Exhibit 10.7
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MR3 TECHNOLOGY ACQUISITION AGREEMENT
This Technology Acquisition Agreement ("Agreement") is made this 10th
day of April, 2002 ("Effective Date"), by and between Linsa Associates, Ltd.,
with its principal place of business at Xxxxx Xxxxxx, X.X. Xxx 000, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx ("Purchaser") and MR3 Systems, Inc., with its
principal place of business at Xxxx 00, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("MR3").
RECITALS
A. MR3 owns all right, title, and interest in and to that certain
technology and related documentation identified as MR3 Technology
("Technology"), the specifications for which are set forth in Exhibit A hereto;
B. MR3 desires to sell, assign, grant, convey, and transfer the
Technology to Purchaser, and Purchaser desires to buy and acquire the
Technology, for use limited to the Restricted Area as defined in Exhibit B
hereto, in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MR3 and Purchaser, intending to be
legally bound, hereby agree as follows:
AGREEMENT
1. DEFINITIONS
1.1. Technology means, collectively, the full version of the
Technology, as specified in Exhibit A, together with any and
all documentation, improvements, corrections, modifications,
updates, enhancements or other changes, whether or not
included in the current version.
1.2. Technology Trade Secret means any scientific or technical
information, design, process, procedure, formula, or
improvement included in the Technology that is valuable, not
generally known in the industry, and gives the owner of the
Technology a competitive advantage over those competitors who
do not know or use such information.
1.3. Restricted Area means those countries and fields of use listed
on the attached Exhibit B.
2. CONVEYANCE OF RIGHTS
2.1. For use only within the Restricted Area, MR3 hereby transfers,
grants, conveys, assigns, and relinquishes exclusively to
Purchaser all of MR3's right, title, and interest in and to
both the tangible and the intangible property constituting the
Technology, in perpetuity (or for the longest period of time
otherwise permitted by law), including the following corporeal
and incorporeal incidents to the Technology:
(a) Title to and possession of the media, devices, and
documentation that constitute all copies of the
Technology, its component parts, and all
documentation relating thereto, possessed or
controlled by MR3, which are to be delivered to
Purchaser pursuant to Section 3 of this Agreement;
and
(b) All right, title, and interest of MR3 in and to the
inventions, discoveries, improvements, ideas, trade
secrets, know-how, confidential information, and all
other intellectual property owned or claimed by MR3
pertaining to the Technology.
3. DELIVERY OF THE MAGNUM OPUS AND OTHER PHYSICAL OBJECTS
3.1. Within thirty (30) days after the Effective Date of this
Agreement, MR3 shall deliver to the Purchaser a copy of the
Magnum Opus together with copies of all other documentation
pertaining to the Technology referred to Exhibit A hereto.
3.2. Unless otherwise agreed by the parties, MR3 will select the
mode of shipment of such Section 3.1 items and the carrier and
will be responsible for and pay all packing, shipping, freight
and insurance charges.
4. CONSIDERATION
4.1. Profit Share. In consideration for MR3's execution of this
Agreement and performance of the terms and conditions
contained herein, Purchaser and MR3 agrees to share all the
Distributable Profits (as defined in Section 4.3 below) to
which they are collectively entitled on a 50/50 basis.
Purchaser and MR3, collectively, shall be entitled to receive
100% of all Distributable Profits, less any percentage to
which a third party is entitled.
4.2. Equity Share.
(a) MR3 shall have the right to acquire up to a 50% share
in the equity held by Purchaser of any entity
operating to exploit or commercialize the Technology
under this Agreement (an "Operating Entity"),
provided that MR3 may not acquire an equity share
greater than that of Purchaser. The purchase price of
any such equity share from Purchaser shall be
calculated on the basis of the then book value of
such Operating Entity at the time of such purchase.
MR3 may effectuate such a purchase of equity from the
Purchaser by either assigning all or a part of its
share in Distributable Profits under Section 4.1
above, or by making a separate cash payment.
(b) Should Purchaser sell any of Purchaser's Equity Share
in an Operating Entity, prior to MR3 having acquired
all of the equity in such Operating Entity to which
MR3 would be entitled under Section 4.2 (a) above,
then Purchaser shall immediately distribute to MR3
that portion of the equity sale proceeds necessary to
equalize the proceeds received by MR3 and Purchaser
on a 50/50 basis.
4.3. Distributable Profits. Is defined as Net Revenue, less any
amounts held in reserve or required to be repaid to third
party investors or lenders in connection with the financing of
the construction or operation of any facilities necessary to
exploit or commercialize the Technology under this Agreement.
