EXHIBIT 10.1
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (this "Memorandum") is entered into as of
this 31st day of July, 2004, among DDS Technologies USA, Inc. ("DDS US"),
Xxxxxxx Xxxxxx ("Xxxxxx"), Haras Engineering Corp. ("HEC"), High Speed
Fragmentation B.V. ("HSF"), and Intel Trust S.A. ("Intel"). Each of DDS US,
Manola, HEC, HSF and Intel are sometimes referred to herein as a "Party" and
sometimes collectively referred to herein as "Parties."
For the purposes of this Memorandum various other entities or persons may
be involved with the transaction and they are as follows: Xxxxxxxxx Xx Fiego
("Lo Fiego"), Xxxxxxx Xxxxxxxxx ("Zapparoli"), and D.D.S. Technologies Ltd.
("DDS UK").
RECITALS
X. Xxxxxx is the inventor of the technology known as "dry
disaggregation" (the "Technology") represented by patent no. 02425336-1 filed
with the European Patent Office on May 28, 2002 (together will patents and
patent applications filed anywhere else, the "Patent").
B. On July 8, 2002, Manola, Lo Fiego, Xxxxxxxx Xxxxxxxx and Xxxxxx
Holdings, S.A. entered into a Private Deed pursuant to which the parties agreed
to form a company called D.D.S. Technologies Ltd. (UK) to which Manola would
transfer all exploitation rights relative to the Patent. Manola owned 60% of the
equity interests and was a director of DDS UK.
C. On August 29, 2002, DDS UK and DDS US entered into an agreement
pursuant to which DDS UK granted to DDS US an exclusive license to the
Technology in Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, and the Caribbean
(excluding Cuba); DDS US paid DDS UK US$500,000 and issued to DDS UK 3,500,000
shares of common stock of DDS US; DDS UK represented that it had all rights to
grant the license; DDS US agreed to purchase machines which embody the
Technology from DDS UK and DDS UK agreed to sell such machines to DDS US at a
price equal to DDS UK's cost.
D. Under the August 29, 2002 agreement, DDS UK was entitled to nominate
one director to the board of directors of DDS US and in August 2002, Manola
became a director of DDS US as DDS UK's nominee, with full fiduciary, regulatory
and statutory obligations.
E. Effective January 6, 2003, DDS UK and DDS US entered into an amendment
to the August 29, 2002 agreement pursuant to which the parties agreed that the
proper legal name of the licensor was D.D.S. Technologies, Ltd. rather than DDS
Technology, Inc. and the geographic area of the license was extended to include
Africa and DDS US paid DDS UK an additional US$200,000 and issued and additional
500,000 shares of DDS US common stock.
F. A dispute has arisen among the Parties and the Parties desire to
resolve their dispute upon the terms set forth herein.
G. DDS US has commenced litigation (the "Litigation") against Manola, DDS
UK, HEC, HSF, Intel and Lo Fiego in order to resolve their dispute relating to
(i) the ownership of the technology described in the application for the Patent,
(ii) the accounting for the funds paid by DDS US to HSF and (iii) various
related matters.
H. DDS US, DDS UK, HEC, HSF, Intel, Lo Fiego and Zapparoli have entered
into an Amended and Restated Memorandum of Understanding dated as of the 31st
day of July, 2004.
X. Xxxxxx is the beneficial owner of 60% of the equity interests in DDS
UK.
NOW, THEREFORE, the Parties intending to be legally bound hereby agree as
follows:
1. HSF shall pay Manola 100,000 euros upon Manola's execution of this
Memorandum, his confirmation that he has taken and will take such actions as
necessary to confirm ownership of the Patent in HSF, and such other matters as
DDS US and HSF may reasonably require from Manola in order to give effect to
this Memorandum.
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2. Manola acknowledges and agrees that DDS UK has no interest in the
Patent or the related intellectual property or Technology and confirms that the
conveyances previously executed by him on behalf of DDS UK were valid and
binding in all respects. To the extent necessary or appropriate, Manola shall
take all necessary and desirable actions, to the extent not previously
effectuated, to cause the ownership of the Patent and all related intellectual
property and Technology to be transferred to HSF, free and clear of any claim or
lien, and shall have delivered to HSF evidence reasonably satisfactory to HSF
confirming that HSF is the owner of the Patent and such related intellectual
property and technology free and clear of any claim or lien. Manola
acknowledges, understands and agrees that the Patent and all related rights will
be transferred to DDS US.
3. Subject to the provisions of Section 2, DDS US will execute and
deliver to Manola a general release on behalf of DDS US, its officers and
directors, affiliates and shareholders releasing Manola from the claims DDS US
has alleged against him in the Litigation. Manola will execute and deliver a
reciprocal release in favor of DDS US.
4. Subject to the provisions of Section 2, DDS US will send engineers
and technicians to visit Tecalit and Manola will devote such time and efforts as
are deemed necessary by DDS US in order to fully train the engineers and
technicians in the use of the Technology and the design and operation of the
machines incorporating the Technology.
5. Manola will take all necessary and desirable actions to vote all
shares of DDS UK beneficially owned by him and take such other actions as may be
required to give effect to the transactions contemplated by this Memorandum.
6. Manola will take all necessary and desirable actions to transfer to
and confirm ownership by, and possession of, DDS US of two of the three
prototype machines incorporating the Technology, including the multi-tasking
machines in Marani and Poggio Rusco, free and clear of any claim or lien.
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7. Each Party hereto confirms that it has the full right, power and
authority to enter into this agreement on behalf of itself or in the capacity in
which it is signing, has had the benefit of legal counsel, and has been fully
advised on the legal consequences of this Memorandum.
8. This Memorandum of Understanding shall be binding upon the Parties
hereto and their respective successors and assigns.
9. This Memorandum may be executed in counterparts.
10. This Memorandum shall be governed by and construed in accordance
with the laws of the State of Florida.
11. The Parties irrevocably submit to the exclusive jurisdiction of the
courts of the Eleventh Judicial Circuit of the State of Florida and of the
United States District Court for the Southern District of Florida, Miami
Division in either case sitting in Miami-Dade County, Florida. Each of the
Parties irrevocably and unconditionally waives, to the fullest extent permitted
by applicable law, any objection that it may now or hereafter have to the laying
of venue of any action or proceeding arising out of or relating to this
Memorandum of Understanding.
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Memorandum of Understanding as of the day and year first above written.
Haras Engineering Corp. DDS Technologies USA, Inc.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President Title: President and Chief Executive Officer
High Speed Fragmentation B.V. Intel Trust S.A.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxxxx
Title: Director Title:
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
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