9.3 Currency - All dollar amounts in this Agreement and Schedules are
in the United States currency.
9.4 Severability - Should any provision in this Agreement be held by
a court of competent jurisdiction to be illegal, invalid or
unenforceable, such provision may be modified by such court in
compliance with the law and, as modified, enforced. All other
terms and conditions of this Agreement shall remain in full force
and effect and shall be construed as if such illegal, invalid or
unenforceable provision had not been contained in this Agreement.
9.5 Compliance with Laws and Regulations - The Vendor and Purchaser
will comply with all applicable government laws, regulations and
ordinances.
9.6 Arbitration - If any difference or dispute shall arise between any
of the parties in respect to any matter in this Agreement, such
dispute or matter shall be arbitrated or submitted to arbitration
under and pursuant to the Commercial Arbitration Act of British
Columbia. The arbitrator shall sit in Vancouver, British Columbia,
and shall hear and dispose of the dispute in such manner, as the
arbitrator, in his discretion, shall determine. The decision of
the Arbitrator shall be rendered in writing with all reasonable
speed and shall be final and binding upon such parties involved.
9.7 Schedules - The following schedules are incorporated into this
Agreement by reference:
Schedule A Development Schedule
Schedule B Financial Schedule
Schedule C Share Schedule
9.8 Amendment/Waiver - No amendment or modification of this Agreement
shall be in effect unless set forth in writing executed by the
parties' authorized representatives. No waiver of any provision
of this Agreement shall be effective unless it is set forth in
writing which refers to the provisions so waived and the instrument
in which provision is contained and is executed by an authorized
representative of the party waiving its rights.
9.9 Counterpart Execution - This Agreement may be executed in as many
counterparts as may be necessary and each of which so signed will be
deemed to be an original and such counterparts together will
constitute one and the same instrument and notwithstanding the date
of execution will be deemed to bear the date set forth above.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
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SIGNED AND DELIVERED by )
XXXXXXX XXXXXXXXXXX )
in the presence of: )
)
)
/s/ WITNESS ) /s/ Xxxxxxx Xxxxxxxxxxx
_________________________________ ) ____________________________
Witness Xxxxxxx Xxxxxxxxxxx
SIGNED, SEALED AND DELIVERED by )
M.A. TURBO/ENGINE LTD. )
in the presence of: )
)
) c/s
/s/ AUTHORIZED REPRESENTATIVE )
_________________________________ )
Authorized Representative
SIGNED, SEALED AND DELIVERED by )
RIVAL TECHNOLOGIES INC. )
in the presence of: )
)
) c/s
/s/ XXXXX XXXXXXXXX )
_________________________________ )
Authorized Representative
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Schedule A
Development Schedule
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PROJECT OBJECTIVES:
Continuous Water Injection technology ready for manufacturing and
marketing for diesel truck and bus applications. Milestones of the
technology: exhaust gas emissions reduction (NOx reduction up to 30%;
PM reduction up to 20%) with simultaneous operational fuel
consumption reduction up to 3%.
# Description of Development Required Development Time Frame FundsUS$
-------------------------------------------------------------------------------------------
1. Design of CWI System for a truck diesel October 1 - December 31, 2003 $35,000
engine including evaluation of system
components
2. Design of CWI System for a bus diesel January 1 - February 28, 2004 $15,000
engine including evaluation of system
components
3. Procurement of systems components and January 10 - February 28, 2004 $35,000
special measurement equipment
4. Rent, purchase or lease of a truck March, 2004 $15,000
5. System installation, tuning and
adjustment April 15 - June 15, 2004 $30,000
6. In-house System tests July 1 - August 30, 2004 $40,000
7. Road System tests October 1 - December 31, 2004 $46,000
8. Fuel, lubricating oil, etc. October, 2004 $4,000
9. Final Product Demonstration/Marketing 2005 $10,000
-------------------------------------------------------------------------------------------
Total: $230,000
Notes:
1. CWI installation and test on a bus is subject to an agreement with BC Translink.
If such an agreement is reached, the Vendor may have to provide additional financing.
2. Beginning of the Project is subject to financing by the Purchaser but no later than
October 1, 2003 (see Schedule B).
3. Required funds include labor.
4. Project work force consists of two mechanical engineers, one electrical engineer, one
emission technician and project manager.
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Schedule B
Financial Schedule
-------------------
# Description Funds Required US$ Completion Date
-------------------------------------------------------------------------------------------
1. Design of CWI System for a truck diesel $35,000 September 30, 2003
engine including evaluation of system
components
2. Design of CWI System for a bus diesel $15,000 November 30, 2003
engine including evaluation of system
components
3. Procurement of systems components and $35,000 January 31, 2003
special measurement equipment
4. Rent, purchase or lease of a truck $15,000 March 1, 2004
5. System installation, tuning and $30,000 April 15, 2004
adjustment
6. In-house System tests $40,000 July 1, 2004
7. Road System tests $46,000 October 1, 2004
8. Fuel, lubricating oil, etc. $4,000 October 1, 2004
9. Final Product Demonstration/Marketing $10,000 December 31, 2004
-------------------------------------------------------------------------------------------
Total: $230,000
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Schedule C
Share Schedule
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1. Xxxxxxx Xxxxxxxxxxx
Technology #1 2,000,000
Technology #2 3,000,000
2. Xxxx Xxxxxxxx 2,000,000
3. Xxxx Xxxxxxx 2,000,000
4. Drayton Park Capital Corp. 26,000,000
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Total 35,000,000
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