MR3 SYSTEM METALS EXTRACTION AGREEMENT
between
MR3 SYSTEMS, INC.
and
XXXXXXXX XXXX RESOURCES, INC.
November 30, 2004
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 4
2. GRANT OF EXCLUSIVE PROCESSING RIGHTS - THE PROJECT 6
3. MINING, CONCENTRATION AND PROCESSING OF TARGET METALS 7
4. OBLIGATIONS OF THE PARTIES 8
5. EXPENSES AND DISBURSEMENTS 9
6. REPORTING, BOOKS, RECORDS AND BANKING 9
7. GOVERNMENT APPROVALS 10
8. TEST RESULTS CONDITION TO MR3 PERFORMANCE 10
9. LIMITATIONS OF LIABILITY 10
10. INCOME TAXES 10
11. ASSIGNMENT 10
12. DURATION AND TERMINATION 11
13. FORCE MAJEURE 11
14. CONFIDENTIALITY 12
15. GENERAL PROVISIONS 14
16. GOVERNING LAW 15
17. ARBITRATION 22
18. ENTIRE AGREEMENT 16
19. REPRESENTATIONS AND XXXXXXXXXX 00
00. GOOD FAITH 18
21. INDEMNIFICATION 18
EXHIBIT A 19
THIS AGREEMENT is made this 30th day of November 2004, BETWEEN MR3 Systems,
Inc., a Delaware corporation, whose corporate address is 000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("MR3"); and Xxxxxxxx Xxxx Resources,
Inc., a Nevada corporation; whose corporate address is 000 Xxxxxxxx Xxxxxx,
Xxxxx Xxx Xxxxxxxxx, XX 00000-0000 ("FLR"). FLR and MR3 are at times referred to
herein individually as a "party", or collectively as the "parties" hereto.
RECITALS
WHEREAS, MR3 is the exclusive owner and developer of, and will continue
to develop, the MR3 Technology, which extracts individual metals from industrial
wastes, precious metal ores, and other complex metal sources for conversion into
pure metals and specialty chemical products; and
WHEREAS, MR3 designs, manufactures, installs and operates facilities utilizing
the MR3 Technology to extract and recover metals; and
WHEREAS, FLR owns or controls mining claims covering approximately 8,000 acres
located in and about Xxxxxxxx Xxxx, a dry lake bed, near Death Valley Junction,
California, of which tests, although inconsistent, generally show the presence
of gold and other precious metals; and
WHEREAS, FLR has developed, purchased, and otherwise acquired the FLR
Technology, and will continue to develop such technology; and
WHEREAS, FLR leases the Amargosa Site, a desirable location for the Project; and
WHEREAS, MR3 and FLR wish to enter into this Agreement, under the terms of which
the parties will jointly build and operate a Facility at the Amargosa Site to
process Source Material, Concentrate, and other Material in order to extract
Target Metals, which are then generally made into dore bars or other metal
Concentrates of acceptable purity for sale to refiners and other third parties;
and
WHEREAS, development of the Project requires financing from a third party
("Investor"), and the parties believe they have identified a party who will be
the Investor, and who desires to provide the funds for the Project through MR3
(for convenience, MR3 and Investor together may be referred to as
"MR3/Investor") and secured and collateralized against the Project, FLR, and
MR3;
NOW THEREFORE, in consideration of the premises, terms and conditions set forth
herein, the parties agree as follows:
1) DEFINITIONS
For purposes of this Agreement, when capitalized the following terms shall have
the following meanings (other terms are defined in the text):
a) AGREEMENT - Means this Agreement, including all schedules, exhibits, and
attachments hereto, as it may be amended by the parties hereto from time to
time.
b) AMARGOSA SITE - Means approximately eight acres of land, surrounded by a
fence, including a building containing a Facility and several auxiliary
buildings, located at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxx,
approximately 7.5 miles from Xxxxxxxx Xxxx.
c) BUILDING - Means any building or other structure, including a mobile home,
located at the Armagosa Site.
d) CAPTIAL COSTS - Means all the capital costs and expenses, including, without
limitation, debt service, the cost of purchasing, designing, engineering,
constructing, fabricating and installing all buildings and equipment necessary
to equip and operate a Facility, the filing of any required reclamation bonds
and operating permits, and any other costs and expenses of the Project that
would be considered capital expenditures under U.S. Generally Accepted
Accounting Principles ("US GAAP").
e) CONCENTRATE - Means the part, resulting from processing a Source Material
into two parts, which contains a greater proportion of a Target Metal than was
contained in the Source Material.
