Exhibit 10.6 Contract for Assignment of Rights to BVM Bag Invention
CONTRACT FOR ASSIGNMENT
OF RIGHTS TO
BVM BAG INVENTION
This Contract for Assignment of Rights to "BVM Bag" Invention Agreement
hereinafter termed the "Agreement," is made to be effective as of the _____ day
of _____________, 2000, by and between Xxxxx Xxxxx Xxxx, hereinafter termed the
"Developer," who is an individual resident of California with his principal
place of business located at 000 Xxxx Xxxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, and Emergency Filtration Products, Inc., hereinafter termed the
"Company," which is a Nevada corporation with its principal place of business
located at 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx #000, Xxx Xxxxx, XX 00000.
GENERAL CONSIDERATIONS
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A. Developer has developed a new and useful Portable Emergency Safety
Resuscitator. This device, itself, is designated the "BVM Bag," and the BVM Bag
plus technology developed from the BVM Bag are designated the "BVM Bag
Invention." The BVM Bag is the subject of the United States patent no. 6.062.217
and United States patent application serial no. 09.570.154
B. Company desires to exploit commercially the BVM Bag Invention.
C. Developer desires to transfer its rights in the BVM Bag Invention to
Company in order to facilitate the commercial manufacturing and marketing of
commercial products involving the BVM Bag Invention.
TERMS
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Now, therefore, in consideration of the proceeding premises, the manual
promises set forth below, and other good and valuable consideration--the receipt
and sufficiency of which is hereby acknowledged. Developer and Company do hereby
promise and agree as follows:
Article 1
Agreement concerning Assignment
1.01 Agreement to Assign Rights. Developer agrees to assign to Company the
entire right, title, and interest in the BVM Bag Invention for the United States
and its territorial possessions and for all countries foreign to the United
States, including all rights to claim priority, in and to the BVM Bag Invention
and all title and rights to all letters patent to be obtained for the BVM Bag
Invention and, as to such letters patent all rights and title to any reissue;
re-examination, or extension thereof and any related statutorily provided
periods of market exclusivity.
1.02 Further Assignment. Moreover, whenever a patent application is filed
concerning the BVM Bag Invention, Developer agrees to execute a new assignment
document which will identify such applications by serial number.
Article II
Commercialization and Marketing
2.01 Efforts by Company. Company agrees to use its best efforts to
commercialize and market products incorporating the BVM Bag Invention.
Article III
Compensation
3.01 Initial Stock Payment. Upon execution of this Agreement and the
Assignment required by Paragraph 1.01 above, Developer shall receive one hundred
twenty thousand shares of restricted stock in Company.
3.02 Additional Stock. Company will convey to Developer fifty thousand
shares of restricted stock in Company upon the manufacturing and marketing of
commercial products employing the BVM Bag Invention. Developer's rights to such
shares shall automatically vest upon any change of ownership covered by
Paragraph 3.05 of this Agreement.
3.03 Annual Stock Option. Each year on December 31, commencing December 31,
2000, Developer shall be entitled to purchase fifty thousand options for stock
in Company at a fifty percent discount of the average bid price over the
immediately preceding six-month period.
3.04 Rights upon Ownership Change. In the event of a buyout of Company,
merger of Company with another entity, or other acquisition of Company,
Developer shall be given the choice of receiving fifty thousand shares of
restricted stock in Company or participating as a member of the negotiating team
of Company concerning the potential acquisition of Company for the purpose of
negotiating a royalty to Developer from the acquiring entity that shall not be
less than 2.5 percent of the gross net for sales by the acquiring entity of
products incorporating the BVM Bag Invention. Developer will choose the stock or
royalty and notwithstanding the provisions of paragraph 10.05 of this Agreement
provide actual notice to Company within forty-eight hours of receiving actual
notice, orally or in writing, of a potential acquisition. If Developer does not,
within the forty-eight hour period, provide actual notice to Company of
Developer's selection, Developer will receive the stock should the acquisition
actually transpire.
3.05 Insurance. For his work in developing and implementing the BVM Bag
Technology, Developer shall be covered by Company's product liability insurance.
3.06 Non-acquisition. In the even Company is not acquired by another entity
within twelve months of June 1, 2000, Developer shall have thirty days to choose
whether to have this Agreement continue or to have re-conveyed to Developer
United States patent no. 6.062.217 and any foreign patents or patent
applications that cover solely the same invention as Company all stock he has
received pursuant to this Agreement other than stock received under paragraph
3.03. If Developer does not notify Company of Developer's election within the
thirty-day period, this Agreement shall continue in full force.