Net Revenue shall be defined as gross receipts less (i) the
sales commissions and expenses from the sale of output from
MR3 operations, (ii) Operating Expenses, and (iii) any taxes
related hereto. Operating Expenses shall mean all costs and
expenses incurred in connection with the acquisition,
planning, maintenance, operation, technical support, and
management of any facilities utilizing the Technology under
this Agreement. Operating Expenses shall not include any costs
or expenses incurred by either Purchaser or MR3 which are not
directly related to, or allocatable to, the performance of
either party under this Agreement.
4.4. Purchases at Cost. Any goods or equipment purchased by
Purchaser from MR3 under this Agreement shall be sold to
Purchaser at MR3's cost for such items, including any
shipping, insurance, taxes and like costs.
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5. WARRANTIES OF TITLE
5.1. MR3 represents and warrants that:
(a) Purchaser shall receive, pursuant to this Agreement
as of the Effective Date, complete and exclusive
right, title, and interest in and to all tangible and
intangible property rights existing in the
Technology.
(b) it has developed the Technology entirely through its
own efforts for its own account and that the
Technology is free and clear of all liens, claims,
encumbrances, rights, or equities whatsoever of any
third party.
(c) the Technology does not infringe any patent,
copyright, or trade secret of any third party;
(d) the Technology has not been forfeited to the public
domain; and that the for the Technology have been
maintained in confidence;
(e) all personnel, including employees, agents,
consultants, and contractors, who have contributed to
or participated in the conception and development of
the Technology either (1) have been party to a
relationship with MR3 that has accorded MR3 full,
effective, and exclusive original ownership of all
tangible and intangible property arising with respect
to the Technology or (2) have executed appropriate
instruments of assignment in favor of MR3 as assignee
that have conveyed to MR3 full, effective, and
exclusive ownership of all tangible and intangible
property thereby arising with respect to the
Technology;
6. EXPORT CONTROLS AND RESTRICTIVE RIGHTS
6.1. The Technology and all underlying documentation or information
may not be exported, re-exported, or used by Purchaser or its
affiliates, into or in any country outside the Restricted
Area, if such activity would conflict with the territorial
rights of any other party; provided, however, that exportation
shall be permitted to the United States of America with the
written consent of MR3, which consent shall not be
unreasonably withheld. Purchaser acknowledges that any breach
of this Section 6 will irreparably harm MR3. Accordingly, in
the event of a breach, MR3 is entitled to promptly seek
injunctive relief in addition to any other damages and
remedies that MR3 may have at law or in equity.
7. FURTHER ASSURANCES
7.1. MR3 shall execute and deliver such further conveyance
instruments and take such further actions as may be necessary
or desirable to evidence more fully the transfer of ownership
of all of the Technology to Purchaser. MR3 therefore agrees:
(a) To execute, acknowledge, and deliver any affidavits
or documents of assignment and conveyance regarding
the Technology; and
(b) To provide testimony in connection with any
proceeding affecting the right, title, or interest of
Purchaser in the Technology; and
(c) To perform any other acts deemed necessary to carry
out the intent of this Agreement.
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8. PROTECTION OF TRADE SECRETS
8.1. The parties agree to hold each other's Confidential
Information in confidence for a period of ninety-nine (99)
years following the Effective Date of this Agreement. The
parties agree, that unless required by law, they shall not
make each other's Confidential Information available in any
form to any third party or to use each other's Confidential
Information for any purpose other than the implementation of
this Agreement. Each party agrees to take all reasonable steps
to ensure that Confidential Information is not disclosed or
distributed by its employees or agents in violation of the
terms of this Agreement.
8.2. A party's "Confidential Information" shall not include
information that: (a) is or becomes a part of the public
domain through no act or omission of the other party; (b) was
in the other party's lawful possession prior to the disclosure
and had not been obtained by the other party either directly
or indirectly from the disclosing party; (c) is lawfully
disclosed to the other party by a third party without
restriction on disclosure; (d) is independently developed by
the other party; or (e) is required to be disclosed by any
judicial or governmental requirement or order (provided that
Recipient timely advises the disclosing party of the
governmental demand for disclosure).