f) CONFIDENTIAL INFORMATION - Means as defined in Section 14 of this Agreement.
g) FACILITY - Means equipment and infrastructure necessary to process Source
Material, Intermediate Product, or Concentrate.
h) FINAL PRODUCT - Means the material containing the Target Metal(s), after all
the processing contemplated by this Agreement has been completed, commonly in
form of a dore bar or other metal Concentrates of acceptable purity for sale to
or other third party.
i) FLR SYSTEM - Means the entire FLR primary and secondary equipment, modules,
media, controls, including without limitation, instrumentation, primary and
secondary control elements, shared display(s), control algorithms or any
software based functions necessary to operate a Facility, including the FLR
Technology used to make the System effective, all of which existed prior to the
signing of this Agreement.
j) FLR TECHNOLOGY - Means all the technology owned by FLR designed or intended
for use in processing Source Material, Concentrate, or Intermediate Product in
order to produce a Final Product or another Intermediate Product; it includes
without limitation patents, trade secrets, other technical information whether
in written form or existing only in the mind of one or more persons, know-how,
show-how, Confidential Information, copyrights, trademarks, service marks, and
information of any nature whatsoever which relates to the FLR System, including
any modifications, improvements, and translations thereof, or to processes,
methods, techniques, devices, or other items used by FLR in its efforts to
process Material into a Final Product, all of which are so defined prior to the
signing of this Agreement.
k) GOVERNMENT AUTHORIZATIONS - Means all authorizations, consents, permits,
waivers, privileges, and approvals from all Governmental Instrumentalities
necessary for the performance of this Agreement.
l) GOVERNMENTAL INSTRUMENTALITY - Means the government of any country, state,
county or other political subdivision and any department, division,
instrumentality, agency, corporation commission, or the like, under the direct
or indirect control of that government.
m) GROSS REVENUE - Means the gross receipts collected from the sale of the
Target Metals and other output from a Facility.
n) INTERMEDIATE PRODUCT- Means Source Material that has been subject to some
processing, but is not yet a Final Product.
o) LEGAL REQUIREMENTS - Means all laws, statutes, orders, decrees, regulations,
or the like, of any Governmental Instrumentality having jurisdiction over the
matter in question.
p) MATERIAL includes Source Material, Concentrate, and Intermediate Product.
q) MONTH - Means a calendar month.
r) MR3 SYSTEM - Shall mean the entire MR3 primary and secondary equipment,
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 Facility, which selectively removes targeted metals from any Material.
The MR3 System is proprietary to MR3 and is deployed in various market sectors
for the extraction and purification of Target Metals.
s) MR3 TECHNOLOGY - Means the proprietary high affinity metals extraction and
metals separation technology owned by MR3 and embodied in the MR3 System, and
all of the know-how, show-how, Confidential Information, copyrights, trademarks,
service marks and information of any nature whatsoever which relates to the MR3
System, developed, possessed, conceived and/or used by MR3, including any
modifications, improvements and translations thereof in respect of commercial
and industrial uses. The MR3 technology also includes several halogen leaching
technologies, both utilized in the vapor form and liquid state, from which
Target Metals are extracted from Source Materials, ores, tailings, and various
solid forms containing Target Metals.
t) NET REVENUE - Means the Gross Revenue, less
(i) the sales commissions and selling expenses,
(ii) any taxes other charges related to such sales, and (iii) Operating
Expenses.
u) OPERATING EXPENSES - Means all non-capital expenses reasonably necessary for,
and incurred in connection with, a party's performance of its obligations under
this Agreement, including, without limitation, excavation and loading, trucking
(from the Property to the Amargosa Site and from there to the place of
disposal), concentrating, utilities, security, BLM claim maintenance fees and
other similar governmental fees, application fees and other charges related to
applications for and granting of Governmental Authorizations, property taxes,
payroll and payroll taxes, workers' compensation, day laborers, supplies,
maintenance and repair of Buildings and equipment used in connection with
activities under this Agreement, reclamation and similar expenses, and fees paid
to consultants, scientists, engineers, attorneys, accountants, and other
professionals and independent contractors directly related to a party's
obligations under this Agreement (but not including general company overhead).
v) PROJECT - Means the excavation, and concentrating if done on the Property,
and trucking of the Source Material and Concentrate from the Property to the
Amargosa Site and processing of Source Material and Concentrate under this
Agreement and for the purpose of producing a Final Product.