3.07 Bankruptcy. So far as is permissible under the applicable bankruptcy
laws, the ownership of the BVM Bag Invention shall automatically revert to
Developer if Company is adjudged bankruptcy prior to a change of ownership
covered by Paragraph 3.05 of this Agreement.
Article IV
Patents
4.01 Patent Prosecution. Within a reasonable time after an attorney
licensed to practice before the United States Patent and Trademark Office and
retained by Company renders a written opinion that the same portion of the BVM
Bag Invention is patentable as a utility patent, Company will seek patent
protection as a utility patent for such portion of the BVM Bag Invention and
will be responsible for the costs of doing so.
4.02 Appeals. Such patent prosecution shall include the obligation to
appeal administratively and judicially any final rejection if an attorney
licensed to practice before the United States Patent and Trademark Office and
retained by Company provides an opinion that such an appeal would have a
reasonable likelihood of success at a reasonable cost.
4.03 Election Not to Appeal. If Company does not appeal a final rejection
by the United States Patent and Trademark Office, Developer may pursue such an
appeal at Developer's own cost. If such an appeal is, however, successful the
royalties provided pursuant to Article II of this Agreement shall be doubled
until Developer has been reimbursed for the reasonable costs associated with
such a successful appeal. Any resultant patent shall belong to Company.
4.04 Patenting outside the United States. The seeking of patents outside
the United States may be done in the discretion of Company. If, though, Company
elects not to prosecute a patent application in a country where Developer has
notified Company in writing that Developer desires patent protection, Company
shall notify Developer of such election within such period of time as to enable
Developer to seek such patent protection at Developer's own cost. If Developer
successfully obtains a foreign patent that is equivalent to a utility patent in
the United States, all royalties associated with the country in question shall
be doubled until Developer has been reimbursed for the reasonable costs
associated with such successful patent prosecution. Any resultant patent shall
belong to Company.
Article V
Assistance by Developer
5.01 Cooperation. Developer will provide to Company all information and
assistance reasonably necessary for the patenting and commercial development of
the BVM Bag Invention.
Article VI
Warranties
6.01 Ownership. Developer represents and warrants that Developer holds
title to and is the exclusive owner of all rights in the BVM Bag Invention as it
presently exists.
6.02 Authority. Developer represents and warrants that Developer has the
authority to grant the assignment which is the subject of this Agreement and
that is no assignment, sale, agreement, or encumbrance has been, or will be,
made or entered which would conflict with or be prior in right to such
assignment.
6.03 Patent Infringement. Developer provides to Company no warranty of
non-infringement of any patent. Developer will, consequently, not be liable to
defend Company in any suit for infringement or to reimburse Company for any sums
expended in defending, or satisfying a judgment resulting from, a charge of
patent infringement.
Article VII
Patent Infringement
7.01 Notification. Once any United States patent has been obtained for the
BVM Bag Invention, Developer and Company shall promptly notify one another of
any apparent infringement by a third party of all such patents.
7.02 Suit for Infringement. Company shall not be obligated to institute a
lawsuit against any apparent infringer. If, however, Company commences such a
lawsuit, Developer, upon Company's request and at Company's expense shall
provide all reasonable assistance with respect to such a lawsuit, including
making Developer's employees and agents available to testify on Company's
behalf. Unless Developer and Company otherwise agree. Company shall be solely
responsible for the expenses of such litigation and with any recovery obtained
therefrom shall first be fully reimbursed for such expenses.
Ninety-seven-and-a-half (97.5) percent of the remainder of any such recovery
shall belong to Company and two-and-a-half (2.5) percent to Developer.
7.03 Unavailability of Recourse. If Company shall be unable to uphold the
validity of any such patent against an alleged infringer, Company shall have no
damage claim and no claim for refund or reimbursement against Developer.
Article VIII
Non-competition
8.01 Non-competition by Developer. Developer agrees that during the term of
this Agreement and for two years after the conclusion of such term, Developer
will not compete against Company or Company's successor in interest or
facilitate competition against Company or Company's successor in interest by any
other entity with respect to technology that is directly related to the BVM Bag
Invention.
Article IX
Term and Termination
9.01 Term. This Agreement shall last until the date that the last patent
covering the BVM Bag Invention expires.
Article X
Miscellaneous Provisions
10.1 Marking. Company agrees to use reasonable efforts to place appropriate
legal patent markings on every product incorporating the BVM Bag Invention
produced after issuance of any patent for the BVM Bag Invention.
