EXHIBIT 10.34
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 1 of 15
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STN ATLAS Elektronik GmbH
Industriestrabe 23-33
D-22880 Wedel
Germany
represented by Xx. Xxxxxx Xxxxx
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and Xx. Xxxxxx Xxxx
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- hereinafter called STN ATLAS (or Customer) -
and
Electric Fuel Limited
5 Kiryat Mada Street
Har Hotzvim Science Park
IL - 91230 Jerusalem
Israel
represented by Xx. Xxxxxx Xxxxxx
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and Mr. Binyamie Xxxxxx
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- hereinafter called EFL (or Contractor) -
the following contract is concluded under the STN ATLAS contract no.
M80/20029260 for duties and deliveries concerning
ZINC-OXYGEN TORPEDO BATTERY - PHASE 2
as part of the scope of duties and deliveries concerning the
Pre-Development of Zinc-Oxygen Battery for Torpedo
as per contract [*].
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EXHIBIT 10.34
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 2 of 15
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TABLE OF CONTENTS
Preamble ................................................... 3
Art 1 Scope of Duties and Deliveries ............................. 4
Art 2 Packing .................................................... 6
Art 3 Dates of Performance ....................................... 6
Art 4 Provision of Supplies and Services ......................... 6
Art 5 Shipping Instructions ...................................... 7
Art 6 Security ................................................... 7
Art 7 Remuneration ............................................... 7
Art 8 Most-Favoured-Customer Clause .............................. 8
Art 9 Special Tooling and Test Equipment ......................... 9
Art 10 Payment .................................................... 9
Art 11 Right of User ............................................. 10
Art 12 Intellectual Property Rights .............................. 10
Art 13 Contractor's Quality Control .............................. 11
Art 14 Termination for Convenience, Settlement of Residual
Claims .................................................. 11
Art 15 Warranty .................................................. 12
Art 16 Subcontracts .............................................. 13
Art 17 General Terms and Conditions .............................. 13
LIST OF ANNEXES ........................................... 15
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 3 of 15
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Preamble
[*]
STN ATLAS Elektronik GmbH
has received a contract for supplies and services relating to the project
"Zinc-Oxygen Battery for Torpedo".
This contract, covering an essential part of this project, is based on the
contract from the [*] to STN ATLAS and substitutes the Letter of Intent dated
03.09.1996.
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COMMISSION.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 4 of 15
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ART 1 SCOPE OF DUTIES AND DELIVERIES
1. The Contractor undertakes to fulfil the performances of this contract
based on the results and knowledge of the participation in the "Phase 1 -
Study" (STN ATLAS P.O. No. M80/20004731) concerning the "Feasibility
Phase of a Zinc-Oxygen Compact Battery" and former activities in the
field of ZnO battery systems.
2. The scope of work is described and specified in the Work Package
Description (ANNEX 1).
The parties agree that the Contractor shall, in any case, present a
result that allows to be properly evaluated by the Customer and [*],
respectively.
3. The Contractor shall xxxx reports, including the Final Report, as
follows:
"Right of Use in accordance with VG 95 034"
4. The results of activities that have been performed beginning 01. July
1996 as part of the work package description as per Annex 1 before the
conclusion of this contract are transferred to the Customer under the
conditions of this contract.
5. The Contractor further agrees to inform the Customer of the progress of
work in accordance with the Scope of Work (ANNEX 1) and the agreed dates.
Furthermore the Contractor agrees
. to summarize the results of work in a Final Report
. to submit this report in six (6) copies
The Contractor shall, upon the Customer's request, participate in three
(3) reviews, [*].
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 5 of 15
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6. The parties agree that the result of this study includes all material,
components and assemblies (including their technical documentation), if
any.
This shall not be the case if the mentioned material, components and
assemblies are
a. commercial products; i.e. products generally available in the market
at market prices,
b. modified commercial products; i.e. products which have been made from
commercial products without essential modification to their general
design and function.