w) PROPERTY - Means the claims of FLR as set forth on the attached Exhibit A, on
land owned by the Bureau of Land Management, which generally overlay land
commonly known as the Xxxxxxxx Xxxx Playa.
x) SOURCE MATERIAL - Means all material taken from the ground on the Property
and any other material (including tailings) acquired from a third party or from
land other than the Property intended to be processed under this Agreement.
y) TARGET METALS - Means gold, other precious metals, and any other metal of
commercial value that the parties desire or attempt to extract from Source
Material.
z) TERM - Subject to the provisions of Section 12 below, Means the duration of
this Agreement, being the period commencing on the date of this Agreement and
continuing for a period of Two (2) years, with evergreen renewing of the term
for Two (2) years each renewal for a total addition period of Sixteen (16)
years. After Financing is complete, neither Party may terminate this Agreement
unless for specific reasons stated in Section 12. Neither party shall enter into
any agreement with any third entity which would limit the right of the other
party.
2) EXCLUSIVE RELATIONSHIP - THE PROJECT
a) EXCLUSIVITY - FLR agrees that it will work exclusively with MR3 in
processing the Source Material from the Property, and MR3 agrees that
it will use Source Material from the Property exclusively in the
processing at the Amargosa Site; provided, however, that MR3 may agree
to process other materials sourced by FLR. Notwithstanding the
foregoing sentence, each party agrees to cooperate with the other in
using the Facility for testing of variations in existing processes,
trying new processes, testing material different from Source Material,
or doing any other action that might improve performance on the
Project and profitability of the parties.
b) PROJECT PLAN - The Parties understand that the commercial feasibility
of the Project has not been established and that a project plan must
be executed within 60 days of the date of this Agreement (the "Project
Plan"). When executed, the Project Plan will be attached to and
incorporated by reference into this Agreement, and the terms and
conditions of the Project Plan shall control to the extent consistent
with the terms contained herein. The Parties agree that the Project
Plan will set forth, among other things as the Parties shall deem
appropriate, the following:
i) A detailed description of the Project and the cost of Project
implementation; and
ii) any design documents or specifications (unless the project
contemplates creation or development of the same); and
iii) project deliverables, if any, that either or both Parties will be
responsible for creating and developing; and
iv) tasks, responsibilities, covenants and agreements of each Party
relating to the project; and
v) deadlines, interim milestones, and other matters relating to
timing and delivery or performance under the Project; and
vi) intellectual property rights or licenses to the extent different
from the terms of this Agreement; and
vii) termination rights of the Parties relating to the Project; and
viii) obligations of the Parties to market and implement the Project;
and
ix) any other terms or conditions that vary from the terms and
conditions set forth in this Agreement.
3) COLLECTION, DELIVERY, MINING AND PROCESSING OF TARGET METALS FLR
agrees to:
a) acquire and operate all equipment necessary to excavate and load
the Source Material on the Property, truck the Source Material
and offload it at the Armagosa Site; alternatively, it can
concentrate the Source Material at the Property and truck the
Concentrate to the Amargosa Site ; and
b) install and operate all required mining equipment and systems at
the Armagosa Site necessary to crush, screen and concentrate (if
applicable) the Target Metals from the Source Material and
deliver the resulting material to the Building for processing
into dore bars; and prepare and file the required mining plans
with the appropriate Governmental Instrumentalities; and
c) obtain all operating, building, use and other permits required to
operate the MR3 System in the Building; and
d) obtain all water rights, bonds and permits necessary to perform
hereunder; and
e) provide security necessary at at the Property and at the Amargosa
Site, and during transportation of Target Metal dore bars; and
f) pay 100% of all FLR operating expenses that are not paid by the
financial source for the project.
MR3 AGREES TO:
g) Manufacture, deliver and install a complete MR3 System an at the
Amargosa Site; and
h) provide all consulting and technical expertise necessary for the
installation and implementation of the MR3 System; and
i) operate, maintain and manage all aspects and activities of the
Facility at the Amargosa Site, including disposing of any residue
generated exclusive of the tailings and remnant of the Source
Materials after the extraction of the Target Metals; and
j) commence operation of the Facility within 60 days of receipt of
all permits required to do so, and begin processing the Source
Material within 30 days of the date of commencing such operation;
and
k) establish a processing rate of at least 50 tons of Source
Material per day within 60 days from commencing operations as
stated in Section 3(j); and
l) sell all of the Facility's output and metals products, either
directly or through brokers and/or sales agents, including
without limitation, the sale of the Target Metals dore bars or
other metal Concentrates of acceptable purity for sale to
refiners and other third parties; and
m) expand MR3 Systems and the Facility as necessary to match the
growth and expansion of FLR's operations.