9. ACKNOWLEDGMENT OF RIGHTS; INTENT AND DUTY TO USE BEST EFFORTS
9.1. In furtherance of this Agreement, MR3 hereby acknowledges
that, from and after the Effective Date of this Agreement,
within the Restrictive Area Purchaser has acceded to all of
MR3's right, title, and standing to:
(a) Receive all rights and benefits pertaining to the
Technology; and
(b) Institute and prosecute all suits and proceedings and
take all actions that Purchaser, in its sole
discretion, may deem necessary or proper to collect,
assert, or enforce any claim, right, or title of any
kind in and to any and all of the Technology.
(c) Defend and compromise any and all such action, suits,
or proceedings relating to such transferred and
assigned rights, title, interest, and benefits, and
perform all other such acts in relation thereto as
Purchaser, in its sole discretion, deems advisable.
9.2. The intent of the parties under this Agreement is for
Purchaser, within the Restricted Area, to exclusively use,
commercialize and exploit the Licensed Technology, and to
sublicense or assign to other entities the right to do the
same, including the development, processing, manufacture and
marketing of products and processing services and other
revenue producing sources and activities.
9.3. Purchaser shall devote its substantial time and diligent best
efforts to realize and effectuate the intent of this Agreement
and to manufacture, market, promote, and exploit the Licensed
Technology in an effort to xxxxxx its commercialization and
use, including the use of such best efforts to process, market
and distribute products and processing services in the
Restrictive Area in an efficient and expeditious manner.
10. LIMITED WARRANTY; SUPPORT
10.1. MR3 represents and warrants that the Technology conforms in
all material respects to the functional Specifications set
forth in Exhibit A. With that sole exception, OWNER ASSIGNS
THE PROGRAM TO PURCHASER "AS IS," AND OWNER DISCLAIMS ALL
WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE PROGRAM,
INCLUDING (WITHOUT LIMITATION) ANY WARRANTY OR MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. Purchaser's exclusive
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remedy for breach of the foregoing warranty shall be to
require MR3 to correct any material nonconformance to such
Specifications or, at MR3's option, to receive repayment in
full of the Purchase Price.
10.2. During the term of this Agreement, MR3 shall provide full
technical support to the Purchaser on an ongoing, "as needed"
basis. All expenses, salaries, benefits and other obligations
incurred for the provision of such technical support shall be
paid by Purchaser.
11. INDEMNITY
11.1. Indemnification. MR3 will defend, at its sole expense, any
claim, suit or proceeding brought against Purchaser which is
based upon a claim that (i) the Technology infringes any
patent, copyright, or trade secret, provided Purchaser gives
MR3 written notice within thirty (30) days of receiving notice
of such claim and provides MR3 reasonable cooperation in the
defense of the claim. MR3 will pay any damages and costs
assessed against Purchaser (or payable by Purchaser pursuant
to a settlement agreement) in connection with the proceeding.
11.2. Remedies of Purchaser. In the event that a court directs
Purchaser to cease use of the Technology, MR3 will either (i)
modify the Technology so that it is no longer infringing, or
(ii) procure for Purchaser the rights necessary for Purchaser
to exploit the Technology at no expense to Purchaser. If MR3
is unable to comply with either subsection (i) or (ii),
Purchaser, at its option may either replace the infringing
portions of the Technology with non-infringing technology at
MR3's expense, or terminate this agreement and receive a
complete refund of the purchase price.
12. MISCELLANEOUS
12.1. Binding. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto, together with their
respective legal representatives, successors, and assigns.
12.2. Choice of Law. This agreement shall be governed by and
construed in accordance with the laws of the United States and
the State of California, as applied to agreements entered into
and to be performed entirely within California between
California residents.
12.3. Notices. Any notices given by either party hereunder will be
in writing and will be given by personal delivery, national
overnight courier service, or by U.S. mail, certified or
registered, postage prepaid, return receipt requested, to MR3
or Purchaser at their respective addresses specified above.
All notices will be deemed effective upon personal delivery,
or five (5) days following deposit in the U.S. mail, or two
(2) business days following deposit with any national
overnight courier service.
12.4. Entirety and Amendment. This Agreement and all exhibits hereto
constitutes the entire agreement and understanding between the
parties with respect to the subject matter hereof and
supersedes all prior or contemporaneous agreements, any
representations or communications. The terms of this Agreement
may not be amended except by a writing executed by both
parties.
12.5. Force Majeure. Neither party will be in default if its
performance is delayed or becomes impossible or impractical by
reason of any cause beyond such party's reasonable control.
