Document:

EXHIBIT
      10.7

     

     

    EXHIBIT
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      PURCHASE AND LOAN OPTION AGREEMENT

     

    STRATEGIC
      PARTNERSHIP AGREEMENT

    

    This
      Strategic Partnership Agreement ("Agreement") is made this 30th
      day of
      May 2005 ("Effective Date"), by and between MRD Holdings Inc., with its
      principal place of business at The Naaman’s Building Suite 206, 306 Silverside
      Rd., DE 19810 Wilmington, Delaware, USA ("MRD") and MR3 Systems, Inc., with
      its
      principal place of business at 435 Brannan Street, Suite 200, San Francisco,
      California 94107 ("MR3").

    

    RECITALS

    

    A.
      MR3
      owns all rights, title, and interest in and to that certain technology and
      related documentation identified as MR3 Technology ("Technology"), the
      specifications for which are set forth in Exhibit A hereto;

    

    B.
      MR3
      and MRD desire to form a strategic partnership for the transfer use,
      utilization, publication and registration of the Technology for the “Areas of
      Jurisdiction” as defined in Exhibit B hereto pursuant to Sec. 2.5 of the Stock
      Purchase and Loan Option Agreement (“Purchase Agreement” ) and the subsections
      thereof;

    

    NOW,
      THEREFORE,
      for and
      in consideration of the purchase of securities by MRD as agreed upon in the
      Purchase Agreement, executed, and delivered by MRD to MR3, and all the remaining
      compliance documents and requirements are duly submitted by MR3 as required
      by
      the Purchase Agreement, but not later than June 6, 2005, MR3 and MRD, intending
      to be legally bound once the Purchase Agreement is transacted, and for the
      royalty payment agreed upon in this document, the parties hereby agree as
      follows:

    

    AGREEMENT

    

    
      	1.	
              DEFINITIONS

            

    

    

    
      	
            	1.1.	
              “Technology”
                means, the MR3 technology itself, the collective technologies and
                intellectual property rights of MR3 necessary to ensure the basic,
                and
                optimum application of the MR3 technology or collectively, the full
                version of the Technology, together with any and all documentation,
                improvements, corrections, modifications, updates, enhancements,
                applications or other changes, whether or not included in the current
                version necessary to ensure its optimum or commercial application
                and its
                proprietary nature. 

            

    

     

    
      	 	
              1.2.
                

            	
              “Technology
                Trade Secret” means any scientific or technical information, design,
                process, procedure, formula, or improvement included in the Technology
                that is valuable, not generally known in the industry, and gives
                the owner
                of the Technology a competitive advantage over those competitors
                who do
                not know or use such information.

            

    

    

    
      	 	
              1.3.
                

            	
              “Areas
                of Jurisdiction” means those countries and fields of use listed on the
                attached Exhibit B and this term as initially used in this document
                and
                the same is deemed automatically converted to the Expanded Jurisdiction
                once the additional investment or loan of 4.5 Million US$ is transacted
                pursuant to Section 2.3 of the Purchase
                Agreement.

            

    

     

    
      
         

      

      
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              1.4

            	
              “Expanded
                Jurisdiction” means territories, countries and areas to be covered by the
                Technology application upon the infusion of the 4.5 Million US$ loan
                and/or investment specifically all territories, countries and areas
                except
                the United States of America.

            

    

    

    
      	2.	
              CONVEYANCE
                OF RIGHTS

            

    

    

    
      	 	
              2.1.
                

            	
              For
                use only within the Areas of Jurisdictions, MR3 hereby transfers,
                grants,
                conveys, assigns, and relinquishes exclusively to MRD all of MR3's
                rights,
                title, and interest in and to both the tangible and the intangible
                property constituting the Technology, in perpetuity (or for the longest
                period of time otherwise permitted by law), including the following
                corporeal and incorporeal incidents to the Technology and further
                agrees
                and permits the publication of intellectual property (“IP”) associated
                with the Technology in Europe subject to the steps and conditions
                outline
                in Section 2.5 of the Purchase Agreement together with its
                subsections:

            

    

    

    
      	 	
              (a)
                

            	
              Title
                to and possession of the media, devices, and documentation that constitute
                all copies of the Technology, its component parts, and all documentation
                relating thereto, possessed or controlled by MR3;
                and

            

    

    

    
      	 	
              (b)
                

            	
              All
                right, title, and interest of MR3 in and to the inventions, discoveries,
                improvements, ideas, trade secrets, know-how, confidential information,
                and all other intellectual property owned or claimed by MR3 pertaining
                to
                the Technology.

            

    

    

    
      	3.	
              PUBLICATION
                OF INTELLECTUAL PROPERTY

            

    

    

    
      	 	
              3.1.

            	
              Within
                the Option Period of the Purchase Agreement, MR3 and MRD shall execute
                a
                strategy to record and publish the current intellectual property
                of MR3
                through the appropriate channels as designated by MRD in
                Europe.

            

    

    

    
      	
            	3.2.	
              Unless
                otherwise agreed by the parties, MR3 will select the method of disclosure,
                recording, publication, patenting, and warehousing of intellectual
                property for MRD, all pursuant to the instructions as outlined in
                Section
                2.5 of the Purchase Agreement.

            

    

    

    
      	
            	3.3.	
              MRD
                agrees to pay for all costs associated with the publication of MR3
                intellectual property, including all legal fees, patent costs, personnel
                time, travel costs, accommodations, per diem, and any other costs
                incurred
                by MR3 as agreed upon jointly by MR3 and
                MRD.

            

    

     

    
      
         

      

      
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              4.

            	
              ESTABLISHMENT
                OF RESEARCH AND DEVELOPMENT AND PROCESSING
                FACLITIES

            

    

     

    
      	 	
              4.1

            	
              As
                stated in Sec. 2.5 of the Purchase Agreement, MR3 and MRD
                agree that any utilization or deployment of the MR3 Technology shall
                be
                fully supported by MR3 technology
                teams.

            

    

     

    

    
      	 	
              4.2

            	
              MRD
                will fund, establish, and maintain R&D facilities in Europe and/or
                Philippines, all to be designed, operated, and supported by MR3.
                Such
                facility will showcase the full application and utilization of the
                Technology and will replicate the work and operations of the Denver,
                Colorado, R&D facilities of
                MR3.

            

    

    

    
      	 	
              4.3

            	
              Full
                support and staffing requirements will be provided by MR3 to such
                R&D
                facilities in Europe and/or Philippines upon the request and needs
                as
                determined by MRD with coordination and consultation to
                MR3.