4) OBLIGATIONS OF THE PARTIES
MR3 AND FLR SHALL, IN PERFORMING THEIR DUTIES HEREUNDER:
a) Do so in a manner that does not cause the Property or Facility to
be in violation of any applicable Legal Requirements or
Government Authorizations known to either party; and
b) Do so in a good, workmanlike and diligent manner, in good faith,
and in the best commercial interests of both parties.
c) The parties shall be responsible for complying with all
conditions and requirements imposed by all Government
Authorizations for the operation and maintenance of the facility
and other activities conducted on the property.
d) The parties shall perform their respective duties hereunder in
accordance with the government approvals and legal requirements
relating to pollution control and environmental standards
applicable to the facility and the property.
e) Each party is an independent contractor and is not, and shall not
be construed to be, an employee, partner, joint venturer or
holder of any position with or as agent of the other party.
5) EXPENSES AND DISBURSEMENTS
a) MR3 shall collect all gross receipts from the sale of metals
products produced under this Agreement, and pay all Capital Costs
and all costs and expenses listed in Section 1(u) above.
b) Within five (5) days after the end of each semi-monthly period,
after deduction of all such Section 1(u) expenses and any
financial obligations that MR3 and FLR have jointly submitted the
Project under lien, such as repayment of debt financing from
third party Investor, MR3 shall disburse fifty percent (50%) of
the net revenue received (if any) for such period to FLR and the
remaining fifty percent (50%) of such net revenue (if any) shall
be paid to MR3.
6) REPORTING, BOOKS, RECORDS AND BANKING
a) MR3 shall provide FLR with Monthly reports on the operation and
performance of a Facility in a format to be agreed to with FLR.
b) To the extent consistent with applicable Government
Authorizations and Legal Requirements, MR3 shall keep accurate
records of any accident or other occurrence at the Facility or on
the Property that results in injury to persons or damage to
property, together with any other records required by such
Authorizations and Requirements. MR3 shall provide to FLR
reasonable access to these records.
c) MR3 shall keep a daily operation log for the Project, which shall
include information on any significant events relating to the
operation of the Facility.
d) MR3 shall maintain the financial books and records recording the
Project's operations and sales of its output in accordance with
U.S. Generally Accepted Accounting Principles ("US GAAP") and
other applicable Legal Requirements.
e) An audit of the Project's financial records and accounts shall be
performed annually at the end of each calendar year (and upon
termination of this Agreement if not coincident with a calendar
year's end) by an independent accounting firm. The results of
such audit shall be binding upon the parties with respect to all
matters arising under or in connection with this Agreement.
f) The financial books and records maintained by MR3 for the
operation of the Project and sale of its output, shall be the
property of both Parties. The accounting firm of FLR or such
other person authorized by FLR shall have the right to examine
such financial books and records at any time during normal
business hours.
7) GOVERNMENT APPROVALS
FLR shall be responsible for obtaining and maintaining all Government
Authorizations necessary for the construction and operation of the
Facility, and shall obtain and maintain all permits, claims and Government
Authorizations necessary to mine the Source Material and maintain the
ownership rights to all claims thereto.
8) TEST RESULTS CONDITION TO MR3 PERFORMANCE
a) MR3 shall begin sampling and testing the Target Metals in the
Source Material within 90 days of the date of this Agreement.
b) Concurrent with such sampling and testing, the parties will seek
project financing for the Project, which must be obtained within
180 days of the date of this Agreement.
c) MR3 shall complete testing within 180 days of the date of this
Agreement and shall notify FLR in writing of its intent to
proceed or not to proceed, hereunder based on the results of such
testing and receipt of a written commitment for project
financing.
d) Should MR3 elect to proceed under Section 8(c) above, FLR shall
apply, within 30 days of such election, for all permits required
to commence operations under this Agreement.
9) LIMITATIONS OF LIABILITY
Neither party shall be liable to the other, whether for breach of contract
or for any negligent act or omission or otherwise, for any loss of profit,
loss of use, loss of production, loss of contracts or for any other
special, incidental, punitive, indirect or consequential loss or damage
that may be suffered by the other, except for liability under Section 14.
10) INCOME TAXES
Each party shall be responsible for the handling and payment of all income
taxes and levies imposed upon such party or its subcontractors or their
respective agents or employees as a result of this Agreement and any
services performed pursuant hereto.
