ATARAXIA CORP.
P.O. Box 267
B.C.M. Cape Building
Leeward Highway
The Turks of Caicos
September 17, 1997
Xxxxxxx X. Xxxxxx
Pecos, New Mexico 87552
Estancia Limited
P.M.B. 2
Providenciales
Turks & Caicos Islands
British West Indies
Dear Sir:
Re: Joint Ownership & Exclusive License Rights to Certain Patents
-------------------------------------------------------------
Further to our earlier discussions and the Heads of Agreement dated
June 17, 1997, we provide the following by way of summary of the principal terms
and conditions we would be prepared to acquire, and you would be prepared to
grant, joint ownership and an exclusive license right to Ataraxia Corp. and or
its wholly-owned subsidiary Pageant Technology, Inc. (together "Ataraxia") to
jointly develop,m as well as manufacture and sell the related products
associated with the invention entitled the Hall Effect Ferromagentic Random
Access Memory technology (the "HFRAM Technology").
1. Patents. Ataraxia will acquire the joint ownership and exclusive
world wide licensing rights (together the "Territory") the following patents:
a. US Patent File No. 5295097
b. EEC Patent File No. 939186441
c. Japan Patent File No. 505547/1994
(together the "Patents",)
2. Joint Ownership and Maintenance of Patents. Estancia Limited will
and will cause Xxxxxxx Xxxxxx (Xx. Xxxxxx personally and or jointly acting under
the business name NVTECH) to patent, register, copyright or otherwise protect to
the extent commercially feasible, the HFRAM technology selected by Ataraxia for
transfer to joint ownership. Estancia Limited will cause Xxxxxxx Xxxxxx to
transfer a nontransferable undivided one-half joint ownership interest in such
technology and related patents to Ataraxia. Ataraxia agrees it will transfer its
ownership to Estancia Limited in the event of a
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material default of the agreement between the parties by Ataraxia which is not
cured within a reasonable time. Ataraxia will finance future patent costs for
further considerations. Inventor(s) will always be given full credit for the
parties, but all rights shall be jointly owned by Ataraxia and Estancia Limited.
3. Power to Grant Rights and Validity of Patents. Estancia
Limited will and will cause Xxxxxxx Xxxxxx to patent, register, copyright or
otherwise protect to the extent the commercially feasible, the HFRAM technology
selected by Ataraxia to transfer to joint ownership. Estancia Limited will
demonstrate to Ataraxia that Estancia Limited has all necessary ownership or
other rights in such technology to enter into the transactions contemplated in
this letter agreement. Estancia Limited will also warrant that the technologies,
systems, etc. provided to Ataraxia are original works and were not
misappropriated from others. Estancia Limited will or will cause to be
transferred an ownership interest in such technology and related patents to
Ataraxia. Ataraxia will finance future patent costs for further considerations.
The parties agree the inventor(s) will always be given full credit for the
patents, but all rights will be jointly owned by Estancia Limited and Ataraxia.
4. Obligations of Estancia Limited:
a. New Inventions: Estancia Limited will and will cause
Xxxxxxx Xxxxxx to xxxxx to Ataraxia a right of first
refusal to acquire rights in respect of any patent
improvements or new technology or application developed or
under the control of the Estancia Limited Corp. or Xxxxxxx
Xxxxxx relating to any invention, technology, application
or product which may reasonably be regarded as similar to
or competitive with the Products.
b. Technical and Marketing Support. Estancia Limited agrees
to provide Ataraxia with all information/training
reasonably necessary for it to market the technology.
Estancia Limited will serve as advisors to Ataraxia at no
cost to Ataraxia, in regards to license/contract
negotiation, marketing and personal hiring, as reasonably
deemed necessary by Xxxxxxxx.
c. Consulting Services. Estancia Limited will cause Xxxxxxx
Xxxxxx to serve as a consultant to Ataraxia for a fee of
no more than US$ 125 per man-hour plus reasonable expenses
to include evaluating other technologies, developing new
applications and/or systems whether HFRAM or other
technologies. Additionally, Estancia Limited will provide
such services to such customers of Ataraxia as Ataraxia
may reasonably request at the same rate. If Estancia
Limited contracts directly with customers of Ataraxia for
such services, Estancia Limited shall pay to Ataraxia 40%
of the gross profit less agreed to expenses related to
such contracts.