            

    

    

    
      	 	
              4.4

            	
              Within
                the Option Period under Section 2.3 of the Purchase Agreement, MR3
                will
                submit a comprehensive plan for the design, construction, operation,
                and
                implementation of the R&D facilities to be located in Europe and/or
                Philippines. The implementation of the plans to establish, construct,
                staff, start-up, and operate said facilities will be outlined in
                terms of
                cost, schedule, and manpower
                requirements.

            

    

    

    
      	 	
              4.5

            	
              MRD
                agrees to pay for all costs associated with the comprehensive
                planning for the design, construction, operation, and implementation
                of
                the R&D facilities,
                including all site surveys, architectural costs, drafting and drawings,
                engineering estimates, personnel time, travel costs, accommodations,
                per
                diem, and any other costs incurred by MR3 as agreed upon jointly
                by MR3
                and MRD.

            

    

    

    
      	
              5.

            	
              CONTRACT
                OF PROJECTS AND CONSIDERATION OF
                ROYALTY

            

    

     

    
      	 	
              5.1

            	
              For
                all projects and opportunities within the Areas of Jurisdiction and
                Expanded Jurisdiction as outlined in Exhibit B hereto, MRD
                agrees to exclusively contract MR3 as the technology partner,
                implementation entity, and primary contractor for the design,
                construction, and operation of processing facilities involving MR3
                Technology.

            

    

     

    

    
      	 	
              5.2

            	
              For
                each project and opportunity identified by MRD, MR3, upon approval
                by its
                Board of Directors, will submit a comprehensive project proposal
                for
                project implementation. This project proposal will outline the
                following:

            

    

     

    
      	·  	
              A
                detailed description of the
                project;

            

    

     

    
      	·  	
              Any
                design documents or specifications (unless the project contemplates
                creation or development of the
                same);

            

    

     

    
      
         

      

      
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      	·  	
              Project
                deliverables, if any, that either or both MR3 and MRD will be responsible
                for creating and developing;

            

    

     

    
      	·  	
              Tasks,
                responsibilities, covenants and agreements of each MR3 and MRD relating
                to
                the project;

            

    

     

    
      	·  	
              Deadlines,
                interim milestones, and other matters relating to timing and delivery
                or
                performance under the project;

            

    

     

    
      	·  	
              Intellectual
                property rights or licenses to the extent different from the terms
                of this
                Agreement and the Purchase
                Agreement;

            

    

     

    
      	·  	
              Exclusivity
                rights or other restrictions on use with or marketing of the project,
                if
                any;

            

    

     

    
      	·  	
              Termination
                rights of the MR3 and MRD relating to the project, if
                any;

            

    

     

    
      	·  	
              Obligations
                of the Parties to market and implement the project;
                and

            

    

     

    
      	·  	
              Any
                other terms or conditions that vary from the terms and conditions
                set
                forth in this Agreement and the Purchase
                Agreement.

            

    

     

    
      	 	
              5.3

            	
              In
                consideration for MR3's execution of this Agreement and performance
                of the
                terms and conditions contained herein, and the transfer and conveyance
                of
                the Technology in favor of MRD covering the defined Areas of Jurisdiction,
                MRD agrees to pay or give MR3 a royalty equivalent to 5% of its net
                profit
                on each particular project in any of the defined Areas of Jurisdiction,
                but excluding humanitarian projects where no profit will be
                realized.

            

    

    

    
      	
              6.

            	
              IP
                REGISTRATION, TREATMENT, AND UTILIZATION POST REGISTRATION
                

            

    

     

    
      	 	
              6.1

            	
              The
                sources of MR3 IP are the following

            

    

    

    
      	
            	(a)	
              Legacy
                unpublished IP before May 2004.

            

    

    
      	
            	(b)	
              IP
                developed by Tao and McGrath from May 2004 to
                present.

            

    

    
      	
            	(c)	
              IP
                under development between MR3 and Arrakis
                Mining.

            

    

    
      	
            	(d)	
              Future
                IP by MR3 and MRD.

            

    

    

    
      	
            	6.2	
              General
                Treatment of IP with MR3 Systems
                Inc.

            

    

    

    
      	 	
              (a)

            	
              All
                conceptual developments of IP are recorded in notebooks and
                journals.

            

    

    
      	 	
              (b)

            	
              MR3
                maintains a structured agreement with each participating employee
                reflecting the following:

            

    

     

    
      
         

      

      
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              i.

            	
              During
                the employment term of the employee, the employee agrees to license
                royalty-free, all-fees paid, the IP to
                MR3.

            

    

    
      	 	
              ii.

            	
              When
                the employee retires or desires to be employed elsewhere and would
                like to
                apply the IP, MR3 agrees to license the IP to the employee on terms
                mutually agreed to between MR3 and the
                employee.

            

    

    
      	 	
              iii.

            	
              If
                the employee is dismissed for cause, the employee relinquishes his
                rights
                and claims of the IP in favor of MR3, subject to the grant and conferment
                of what is due to employee under the signed deed or
                agreement.

            

    

    

    
      	 	
              6.3

            	
              Treatment
                of IP during Operations

            

    

    

    
      	 	
              (a)

            	
              Operations
                are defined as projects, processing sites, and the Company R&D
                laboratory.

            

    

    
      	 	
              (b)

            	
              At
                each operation site, the Company will keep logbooks related to operational
                logistics and chemical processing
                parameters.

            

    

    
      	 	
              (c)

            	
              The
                logbooks will be kept in a vault as an operational backup and may
                be
                accessed and be the basis of reference in the event of contingencies
                mentioned in the Stock and Loan and Option Agreement (“Purchase
                Agreement”).

            

    

    

    
      	 	
              6.4

            	
              Prior
                to the infusion of the US$1M, under Section 2.1 of the Purchase Agreement,
                MR3, through its authorized officer Dr. William Tao, will sign and
                execute
                a Strategic Partnership Agreement (this Agreement) between MRD and
                MR3, of
                which its effective date shall be deemed to commence automatically
                once
                the US$1M is transacted and remitted to MR3 by MRD. Upon the infusion,
                the
                following activities shall be undertaken by MRD and
                MR3:

            

    

    

    
      	
            	(a)	
              MR3,
                MRD, and MR3’s employees will outline for publication its original IP in
                Europe, which is a form of protection for MR3 and all of its shareholders
                and simultaneous thereto to transfer to MRD or
                its designate exclusive
                rights to MR3 Technology for utilization and development in the Areas
                of
                Jurisdiction.

            

    

    

    
      	 	
              (b)

            	
              MRD
                and the MR3 will co-develop new technologies and new IP for applications
                in the Areas of Jurisdiction.