11) ASSIGNMENT
Neither Party may assign its rights or delegate its obligations hereunder,
either in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other Party. Any attempted
assignment or delegation without consent will be void. The rights and
liabilities of the Parties under this Agreement will bind and inure to the
benefit of the Parties' respective successors and permitted assigns.
12) DURATION AND TERMINATION
This Agreement shall remain in full force and effect throughout the Term,
unless terminated earlier by written notice from one party to the other
party upon the occurrence of any of the following:
a) an order is made or an effective resolution is passed for the
liquidation or winding up of either party and such order or
resolution is not revoked within ninety (90) days after issuance
thereof; or
b) either party commits a material breach of this Agreement and
fails to remedy such breach within a period of ninety (90) days
from the provision of a written notice from the other party
requiring the remedy of such breach; or
c) either party contravenes any applicable Government Authorization
or Legal Requirement in relation to its obligations hereunder
which has a material adverse effect on the other party and is not
caused or contributed to by any act or omission of such other
party; or
d) a change in Legal Requirements renders the continued performance
of this Agreement for a reasonable period of time by the other
party; or
Upon any termination of this Agreement,
e) MR3 shall remove the MR3 System from the Amargosa Site within 90
days of such termination.
f) The termination of this Agreement shall not prejudice or affect
any rights or remedies of the parties to this Agreement, which
have already accrued.
g) The provisions of Sections 5, 6, 9, 14, 16, and 19 shall survive
any termination of this Agreement.
13) FORCE MAJEURE
For the purposes of this Agreement, "Force Majeure" means any of the
following events or circumstances
(i) not within the reasonable control of either party,
(ii) which event or circumstance, despite the exercise of reasonable
diligence, cannot be or be caused to be prevented, avoided or
removed by either party, and
(iii) does not arise out of particular circumstances which are within
the knowledge of either party at the time of entering into this
Agreement:
a) acts of war or the public enemy whether war be declared or
not;
b) public disorder, insurrection, rebellion, sabotage, riots or
violent demonstrations;
c) earthquakes, floods, typhoons, drought, storms, other
natural calamities and acts of God, or the discovery of
hazardous materials or historical artifacts at the Property;
d) strikes or lockouts or other industrial action;
e) for the purposes of Force Majeure affecting MR3's
performance, acts of FLR affecting the operation or
maintenance of the Facility; and
f) any shortfall in utilities or other necessaries for the
operation of the Facility
A party shall be excused from performance and shall not be construed
to be in default of any obligation hereunder so long as failure to
perform such obligation is due to an event of Force Majeure. MR3 and
FLR:
g) shall make all reasonable efforts to prevent and reduce to a
minimum and mitigate the effect of any delay occasioned by
any Force Majeure; and
h) shall use their best efforts to ensure resumption of normal
performance of this Agreement after the termination of any
Force Majeure and shall perform their obligations to the
maximum extent practicable.
i) shall each have the option to terminate this Agreement
should such Force Majeure continue for a period of 90 days.
14) CONFIDENTIALITY
Unless waived in whole or in part by a written document signed by both
parties, each party agrees to abide by the confidentiality obligations set
forth below:
a) PROPRIETARY AND CONFIDENTIAL INFORMATION
i) Each party agrees that any proprietary or confidential
information ("Confidential Information") that is or has been
disclosed by or under the authorization of the other party
or results from prior discussions pertaining to such
disclosures, shall be subject to the terms of this
Agreement. "Confidential Information" includes all business
and technical information whether disclosed in writing,
orally, or in any other form, tangible or intangible,
including information of all kinds concerning any:
ii) information concerning inventions, discoveries, concepts,
ideas, techniques, uses, methods, raw materials, compounds,
formulations, test results, lab books, and reports,
formulas, software in various stages of development, source
codes, object codes, research and development procedures and
work in progress, trade secrets, know-how, inventions,
technical reports, scientific, engineering, manufacturing
and processing information, processes, designs,
specifications, drawings, diagrams, models, samples, flow
charts, prototypes, tooling, computer programs, algorithms,
data, databases, studies, mathematical calculations,
finances and plans, customer lists, business plans,
contracts, sales, marketing and pricing plans and
techniques, production plans, distribution plans, system
implementation plans, business concepts, supplier
information, personnel matters, business procedures and
operations, present or future products, research, processes
and technology development programs and investor
information, whether in oral, graphic, electronic or any
other media or form, and all materials related thereto.