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5. Obligations of Ataraxia
a. Initial & Subsequent Payment. The parties acknowledge
Ataraxia provided Estancia Limited with US$ 3,000 at the
signing of the original heads of agreement. Ataraxia
agrees to provide Estancia Limited with an additional sum
of CD$ 20,000 on or shortly after Ataraxia entering into
an agreement with a listed public company related to the
technology. The CD$ 20,000 will be satisfied, subject to
regulatory approval, by the reservation and issuance of
free trading shares in the listed public company. The
exact number of shares will be determined by dividing the
value of the shares of the listed public company into CD$
20,000.
b. Financing of Development and Manufacturing. Ataraxia will
provide funding deemed necessary and as commercially
feasible to support the prototype development by the
University of Utah of the HFRAM technology as necessary to
test, manufacture, document, or otherwise take the HFRAM
technology to the marketplace. Additionally, Ataraxia will
be responsible for all marketing, sales and licensing of
the selected technology.
c. Royalty. Ataraxia will pay Estancia Limited a royalty of
40% of gross profit (less those expenses agreed by the
parties) for each HFRAM license sold or otherwise
transferred by Estancia Limited. Additionally, Ataraxia
will pay Estancia Limited 40% of any per unit royalty
received by Ataraxia less properly documented reasonable
expenses directly related to the obtaining of said
royalties and as agreed to by the parties in writing.
d. Other Payments. Ataraxia will pay Estancia Limited 40% of
any other revenues (less those expenses agreed by the
parties) of Ataraxia related to the grant of rights or use
of the HFRAM technology by Estancia Limited, exclusive of
participation of Estancia Limited in the contract.
6. Formal Agreement.
a. Terms of Formal Agreement: The parties agree to enter into
a formal agreement with one another within six months from
the date of this Agreement which will:
i. reflect the provisions set forth herein and the Heads
of Agreement attached as Appendix One;
ii. set out the minimum performance requirements of each
party; and
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iii. such other provisions as are customary in a
licensing arrangement of the character contemplated
hereby and are reasonably acceptable to Ataraxia
and Estancia Limited.
b. Agreement is Binding: Until superseded by the formal
agreement, this Agreement will remain binding and in full
force and effect.
c. Purpose of Agreement: Estancia Limited and Xxxxxxx Xxxxxx
agree that the purpose of this and the formal agreement is
to tie-up and exhaust the entire rights held by Estancia
Limited and Xxxxxxx Xxxxxx in the Patents during the term
of this Agreement and any formal agreement entered into by
the parties. In addition to a formal license agreement,
the parties agree to enter into all other supporting
documents necessary fulfill this intent.
d. Compensation on Termination. Estancia Limited agrees that
that if the relationship of the parties is terminated it
will pay to Ataraxia all costs properly incurred by
Ataraxia to develop the prototype, test, manufacture,
document, or otherwise take the HFRAM technology to the
marketplace.
7. Sale of Rights to Third Parties. If Ataraxia sells the rights
to the HFRAM Technology to a third party not owned or controlled by Ataraxia,
Ataraxia will pay Estancia Limited 50% of the proceeds from such transaction.
Estancia Limited will not be obligated to provide to the third party the same
concessions, prices and services as to Ataraxia. If there is any dispute between
Ataraxia and Estancia Limited as to the fairness or value of a third party
contract either Ataraxia or Estancia Limited may request independent
arbitration.
8. New Ventures. Ataraxia and Estancia Limited agree that a
separate agreement will cover the parties or their respective affiliates
arrangement with respect to the design of a new computer system and operating
software based on the HFRAM technology. Estancia Limited or its designated
affiliate will be given a 15% ownership of the organization. Any transfer of
HFRAM products from a licensee within the contemplation of section 5 above to
such separate organization shall not in any way reduce or off-set license fees
or royalties contemplated by such section 5.
9. Information. Ataraxia and Estancia Limited agree to make
available to each other information necessary for either party to verify sales
or other pertinent costs and equipment purchases. Each party agrees to protect
the confidentiality of the confidential and/or proprietary information of the
other party, and to use such information only as provided in the business
agreement.
10. Use of Trademarks. Neither party shall publish, make
reference to, or otherwise use or designate the trademarks or trade names of the
other party in connection with activities contemplated hereby without the
written consent of such other party.
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11. Material Default. In the event of a default under these
provisions of the agreement, specific therein, to constitute a "material
default":
a. By Xxxxxxxx, all right, title and interest in the
technology and related intellectual property rights
transferred to Ataraxia under the agreement shall
revert back to Estancia Limited; or
b. By Estancia Limited, Ataraxia shall have the right
to cure or cause a third party to cure such
material default and deduct the cost thereof from
the amounts due to Estancia Limited pursuant to
sections 4 and 5 above.
12. Confidentiality. Each party agrees to keep confidential and
not disclose, directly or indirectly, any information concerning the HFRAM
Technology or other parties business (except to the extent that such information
is available to the general public) or any other information which the other
party designates as confidential, including the contents of this agreement.