            

    

    

    
      	 	
              6.5

            	
              Post
                Investment of the 4.5US$M under Section 2.3 of the Purchase
                Agreement

            

    

    

    
      	 	
              (a)

            	
              Upon
                the receipt by MR3 of the said loan or investment the physical possession
                of the outlined IP shall be given to MRD for registration and patenting,
                who will in turn license the IP back to the MR3 for its utilization
                solely
                for projects in the US with a minimal fee (i.e. US$1.00 only). The
                IP
                shall be owned jointly by the MR3 and MRD, as co-developers. MRD
                shall
                have the option to assign its interest in the IP to its holding company
                or
                any designate or assign of MRD.

            

    

     

    
      
         

      

      
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              (b)

            	
              MR3
                and MRD will devise a process to govern the disposition of IP in
                the
                context of projects originated by either the MR3 or MRD or the latter’s
                designate.

            

    

    

    
      	 	
              (c)

            	
              MR3
                and MRD will resolve to structure an agreement in which the MRD designate
                can apply the IP subject to royalty and fee negotiation with the
                MR3.
                

            

    

    

    
      	 	
              6.6

            	
              IP
                derived by MR3 on MRD Projects in the Areas of Jurisdiction
                

            

    

    

    
      	 	
              (a)

            	
              The
                IP derived by MR3 while working on MRD projects in the expanded
                jurisdiction, all territories except US, under contractual funding
                from
                the MRD will be published in Europe and registered under the name
                of MRD
                or its designate. 

            

    

    

    
      	 	
              (b)

            	
              MRD
                or its designate shall license such IP back to MR3 for application
                in the
                US with a minimal fee of US$1.00, and MRD through the Board of the
                Company
                will determine the fee structure and royalty due the MRD or its
                designate.

            

    

     

    
      	7.	
              WARRANTIES
                OF TITLE

            

    

    

    
      	
            	7.1.	
              MR3
                represents and warrants that:

            

    

    

    
      	 	
              (a)
                

            	
              MRD
                shall receive, pursuant to the steps and conditions outline in Section
                2.5
                of the Purchase Agreement together with its subsections: and the
                procedures defined in this Agreement as of the Effective Date, complete
                and exclusive right, title, and interest in and to all tangible and
                intangible property rights existing in the
                Technology.

            

    

    

    
      	 	
              (b)

            	
              it
                has developed the Technology entirely through its own efforts for
                its own
                account and that the Technology is free and clear of all liens, claims,
                encumbrances, rights, or equities whatsoever of any third
                party.

            

    

    

    
      	 	
              (c)
                

            	
              the
                Technology does not infringe any patent, copyright, or trade secret
                of any
                third party.

            

    

    

    
      	 	
              (d)
                

            	
              the
                Technology has not been forfeited to the public domain; and that
                the for
                the Technology have been maintained in
                confidence.

            

    

    

    
      	 	
              (e)
                

            	
              all
                personnel, including employees, agents, consultants, and contractors,
                who
                have contributed to or participated in the conception and development
                of
                the Technology either (i) have been party to a relationship with
                MR3 that
                has accorded MR3 full, effective, and exclusive original ownership
                of all
                tangible and intangible property arising with respect to the Technology
                or
                (ii) have executed appropriate instruments of assignment in favor
                of MR3
                as assignee that have conveyed to MR3 full, effective, and exclusive
                ownership of all tangible and intangible property thereby arising
                with
                respect to the Technology.

            

    

     

    
      
         

      

      
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              	8.	
                      EXPORT
                        CONTROLS

                    

            

          

        

      

    

    

    
      	 	
              8.1.
                

            	
              The
                Technology and all underlying documentation or information may be
                exported, re-exported, or used by MRD or its designates or affiliates
                and
                may be used and applied in the agreed Areas of Jurisdiction.
                

            

    

    

    
      	9.	
              FURTHER
                ASSURANCES

            

    

    

    
      	 	
              9.1

            	
              MR3
                shall execute and deliver such further conveyance instruments and
                take
                such further actions as may be necessary or desirable to evidence
                more
                fully the transfer of ownership of all of the Technology to MRD.
                MR3
                therefore agrees:

            

    

    

    
      	 	
              (a)
                

            	
              To
                execute, acknowledge, and deliver any affidavits or documents of
                assignment and conveyance regarding the Technology;
                and

            

    

    

    
      	 	
              (b)
                

            	
              To
                provide testimony in connection with any proceeding affecting the
                right,
                title, or interest of MRD in the Technology;
                and

            

    

    

    
      	 	
              (c)
                

            	
              To
                perform any other acts deemed necessary to carry out the intent of
                this
                Agreement.

            

    

    

    
      	10.	
              PROTECTION
                OF TRADE SECRETS

            

    

    

    
      	 	
              10.1.
                

            	
              The
                parties agree to hold each other's Confidential Information in confidence
                for a period of ninety-nine (99) years following the Effective Date
                of
                this Agreement. The parties agree that unless required by law, they
                shall
                not make each other's Confidential Information available in any form
                to
                any third party or to use each other's Confidential Information for
                any
                purpose other than the implementation of this Agreement. Each party
                agrees
                to take all reasonable steps to ensure that Confidential Information
                is
                not disclosed or distributed by its employees or agents in violation
                of
                the terms of this Agreement.

            

    

    

    
      	 	
              10.2.
                

            	
              A
                party's "Confidential Information" shall not include information
                that: (a)
                is or becomes a part of the public domain through no act or omission
                of
                the other party; (b) was in the other party's lawful possession prior
                to
                the disclosure and had not been obtained by the other party either
                directly or indirectly from the disclosing party; (c) is lawfully
                disclosed to the other party by a third party without restriction
                on
                disclosure; (d) is independently developed by the other party; or
                (e) is
                required to be disclosed by any judicial or governmental requirement
                or
                order (provided that Recipient timely advises the disclosing party
                of the
                governmental demand for
                disclosure).

            

    

     

    
      
         

      

      
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              11.
                

            	
              ACKNOWLEDGMENT
                OF RIGHTS; INTENT AND DUTY TO USE BEST
                EFFORTS

            

    

    

    
      	 	
              11.1.
                

            	
              In
                furtherance of this Agreement, MR3 hereby acknowledges that, from
                and
                after the Effective Date of this Agreement, within the defined Areas
                of
                Jurisdiction, MRD has acceded to all of MR3's right, title, and standing
                to:

            

    

    

    
      	 	
              (a)

            	
              Receive
                all rights and benefits pertaining to the Technology as given and
                defined
                in this document;

            

    

    

    
      	 	
              (b)
                

            	
              Institute
                and prosecute all suits and proceedings and take all actions that
                MRD, in
                its sole discretion, may deem necessary or proper to collect, assert,
                or
                enforce any claim, right, or title of any kind in and to any and
                all of
                the Technology; and

            

    

    

    
      	 	
              (c)
                

            	
              Defend
                and compromise any and all such action, suits, or proceedings relating
                to
                such transferred and assigned rights, title, interest, and benefits,
                and
                perform all other such acts in relation thereto as MRD, in its sole
                discretion, deems advisable.

