Exhibit 10.3
Exclusive Agency Agreement
This Agreement entered into as of the 1st day July, 1998, by and between
MEDIS EL LTD, a Company organized and registered under the laws of State of
Israel and having its principal place of business at 0 Xxxxxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxx 00000 (hereinafter: "MEDIS"), and CDS DISTRIBUTOR INC., a
Delaware corporation and a wholly-owned subsidiary of Cell Diagnostics Inc., a
Delaware corporation, having its principal place of business at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter: the "Agent").
W I T N E S S E T H
WHEREAS, Medis is currently engaged in the research and development of
technology for products designated the Synchronous Twin Piston Reciprocating
Linear Compressor and expander displacer assembly for Stirling Cycle System and
a Synchronous Reciprocating Electric Machine, and Media currently owns or has
pending related patents;
WHEREAS, Medis has determined that the licensing of rights to such
technology is necessary to properly bring such technology to the commercial
markets in North America; and
WHEREAS, Medis desires to retain the Agent, and the Agent desires to be
retained by Medis, to serve as the exclusive agent to coordinate Medis licensing
arrangement in North America with respect to the Licensed Products (as
hereinafter defined) and to help Media seek possible funding resources for all
aspects of Medis' work with regard to the Patents and Licensed Know-How (as
defined below).
NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
"Licensed Patents" shall mean U.S. Patent No. 5693991 issued on December
2, 1997 entitled " Synchronous Twin Piston Reciprocating Apparatus", the
continuation of Patent No. 569331, application of 599,206 Displacer Assembly
for Stirling Cycle Systern, U.S. Patent Application No 08/933856 entitled
"Synchronous Reciprocating Electric Machine", and any other United States and
foreign patents and patent applications based upon the foregoing or in any
manner related to the Licensed
Products owned or controlled by Medis on the date hereof or hereafter including
subsequent application derived therefrom, and the foreign counterparts based
thereon.
"Licensed Know How" shall mean any and all data, information, technology
or special ability on the part of Medis including, without limitation,
processes, techniques, methods, products, materials and compositions relating in
any way to the research, development, manufacture, testing, marketing or use of
Licensed Products owned or controlled by Medis on the date hereof or hereafter.
"Licensed Product" shall mean all devices, systems and products making
use of or embodying in whole or in part the invention(s) covered by any or all
of the Licensed Patents and Licensed Know-How, including, without limitation, a
synchronous twin piston reciprocating linear compressor.
ARTICLE II
APPOINTMENT AND AGENCY
(A) Subject to the terms of this Agreement, Medis hereby appoints the
Agent, and the Agent hereby accepts Medis' said appointment, as the exclusive
agent of Medis to present Medis' technology for licensing (subject to the
potential licensee signature on a non-disclosure agreement and any other
document as shall be demanded by Medis) and to coordinate all aspects relating
to the licensing arrangements between Medis and third parties within North
America (hereafter the "Marketing Area") in respect of the licensing to such
third parties under the Licensed Patents arid the Licensed Know-How to make,
have made, use and sell the Licensed Products.
To avoid any doubt it is hereby expressly declared that the Agent has no
authority to incur any obligation on behalf of Medis or any way to pledge Medis'
credit and/or to submit or accept on behalf of Medis any proposal, contract,
offer and/or order or otherwise commit Medis to any agreement or arrangement.
(B) In exchange for such agency services, Medis shall pay to the agent a
fee equal to 10% of gross amount of all royalties and other amounts payable to
Medis under all licensing arrangements entered into by Medis pursuant to the
clause (A) above during the first ten years of each such arrangement and a fee
of 5% of such amounts thereafter. Such fees shall be payable within 30 days
after the end of each calendar month based upon the royalties and other amounts
which have been paid to Medis under such licensing arrangements during such
calendar month. To avoid any doubt it is hereby agreed that the delivery of
promissory notes or any other security to ensure payment by the Licensee shall
not be considered a payment and shall not entitle the Agent to any payment,
until, and to the extent, that said notes are paid. Any sales tax, export
duties or other charges imposed by any Israeli government authority, in
connection with the licensing of the Licensed Products and the collection of
royalties and other amounts with respect thereto, shall be the sole
responsibility of and shall be paid for by Medis. If license fees paid to Medis
are in a form of consideration other than royalty payment the parties will
equitably adjust so that Medis makes appropriate compensation to Agent.
(C) Medis agrees to provide the Agent with written quarterly reports with
respect to all royalties and other amounts payable pursuant to clause (B) above
within 10 days after each calender quarter, whether or not any such royalties
and other amounts are payable during such quarter.
(D) Medis shall not, during the term this Agreement, appoint in the
Marketing Area, any other licensing agent for the Licensed Products, the
Licensed Know How or the Licensed Patents. Medis shall promptly advise the Agent
of any inquiries that Medis receives regarding the licensing of the Licensed
Products, the Licensed Know-How and/or the licensed Patents in the Marketing
Area.
