Exhibit 10.9
------------
MR3 SYSTEM METALS EXTRACTION AGREEMENT
between
MR3 SYSTEMS, INC.
and
XXXXXXX X. XXXXXX
DECEMBER 13, 2002
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION.......................................... 2
2. GRANT OF EXCLUSIVE PROCESSING RIGHTS.................................... 4
3. MINING, CONCENTRATION AND PROCESSING OF GOLD, PLATINUM AND
PALLADIUM............................................................... 4
4. OBLIGATIONS OF THE PARTIES.............................................. 5
5. EXPENSES AND DISBURSEMENTS.............................................. 6
6. REPORTING, BOOKS, RECORDS AND BANKING................................... 6
7. GOVERNMENT APPROVALS.................................................... 7
8. TEST RESULTS CONDITION TO MR3 PERFORMANCE............................... 7
9. LIMITATIONS OF LIABILITY................................................ 7
10. TAXES................................................................... 8
11. ASSIGNMENT AND SUB-CONTRACTING.......................................... 8
12. DURATION AND TERMINATION................................................ 8
13. FORCE MAJEURE, LIABILITY FOR NON-PERFORMANCE AND CAUSE OF
GENERATION DEFICIENCY................................................... 9
14. CONFIDENTIALITY......................................................... 10
15. GENERAL PROVISIONS...................................................... 12
16. GOVERNING LAW........................................................... 12
17. ARBITRATION............................................................. 13
18. ENTIRE AGREEMENT........................................................ 13
19. REPRESENTATIONS AND WARRANTIES.......................................... 13
20. GOOD FAITH.............................................................. 14
EXHIBIT A.................................................................... 15
1
THIS AGREEMENT is made this 13th day of December, 2002
BETWEEN
MR3 Systems, Inc., a Delaware corporation, whose address is 000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("MR3"); and
Xxxxxxx X. Xxxxxx, an individual; whose mailing address X.X. Xxx 0000, Xxxxxx,
Xxxxxx (`RLL").
The RLL and the 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 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, RLL owns mining claims for the Silver Mountain Mining Services
property located approximately 75 miles from Fallon in the Clan Alpine Mountains
of Xxxxxxxxx County, Nevada, containing valuable gold, platinum and palladium
deposits; and
WHEREAS, MR3 and RLL wish to enter into this Agreement, under the terms
of which RLL agrees to engage MR3 to build and operate a MR3 Facility on its
site to process the ore sources into the gold, platinum and palladium dore bars
for sale by MR3, with MR3 and RLL sharing the net proceeds from such sales on a
50/50 basis.
NOW THEREFORE, in consideration of the premises, terms and conditions
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
1. DEFINITIONS AND INTERPRETATION
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Agreement" shall mean this Agreement,
including all schedules,
exhibits, and attachments
hereto, as it may be amended
by the parties hereto from
time to time.
1.2 "Building" means any building or
structure housing a Facility
and located either on or off
the Property.
1.3 "Confidential Information" means as defined in Section
14 of this Agreement.
1.4 "Facility" means all the equipment,
material and infrastructure
housed in a Building
necessary to process Source
Material utilizing the MR3
System.
2
1.5 "Government Authorizations" means all authorizations,
consents, permits, waivers,
privileges, approvals from,
and filings with, all
Governmental
Instrumentalities necessary
for the performance of this
Agreement.
1.6 "Governmental Instrumentality" means the government of any
country, state, county or
other political subdivision
and any ministry,
department, political
sub-division,
instrumentality, agency,
corporation commission, or
the like, under the direct
or indirect control of that
government.
1.7 "Gross Revenue" means the gross receipts
collected by MR3 from the
sale of the Target Metals
and other output from a
Facility.
1.8 "Legal Requirements" means all published laws,
statutes, orders, decrees,
regulations, or the like, of
any Governmental
Instrumentality having
jurisdiction over the matter
in question.
1.9 "Month" means a calendar month.
1.10 "MR3 System" shall mean all the 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
MR3 facility which
selectively removes targeted
metals from metals streams
to produce metals and
specialty chemical products.
1.11 "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.
1.12 "Mine Operating Expense" means all expenses necessary
for, and incurred on the
Property in connection with,
the joint performance of the
parties under Section 3.1
below, including (without
limitation) the cost of all
buildings, labor, equipment
acquisition and operation,
crushing and screening
3
expenses, utilities,
security, B.L.M Maintenance
fees and re-filing fees,
permits, bonds, payroll
taxes, property taxes, and
other taxes, and the like.
