AGREEMENT
Made as of the 5th day of November, 1981, by and between:
Advanced Products Beer Sheva Ltd. (AP) and the Xxx Xxxxxx University of the
Negev (the Research and Development Authority) (RDA), jointly and severally,
(hereinafter referred to as "APRDA")
of the first part;
and Solmecs Corporation N.V. (hereinafter referred to as "Solmecs")
of the second part;
and Solmecs Corporation (U.K.) Limited (hereinafter referred to as "SCUK")
of the third part
Whereas on June 4th, 1980, APRDA and Solmecs have entered into an
agreement, a copy of which is attached hereto as Appendix "A"; and
Whereas the research and development of the Process (as defined in Appendix
"A") and especially the building of the first prototype of a Pilot Liquid Metal
MHD Generator ("Pilot Generator"), based on the Process, requires more funds,
efforts and time than envisaged when Appendix "A" was signed; and
Whereas, since the execution of Appendix "A", Xxxxxxxxx Xxxxxxxx and his
Team have developed an additional concept and/or invention named Hydrosol
("Hydrosol") and it was agreed to include Hydrosol in Appendix "A" as per letter
by Xx. X. Xxxxxxxxx to Xx. X. Xxxxxxxxx dated 30th March 1981, copy of which is
attached herewith as Appendix "B"; and
Whereas it is also in the interest of APRDA that the processing funds
raised and invested in the further development of the process, the building of a
bigger pilot generator than the 5 KW envisaged before, the commercialization and
exploitation of the Process and Patents; and
Whereas Solmecs and/or its controlling shareholders have formed SCUK, with
the intent to bring in new investors into SCUK by a private placing of shares
and loan stock to finance the further development of the process and Hydrosol
and the construction of the pilot generator; and it is necessary, for the
purpose of attracting new investors, to reduce the royalties paid in accordance
with Appendix "A", and also to assign all Solmecs' rights and obligations in
Appendices "A" and "B" to SCUK; and
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Whereas there were a few clerical errors which should be corrected in
Appendix "A" and there are a few clarifications which are to be made thereto;
Now, therefore, in consideration of the premises and the mutual covenants
and undertakings hereinafter set forth, it is agreed as follows:
1. Preamble, Schedules and Definitions
1.01 The preamble to this Agreement forms an integral part thereof.
1.02 The Schedules to this Agreement form an integral part thereof.
1.03 Words and phrases in this Agreement which are defined in Appendix "A",
will have the same definition and meaning, unless the contents require
otherwise.
2. Minor Changes and Clarifications
2.01 APRDA agrees that the provisions of paragraph 5.05 of Appendix "A"
refer to all improvements, and not only to "substantial improvements".
2.02 APRDA declare that the arrangement entered into as per paragraph 5.06
of Appendix "A", was for one year only; that the one year has elapsed
with no action taken in accordance with the said arrangement, and that
the arrangement is now null and void.
2.03 In paragraph 6.03 of Appendix "A", after the word "products" there
shall be inserted in brackets the words "(produced in accordance with
the process or based on it or pursuant to it)".
2.04 In paragraph 8.02 of Appendix "A", the words "three month period" or
"three months" wherever they appear therein will be replaced by the
word "month"; and the words "not later than" shall be added before the
number "30" appearing at the beginning of the paragraph.
2.05 In paragraphs 8.02, 8.03 and 9 of Appendix "A", the words "RDA" should
be replaced by the word "AP".
2.06 In paragraph 8.06 of Appendix "A", the percentage "towards meeting
Solmecs' obligation" is 75%.
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2.07 In paragraph 9.02, the phrase "the sale price of Solmecs Israel sales
of LMMG produced in Israel" should be replaced by the phrase "The sale
price of Solmecs' sales of LMMG produced by Solmecs or for Solmecs".
2.08 The quarter annual payments as per paragraph 9.03 of Appendix "A",
will be effected on the 5th day of April, July, October and January of
each year, starting on the first such date coming first after Solmecs
has received the first payment for sales of generators based on the
process and patents.
2.09 Notwithstanding anything in Appendix "A" contained - especially in
paragraph 11 thereof, Solmecs will be entitled to disclose this
Agreement, Appendix "A" and the other appendices to this Agreement or
any part thereof to underwriters, potential investors and their
representatives, advisers and employees; and also to reveal to the
above that part of the process which it will deem fit and proper, even
though it is not in the public domain.
2.10 APRDA hereby irrevocably empower Solmecs to pay to the Government of
Israel ("The Government") the royalties due to the Government from the
Xxx Xxxxxx University under paragraph 4 of the Agreement dated 31st
March 1981, a copy of which is attached hereto as Appendix "C". In
view of the provisions of the letter dated 29th March 1981, a copy of
which is attached herewith as Appendix "D", APRDA agrees that half of
such payment made by Solmecs to the Government may be deducted by
Solmecs from royalties due or to be due in the future to AP under
Appendix "A".