b) EXCEPTIONS
i) Confidential Information does not include that information
which:
ii) is available to the public at the time it is disclosed or
thereafter becomes available to the public; or
iii) is known to the receiving party at the time of disclosure;
or
iv) is received from independent sources having the right to
such information without an obligation of confidence or
non-disclosure, and without the information having been
solicited or obtained by any use of the Confidential
Information; or
c) NON-DISCLOSURE TO THIRD PARTIES
i) Each party shall keep the Confidential Information strictly
confidential and in trust for the other party. Each party
shall use its best efforts to safeguard the Confidential
Information, taking at least the same strict precautions it
would take to safeguard its own most valuable proprietary
and confidential information.
ii) Neither party shall disclose any Confidential Information of
the other party to any third party (that is not an employee
provided for below), unless the other party specifically
agrees in writing in advance and the third party agrees in
writing to be bound to the disclosing party as the other
party is bound by this Agreement (in its entirety).
iii) Each party shall immediately notify the other party upon
receiving any request by any third party to disclose any
Confidential Information of the other party and shall
cooperate with the other party in its efforts to protect the
Confidential Information from disclosure. Should any third
party make any unauthorized use of any Confidential
Information provided hereunder, the party learning of such
unauthorized use shall notify the other party and the
parties will cooperate in taking steps to protect the
Confidential Information from further unauthorized use.
iv) Either party may disclose Confidential Information of the
other Party to the extent required to be disclosed pursuant
to any governmental application or pursuant to any final
court order, provided however that the disclosing party
shall: (1) promptly notify the other party upon its receipt
of any pleading, discovery request, interrogatory, motion or
other paper that requests or demands disclosure of the
Confidential Information, (2) oppose any request for
disclosure, and that failing, seek to have access and use
limited by a protective order; and (3) provide the other
party all reasonable opportunity and assist the other party
in its efforts to contest any requirement of disclosure,
seek judicial protection against the disclosure and have
such disclosure as is required made under a protective
secrecy order.
d) EMPLOYEE ACCESS AND CONTROL OF THE INFORMATION
i) Each party agrees that only those of its employees who need
to know the Confidential Information of either party will
have access to same, and then only to the extent necessary
to carry out their respective tasks. As part of its
obligation to safeguard the Confidential Information, each
party agrees that prior to and as a condition of his or her
access to the Confidential Information, each of its
employees shall sign a Confidentiality Agreement. Each party
shall keep copies of all such agreements, and provide copies
to the other party upon request.
ii) Upon any termination of this Agreement, each party agrees to
stop use of the Confidential Information of the other party
and to:
(1) Return promptly all documents and other tangible
materials provided by or under authorization of the
other party that contain evidence, record, derive from
or reveal any of the Confidential Information; and
(2) Destroy all documents and other tangible materials
generated by it or its employees that evidence, record,
derive from or reveal any of the Confidential
Information. Upon request, it shall certify in writing
that such materials have been so returned or destroyed.
e) OWNERSHIP OF THE CONFIDENTIAL INFORMATION
i) All Confidential Information is and will remain the
exclusive property of the party which invented or developed
it or acquired it from a third party until and unless some
other agreement is made regarding that Confidential
Information. This Agreement does not transfer any license or
other right to use the Confidential Information other than
pursuant to the Agreement, and does not obligate either
party to provide any such rights to the other party in the
future. If either party either directly or indirectly
through a third party makes, develops or contributes to any
invention, application, technique, process, specification or
work of authorship that is based on, improves upon, is
derivative of or results from any use of the Confidential
Information of the other party, the first party agrees to
assign all rights therein to the other party; provided that
the first party may request reasonable compensation in
exchange for such assignment. If the parties cannot agree on
reasonable compensation, the issue shall be deemed a dispute
and resolved as other disputes under this Agreement.
15) GENERAL PROVISIONS
a) NOTICES Any notice or other communication ("Notice") from one
party to the other with respect to this Agreement or any Project
Plan Agreement entered into between the parties under this
Agreement shall be sent by fax and e-mail; if the sender of a
Notice cannot confirm that at least one of such transmissions was
received by the other party within 2 hours of sending it, the
sender shall telephone the other party to inform him of the
Notice and to arrange for a method of delivery of the Notice
(including personal delivery delivery or the use of a commercial
courier) which will assure the sender that it will reach the
other party in the shortest practicable time. If, because of its
size or any other reason, it is impractical to send a Notice by
fax or e-mail, the sender shall inform the other party by fax,
e-mail, and/or telephone that it is sending the Notice and shall
send the Notice by personal delivery or commercial courier. A
Notice shall be deemed received upon actual receipt. Notices
shall be sent as follows:
To MR3 To FLR
--------------------------------------------------------------------------
Xx. Xxxxxxx Xxx, CEO Father Xxxxxxx Xxxxxx, President
MR3 Systems, Inc. Xxxxxxxx Xxxx Resources Inc.