12.6. Attorneys' Fees. Including an action for injunctive or
declaratory relief, or to pursue damages for any breach of
this Agreement, including all appeals, the prevailing party
shall be entitled to recover reasonable attorneys' fees,
litigation costs from the other party. The attorneys' fees and
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costs may be ordered by the court in the trial or appeal of
any action described in this paragraph, or may be enforced in
a separate action brought for determining attorneys' fees and
costs.
12.7. Except as otherwise provided by this Agreement, neither party
may assign its rights, duties and obligations under this
Agreement, without the prior written consent of the other
party, which consent shall not be unreasonably withheld, and
further provided that any such assignment is made expressly
subject to the terms and conditions of this Agreement, and the
assignee agrees in writing to be bound by the terms and
conditions hereof.
WHEREAS, the parties have executed this agreement in counterparts, each
of which shall be deemed an original, as of the Effective Date first written
above.
LINSA ASSOCIATES, LTD. MR3 SYSTEMS, INC.
By: /s/ XXXXXXXXX XXXXXXXXXXX By: /s/ XXXXXXX X. XXXX
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Xxxxxxxxx Xxxxxxxxxxx, President Xxxxxxx X. Xxxx, Chairman and CEO
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EXHIBIT A
MR3 Technology: includes the proprietary high affinity metals
extraction and metals separation technology owned by
the and embodied in the MR3 Modules, and all of the
trade secrets, know-how, show-how, inventions,
patents including US Patent(s) and US Patent(s)
applications, lab books, formulae, processes,
computer systems, methods, discoveries, business
methods, confidential information, expertise,
copyrights, trademarks, service marks, plans,
drawings, sketches, prototypes, tooling and
information of any nature whatsoever which relates to
the MR3 Modules and their implementation in a MR3
Facility, including but not limited to the Know-How
for solubilizing metals as a method of feedstock
preparation for the high affinity metals extraction
process and the know-how for creating commercially
valuable products from that process; developed,
possessed, conceived and/or used by, including the
Process Package and any modifications, improvements
and translations thereof in respect of commercial and
industrial uses, not in the public domain.
Know-How: includes all technical knowledge (whether
or not patentable), unpatented inventions,
manufacturing and operational procedures, processes,
trade secrets, marketing techniques, skills and
ideas, and current and accumulated experience, which
has acquired or will acquire in connection with the
MR3 Technology including, but not limited to, the
following: (a) the amounts and types of locations,
personnel, machinery, equipment, raw materials,
chemicals and the like needed to create MR3 Modules
and to operate MR3 Facilities for the production of
End-Products and Processing Services, and (b) the
proper engineering, construction, installation,
maintenance, and repair of such System.
MR3 Facility: includes all the MR3 primary and
secondary equipment, MR3 Modules, media, facility
controls including, without limitation,
instrumentation, primary and secondary control
elements, shared display(s), control algorithms or
any software based functions necessary and required
to operate a plant, facility or system, and to
commercially implement the MR3 Technology, which
selectively removes targeted metals from feedstocks
or metals streams via high affinity metals extraction
to produce or render End-Products or Services. Each
MR3 Facility contains one or more MR3 Modules to
produce one or more specific metal End-Products or
Processing Services.
MR3 Module: includes the media, the container(s) and
the direct control system(s) for high affinity metals
extraction, used in the MR3 Technology.
Process Package: includes the set of information and
documentation required to design, specify, procure,
build and operate a MR3 Facility including but not
necessarily limited to Process Flow Drawing(s),
General Arrangement Drawing(s), Piping and
Instrumentation Diagrams, Detailed Process
Description, Detailed Functional Control Description,
Finalized Major Equipment List, and Major Process
Equipment and Instrumentation Data Sheets.
Magnum Opus: the treatise and document, authored by
Xx. Xxxxxx XxXxx and completed in April 1999, as well
as any amendments, corrections, additions or updates
that are made to it from time to time, containing an
extensive background to the Technology, including,
but also over and above the definitions of the
Technology included in this document.
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EXHIBIT B
Restricted Areas is defined as the following countries:
Taiwan
China (including Hong Kong, Macau and Mongolia)
Korea (except any transaction with Korea Zinc Co., Ltd.)
Japan
Australia
Bahrain
Brunei
Cambodia
Egypt
Federated States of Micronesia
Iran
Iraq
Jordan
Kuwait
Lebanon
India
Indonesia
Israel
Laos
Malaysia
Maldives
Myanmar
Nepal
New Zealand
North Korea
Oman
Pakistan
Saudi Arabia
Singapore
Sri Lanka
Syria
Thailand
The Philippines
United Arab Emirates
Vietnam
Yemen