ARTICLE III
LICENSING AND PROMOTION OF THE LICENSED PRODUCTS
(A) The Agent undertakes at all such times as this Agreement remains in
force and at its sole cost and expense, to seek potential licensees of Licensed
Products by promoting the Licensed Products actively, diligently and
aggressively in cooperation with Medis throughout the Marketing Area and, to
this end, the Agent shall inter alia;
(1) create, develop and put into effect in cooperation with Medis a
marketing campaign to present the Licensed Products in the Marketing Area,
including demonstrations of the Licensed Products;
(2) locate potential licensees and inform Medis of them. Medis will
decided which of these potential licensees should be further approached.
3) coordinate with Medis and Medis' legal counsel the preparation
and negotiation of documentation relating so proposed licensing arrangements;
4) cooperate with Medis in overseeing all legal proceeding between
Medis and third parties arising out of or in connection with licensing
arrangements within the scope of this Agreement;
5) manage the collection of royalties payable to Medis pursuant to
licensing arrangements within the scope of this Agreement, and maintain an
office with sufficient secretarial, telephone and telex facilities and service
for same;
6) submit periodically reports to Medis describing the Agent's
activities performed pursuant to the terms of this Agreement;
7) use only personnel who, in Agent's reasonable judgement, are
highly qualified and trained for the licensing promotion and otherwise carrying
out the Agent's duties under this Agreement, and employ a number of said
personal who, in the Agent's reasonable judgement, are sufficient to cover the
Marketing Area fully; and
(8) submit to Medis for review and approval any promotional
literature to be used by the Agent in presenting and marketing the Licensed
Products.
(B) Medis shall use its best efforts to make available in the Marketing
Area, at no charge of any of any kind, such of its personal as may be reasonably
requested by the Agent to coordinate with the Agent in the promotion of the
Licensed Products.
(C) Upon request from Medis, the Agent will cooperate with Medis to
identify possible funding resources for all aspects of Medis-El's work with
regard to Medis-El's Technology.
ARTICLE IV
PROPRIETARY RIGHTS AND NON-COMPETITION
(a) Proprietary Rights:
(1) Medis reserves exclusively to itself all right, title and
interest in and to the Licensed Patents, the Licensed Know-How and all other
intellectual property rights relating in any way to the Licensed Products, and
their manufacture, use, sale and maintenance.
(2) The Agent agrees and acknowledges that all information supplied
by Medis to the Agent, other than information which (a) was known to the public
prior to the date of communication thereof to the Agent or which became known to
the public thereafter other than through communication by the Agent, (b) was in
the Agent's possession prior to disclosure thereof by Medis to the Agent; or (c)
is disclosed to the Agent by a third party not under any obligation of
confidentiality to Medis, is proprietary to Medis and shall be kept in
confidence by the Agent, its employees, agents and contractors. In addition, the
Agent may disclose information of the kind which would be disclosable in a
filing with a government agency in connection with a sale or offer of shares of
the Agent out not information for which confidential treatment by the U.S.
Securities and Exchange Commission might reasonably be requested. The Agent
undertakes to utilize said information solely for the purpose of furthering the
promotion of the Licensed Products in the Marketing Area, to the extent that
same is permitted pursuant to the provisions of this Agreement.
To avoid any doubt, it hereby expressly agreed that the provisions of
sub-article 2 (b) above do not exempt the Agent from its obligation to keep in
strict confidence any and all information which was given to the Agent, or any
of its employees, agents, managers or owners, prior to the execution of this
Agreement, whether such information was given as part of the negotiations
towards this Agreement or whether it was gives with no connection thereto.
(B) Non-Competition:
The Agent undertakes that, throughout the period during which this
Agreement is in full force and effect and for a period of four years thereafter,
the Agent will not be
involved, either directly or indirectly, in the development, manufacture,
marketing, sales, service and/or support of any product in the Marketing Area
which may compete with the Licensed Products or any part thereof.
ARTICLE V
RELATIONSHIP OF PARTIES
(A) It is hereby agreed that the Agent is authorized to represent itself
as Medis' exclusive licensing agent for the Licensed Products in the Marketing
Area.
(B) It is agreed that the Agent acting under this Agreement as an
independent contractor, and that this Agreement does not confer upon the Agent
the power to bind or act for Medis in any other manner whatsoever.
The Agent shall be exclusively responsible for all wages, salaries, travelling
expenses and any other expenses and liabilities of any kind whatsoever, incurred
by the Agent or its employees in the performance of its obligations under this
Agreement.