            

    

    

    
      	 	
              11.2.

            	
              The
                intent of the parties under this Agreement is for MRD, within the
                Areas of
                Jurisdiction or expanded jurisdiction when already in effect and
                applicable, to exclusively use, commercialize and exploit the Licensed
                Technology, and to sub license or assign to other entities the right
                to do
                the same, including the development, processing, manufacture and
                marketing
                of products and processing services and other revenue producing sources
                and activities.

            

    

    

    
      	 	
              11.3.

            	
              MRD
                shall devote its substantial time and diligent best efforts to realize
                and
                effectuate the intent of this Agreement and to utilize and look for
                opportunities for its commercial and humanitarian application of
                the
                conveyed Technology in an effort to foster its commercialization
                and use,
                including the use of such best efforts to process, market and distribute
                products and processing services in the Areas of Jurisdiction, Expanded
                Jurisdiction, and Restrictive Area in an efficient and expeditious
                manner.

            

    

    

    
      	12.	
              LIMITED
                WARRANTY; SUPPORT

            

    

    

    
      	 	
              12.1.
                

            	
              MR3
                represents and warrants that the Technology conforms in all material
                respects to the functional Specifications set forth in Exhibit A.
                With
                that sole exception, MR3 ASSIGNS THE TECHNOLOGY TO MRD "AS IS," AND
                MR3
                DISCLAIMS ALL WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE
                TECHNOLOGY, INCLUDING (WITHOUT LIMITATION) ANY WARRANTY OR MERCHANTABILITY
                OR FITNESS FOR A PARTICULAR PURPOSE. MRD's exclusive remedy for breach
                of
                the foregoing warranty shall be to require MR3 to correct any material
                nonconformance to such
                Specifications.

            

    

     

    
      
         

      

      
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              12.2.
                

            	
              During
                the term of this Agreement, MR3 shall provide full technical support
                to
                the MRD on an ongoing, “as needed” basis. All expenses, salaries, benefits
                and other obligations incurred for the provision of such technical
                support
                shall be paid by MRD.

            

    

    

    
      	13.	
              INDEMNITY

            

    

    

    
      	 	
              13.1.
                

            	
              Indemnification.
                MR3 will defend, at its sole expense, any claim, suit or proceeding
                brought against MRD which is based upon a claim that (i) the Technology
                infringes any patent, copyright, or trade secret, provided MRD gives
                MR3
                written notice within thirty (30) days of receiving notice of such
                claim
                and provides MR3 reasonable cooperation in the defense of the claim.
                MR3
                will pay any damages and costs assessed against MRD (or payable by
                MRD
                pursuant to a settlement agreement) in connection with the
                proceeding.

            

    

    

    
      	 	
              13.2.
                

            	
              Remedies
                of MRD.
                In
                the event that a court directs MRD to cease use of the Technology,
                MR3
                will either (i) modify the Technology so that it is no longer infringing,
                or (ii) procure for MRD the rights necessary for MRD to exploit the
                Technology at no expense to MRD. If MR3 is unable to comply with
                either
                subsection (i) or (ii), MRD, at its option may either replace the
                infringing portions of the Technology with non-infringing technology
                at
                MR3's expense, or terminate this agreement and receive a complete
                and full
                refund of the consideration involved in the
                Agreement.

            

    

    

    
      	14.	
              MISCELLANEOUS

            

    

    

    
      	 	
              14.1.
                

            	
              Effectivity
                and Binding Effect.
                This Agreement shall be binding and effective indefinitely until
                terminated upon mutual agreement of parties and it will be binding
                upon,
                the parties hereto, together with their respective legal representatives,
                successors, and assigns.

            

    

    

    
      	
            	14.2	
              Arbitration.
                Parties agree and stipulates, before commencing a court action, to
                voluntary resort to arbitration or mediation to determine the claims
                and
                complaint that each party may have arising from or connected or related
                to
                the provision of this Agreement. Parties agree to defray the cost
                equally
                and if necessary may employ the assistance of technical staff from
                each
                side to present and simplify the complex nature of claim. Each party
                may
                opt to waive the assistance of counsel and choose to represent itself
                through the assistance of competent individual in the arbitration
                proceedings. 

            

    

    

    
      	 	
              14.3.
                

            	
              Choice
                of Law.
                This agreement shall be governed by and construed in accordance with
                the
                laws of the United States and the State of California, as applied
                to
                agreements entered into and to be performed entirely within California
                between California residents or parties may agree to a less expensive
                and
                neutral venue if the juridical existence of the other party was registered
                in another country or state or the nationality of the natural person
                involved is from another country.

            

    

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    
      EXHIBIT
        G

      STOCK
        PURCHASE AND LOAN OPTION AGREEMENT

       

    

    
      	 	
              14.4.
                

            	
              Notices.
                Any notices given by either party hereunder will be in writing and
                will be
                given by personal delivery, national overnight courier service, or
                by U.S.
                mail, certified or registered, postage prepaid, return receipt requested,
                to MR3 or MRD at their respective addresses specified above and in
                the
                Purchase Agreement. All notices will be deemed effective upon personal
                delivery, or five (5) days following deposit in the U.S. mail, or
                two (2)
                business days following deposit with any national overnight courier
                service.

            

    

    

    
      	 	
              14.5.
                

            	
              Entirety
                and Amendment.
                This Agreement and all exhibits hereto constitutes the entire agreement
                and understanding between the parties with respect to the subject
                matter
                hereof and supersedes all prior or contemporaneous agreements, any
                representations or communications. The terms of this Agreement may
                not be
                amended except by a writing executed by both
                parties.

            

    

    

    
      	 	
              14.6.
                

            	
              Force
                Majeure.
                Neither party will be in default if its performance is delayed or
                becomes
                impossible or impractical by reason of any cause beyond such party's
                reasonable control.

            

    

    

    
      	 	
              14.7.

            	
              Attorneys’
                Fees.
                Including an action for injunctive or declaratory relief, or to pursue
                damages for any breach of this Agreement, including all appeals,
                the
                prevailing party shall be entitled to recover reasonable attorneys’ fees,
                litigation costs from the other party. The attorneys’ fees and costs may
                be ordered by the court in the trial or appeal of any action described
                in
                this paragraph, or may be enforced in a separate action brought for
                determining attorneys’ fees and
                costs.