2.11 APRDA confirms that it has granted Solmecs the sole and exclusive
right to develop, commercialize and exploit Hydrosol upon the same
terms which refer to the process as per Appendix "A", and that
therefore the terms "Process", "know-how", "Patents" and "Patent
Applications" in Appendix "A" will also apply, mutatis mutandis, to
Hydrosol.
2.12 All royalty payments made to AP will be subject to withholding tax, if
any, in accordance with the laws of the countries from which the
royalties either derive or are paid now.
3. Coming into effect of the Whole Agreement
3.01 Solmecs and APRDA agree that if not later than by the 31st of March
1982, SCUK signs this Agreement and delivers a
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signed copy thereof to APRDA and pays AP the sum provided for in
paragraph 5.02 hereof, then the provisions of the whole of this
Agreement shall bind Solmecs, APRDA and SCUK. If such payment and
signed copy as aforesaid do not reach APRDA by the 31st of March,
1982, then only paragraph 2 of this Agreement shall bind Solmecs and
APRDA, as an amendment to Appendix "A", whilst all the other parts and
provisions of this Agreement will have no effect whatsoever.
3.02 Until such time as SCUK signs this agreement and makes the payment as
per paragraph 3.01 hereof (if it signs and pays same at all) this
Agreement shall be signed by Solmecs and APRDA.
4. Assignment and Transfer
4.01 Solmecs hereby transfers and assigns all its rights and obligations
under Appendices "A" and "B" as amended by this Agreement unto SCUK,
and SCUK hereby accepts the said transfer and assignment and
undertakes to fulfill directly towards APRDA the obligations contained
in Appendices "A" and "B" which were formerly the obligations of
Solmecs. Appendix "A" shall read as if SCUK replaces Solmecs N.V.
wherever there is reference therein to Solmecs N.V. and shall be
considered a direct Agreement between APRDA and SCUK.
4.02 Solmecs undertakes to transfer its shares in Solmecs Israel and/or
Solmecs Netherlands to SCUK, and SCUK agrees to acquire the said
shares, for their nominal value.
4.03 Solmecs assigns and transfers unto SCUK all its rights under Appendix
"C" and SCUK accepts the said transfer and further undertakes to
fulfill, instead of Solmecs, all Solmecs' obligations under Appendix
"C". Should Solmecs receive the Government of Israel's consent to the
assignment of all the rights and obligations of Solmecs' in Appendix
"C" to the Government, then the provisions of paragraph 4.01 hereof as
to Appendices "A" and "B" will apply, mutatis mutandis, also to
Appendix "C".
4.04 Solmecs hereby transfers and assigns unto SCUK all its rights under
letter of 6th September, 1981 copy of which is attached herewith as
Appendix "E" and SCUK accepts such transfer. SCUK and APRDA will
mutually agree in advance on
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the various security, ecological and environmental aspects resulting
from the building of the Pilot Generator within the premises of RDA.
4.05 APRDA agrees to the above transfers and assignments.
5. Royalties and Payment
5.01 In case not later than by the 31st of March, 1982, SCUK signs this
Agreement and delivers a signed copy thereof to APRDA and pays AP the
sum provided for in paragraph 5.02 hereof, then the royalties due to
AP as per Appendix "A" will be reduced as follows:-
(a) The figure 3% in paragraph 9 of Appendix "A" will be reduced to
1.725% (one point seventy two and a half percent).
(b) The figure 20% in paragraph 9 of Appendix "A" will be reduced to
11.5% (eleven and a half percent).
(c) On top of the above royalties, SCUK will bear, at its expense,
the whole of the royalties due to the Government under Appendix
"C". This sub-paragraph (c) cancels the provisions of paragraph
2.10 hereof and cancels Appendix A.
5.02 SCUK undertakes that upon delivery of a signed copy of this Agreement
to APRDA before 31st March 1982 it shall pay AP a sum of $100,000 (One
Hundred Thousand US Dollars).
6. Further Research and Development & Pilot Generator
6.01 SCUK declares that its projected budget for the next three years,
includes payments of not less than $400,000 (Four Hundred Thousand US
Dollars) to be paid to RDA for salaries of Xxxxxxxxx Xxxxxxxx and his
Team, materials to be used in ___ Laboratory and overheads. SCUK
undertakes that the above mentioned payment will actually be spent and
paid to AP for services to be rendered as per paragraph 4 of Appendix
"A" over the next three years.
6.02 SCUK estimates that the projected pace of the above mentioned
expenditure during the next three years will not be less than $7000
(Seven Thousand US Dollars) per month.
6.03 SCUK declares that its projected budget for the next three years
includes an investment of approx. $1,500,000 (One Million Five Hundred
US Dollars) in the Pilot Generator, and that it intends to start
working on the building of the Pilot Generator as soon as possible.
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7. Arbitration
7.01 In the event of any difference or dispute between the parties, arising
under this Agreement or under Appendix "A", such dispute shall be
referred to arbitration under the Israel Law or Arbitration. The
Arbitrator shall be such person as shall be appointed by consent by
the President of the Xxx Xxxxxx University of the Negev or the
Managing Director of AP and the Chairman or failing him the Managing
Director for the time being of SCUK. The Arbitrator's award or
decision shall be final and not subject to appeal or review.