1.13 "MR3 Operating Expenses" means all the expenses of
operating, maintaining and
managing a Building,
Facility and the MR3 System
to process the Target Metals
hereunder.
1.14 "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) each
party's share of the Mine
Operating Expenses and MR3
Operating Expenses as
determined under Sections
3.2. and 3.3 below.
1.15 "Property" means the property of RLL
described as the Silver
Mountain Mine, where lies
the Source Material to be
processed, located at the
sites and on the claims set
forth on the attached
Exhibit A.
1.16 "Source Material" means those Target Metals
and other metal bearing
mineral resources located on
the Property.
1.17 "Target Metals" means gold, platinum,
palladium and any other
metals found in the Source
Material, which the Parties
agree to process.
1.18 "Term" means the term of this
Agreement, being the period
commencing on the date of
this Agreement and
continuing for ten years
from the date processing
reaches the rate under
Section 3.1(e) hereunder,
unless extended by the
mutual consent of the
parties or earlier
terminated in accordance
with this Agreement.
2. GRANT OF EXCLUSIVE PROCESSING RIGHTS
RLL grants to MR3 the exclusive right to process the Source Material
located on the Property into Target Metal dore bars and similar end
products under the terms and conditions of this Agreement.
3. MINING, CONCENTRATION AND PROCESSING OF GOLD, PLATINUM AND PALLADIUM
3.1 MR3 and RLL agrees to jointly:
a. mine, crush and screen the Target Metals from the Source
Material, to be delivered to the MR3 Facility for processing
into dore bars; and
4
b. prepare and file the required mining plans with the
appropriate governmental Instrumentalities; and
c. obtain all water rights, bonds and permits necessary and
perform hereunder; and
d. lease or otherwise acquire all the equipment necessary to mine
and prepare the Target Metals for MR3 processing on the
Property; and
e. reach a processing rate of 300 tons of Source Material per day
on or before December 31, 2003.
3.2 RLL shall pay 100% of all Mine Operating Expenses until such time as
RLL receives sufficient funds under Section 5.2 below to cover such
Expenses. MR3 agrees to advance all the funds necessary to pay all Mine
Operating Expenses incurred under this Section 3, and will be
reimbursed by RLL for RLL's share of said expenses pursuant to Section
5.3 below.
3.3 MR3 agrees to:
a. manufacture, deliver and install a complete MR3 System and
Facility in a Building located on the Property, or elsewhere;
and
b. operate, maintain and manage all aspects and activities of the
Facility necessary to (i) prepare and process in the Facility
all Source Material into dore bars and like end products (ii)
dispose of any residue, and (iii) otherwise perform its
obligations hereunder, in accordance with the terms and
conditions hereof. The parties acknowledge and agree that the
MR3 shall at all times be the sole and exclusive owner and
operator of the Facility, and shall (i) have such access,
power and authority as necessary to exercise its rights and
perform its obligations hereunder, and (ii) independently
determine the method, means, and technical details for
performing the same. MR3 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
RLL, except where the MR3 has authority to act on behalf of
RLL in the circumstances described hereunder.
c. pay 100% of the MR3 Operating Expenses and any other costs of
MR3's performance of its duties and obligations under this
Section 3.3 out of MR3's share of Net Revenue.
d. obtain all operating, building, use and other permits required
to operate the MR3 System in the Building.
e. commence operation of the Facility within 120 days of receipt
of all permits required to do so, and begin processing the
Source Material within 90 days of the date of commencing such
operation.
3.5 RLL agrees to supervise the activities on the Property described in
Section 3.1 above.
4. OBLIGATIONS OF THE PARTIES
4.1 MR3 and RLL shall, in performing their duties hereunder:
(i) 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
5
(ii) do so in a good, workmanlike and diligent manner, in good
faith, and in the best commercial interests of both parties.
4.2 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.
4.3 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.
4.4 MR3 shall restrict access to any Facility by all persons, except for
(i) those persons authorized by MR3, and (ii) the employees and agents
of he RLL (approved by MR3) to the extent that such access is
reasonably required in connection with the operation, maintenance or
repair of the Facility.
4.5 MR3 shall be responsible for the provision of all reasonable and
customary measures required to ensure the protection and security of
any Facility.
4.6 The parties shall share responsibility for the sale or other
disposition 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.