7. The hardware items (including cells and stacks used for tests/trials)
procured or manufactured by the Contractor for the execution of this
contract, including materials used for manufacture, components and
assemblies, shall be listed, indicating the appropriate values and
application, and shall be offered by the Contractor for transfer of
property at the time of submission of the final report. The Customer may
request transfer of property in a period of up to one year after
submission of the final report. In case the Customer is not liable to pay
or is liable to pay only part of the costs incurred by the Contractor for
procuring or manufacturing such hardware items, he is entitled to
transfer of property only if all the costs and/or remaining costs plus
profit are reimbursed.
The Contractor will not be held liable for any hardware items or
materials that are disposed of as part of its normal handling practices.
8. The development tools procured or manufactured by the Contractor for the
execution of this contract will be transferred to the property of the
Customer and shall remain at the Contractors premises in the frame of
this contract.
The Contractor undertakes to keep the development tools in a correct
and operating condition and to use them free of charge for future
development and/or procurement contracts between the Parties, if any.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 6 of 15
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9. The Contractor declares his willingness to perform the development of the
Zinc-Oxygen Torpedo-Battery if this is requested by the Customer.
10. The Contractor declares that the scope of delivery does not contain
radioactive material; he undertakes the obligation to avoid the use of
radioactive material wherever possible.
If the Contractor realizes that the use of radioactive material is
necessary, the Contractor has to apply for the written consent of the [*]
via the Customer indicating the cogent reasons.
In case the Contractor will deliver other dangerous material he
undertakes to inform the Customer prior to each delivery and xxxx each
item according to the international regulations.
ART 2 PACKING
1. Hardware items to be delivered to STN ATLAS shall be packed according to
the technical necessities and relevant rules.
2. Documents to be sent to the Customer shall be packed according to company
standard.
ART 3 DATES OF PERFORMANCE
The duties and deliveries to be rendered by the Contractor in accordance
with Art 1 will cover the period from 01.July '96 to 15.July '97.
The Contractor shall render his performances in accordance with the Bar
Chart as per ANNEX 2.
ART 4 PROVISION OF SUPPLIES AND SERVICES
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 7 of 15
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1. The supplies and services to be provided by the Customer for the
performance of the contract as per Annex 1 are to be mutually agreed upon
in due time.
The provisions are to be performed free of charge.
2. The Contractor shall check the material furnished after arrival without
delay.
ART 5 SHIPPING INSTRUCTIONS
The Contractor shall mail reports and documents "postage prepaid" and
take the necessary security precautions.
Consignee will be for reports, documents and hardware
STN ATLAS Elektronik GmbH
MTV4 - Project Management DM 2 A4
IndustriestraBe 23-33
D - 22880 Wedel
Germany
ART 6 SECURITY
The Contractor shall meet his company confidential requirements.
ART 7 REMUNERATION
For the Contractor's services and deliveries under this contract a price
with a maximum ceiling of
[ * ]
is agreed.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 8 of 15
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[*]
ART 8 MOST-FAVOURED-CUSTOMER CLAUSE
1. The following Most-Favoured-Customer Clause is agreed:
a. EFL gives her assurance that, taking due account of the general price
development and converting the price to comparable circumstances, that
the agreed price is not less favourable than those that have been
granted by EFL or that will be granted by EFL to third parties during
the period of validity of this contact, whereby the export benefits
applying in Israel - if any - are or will be taken into account in
favour of STN ATLAS.
b. If despite this EFL should grant or has granted more favourable prices
to third parties, EFL undertakes to reduce the agreed price
accordingly and to reimburse [*] STN ATLAS for excess payments.
c. EFL undertakes to provide STN ATLAS at the latter's request with proof
of the assurance given in letter a) above.