000 Xxxxxxx Xxxxxx #000 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxx Xxx Xxxxxxxxx, XX 00000
Tel - office - 000-000-0000 Tel - office - 000-000-0000
Tel - cell - 000-000-0000 Tel - cell - 000-000-0000
Fax - 000-000-0000 Fax - 000-000-0000
e-mail - xxxx@xx0xxxxxxx.xxx e-mail - xxxxxxxx@xxx.xxx
and a copy to and a copy to
------------------------------------------------------------
Xxxxx Xxxxxxxx, COO Xxxxx Xxxxx, Secretary
MR3 Systems, Inc. Xxxxxxxx Xxxx Resources Inc.
000 Xxxxxxx Xxxxxx #000 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxx Xxx Xxxxxxxxx, XX 00000
Tel - office - 000-000-0000 Tel - office - 000-000-0000
Tel- cell - 000-000-0000 Tel - cell - 000-000-0000
Fax - 000-000-0000 Fax - 000-000-0000
e-mail - xxxxxxxxx@xx0xxxxxxx.xxx e-mail - xxxx@xxxxxxxxxxxx.xxx
b) HEADINGS - The subject headings of this Agreement are included
for purposes of convenience only, and shall not affect the
construction or interpretation of any provision of this
Agreement.
c) COUNTERPARTS - This Agreement may be executed in several
duplicate originals, each one of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party,
the party who receives the transmission may rely upon the
electronic facsimile as a signed original of this Agreement.
d) WAIVERS - If either party fails to enforce any provision of this
Agreement, or exercise any of its rights hereunder, such failure
shall not be construed as constituting a waiver of that Party's
right thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
e) GOVERNING LAW - This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of
California, USA, excluding any conflicts of laws rules.
f) DISPUTE RESOLUTION - Any dispute between the parties with respect
to this Agreement, a Project Plan Agreement, or any other matter
related to this Agreement shall be settled as follows:
i) MEDIATION - If any issue arises between the parties which
they have not been able to resolve between themselves,
either party may submit the matter to mediation (and must do
so before commencing an arbitration proceeding or taking any
other action with respect to the issue), by referring it to
the American Arbitration Association ("AAA") or any other
generally recognized alternative dispute resolution ("ADR")
organization (including an individual who holds himself or
herself out as a practitioner of ADR and has at least five
years of experience as a mediator and arbitrator), having an
office in San Francisco, California, or within 25 miles
thereof. All filing fees, mediator fees, and other expenses
of the mediation (except legal expenses, which shall be
borne by the respective parties) shall be divided equally
between the parties; except, that, within 90 days after the
conclusion of the mediation proceeding, either party may
request the mediator to make a finding that the other party
was not acting in good faith in the proceeding, and, if the
mediator so finds, the mediator may issue an order that the
party not acting in good faith shall bear 100 percent, or
any other amount greater than 50 percent, of the total fees
and expenses (excluding legal expenses). This order will be
final, binding, and non-appealable.
ii) ARBITRATION - If, after reasonable attempts, either party
concludes that further mediation is not likely to be
productive, it (first party) may submit the matter to
binding arbitration, by referring it to the AAA or any other
generally recognized ADR service (including and individual,
as with mediation), having an office in San Francisco,
California, or within 25 miles thereof. The other party may
ask such questions of the arbitrator as it deems appropriate
for the purpose of determining whether the arbitrator might
have a conflict of interest or otherwise not be able to
decide the matter impartially and objectively. If the other
party determines that the arbitrator cannot act impartially
and objectively, the other party may select another
arbitrator and the first party may have the same right to
ask questions as the other party did, and this shall
continue until the parties agree on an arbitrator. Any
arbitration proceeding shall be handled pursuant to the
rules prescribed by the arbitrator for such proceedings,
except that (i) discovery shall be allowed pursuant to the
California Code of Civil Procedure, (ii) the proceedings
shall be conducted by a single arbitrator, unless the amount
in controversy exceeds $250,000, in which case either party
may elect to have it heard by a panel of three arbitrators,
(iii) the arbitrator(s) shall agree to prepare a written
statement of the reasons for his decision, and (iv) the
arbitrator shall allocate the costs of the arbitration
proceeding (not including their respective attorneys' fees)
between them, all to one party, divided equally between
them, or in any manner the arbitrator deems equitable.