ARTICLE VI
TERM OF THIS AGREEMENT
The Agreement shall enter into effect upon signature by the last party
hereto to sign and shall, unless terminated as provided below, continue in full
force and effect until the fifteenth (15th) anniversary of the date hereof. Upon
the request of either party, the parties will meet six months prior to the end
of the term of this Agreement to negotiate the possible extension of this
Agreement for a further term. If no extension is so agreed upon in writing and
duly signed by the parties hereto, upon the expiration of the term of this
Agreement, this Agreement shall automatically be terminated without the need for
any notice or other correspondence between the between the parties. This
Agreement may, at the option of Medis, be terminated upon 30 days written
notice to the Agent upon (i) the breach or default by the Agent of any material
provision of this Agreement, or (ii) the institution by (or against if not
dismissed within ninety (90) days) the Agent of proceeding in bankruptcy or the
Agent's adjudication as a bankrupt, or the insolvency of the Agent. The parties
hereby agree that, except as provided for in Article II(B) hereof with respect
to licensing arrangements entered into prior to the date of termination, all
obligations and liabilities under this Agreement shall cease, and neither party
shall have any claim against the other, upon the term of this Agreement, or upon
the expiration of any extension of the term of this Agreement, or upon the prior
termination of this Agreement, except to the extent any such claim accrued prior
to such expiration or termination. For the sake of clarity, it is further agreed
that, on the expiration or prior termination of this Agreement Medis shall not
be obligated to remunerate, repay, reimburse or otherwise compensate the Agent
for loss of profit, loss of goodwill, loss of clientele or other like item,
and/or for promotional costs, and/or for other expenses and costs incurred by
the Agent.
ARTICLE VII
ARITRATION AND GOVERNING LAW
Any dispute between the parties arising under this Agreement or in
connection herewith shall be resolved by arbitration under the rules of the
International Chamber of Commerce in front of one arbitrator. The arbitration
shall be held in the English language and the tribunal shall sit in New York
City, New York. The substantive law to be applied to the interpretation of the
Agreement and in implementation shall be the law of the State of New York.
ARTICLE VIII
NOTICES
(A) Any notice required to be given by either party to the other hereunder
or in connection therewith shall be in writing and delivered personally or by
registered mail, facsimile or telex to the other party. Notice shall be deemed
effective upon the date of personal delivery thereof (if personally delivered)
or upon the tenth day after such notice is mailed (if sent by registered mail),
or two days after being sent by telex or facsimile.
(B) For the purposes of clause (A) above, the following are the addresses
of the parties, provided that either party may change such address upon notice
to the other in the manner provided in this Article:
Agent CDS DISTRIBUTOR, INC.
c/o Cell Diagnostics, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Fax No: (000) 000-0000
Medis: MEDIS EL LTD.
0 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxx Xxxxxx 00000
Attention: Xx. Xxx Xxxxxx
Fax No: 000-000-0-000-0000
ARTICLE IX
MISCELLANEOUS
(A) All correspondence, information, specifications, reports, notices and
any other written or oral communications between the parties shall be in the
English Language.
(B) The failure of a party to insist in any one or more instances upon
strict performance of any of the terms of this Agreement or to exercise any
rights herein conferred shall not be construed as a waiver or relinquishment to
any extent by said party of said party's right to assert or rely upon any such
term or right on any future occasion.
(C) Either party may assign this Agreement, and all of its right and
obligations hereunder, to its existing or newly established affiliates subject
to an undertaking of all obligations and rights under this Agreement.
(D) The caption headings or the Articles of this Agreement are for
convenience only and shall not be constructed as in any way limiting or
extending the language of the provision to which the caption refer.
(E) The terms and conditions of this Agreement constitute the entire
agreement between the parties and shall supersede all previous communications,
representations or agreements, whether oral or written, between said parties
with respect to the subject matter hereto. No agreement or understanding, either
oral, or written, between the parties will be binding upon either party unless
in writing, signed by a duly authorized representative of each party.
(F) Nothing in this Agreement, whether expressed or implied, is intended
to confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties hereto and their perspective permitted successors
and assigns.
(G) Except as provided for in paragraph IX C above, the Agent may not
subcontract or assign all or any of its rights or obligations under this
Agreement without the previous written consent of Medis.
IN WITNESS WHEREOF, the parties hereto have caused their respective duly
authorized representatives to execute this Agreement in counterparts and in two
duplicate originals, of which one is left with Medis and one with the Agent, all
as of first herein above written.
MEDIS EL LTD. CDS DISTRIBUTOR, INC.
By: /s/ Xxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: XXX XXXXXX Name: Xxxxxx X. Xxxxxx
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Title: EXECUTIVE VICE PRESIDENT Title: Chairman
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By: /s/ Xxxxxx Xxxxxx
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Name: XXXXXX XXXXXX
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Title: VICE PRESIDENT FINANCE
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