5. EXPENSES AND DISBURSEMENTS
5.1 MR3 shall collect all gross receipts from the sale of output and metals
products produced in any Facility, and pay all shared expenses listed
in Sections 1.17 (i), (ii) and (iii) above, including reimbursement to
MR3 for any Section 3.2 advances made for Mine Operating Expenses.
5.2 Within five (5) days after the end of each semi-monthly period, after
deduction of all Section 1.17 expenses, (including deduction of all On
Site Operating Expenses for that period at the rate of 100% of such
Expenses from RLL's share, and 100% of all MR3 Operating Expenses from
MR3's share), MR3 shall disburse fifty percent (50%) of the Net Revenue
received (if any) for such period to RLL and the remaining fifty
percent (50%) of such Net Revenue (if any) shall be paid to MR3.
5.3 Pursuant to Section 3.2 above, MR3 has agreed to advance all the funds
necessary to pay all Mine Operating Expenses. RLL agrees that MR3 may
reimburse itself for any outstanding amounts advanced by MR3 on behalf
of RLL at the rate of 75% of any disbursements due RLL under Section
5.2 above until such time as MR3 has been paid in full for all such
advances.
6. REPORTING, BOOKS, RECORDS AND BANKING
6.1 MR3 shall provide RLL with Monthly reports on the operation and
performance of a Facility in a format to be agreed to with RLL.
6.2 To the extent consistent with applicable Government Authorizations and
Legal Requirements, MR3 shall keep accurate records of any accident or
6
other occurrence at the Facility that results in injury to persons or
damage to property. MR3 shall provide to RLL reasonable access to these
records subject to requirements of confidentiality.
6.3 MR3 shall keep a daily operation log for a Facility, which shall
include information on any significant events relating to the operation
of the Facility.
6.4 MR3 shall maintain the financial books and records recording a
Facility's operations and sales of its output in accordance with U.S.
Generally Accepted Accounting Principles ("US GAAP") and other
applicable Legal Requirements.
6.5 An audit of each Facility'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 MR3's independent accounting firm, at MR3's expense. The
results of such audit shall be binding upon the parties with respect to
all matters arising under or in connection with this Agreement.
6.6 The financial books and records maintained by MR3 for the operation of
a Facility and sale of its output, and specific to the Facility, shall
be the property of MR3. The accounting firm of RLL or such other person
authorized by RLL shall have the right to examine such financial books
and records at any time.
7. GOVERNMENT APPROVALS
7.1 MR3 shall be responsible for obtaining and maintaining all Government
Authorizations necessary for the construction and operation of a
Facility.
7.2 RLL 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
8.1 MR3 shall begin sampling and testing the Target Metals in the Source
Material within 15 days of the date of this Agreement.
8.2 MR3 shall complete testing within 60 days of the date of this Agreement
and shall notify RLL in writing of its intent to proceed, or not to
proceed, hereunder based on the results of such testing.
8.3 Should MR3 elect to proceed under Section 8.2 above, it shall apply for
all building and use permits required to commence processing within 120
days of the Section 8.2 notice to RLL of MR3's intent to proceed.
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.
7
10. TAXES
Each party shall be responsible for the handling and payment of all
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 AND SUB-CONTRACTING
This Agreement shall be binding on all successors and assigns of either
party.
12. DURATION AND TERMINATION
12.1 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:
12.1.1 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
12.1.2 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
12.1.3 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
12.1.4 a change in Legal Requirements renders the continued
performance of this Agreement for a reasonable period of time
by the other party; or
12.1.5 upon notice from MR3 to RLL if the amount of Net Revenue
realized by MR3 over any six-month period during the Term is
less than 125 % of the MR3 Operating Expenses plus any other
direct expenses incurred by MR3 to perform hereunder.
12.1.6 any exercise of the option granted under Section 12.3 (iii)
below.
12.1.7 the failure of the events described in Sections 3.1 (b), (d)
or (e) to take place on or before the dates set forth in each
respective section; provided, however, that neither party
shall have the right to terminate this Agreement pursuant to
this Section 11.1.7 if (i) the terminating party caused such
failure to occur, (ii) such failure was caused for reasons
beyond the control of the non-terminating party, or (iii) such
failure was caused by delays in obtaining any item listed
under Section 3 (c).
12.2 Upon any termination of this Agreement, MR3 shall remove any Building
or Facility housing the MR3 System from the Property, including all
improvements thereto and the accommodations, furnishings, fixtures and
other equipment at the Facility, within 90 days of such termination.