13. Governing Law and Arbitration. All disputes, controversy or
claims arising out of or in connection with or in relation to the contract,
including any question regarding its existence, validity or termination, will be
governed by and construed in accordance with the laws of the United States
related to intellectual property and the domestic laws of the State of New
Mexico; under this agreement. The parties irrevocably submit to the jurisdiction
of such courts to finally adjudicate or determine any suit, action or
proceedings arising out of or in connection with this agreement.
14. General Terms:
a. This Agreement constitutes the entire agreement
between the parties or any of them and supersedes
and replaces all previous oral or written
agreements. Specifically, where any term of the
signed Heads of Agreement attached as Appendix One
conflicts with the terms of this Agreement, the
terms of this Agreement apply.
b. This Agreement may be amended only by an agreement
in writing executed by all the parties to the
Agreement.
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c. This Agreement may be executed in counterpart and by
fax.
If you find the foregoing to be acceptable, please advise by
dating, signing and returning two copies of this letter and on our receipt of
these, we will instruct our counsel to prepare a formal agreement for your
review and consideration. This formal agreement will follow and will be along
the lines of Appendix One attached.
Yours very truly,
ATARAXIA CORP.
/s/ Hibernian Directors Ltd.
Director of the Company
----------------------------
Hibernian Directors Ltd.
-------------------------------------------------------------
AGREED TO AND ACCEPTED this 25 day of September 1997.
ESTANCIA LIMITED XXXXXXX XXXXXX
/s/ /s/ Xxxxxxx Xxxxxx
--------------------------------- ----------------------------
Authorized Signatory
AVATAR CORPORATION LIMITED
(DIRECTOR OF ESTANCIA LIMITED)
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APPENDIX ONE
Part I
HEADS OF AGREEMENT
------------------
ATARAXIA CORP., a Turk & Caicos corporation hereafter known as "ATARAXIA"
purposes to NVTECH the following:
1. NVTECH agrees to patent, register, copyright or otherwise protest to the
extent commercially feasible, the HFRAM technology selected by ATARAXIA for
transfer to joint ownership. NVTECH will demonstrate to ATARAXIA that NVTECH has
all the necessary ownership or other rights in such technology to enter into the
transactions contemplated hereby. NVTECH will also warrant that the
technologies, systems, etc. provided to ATARAXIA are original works and are not
misappropriated from others. NVTECH will transfer a joint ownership interest in
such technology and related patents to ATARAXIA.
2. ATARAXIA intents to set up a separate organization to design a new computer
system and operating software based on the HFRAM technology. NVTECH will be
given 15% ownership of said organization. Any transfer of HFRAM products from a
licensee within the contemplation of paragraph 3 below to such separate
organization shall not in any way reduce or off-set license fees or royalties
contemplated by agreement dated 17 June 1997.
3. ATARAXIA will pay NVTECH a royalty of 40% of gross profit (less those
expenses agreed by the parties) for each HFRAM license sold or otherwise
transferred by ATARAXIA. Additionally, ATARAXIA will pay NVTECH 40% of any per
unit royalty received by ATARAXIA less properly documented reasonable expenses
directly related to the obtaining of said royalties.
4. ATARAXIA and NVTECH agree to make available to each other information
necessary for either party to verify sales or other pertinent costs, and
equipment purchases. Each party agrees to protect the confidentiality of the
confidential and/or proprietary information of the other party, and to use such
information only as provided in the business agreement.
5. Neither party shall publish, make reference to, or otherwise use or designate
the trademarks or trade names of the other party in connection with activities
contemplated hereby without the written consent of such other party.
6. Neither party, without the express consent of all other party shall divulge
the contents of this agreement or the names of the principles of the other
party.
ENTERED INTO AND AGREED TO THIS 17th DAY OF JUNE 1997
NVTECH ATARAXIA CORP.
/s/ Hibernian Directors Ltd.
/s/ Xxxxxxx Xxxxxx Director of the Company
------------------ -----------------------
By: Xxxxxxx Xxxxxx By: Hibernian Directors Ltd.
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APPENDIX ONE
Part II
HEADS OF AGREEMENT
------------------
ATARAXIA CORP., a Turks & Caicos corporation hereafter known as "ATARAXIA",
purposes to NVTECH the following:
1. NVTECH agrees to patent, register, copyright or otherwise protect to the
extent commercially feasible, the HFRAM technology selected by ATARAXIA for
transfer to joint ownership. NVTECH will demonstrate to ATARAXIA that NVTECH has
all the necessary ownership or other rights in such technology to enter into the
transactions contemplated hereby. NVTECH will also warrant that the
technologies, systems, etc. provided to ATARAXIA are original works and were not
misappropriated from others. NVTECH will transfer a joint ownership increase in
such technology and related patents to ATARAXIA.