8. Law
8.01 This Agreement shall be governed by the Laws of the State of Israel.
9. Stamp Duty
9.01 SCUK will bear the stamp duty due on the Agreement.
10. Addresses
10.01 The addresses of the parties for the purpose of sending any notice or
court documents under or relating to this Agreement shall be as
follows and any notice sent by registered mail to such address (and if
sent from one coutry to another by express airmail) shall be deemed
received within ten (10) days of dispatch of such notice.
APRDA - Xxx Xxxxxx University, Beer Sheva, Israel.
Solmecs, - X/x Xxxxx Xxxxxxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx.
SCUK - 00 Xxxxxx Xx., Xxxxxx, XX0X 0XX, Xxxxxxx.
IN WITNESS WHEREOF, the parties hereto have hereunto set their signatures
on the date first above appearing.
/s/ [ILLEGIBLE]
------------------------------ -----------------------------
XXX XXXXXX UNIVERSITY OF THE NEGEV SOLMECS CORPORATION N.V.
/s/ [ILLEGIBLE]
-------------------------------- ------------------------------
ADVANCE PRODUCTS BEER SHEVA LTD. SOLMECS CORPORATION (U.K.) LIMITED
March 10, 1981
APPENDIX "B"
Xx. Xxxxx Xxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxxxxx
Dear Xx. Xxxxxxx,
In response to your enquiry we would like to inform you that we agree that the
hydrosol concept developed by Xxxx. Xxxxxxxx and his group will be included
within the agreements we have made relating to liquid magnetohydrodynamic energy
production.
We request your confirmation of this arrangement.
Yours sincerely,
/s/ X. Xxxxxxxxx
--------------------------
X. Xxxxxxxxx, Director
Applied Research Institute
cc: Xxxx. X. Xxxxxxxx
JS:ss
SOLMECS (ISRAEL) LTD.
00 Xxxxx Xxxxxx A SUBSIDIARY OF THE
Jerusalem, Israel DUTCH SOLMECS CORPORATION
Tel: (02) 669505 DEDICATED TO THE
telex: 25311 DEVELOPMENT OF ENERGY
CONVERSION SYSTEMS
APPENDIX "D"
29th, March, 1981
Xx. Xxxx Xxx
Research and Development Authority
Ben-Gurion University of the Negev
Beer Sheva, Israel.
Dear Xx. Xxx:
With reference to the contract negotiated between the Government of Israel, the
Ben-Gurion University and Solmecs, we hereby confirm as follows:
1. SOLMECS will bear half of the liability undertaken by the University under
subclause 4.2.1. These amounts will be added to payments made by SOLMECS
under its agreement with BGU (Annex A of the contract).
2. In the event that subclause 4.4.1 will be called into effect, SOLMECS will
deduct such sums as are paid to the Government under that subclause from
subsequent payments to the University.
3. The University will send two copies of our agreement (Annex A of the
contract) duly signed and authorised as required by the statutes of the
University and the R and D Authority to SOLMECS at the above address,
within seven days of the signing of the Government/BGU/Solmecs contract.
As confirmation of your agreement to the above, please sign one copy of this
letter and return together with item (3) above.
Yours sincerely, signed for the University/RDA
Advanced Products Beer Sheva Ltd.
/s/ Xxxxx Xxxxxxxxx /s/ [ILLEGIBLE]
------------------------ --------------------------------
Xxxxx Xxxxxxxxx
Managing Director
APPENDIX "E"
COPY OF LETTER DATED 6 SEPTEMBER 1981 FROM S. DEVSHONY, COORDINATOR FOR RESEARCH
AND STUDY SERVICES, TO XXXXX XXXXXXXXX, SOLMECS CORPORATION--
"AT A RECENT MEETING OF YOUR CHAIRMAN, XX. XXXXX XXXXX, WITH OUR GENERAL
DIRECTOR, XX. XXX XXXXXX, XXXXXXXXX XXXXXXXX AND MYSELF, WE DISCUSSED THE SITE
FOR XXXXXXXXX XXXXXXXX'X M.H.D. PILOT PLANT.
AFTER FURTHER DELIBERATION AND FOLLOWING PRESIDENT GAZIT'S CONSENT, WE CAN NOW
POINT OUT THE SITE ALLOCATED FOR THE PROJECT. AS DESCRIBED ON THE ATTACHED
SKETCH OF THE NEW CAMPUS, THIS SITE IS LOCATED ADJACENT TO THE NORTH SIDE OF
BUILDING NUMBER C-26.
WE EXPECT THAT THE UNIVERSITY FINANCE COMMITTEE WILL SHORTLY RELEASE DOLLARS
200,000, AS WE APPLIED FOR, TO PREPARE THE INFRA-STRUCTURE AND THE NECESSARY
ACCOMMODATIONS FOR XXXXXXXXX XXXXXXXX'X STAFF, SO THAT THEY MAY COMMENCE THEIR
WORK EARLY NEXT YEAR."
REGARDS