However, RLL shall have the option to purchase from MR3 any gravity
circuit located on the Property, at MR3's cost, less depreciation,
and/or continue MR3's lease of such gravity circuit with the consent of
the lessor.
8
12.3 The termination of this Agreement shall not prejudice or affect any
rights or remedies of the parties to this Agreement, which have already
accrued.
12.4 The provisions of Sections 5, 6, 9, 14, 16, and 19 shall survive any
termination of this Agreement.
13. FORCE MAJEURE, LIABILITY FOR NON-PERFORMANCE AND CAUSE OF GENERATION
DEFICIENCY
13.1 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:
(i) acts of war or the public enemy whether war be declared or
not;
(ii) public disorder, insurrection, rebellion, sabotage, riots or
violent demonstrations;
(iii) earthquakes, floods, typhoons, drought, storms, other natural
calamities and acts of God, or the discovery of hazardous
materials or historical artifacts at the Property;
(iv) strikes or lockouts or other industrial action;
(v) for the purposes of Force Majeure affecting MR3's performance,
acts of RLL affecting the operation or maintenance of the
Facility; and
(vi) any shortfall in utilities or other necessaries for the
operation of the Facility (except to the extent that such
failure is caused by or contributed to by an act or omission
on the part of MR3 or RLL).
13.2 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.
13.3 As soon as possible following the date of commencement of any Force
Majeure, if either party desires to invoke such Force Majeure as a
cause for delay in the performance of any obligation (other than
payment of money) hereunder, it shall advise the other party in writing
of such date and the nature and expected duration of such Force
Majeure. As soon as possible and in any event within three (3) days
following the termination of such Force Majeure, the party having
invoked such Force Majeure as a cause for such delay shall submit to
the other party reasonable proof of the nature of such delay and its
effect upon the time of performance.
MR3 and RLL:
(i) 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
(ii) shall use their best efforts to ensure resumption of
normal performance of this Agreement after the
9
termination of any Force Majeure and shall perform
their obligations to the maximum extent practicable
as agreed between RLL and MR3.
(iii) 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 MR3
and received by fax of mail to RLL, RLL agrees to abide by the
confidentiality obligations set forth below:
14.1 Proprietary and Confidential Information - RLL agrees that any
proprietary and confidential information ("Confidential Information")
that is or has been disclosed by or under the authorization of MR3, or
results from prior discussions pertaining to such disclosures, shall be
subject to the terms of this Agreement. "Confidential Information"
includes all MR3 business and technical information whether disclosed
in writing, orally, or in any other form, tangible or intangible,
including information of all kinds concerning any:
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:
14.2 Exceptions- Confidential Information does not include that information
which:
a) is available to the public at the time it is disclosed or
thereafter becomes available to the public; or
b) is known to the RLL at the time of disclosure; or
c) is received by RLL 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
14.3 Non-Disclosure to Third Parties - RLL shall keep the Confidential
Information strictly confidential and in trust for MR3. RLL 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.
10
a) RLL shall not disclose any portion of the Confidential
Information to any third party (that is not an employee
provided for below), unless MR3 specifically agrees in writing
in advance and the third party agrees in writing to be bound
to MR3 as RLL is bound by this Agreement (in its entirety) or
by terms substantially similar which are agreed upon by the
third party and MR3.
b) RLL shall immediately notify MR3 upon receiving any request
made by any non-authorized third party to disclose any
Confidential Information and shall cooperate with MR3 in its
efforts to protect the Confidential Information from
disclosure. Should any third party make any unauthorized use
of any Confidential Information provided hereunder, RLL shall
notify MR3 and cooperate in taking steps to protect the
Confidential Information from further unauthorized use.
c) RLL may disclose material to the extent required to be
disclosed pursuant to any governmental application or pursuant
to any final court order, provided however that RLL shall: I)
promptly notify MR3 upon its receipt of any pleading,
discovery request, interrogatory, motion or other paper that
requests or demands disclosure of the Confidential
Information, II) oppose any request for disclosure, and that
failing, seek to have access and use limited by a protective
order; and III) provide MR3 all reasonable opportunity and
assist MR3 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.
14.4 Employee Access and Control of the Information - RLL agrees that only
those RLL employees who need to know the Confidential Information 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, RLL agrees that prior to and as a condition
of his or her access to the Confidential Information, each employee
shall sign a Confidentiality Agreement. RLL shall keep copies of all
such acknowledgments, and provide copies to MR3 immediately.