            

    

    

    
      	 	
              14.8.

            	
              Except
                as otherwise provided by this Agreement, neither party may assign
                its
                rights, duties and obligations under this Agreement, without the
                prior
                written consent of the other party, which consent shall not be
                unreasonably withheld, and further provided that any such assignment
                is
                made expressly subject to the terms and conditions of this Agreement,
                and
                the assignee agrees in writing to be bound by the terms and conditions
                hereof.

            

    

    

    WHEREAS,
      the
      parties have executed this agreement in counterparts, each of which shall be
      deemed an original, as of the Effective Date first written above.

     

    
      	MRD
              HOLDINGS INC.	 	 	MR3
              SYSTEMS, INC. 
	 	 	 	 
	 	 	 	 
	/s/ Charles
              K. C. Chan	 	 	/s/ William
              C. Tao, Ph.D.
	
              

            	 	 	
              

            
	Its: 
              Managing Director	 	 	Its: 
              Chief Executive Officer

    
      
         

      

      
        -10-

        
          

        

      

      
         

        
           

        

      

    

    EXHIBIT
      G

    STOCK
      PURCHASE AND LOAN OPTION AGREEMENT

     

    EXHIBIT
      A

     

    
      
        	
                MR3
                  Technology:

              	
                includes
                  the proprietary high affinity metals extraction and metals separation
                  technology owned by the and embodied in the MR3 Modules, and all
                  of the
                  trade secrets, know-how, show-how, inventions, patents including
                  US
                  Patent(s) and US Patent(s) applications, lab books, formulae, processes,
                  computer systems, methods, discoveries, business methods, confidential
                  information, expertise, copyrights, trademarks, service marks,
                  plans,
                  drawings, sketches, prototypes, tooling and information of any
                  nature
                  whatsoever which relates to the MR3 Modules and their implementation
                  in a
                  MR3 Facility, including but not limited to the Know-How for solubilizing
                  metals as a method of feedstock preparation for the high affinity
                  metals
                  extraction process and the know-how for creating commercially valuable
                  and
                  viable products from that process; developed, possessed, conceived
                  and/or
                  used by, including the Process Package and any modifications, improvements
                  and translations and thereof in respect of commercial and industrial
                  uses,
                  not in the public domain and applications to that will optimize
                  the
                  technology and make its application proprietary.

              
	 	 
	 	
                Know-How:
                  includes all technical knowledge (whether or not patentable), unpatented
                  inventions, manufacturing and operational procedures, processes,
                  trade
                  secrets, marketing techniques, skills and ideas, and current and
                  accumulated experience, which has acquired or will acquire in connection
                  with the MR3 Technology including, but not limited to, the following:
                  (a)
                  the amounts and types of locations, personnel, machinery, equipment,
                  raw
                  materials, chemicals and the like needed to create MR3 Modules
                  and to
                  operate MR3 Facilities for the production of End-Products and Processing
                  Services, and (b) the proper engineering, construction, installation,
                  maintenance, and repair of such System. 

              
	 	 
	 	
                MR3
                  Facility:
                  includes all the MR3 primary and secondary equipment, MR3 Modules,
                  media,
                  facility controls including, without limitation, instrumentation,
                  primary
                  and secondary control elements, shared display(s), control algorithms
                  or
                  any software based functions necessary and required to operate
                  a plant,
                  facility or system, and to commercially implement the MR3 Technology,
                  which selectively removes targeted metals from feedstocks or metals
                  streams via high affinity metals extraction to produce or render
                  End-Products or Services. Each MR3 Facility contains one or more
                  MR3
                  Modules to produce one or more specific metal End-Products or Processing
                  Services.

              
	 	 
	 	
                MR3
                  Module:
                  includes the media, the container(s) and the direct control system(s)
                  for
                  high affinity metals extraction, used in the MR3
                  Technology.

              
	 	 
	 	
                Process
                  Package:
                  includes the set of information and documentation required to design,
                  specify, procure, build and operate a MR3 Facility including but
                  not
                  necessarily limited to Process Flow Drawing(s), General Arrangement
                  Drawing(s), Piping and Instrumentation Diagrams, Detailed Process
                  Description, Detailed Functional Control Description, Finalized
                  Major
                  Equipment List, and Major Process Equipment and Instrumentation
                  Data
                  Sheets.

              
	 	 
	
              	
                Magnum
                  Opus:
                  the treatise and document, authored by Dr. Irving DeVoe and completed
                  in
                  April 1999, as well as any amendments, corrections, additions or
                  updates
                  that are made to it from time to time by the employee or technical
                  staff
                  of the Company, containing an extensive background to the Technology,
                  including, but also over and above the definitions of the Technology
                  included in this
                  document.

              

      

    

    
      
 

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

        
           

        

      

    

    EXHIBIT
      G

    STOCK
      PURCHASE AND LOAN OPTION AGREEMENT

    

     

    EXHIBIT
      B

    

    Areas
      Jurisdiction as defined in the Purchase Agreement are:

    

    Austria

    Switzerland

    Taiwan

    Greater
      China (including Hong Kong and Macau)

    India

    Pakistan
      

    The
      Philippines 

    All
      Middle East Countries

     

    Expanded
      Jurisdiction:

    

    All
      territories or countries worldwide except United States of America

     

     

    
      
         

      

        -12-Exhibit 4.2

      This Escrow Agreement (the "Escrow Agreement") dated as of June 7, 2005 is
by and between Ocean Life Sciences I, Inc., a Delaware corporation (the
"Company") and The First National Bank of Long Island, located at 800 Woodbury
Road, Woodbury, NY 11797 (the "Escrow Agent").

                                    RECITALS

      WHEREAS, the Company is offering for sale to the public 50,000 Shares (the
"Shares") of Common Stock, par value $0.0001 per share, of the Company, at a
price of $1.00 per share;

      WHEREAS, the Shares are being offered on a "best efforts, all or none"
basis in accordance with the terms and conditions set forth in the prospectus
(the "Prospectus") included in the Company's Registration Statement on Form SB-2
(SEC File No. 333-122053), as amended (the "Registration Statement");

      WHEREAS, the public offering of the Shares is subject to and is being
conducted in accordance with Rule 419 of the Securities Act of 1933, as amended
(the "Securities Act") pertaining to public offerings by companies commonly
referred to as "blank check companies";

      WHEREAS, the public offering of the Shares commenced on the date of the
Prospectus and will end the earlier of the receipt and acceptance by the Company
of subscriptions for 50,000 Shares being offered or ninety (90) days after the
date of the Prospectus;

      WHEREAS, subscribers for Shares shall deposit with the Escrow Agent, by
check or wire transfer payment, the aggregate subscription price for the Shares
subscribed for;