g) ENTIRE AGREEMENT; SEVERABILITY - This Agreement constitutes the
entire agreement between the parties concerning the subject
matter hereof. If any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision
had never been contained herein. If, moreover, any one or more of
the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to time, duration,
geographical scope, activity or subject, it shall be construed by
limiting and reducing it, so as to be enforceable to the extent
compatible with the applicable law as it shall then exist.
h) REPRESENTATIONS AND WARRANTIES - To the best of each party's
knowledge, after due inquiry, each of MR3 and FLR hereby
represents, warrants and covenants to the other as follows:
i) Right, Power and Authority. Each party has full right, power
and authority to enter into this Agreement and there is
nothing which would prevent it from performing its
obligations under the terms and conditions imposed on it by
this Agreement.
ii) Binding Obligation. This Agreement has been duly authorized
by all necessary corporate or legal action of MR3 and FLR,
respectively, and constitutes a valid and binding obligation
on MR3 and FLR, respectively, enforceable in accordance with
the terms hereof.
iii) Good Standing. MR3 or FLR, as the case may be, is a
corporation or partnership duly organized and validly
existing and in good standing under the laws of its
jurisdiction of formation and is duly qualified and
authorized to do business wherever the nature of its
activities or properties requires such qualification or
authorization.
iv) No Provisions Contravened. There is no provision in its
articles of incorporation or bylaws or equivalent governing
documents, and no provision in any existing mortgage,
indenture, contract or agreement binding on it which would
be contravened by the execution, delivery or performance of
this Agreement.
v) No Consent of Third Parties Needed. No consent of any third
party or holder of any of its indebtedness is or shall be
required as a condition to the validity of this Agreement.
vi) No Law Contravened. Neither its execution nor its delivery
of this Agreement nor its fulfillment of or compliance with
the terms and provisions hereto shall contravene any
provision of the laws of any jurisdiction, including,
without limitation, any statute, rule, regulation, judgment,
decree, order, franchise or permit applicable to it.
vii) Continued Effect of Representations and Warranties. It
covenants and agrees that its representations and warranties
contained in this Agreement shall remain true in all
respects for the Term hereof with the same effect as though
such representations and warranties had been made on and as
of any subsequent date during such Term.
i) FLR holds all claims and 100% of the right and title to the
Source Material and such claims and ownership rights are current.
FLR has the right to grant the exclusive processing rights to MR3
hereunder, and FLR has not granted, and shall not in the future
during the Term of this Agreement grant, such rights to any other
person or entity.
j) GOOD FAITH - Each party diligently and in the utmost good faith
agrees to perform its respective duties and obligations under
this Agreement and to undertake all actions reasonably required
to promote the intent of this Agreement. The parties each agree
to provide all further information, and to execute, acknowledge
and deliver all further documents and instruments, reasonably
required to consummate the transactions contemplated hereunder.
k) INDEMNIFICATION - To the fullest extent allowed by law, each
Party shall indemnify and hold the other Party's officers,
directors, employees, shareholders, agents, and his heirs,
personal representatives, successors and assigns harmless against
any loss, expense, damage, claim, or injury suffered or sustained
by either Party by reason of any acts, errors, omissions, or
alleged acts or omissions related to this Agreement. Each Party's
duty to indemnify will include any judgment, award, settlement,
reasonable legal fees, and other costs and expenses related to
the defense of any actual or threatened action, proceeding, or
claim. The indemnification herein provided shall apply also in
respect of any amount paid in compromise of any such action,
suit, proceeding or claim asserted (including expenses, counsel
fees and costs reasonably incurred in connection therewith),
provided each Party shall have first approved such proposed
compromise settlement, which approval shall not be unreasonably
withheld.
This Agreement must be executed with the attachment of all the Signatory pages.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first written above by their duly authorized representatives. MR3 Systems,
Inc.
By: /S/ XXXXXXX X. XXXX Date: 11/30/04
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Xxxxxxx X. Xxxx, Chairman
Xxxxxxxx Xxxx Resources, Inc.
By: /S/ FATHER XXXXXXX XXXXXX Date: 11/30/04
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Father Xxxxxxx Xxxxxx, President