Upon any termination of the Agreement between MR3 and RLL or at any
time upon MR3's request, RLL agrees to stop use of the Confidential
Information hereunder and to:
a) Return promptly all documents and other tangible
materials provided by or under authorization of MR3
that contain evidence, record, derive from or reveal
any of the Confidential Information; and
b) Destroy all documents and other tangible materials
generated by RLL or its employees that evidence,
record, derive from or reveal any of the Confidential
Information. Upon request, RLL shall certify in
writing that such materials have been so returned or
destroyed.
14.5 Ownership of the Confidential Information - All Confidential
Information, and all information that derives from it, is, shall be and
will remain the exclusive property of MR3 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 MR3 to provide any such rights in the future. If RLL
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
11
derivative of or results from any use of the Confidential Information,
RLL agrees to assign all rights therein to MR3, until or unless the
parties enter into some other written agreement regarding the
Confidential Information. RLL agrees to do what is reasonably necessary
to perfect this assignment.
15. GENERAL PROVISIONS
15.1 Notices. All notices, reports and other communications between the
parties shall be in writing and shall be sent by air courier, or by
facsimile, with a confirmation copy sent by air courier, addressed as
follows:
If to MR3: MR3 Systems Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Chairman and CEO
Fax: 000-000-0000
If to RLL: Xxxxxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxx 00000
Fax: 000-000-0000
All notices, reports and other communications given in accordance with
this Section shall be deemed received (i) if sent by air courier, three
(3) days after the date of dispatch, and (ii) if sent by facsimile:
twenty-four (24) hours after the time and date of transmission.
15.2 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.
15.3 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.
15.4 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.
15.5 Severability. If any of the terms and provisions hereof shall be held
invalid or unenforceable, such invalidity or unenforceability shall not
affect any of the other terms or provisions hereof.
16. GOVERNING LAW
This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of Nevada, U.S.A., excluding any conflicts
of laws rules.
12
17. ARBITRATION
All disputes, differences, or questions arising out of or relating to
this Agreement, or the validity, interpretation, breach, violation or
termination thereof, shall be settled by arbitration at Denver,
Colorado, in accordance with American Arbitration Association Rules
which the parties declare to be known to them. The parties also agree
that: (a) the appointing authority shall be the American Arbitration
Association; (b) the number of arbitrators shall be three (3); (c) the
language to be used in the arbitral proceedings shall be English. In
any such arbitration proceeding, the arbitrators shall adopt and apply
the provisions of the Federal Rules of Civil Procedure relating to
discovery so that each party shall allow and obtain discovery of any
matter not privileged which is relevant to the subject matter involved
in the arbitration to the same extent as if such arbitration were a
civil action pending in a United States District Court. The decision of
a majority of the arbitrators shall be final and binding on all of the
parties. The attorney's fees, arbitrators' fees, costs, expenses, and
other disbursements in connection with such arbitration proceedings
shall be assessed or apportioned as the arbitrators shall determine.
Judgment upon any arbitration award may be entered and enforced in any
court of competent jurisdiction.
18. ENTIRE AGREEMENT
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.
19. REPRESENTATIONS AND WARRANTIES
To the best of each party's knowledge, after due inquiry, each of MR3
and RLL hereby represents, warrants and covenants to the other as
follows:
19.1 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.
19.2 Binding Obligation. This Agreement has been duly authorized by
all necessary corporate or legal action of MR3 and RLL,
respectively, and constitutes a valid and binding obligation
on MR3 and RLL, respectively, enforceable in accordance with
the terms hereof.
19.3 Good Standing. MR3 or RLL, 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.
19.4 No Provisions Contravened. There is no provision in its
partnership, company or corporate charter, articles of
incorporation, By-Laws or equivalent governing documents, and
13
no provision in any existing mortgage, indenture, contract or
agreement binding on it which would be contravened by the
execution, delivery or performance by it of this Agreement.
19.5 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.
19.6 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.
19.7 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.
19.8 RLL holds all claims and 100% of the right and title to the
Source Material and such claims are current. RLL has the right
to grant the exclusive processing rights to MR3 hereunder, and
RLL has not granted, and shall not in the future during the
Term of this Agreement grant, such rights to any other person
or entity.
20. 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.
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
------------------------------
Xxxxxxx X. Xxxx
Chairman and CEO
/s/ XXXXXXX X. XXXXXX
------------------------------
Xxxxxxx X. Xxxxxx
14
EXHIBIT A
15