      WHEREAS, all funds representing the subscription price of Shares
subscribed for shall be deposited and held in an account ("Escrow Account")
established by and maintained with the Escrow Agent as an insured depositary
institution within the meaning of Rule 419(b)(1)(i)(A) of the Securities Act;

      WHEREAS, the Company desires to appoint the Escrow Agent as the escrow
agent for the Escrow Account, on the terms and conditions set forth herein in
order to comply with the requirements of Rule 419 of the Securities Act;

      WHEREAS, if subscriptions all of the 50,000 Shares have not been received
and accepted by the Company within ninety (90) days after the date of the
Prospectus, all funds shall be returned promptly to the subscribers;

      WHEREAS, if subscriptions for Shares have been received and accepted by
the Company and funds therefor have been deposited into the Escrow Account
within ninety (90) days after the date of the Prospectus, the Company will
deposit into the Escrow Account stock certificates in the name of each
subscriber representing the number of Shares purchased from the Company;

      WHEREAS, if subscriptions for any Shares have been received and accepted
by the Company within ninety (90) days after the date of the Prospectus, the

                                       50
<PAGE>

escrowed funds and the stock certificates deposited by the Company shall be held
in the Escrow Account for a period thereafter of up to 18 months after the date
of the Prospectus (the "Post-Offering Period") until the escrowed funds and the
escrowed stock certificates are released and delivered in accordance with the
terms and conditions set forth herein;

      WHEREAS, the escrowed Shares being held in the Escrow Account may not be
transferred except in accordance with the terms and conditions set forth herein;
and

      WHEREAS, the Escrow Agent agrees to serve as escrow agent in accordance
with the terms and conditions set forth herein.

      NOW, THEREFORE, in consideration of the mutual agreements set forth below,
the parties hereby agree as follows:

      1. Appointment of Escrow Agent and Establishment of Escrow Account.

      The Company hereby appoints the Escrow Agent as the escrow agent hereunder
in accordance with the terms and conditions set forth herein, and the Escrow
Agent hereby accepts such appointment. The Escrow Agent shall establish and
maintain the separate Escrow Account in the name of "Ocean Life Sciences I, Inc.
Escrow Account" as an insured depositary institution within the meaning of Rule
419(b)(1)(i)(A) of the Securities Act. The Escrow Account shall not bear
interest until subscriptions for all of the Shares have been received and
accepted by the Company. After such receipt and acceptance the Escrow Funds
shall begin to accrue interest. The Escrow Account shall be maintained and
administered and the escrowed funds and the escrowed securities shall be
released and delivered in accordance with the terms and conditions set forth
herein.

      2. Deposit of Funds.

      (a) All funds received by the Escrow Agent from subscribers for the Shares
shall be deposited and held in the Escrow Account. The Escrow Agent is hereby
empowered on behalf of the Company to endorse and collect all checks, drafts, or
other instruments received on account of subscriptions for Shares. Any check
returned unpaid to the Escrow Agent shall be returned by the Escrow Agent to the
subscriber. In such cases, the Escrow Agent shall promptly notify the Company of
such return. The Escrow Agent shall provide information to the Company as to the
funds deposited into the Escrow Account and the collection status of such funds.

      As used herein, "collection" means the normal process by which a bank
clears checks and collects funds thereon. The Company shall provide information
to the Escrow Agent as to each subscriber's name, address, number of Shares
subscribed for and the subscription price paid therefor, and such other
information concerning the subscribers as the Escrow Agent may reasonably
request.

      (b) If the Company rejects any subscription for which the Escrow Agent has
collected funds from the subscriber, the Escrow Agent upon notice, shall
promptly issue a refund check to the rejected subscriber. If the Company rejects
any subscription for which the Escrow Agent has not collected funds but has
submitted the subscriber's check for collection, the Escrow Agent shall, upon

                                       51
<PAGE>

receipt of written instructions from the Company, promptly issue a check for the
amount of the subscriber's check to the rejected subscriber after the Escrow
Agent has cleared such funds. If the Escrow Agent has not submitted a rejected
subscriber's check for collection, the Escrow Agent shall, upon receipt of
written instructions from the Company, promptly remit the subscriber's check
directly to the subscriber.

      (c) All funds received by the Escrow Agent pursuant to this Escrow
Agreement and deposited and held in the Escrow Account after the subscriptions
have been accepted by the Company may be invested in short-term United States
government securities, including treasury bills, U.S. Government money market
funds, cash and cash equivalents.

      3. Status of Funds.

      Until all funds in the Escrow Account are disbursed in accordance with the
terms and conditions of this Escrow Agreement, all funds deposited into the
Escrow Account shall be considered the property of the subscribers. The funds
deposited and held in the Escrow Account shall not become the property of the
Company or subject to its debts or obligations, unless and until such funds have
been disbursed to the Company in accordance with the terms and conditions of
this Escrow Agreement. The Escrow Agent shall not make any disbursements of
funds from the Escrow Account except as expressly provided herein.

      4. Return of Funds if there is no Closing.

      If subscriptions for all of the 50,000 Shares have not been received and
accepted by the Company within ninety (90) days after the date of the
Prospectus, all funds shall be returned promptly to the subscribers without
deduction, penalty, or expense.

      5. Deposit of Certificates if a Closing occurs.

      If subscriptions for all of the 50,000 Shares have been received and
accepted by the Company within ninety (90) days after the date of the
Prospectus, the Company shall deposit into the Escrow Account share certificates
issued in the names of each subscriber for the number of Shares sold by the
Company to each subscriber and the Escrow Account shall begin to accrue
interest. The share certificates shall be held in the Escrow Account during the
Post-Offering Period and shall not be released or delivered by the Escrow Agent
except as expressly provided herein.

      6. Retention of Funds in the Escrow Account if a Closing occurs.

      If subscriptions for all 50,000 Shares have been received and accepted by
the Company within ninety (90) days after the date of the Prospectus, the funds
shall be held in the Escrow Account during the Post-Offering Period and shall
not be disbursed by the Escrow Agent except as expressly provided herein.

      7. Transfer of Securities Held in the Escrow Account.

      The shares held in the Escrow Account shall not be transferred other than
by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986 as
amended or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. In no event, however, shall any shares held in the Escrow Account be

                                       52
<PAGE>

released or delivered by the Escrow Agent except as expressly provided elsewhere
herein.

      8. Distributions from the Escrow Account.

      (a) The Escrow Agent shall make distributions of the funds held in the
Escrow Account during the Post-Offering Period in accordance with the
instructions set forth in Schedule A attached hereto.