For this purpose EFL shall at the option [*] or their authorized
representatives the right and opportunity to inspect all essential
business papers which are of relevance, to have copies made of these and
to provide all requisite information or to submit the written attestation
of an independent auditor or chartered accountant. This shall not result
in additional costs for STN ATLAS.
d. In case EFL refuses the application of this most-favoured-customer-clause
on certain contracts with third parties by conclusion of contract,
because EFL regards the cost relations this contract is based on as not
comparable with the relations of this contract, EFL undertakes the
obligation to inform STN ATLAS about these contracts in writing without
delay and to state the reasons for EFL opinion.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 9 of 15
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2. EFL undertakes, if subcontracts are issued to subcontractors established
outside Israel and outside the Federal Republic of Germany, to agree with
them the conditions as per Para. (1) above, as far as the total amount
exceeds the equivalent of DM 100.000,00 per subcontractor.
ART 9 SPECIAL TOOLING AND TEST EQUIPMENT
Special tooling and equipment procured or manufactured in the frame of
this contract which can be used for activities within this contract and
further steps are to be listed. The Contractor shall submit this list to
the Customer.
ART 10 PAYMENT
For the payments to be effected by the Customer the following provisions
shall apply:
1. EFL is entitled to invoice monthly for the cost plus fee incurred for the
supplies and services as per Art. 1. The invoices shall indicate
separately the amounts for the relevant work packages.
Invoices shall be detailed according to EFL's budget breakdown dated
24.Oct.1996.
2. Any payments shall be effected after receipt of the invoices [*] within
45 days.
In any case the payment for the final invoice scheduled 15.07.1997 is
depending on the delivery of the final report.
3. A final invoice will be presented by EFL not later than two (2) months
after conclusion of the contractual performances. In the final invoice
EFL will indicate separately the prices for the development performances
as well as payments to third parties, if any, according to cooperation -
or license -contracts.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 10 of 15
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ART 11 RIGHT OF USER
1. The rights related to the specific zinc-oxygen basis-technology necessary
to manufacture zinc-oxygen batteries are industrial property rights of
EFL.
2. A right of use on the property rights as per para (1) above will not
transfer [*].
3. In case EFL will by any reason stop their activities in the field of
zinc-air battery cells, EFL will transfer the rights [*] for the sole use
in torpedo application via STN ATLAS.
As compensation for the above STN ATLAS will make a payment in the amount
of [*]. This payment comes due with coming into force of a development
contract.
ART 12 INTELLECTUAL PROPERTY RIGHTS
1. The Customer is entitled to
. reproduce
. handle, especially modify, transform and translate
. publish
and
. use in any other known type of utilization
the reports, documentation and technical papers submitted in accordance
with Art 1 of the contract.
In doing so the Customer will, in consultation with the Contractor,
consider the latter's legitimate interests as well with respect to his
proprietary rights as with regard to his business or trade secrets
designated to the Customer or recognizable as such. The Contractor, on
the Customer's request, shall make available to the Customer a printing
copy, if existing.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 11 of 15
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2. If the Contractor intends to pass on to third parties, to publish or have
published to third parties the reports not yet published by the Customer,
he shall previously obtain the Customer's written approval.
Furthermore the Contractor shall, after printing, furnish to the Customer
three copies of his publication without delay.
ART 13 CONTRACTOR'S QUALITY CONTROL
The Contractor undertakes the obligation to maintain a quality assurance
system.
ART 14 TERMINATION FOR CONVENIENCE, SETTLEMENT OF RESIDUAL CLAIMS
The following extraordinary right of termination including the settlement
of residual claims is agreed:
1. The Contractor shall terminate immediately any sub-contracts awarded
under this contract, at the same time safeguarding the Customer's
interests. In the case of sub-contracts which provide for the right of
the Contractor to give notice of termination, the contract shall be
terminated, if possible, prior to the next permissible cancellation date,
if this involves a cost saving for the Customer.
2. The Customer shall notify the Contractor in writing whether any work
commenced should be completed, and if so, which; the Contractor is
obligated to carry out this work at the terms and conditions of the
terminated contract.