2. ATARAXIA will finance future patent costs for further considerations.
Inventor(s) will always be given full credit for the patents, but all rights
shall be jointly owned by ATARAXIA and NVTECH.
3. NVTECH agrees that rights to offer HFRAM applications and other technologies
developed by NVTECH will be offered to ATARAXIA on a first right of refusal
basis.
4. NVTECH will provide ATARAXIA with all information/training reasonably
necessary for it to market the technology. NVTECH will serve as advisors to
ATARAXIA at no cost to ATARAXIA, in regards to license/contact negotiation,
marketing and personnel hiring, as reasonably deemed necessary by XXXXXXXX.
5. ATARAXIA will provide all funding necessary to test, manufacture, document,
or otherwise make the HFRAM technology marketable. Additionally, ATARAXIA will
be responsible for all marketing, sales, and licensing of the selected
technology.
6. NVTECH will serve as a consultant to ATARAXIA for a fee of no more than $125
per man-hour plus reasonable expenses to include evaluating other technologies,
developing new applications and or systems whether HFRAM or other technologies.
Additionally, NVTECH will provide such services to such customers of ATARAXIA as
ATARAXIA may reasonably request at the same rate. If NVTECH contracts directly
with customers of ATARAXIA for such services, NVTECH shall pay to ATARAXIA 40%
of the net profit related to such contracts.
7. ATARAXIA will pay NVTECH a royalty of 40% of gross profits (less those
expenses agreed by the parties) for each HFRAM license sold or otherwise
transferred by ATARAXIA. Additionally, ATARAXIA will pay NVTECH 40% of any per
unit royalty received by ATARAXIA less properly documented reasonable expenses
directly related to the obtaining of said royalties.
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8. ATARAXIA will pay NVTECH 40% of any other revenues (less those expenses
agreed by the parties) of ATARAXIA related to the grant of rights or use of the
HFRAM technology by ATARAXIA, exclusive of participations of NVTECH in the
contract.
9. Should ATARAXIA sell the rights to the HFRAM technology to a third party part
not owned or controlled by ATARAXIA, ATARAXIA will pay NVTECH 50% of the
proceeds from such transaction. NVTECH will not be obligated to provide to the
third party the same concessions, prices and services as to ATARAXIA. If there
is any dispute between ATARAXIA and NVTECH as to the fairness or value of a
third party contract either ATARAXIA or NVTECH may request independent
arbitration.
10. ATARAXIA and NVTECH agreed to make available to each other information
necessary for either party to verify sales or other pertinent costs, and
equipment purchases. Each party agrees to protect the confidentiality of the
confidential and/or proprietary information of the other party, and to use such
information only as provided in the business agreement.
11. Neither party shall publish, make reference to, or otherwise use or
designate the trademarks or trade names of the other party in connection with
activities contemplated hereby without the written consent of such other party.
12. ATARAXIA will provide NVTECH $3,000 at the signing of this heads of
agreement. XXXXXXXX will take best efforts to have the business agreement ready
for signing no later than the end of August 1997. ATARAXIA will provide NVTECH
an additional $7,000 of the signing of the business agreement or such other
amount that may be agreed to by the parties. Such agreement shall (a) reflect
the provisions set forth herein (b) minimum performance requirements for each
party, and (c) such other provisions as are customary in a licensing arrangement
of the character contemplated hereby and are reasonably acceptable to ATARAXIA
and NVTECH. In the event of a default under these provisions of the agreement
specified therein to constitute a "material default," (i) by ATARAXIA, all
right, title and interest in the technology and related intellectual property
rights transferred to ATARAXIA under the agreement shall revert back to NVTECH,
or (ii) by NVTECH, ATARAXIA shall have the right to cure or cause a third party
to cure such material default and deduct the cost thereof from the amounts due
to NVTECH pursuant to sections 7 and 8 above. If such agreement is not signed by
31 August 1997, this terms of agreement shall expire and be of no further force
or effect.
13. Neither party, without the express consent of the other party shall divulge
the contents of this agreement or the names of the principles of the other
party.
ENTERED INTO AND AGREED TO THIS 17TH DAY OF JUNE 1997.
NVTECH ATARAXIA CORP.
/s/ Hibernian Directors Ltd.
/s/ Xxxxxxx Xxxxxx Director of the Company
------------------ ----------------------------
By: Xxxxxxx Xxxxxx Xxxxxxxxx Directors Ltd.
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