      (b) The Escrow Agent shall make distributions of the share certificates
held in the Escrow Account during the Post-Offering Period in accordance with
the instructions set forth in Schedule B attached hereto.

      (c) The parties agree that all records relating to transactions made
pursuant to the Escrow Agreement and the Escrow Account shall be available, at
all reasonable times, for inspection, examination and reproduction by any party
hereto, or any representative of any of the parties hereto, and such persons are
authorized to examine and audit the Escrow Account pursuant hereto and the
Escrow Agent is expressly authorized and directed to permit such examination and
audit.

      9. Exculpation and Indemnification of Escrow Agent.

      9.1. The Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein. The Escrow Agent shall have no duty to enforce
any obligation of any person to make any payment or delivery, or to direct or
cause any payment or delivery to be made, or to enforce any obligation of any
person to perform any other act. The Escrow Agent shall be under no liability to
the other parties hereto or to anyone else by reason of any failure on the part
of any party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person's obligations under such
document.

      Except for amendments to this Agreement referred to below, and except for
instructions given to the Escrow Agent by the Company and the subscribers
relating to the Escrow Account, the Escrow Agent, as applicable, shall not be
obligated to recognize any agreement between any and all of the persons referred
to herein, notwithstanding that references thereto may be made herein and
whether or not it has knowledge thereof.

      9.2. The Escrow Agent shall not be liable to the Company or to anyone else
for any action taken or omitted by it, or any action suffered by it to be taken
or omitted, in good faith and in the exercise of its own best judgment. The
Escrow Agent may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained), which is believed by the Escrow Agent, as
applicable, to be genuine and to be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Escrow Agreement or any
of the terms thereof, unless evidenced by a writing delivered to the Escrow
Agent, as applicable, signed by the proper party or parties and, if the duties
or rights of the Escrow Agent, as applicable, are affected, unless it shall give
its prior written consent thereto.

                                       53
<PAGE>

      9.3. The Escrow Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property pursuant to the
provisions of this Agreement. Except as specifically provided for herein, the
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof. The Escrow Agent shall not be liable to the Company or to
anyone else for any loss which may be incurred by reason of any investment of
any monies which it holds hereunder provided the Escrow Agent, as applicable,
has complied with the provisions of Section 2 hereunder.

      9.4. The Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Escrow
Agent, as applicable, does not exist or has not occurred, without incurring
liability to the other parties hereto or to anyone else for any action taken or
omitted, or any action suffered by it to be taken or omitted, in good faith and
in the exercise of its own best judgment, in reliance upon such assumption.

      9.5. To the extent that the Escrow Agent becomes liable for the payment of
taxes, including withholding taxes, in respect of income derived from the
investment of funds held hereunder or any payment made hereunder, the Escrow
Agent, as applicable, may pay such taxes. The Escrow Agent, as applicable, may
withhold from any payment of monies held by it hereunder such amount as the
Escrow Agent, as applicable, estimates to be sufficient to provide for the
payment of such taxes not yet paid, and may use the sum withheld for that
purpose. The Escrow Agent shall be indemnified and held harmless against any
liability for taxes and for any penalties or interest in respect of taxes, on
such investment income or payments in the manner provided in Section 9.6.

      9.6. The Escrow Agent will be indemnified and held harmless by the Company
from and against any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Escrow Agent, as applicable, in
connection with any action, suit or other proceeding involving any claim, or in
connection with any claim or demand, which in any way, directly or indirectly,
arises out of or relates to this Escrow Agreement, the services of the Escrow
Agent, as applicable, hereunder, the monies or other property held by it
hereunder or any income earned from investment of such monies; provided, that
such expenses or loss are not as a result of the Escrow Agent, as applicable,
acting, or omitting to take action, in bad faith or with willful misconduct or
gross negligence promptly after the receipt by the Escrow Agent, as applicable,
of notice of any demand or claim or the commencement of any action, suit or
proceeding, the Escrow Agent, as applicable, shall, if a claim in respect
thereof is to be made against the Company, notify the Company thereof in
writing, but the failure by the Escrow Agent, as applicable, to give such notice
shall not relieve the Company from any liability which the Company may have to
the Escrow Agent hereunder. For the purposes hereof, the term "expense or loss"
shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim, demand, action, suit or proceeding

                                       54
<PAGE>

settled with the express written consent of the Escrow Agent, and all costs and
expenses, including, but not limited to, reasonable counsel fees and
disbursements, paid or incurred in investigating or defending against any such
claims, demand, action, suit or proceeding.

      10. Termination of Escrow Agreement and Resignation of Escrow Agent.

      10.1. This Escrow Agreement shall terminate on the final disposition of
the monies and property held in the Escrow Account hereunder, provided that the
rights of the Escrow Agent and the obligations of the other parties hereto under
Sections 9 and 11 shall survive the termination hereof.

      10.2. The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving the Company and the subscribers at
least thirty (30) days' notice thereof. As soon as practicable after its
resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the Company all monies and property held hereunder upon
presentation of the document appointing the new escrow agent and its acceptance
thereof. If no new Escrow Agent is so appointed within the sixty (60) day period
following such notice of resignation, the Escrow Agent may deposit the aforesaid
monies and property with any court it deems appropriate.

      11. Form of Payments by Escrow Agent.

      11.1. Any payments by the Escrow Agent to subscribers or to the persons
other than the Company pursuant to the terms of this Escrow Agreement shall be
made by check, payable to the order of each respective subscriber or other
person.

      11.2. All amounts referred to herein are expressed in United States
Dollars and all payments by the Escrow Agent shall be made in such dollars.

      12. Compensation.

      12.1. For services rendered, the Escrow Agent shall receive a fee of
$2,500 as compensation. The Escrow Agent shall also be entitled to reimbursement
from the Company for all expenses paid or incurred by it in the administration
of its duties hereunder, including, but not limited to, all counsel, advisors'
and agents' fees and disbursements and all reasonable taxes or other
governmental charges. No such fee, reimbursement for costs and expenses,
indemnification or any damages incurred by the Escrow Agent or any monies
whatsoever shall be paid out of or chargeable to the subscription funds held in
the Escrow Account.