3. The Contractor shall have a right to claim reimbursement of all
inevitable costs incurred under the contract plus the profit fee
proportional to the costs to be reimbursed.
All payments to be made under the contract, including the settlement of
residual claims, shall not exceed the amount which would have been due to
the Contractor for the performance of the contract, if it had not been
terminated.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 12 of 15
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4. The Contractor shall submit sufficient proof for the facts on which his
claims are based.
5. With respect to the items and rights the costs of which shall be fully
reimbursed, the Customer shall be obligated to make payment only insofar
as the Contractor transfers title to, or assigns, these items and rights
to the Customer, free of third party rights, provided that violation of
existing contracts is not involved.
6. The Contractor is obligated to inform his subcontractors of this
agreement and to endeavoUr to make corresponding arrangements, as far as
subcontracts are concerned which are exceeding the value of [*].
In case the Contractor concludes with a subcontractor several
subcontracts, this shall apply to all such subcontracts, if their total
amount exceeds the quoted value.
7. In the event that a subcontractor is not prepared to accept this
obligation, the Contractor shall notify the Customer accordingly before
placing the subcontract. If in such cases the Contractor does not receive
any written instruction from the Customer within 2 weeks after receipt of
such notification, he shall have the right to conclude subcontracts to
the best of his judgement, making the best possible use of the then
prevailing market situation.
ART 15 WARRANTY
The Contractor warrants that the supplies and services will be in
correspondence with the Work Package Description (ANNEX 1).
The warranty period ends 12 months after acceptance of the Final Report
(according to ANNEX 1).
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 13 of 15
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ART 16 SUBCONTRACTS
If, for the purpose of fulfilling his contractual duties, the Contractor
subcontracts part of the duties and deliveries to third parties, he
undertakes the obligation to safeguard the Customers interests in the
best possible way.
ART 17 GENERAL TERMS AND CONDITIONS
1. This contract is concluded in English language.
For working papers, reports and the final report the English language is
to be used.
2. This contract is subject to German law.
3. The following provision is excluded:
- "Ubereinkommen der Vereinten Nationen vom 11.04.1980 uber Vertrage
uber den internationalen Warenkauf"
("United Nations Convention of 11.04.1980 on contracts for the
International Sale of Goods.")
4. The Contractor's General Terms and Conditions are excluded.
5. The Contractor agrees to obtain, without delay, the official licenses
necessary for the performance of this contract and to inform the Customer
promptly in case any difficulties or delays should arise.
6. Arbitration
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This contract shall be lead by the spirit of good confidence and harmonic
cooperation.
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 14 of 15
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If in spite of that, any differences or discords are created by this
contract that cannot be settled amicably, they shall be settled finally
by an arbitration according to the rules of arbitration of the
International Chamber of Commerce, 38 Cours Xxxxxx ler, Paris, by three
arbitrators appointed according to the rules, who shall arbitrate in
accordance with the present contract and under the principle of equality
and justice.
German substantive law shall apply. The place of jurisdiction shall be
Bern, Switherland. The proceedings shall be made in English.
7. The Annexes 1 and 2 as well as
(a) the Agreement on the confidential treatment of information dated 05.
Nov. 1993
(b) the Cooperation Agreement dated 12. Jan. 1995
are part of this contract.
Wedel, 17. 02. 1997 Xxxxxxxxx, 00. 02. 1997
STN ATLAS Elektronik GmbH Electric Fuel Limited
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STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 15 of 15
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LIST OF ANNEXES
Annex 1 Scope of Work/Work Package Description
Annex 2 Bar Chart
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ANNEX 1
STN Atlas Elektronik
Project "Zinc-Oxygen Torpedo-Battery"
Contract No.: M80/20029260 Page 1 of 5
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Scope of Work/Work Package Description
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XXXXX 0
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Project "Zinc-Oxygen Torpedo-Battery"
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Contract No.: M80/20029260 Page 1 of 1
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BAR CHART
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