10.2 Force Majeur. Except for the obligation to make payments when due
pursuant to this Agreement, all other obligations under this Agreement shall be
suspended for so long as one or both of Developer and Company is prevented from
complying with the provisions of this Agreement by acts of God; riots; war; acts
of Federal, state, or local governments, agencies, or courts; strikes;
lock-outs; damage to or destruction or unavoidable shut-down of necessary
facilities; or other matters beyond Developer's or Company's reasonable control
(specifically excluding, however, matters of mere financial exigency). The
entity so prevented from complying with its obligation pursuant to this
Agreement shall promptly notify the other entity of such fact and shall exercise
all due diligence to remove and overcome the cause of such inability to comply.
10.03 Additional Documents. Developer and Company agree that they will
execute any and all additional documents or legal instruments that may be
necessary or required to effectuate the provisions of this Agreement.
10.04 Remedies. Notwithstanding any other provisions of this Agreement,
Developer and Company shall retain all statutory and common law rights to
enforce this Agreement or to seek damages for its breach.
10.05 Notices. Any notice, election, payment, report, or other
correspondence required or permitted pursuant to this Agreement shall be deemed
to have been properly given or delivered when it has been made in writing and
(a) delivered personally to an officer of Developer or Company or
(b) when sent by United States mail with all necessary postage fully
prepaid, a return receipt requested, and addressed to the entity to who directed
at its address as specified below:
Xxxxx Xxxxx Xxxx Emergency Filtration Products, Inc.
147 West Spanish Xxxx Place 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxx, XX 00000
Either Developer or Company may, at any time, change its address for
purposes of this Agreement by giving written notice of such change of address to
the other entity.
10.06 Effect of Waiver. A waiver either by Developer or by Company of any
provision of this Agreement, whether in writing or by course of conduct or
otherwise, shall be valid only in the instance for which such waiver has been
given and shall not be deemed to be a continuing waiver of such provision; nor
shall any such waiver be construed to be a waiver of any other provisions of
this Agreement.
10.07 Paragraph Headings. The paragraph headings within this Agreement are
for convenience only and in no way define, limit, or describe the scope or
intent of this Agreement; nor do such paragraph headings affect the terms and
provisions of this Agreement.
10.08 Preparation of Agreement. Developer and Company acknowledge that they
have both participated in the preparation of this Agreement; and, in the event
that any question arises regarding the interpretation of this Agreement, no
presumption shall be drawn in favor of or against either Developer or Company
with respect to be the meaning of this Agreement.
10.09 Governing Law. This Agreement, and all matters relating to this
Agreement, including any matter or dispute arising from this Agreement, shall be
interpreted, governed, and enforced according to the laws of the State of
Nevada. Developer and Company consent to the jurisdiction and venue of any
appropriate court within the State of Nevada to resolve any such dispute.
10.10 Attorney's Fees. In the even that Developer or Company shall be in
default or breach of this Agreement, such defaulting or breaching entity shall
be liable to pay all reasonable attorney's fees, court costs, and other related
collection costs and expenses incurred by the non-defaulting or non-breaching
entity in pursuing its rights under this Agreement.
10.11 Severability. In the event that any provision of this Agreement, or
any action contemplated pursuant to this Agreement, is found, by a court having
competent jurisdiction in accordance with this Agreement, to be inconsistent
with or contrary to any law, ordinance, or regulation, the latter shall be
deemed to control; this Agreement shall be regarded as modified accordingly; and
such modified provisions as well as the remainder of this Agreement shall
continue in full force and effect.
10.12 Integration. This Agreement constitutes and represents the entire
agreement of Developer and Company with respect to the subject matter of this
Agreement. All other prior agreements, covenants, promises, and conditions,
whether verbal or written, that are intended to apply between Developer and
Company have been incorporated herein. In executing, this Agreement, neither
Developer nor Company has relied upon any promise, representation, warranty, or
the like other than those contained within this Agreement.
10.13 Amendment. This Agreement may be amended at any time upon the
unanimous agreement of Developer and Company. Any such amendment must, however,
be reduced to writing and be executed both by Developer and by Company in order
to become effective.
10.14 Assurance of Authority. Developer does hereby assure Company that
execution of this Agreement is an authorized act of Developer, and Company does
hereby assure Developer that execution of this Agreement is an authorized act of
Company.
10.15 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Developer and Company as well as their successors and assigns.
IN WITNESS WHEREOF, Developer and Company have caused these presents to
be signed by their duly authorized representatives on the dates indicated.
DEVELOPER:
XXXXX XXXXX XXXX
\S\ Xxxxx Xxxxx Xxxx
Date: 06/28/00
COMPANY:
EMERGENCY FILTRATION PRODUCTS, INC.
ATTEST: \S\ Xxxxxxx X. Xxxxxxxxx
\S\ Xxxxx Xxxxxx President
Date: 06/27/00