      13. Notices.

      Unless expressly provided herein to the contrary, notices hereunder shall
be in writing, and delivered by telecopier, overnight express mail, first-class
postage prepaid, delivered personally or by receipted courier service. All such
notices which are mailed shall be deemed delivered upon receipt and all such
notices shall be addressed as follows (or to such other address as any party
hereto may from time to time designate by notice duly given in accordance with
this paragraph):

                                       55
<PAGE>

         If to the Company, to:
         Peter Derycz
         10990 Wilshire Boulevard
         Suite 1410
         Los Angeles, CA 90024

         If to the Escrow Agent, to:
         Brian J. Keeney, EVP
         The First National Bank of Long Island
         800 Woodbury Road
         Woodbury, NY 11797

         14. Miscellaneous.

         (a) Choice of Law and Jurisdiction. This Escrow Agreement shall be
governed by and construed in accordance with the law of the State of New York as
applied to agreements made and to be performed entirely in New York. The parties
agree that delivery or mailing of any process or other papers in the manner
provided herein, or in such other manner as may be permitted by law, shall be
valid and sufficient service thereof.

         (b) Benefits and Assignment. Nothing in this Agreement, expressed or
implied, shall give or be construed to give any person, firm or corporation,
other than the parties hereto and their successors and assigns, any legal claim
under any covenant, condition or provision hereof, all the covenants,
conditions, and provisions contained in this Agreement being for the sole
benefit of the parties hereto and their successors and assigns. No party may
assign any of its rights or obligations under this Escrow Agreement without (i)
the written consent of all the other parties, which consent may be withheld in
the sole discretion of the party whose consent is sought and (ii) the written
agreement of the transferee that it will be bound by the provisions of this
Agreement.

         (c) Counterparts. This Agreement may be executed in several
counterparts, each one of which shall constitute an original, and all
collectively shall constitute but one instrument.

         (d) Amendment and Waiver. This Agreement may be modified only by a
written amendment signed by all the parties hereto, and no waiver of any
provision hereof shall be effective unless expressed in a writing signed by the
party to be charged.

         (e) Headings. The headings of the sections hereof are included for
convenience of reference only and do not form part of this Agreement.

         (f) Entire Agreement. This Agreement contains the complete agreement of
the parties with respect to its subject matter and supersedes and replaces any
previously made proposals, representation, warranties or agreements with respect
thereto by any of the parties hereto.

         IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the date first written above.

                               OCEAN LIFE SCIENCES I, INC.

                               By:
                                  --------------------------------
                               Name: Peter Derycz
                               Title: President

                                       56
<PAGE>

                               THE FIRST NATIONAL BANK OF LONG ISLAND

                               By: /s/ Brian J. Keeney
                                   ---------------------------
                               Name: Brian J. Keeney
                               Title: Executive Vice President

                                       57
<PAGE>

SCHEDULE A

      1. Release of Escrow Assets to the Company. Funds and interest, if any,
held in the Escrow Account (the "Escrow Assets") shall be released to the
Company in accordance with the following:

      (a) The Escrow Agent shall not release the Escrow Assets to the Company
prior to:

      (i) receipt by the Escrow Agent of a signed representation from the
Company, together with other evidence reasonably acceptable to the Escrow Agent,
that the Company has completed a transaction or series of transactions in which
the Company has entered into a specific line of business, and a written
confirmation that the fair market value (as determined by the Company, based
upon standards generally accepted by the financial community, including
revenues, earnings, cash flow and book value) of the business(es) or net assets
to be acquired exceeds eighty percent of the maximum offering proceeds described
in the Registration Statement, as required by the Registration Statement; and

      (ii) the satisfaction of all other conditions required to be satisfied by
the Company for the release of the Escrow Assets, including all those set forth
in (A) Rule 419(e) of the Securities Act and (B) the provisions of NY law.

      The Escrow Agent shall not be responsible for the sufficiency or accuracy
of the form of, or the execution, validity, value or genuineness of, any
document received in connection with this Section 1(a) of this Schedule A, or of
any signature or endorsement thereon, or for any lack of endorsement thereon, or
for any description therein, nor shall the Escrow Agent be responsible or liable
to the other parties to this Agreement or to anyone else in any respect on
account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any such document.

      (b) Subject to Section 1(a) above, the Escrow Agent shall release to the
Company the balance of the funds held in the Escrow Account and interest, if any
(after deducting therefrom the amount of funds and interest, if any, disbursed
to the subscribers in accordance with the provisions of paragraph 2 below),
promptly upon receipt by the Escrow Agent of a certificate of an authorized
officer of the Company representing and warranting that:

      (i) The Company has filed a post-effective amendment to its Registration
Statement (the "Post-Effective Amendment") with the Securities and Exchange
Commission ("SEC"); the Post-Effective Amendment has been declared effective by
the SEC; and within five (5) business days after the effective date of the
Post-Effective Amendment, the Company has sent a copy of the prospectus
contained therein to the subscribers by first class mail or equally prompt
means; and

      (ii) The Company has consummated a business combination with an operating
business in compliance with the requirements of Rule 419 of the Securities Act
within 18 months after the date of the Prospectus.

      2. Disbursement of Funds to the Subscribers. Funds and interest, if any,
held in the Escrow Account shall be disbursed to the subscribers in accordance
with the following:

                                       58
<PAGE>

      (a) If the Company has not received written notification from any
subscriber by the 45th business day following the effective date of the
Post-Effective Amendment to the Company's Registration Statement that such
subscriber has elected to remain an investor, the Escrow Agent shall send to
such subscriber, within five (5) business days, such subscriber's pro rata share
of the funds and interest, if any, held in the Escrow Account.

      (b) If the Company has not consummated a business combination meeting the
requirements of Rule 419 of the Securities Act within 18 months after the date
of the Prospectus, the Escrow Agent shall send to each subscriber, within five
(5) business days after such date, each subscriber's pro rata share of the funds
and interest, if any, held in the Escrow Account.

                                       59
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SCHEDULE B

      1. Delivery of Certificates to the Subscribers. Share certificates held in
the Escrow Account shall be delivered to the subscribers in accordance with the
following:

      (a) The Escrow Agent shall deliver to each subscriber identified by the
Company as having timely elected to remain an investor, promptly after receipt
by the Escrow Agent of the officer's certificate described in paragraph 1(b) of
Schedule A to the Escrow Agreement, the share certificates registered in the
name of each such subscriber.

      2. Return of Certificates to the Company. Share certificates held in the
Escrow Account shall be returned to the Company in accordance with the
following:

      (a) The Escrow Agent shall return all of the share certificates to the
Company if the Company has not consummated a business combination with an
operating business in compliance with the requirements of Rule 419 of the
Securities Act within eighteen (18) months after the date of the Prospectus.

      (b) The Escrow Agent shall return to the Company all share certificates
registered in the name of any subscriber identified in a notice from an
authorized officer of the Company as not having timely elected to remain an
investor, provided that such subscriber's pro rata share of the funds, and
interest, if any, held in the Escrow Account on account of the purchase of the
Shares has been returned to such subscriber in accordance with paragraph 2(a) of
Schedule A to the Escrow Agreement.

                                       60

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