AGREEMENT
---------
made as of the 4th day of June, 1980, 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 one part
and Solmecs Corporation N.V. (hereinafter referred to as "Solmecs")
of the other part
Whereas RDA engages, inter alia, in the carrying of scientific research
projects; and
Whereas AP was incorporated by the Xxx Xxxxxx University as the business
arm of RDA for the exploitation of marketing of the knowledge and know-how
accumulated within RDA; and
Whereas RDA has conducted research, by Xxxxxxxxx Xxxxxxxx Xxxxxxxx, and
developed know-how in the field of energy utilization by means of Liquid Metal
Magnetohydrodynamic system and has filed patents applications relating to the
said know-how in various countries as more particularly detailed in Schedule A
to this Agreement. (The patent applications and the patents already registered
in the name of RDA will hereunder be referred to as "The Patents") and the
method and know-how therein contained and any future development of same by RDA
shall hereinafter be referred to as - "The Process"); and
Whereas Solmecs is desirous of encouraging further research and development
of the process and its application for commercial and industrial use and to
realize the commercial and industrial potential of the process; and
Whereas the parties are desirous of entering into arrangements for the sale
and assignment of APRDA to Solmecs of the Patents and Patent Applications and of
RDA's know-how relating to the process, and for the conduct of research in
connection with the process hereafter set forth, and for all the other purposes
hereinafter set out; and
Whereas Solmecs is aware that APRDA has entered into agreements with the
Government of Israel and BSF for the partial financing of the R&D of part of the
process,
NOW THEREFORE, in consideration of the premises and the mutual covenants
and undertakings hereinafter set forth, it is agreed as follows:
1. Preamble and Schedules
1.01 The preamble to this Agreement forms an integral part of
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this Agreement.
1.02 The Schedule attached to this Agreement form an integral part of this
Agreement.
2. Solmecs and its Aims
2.01 APRDA is advised that: -
Solmecs has been formed and registered in the Dutch Antilles as a
limited company. It has also formed a subsidiary in the Netherlands
(Solmecs Netherlands) and is in the process of forming a subsidiary in
Israel (Solmecs Israel). It is agreed that Solmecs will be entitled to
exercise its rights under this Agreement through all or any of its
above mentioned subsidiaries.
2.02 The main objects of Solmecs are to engage in any one or more ways of
the exploitation of the process with a view to bring about the
production of commercial and industrial MHD Generators based on the
process; Solmecs Israel's main object is to bring about the erection
of a pilot liquid metal MHD Generator (LMMG) to be developed in
Israel, and if possible, thereafter, to produce or be engaged in the
production of LMMG in Israel.
3. Government Agreements
3.01 APRDA is advised that Solmecs intends to negotiate with the Ministry
of Industry, Commerce and Tourism and/or with the Ministry of Energy
(hereinafter - "The Ministry") an agreement whereby Solmecs through
RDA will undertake to carry out a research and development program
whilst the Ministry will contribute part of the funds necessary for
the implementation of the program (hereinafter - "The Government
Agreement").
3.02 At the request of Solmecs, RDA will prepare for submission to the
Ministry a comprehensive and detailed research and development program
for the research and development of the process within RDA. The scope
of outlines of such research will be decided by Solmecs and will be
such as will meet the research requirements in the Government
Agreement.
3.03 RDA undertakes to furnish Solmecs and the Ministry with all such
further particulars as may be required by them in
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respect to the R&D program or programs. RDA shall, if so required by
Solmecs, deal directly as best as it can with the Ministry in matters
affecting the allocation of funds or part of them pursuant to the
Government Agreement and at the request of Solmecs it will promptly
and efficiently assist Solmecs to pursue the processing of the said
R&D programs and applications for funds arising therefrom.
4. RDA Services and Coordination thereof
4.01 Solmecs hereby engages the services of RDA to carry out the research
and development work involved in the transformance of the process from
its present stage to a pilot LMMG and RDA hereby undertakes towards
Solmecs that it will carry out the said research and development work
to the best of its ability.
4.02 The said research and development work will be exercised by RDA team
headed by Xxxxxxxxx Xxxxxxxx Xxxxxxxx (hereinafter "The Team").
4.03 Solmecs will appoint a Project Manager and/or such other personnel as
it considers necessary for the advancement of the interests of
Solmecs, including the research and development side of Solmecs'
activities and RDA shall cooperate with the Project Manager and such
other Solmecs personnel.
4.04 In case the Government Agreement is signed, RDA will acquaint itself
with its terms and will assist Solmecs to comply with all the
scientific conditions imposed by the Ministry, in connection with the
R&D programs approved by the Ministry including the reporting to the
Ministry and all other obligations relating to the conduct of the R&D
as are contained in the Government Agreement, and furnish Solmecs with
all interim and other reports, as will be contemplated under the
Government Agreement.
4.05 RDA shall render Solmecs all aid as may be necessary to prepare any
patent applications.
4.06 Within 30 days after expiration of every period of three months from
date of commencement of research hereunder,
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RDA shall furnish the Project Manager with detailed written report of
the work done pursuant thereto, in the said three month period, and a
financial report showing monies disbursed in the said three month
period. If reports, as aforesaid, have been prepared by RDA for the
Ministry, they shall serve also as reports to Solmecs under this
Clause.
4.07 Whenever the Project Manager may consider it advisable, the Project
Manager will meet with the members of the Team to discuss progress of
the research and forthwith thereafter a Minute of such meetings shall
be prepared.
4.08 The first research and development program to be prepared and executed
by RDA shall be for a period of one year thereafter. If further
research is required, the parties will agree on the continuation of
the research.
4.09 RDA undertakes that all research work carried out by it in reference
to the process and all research work to be carried out by it in future
under this Agreement has been performed by it in accordance with
accepted university research standards in the past and will be so
performed by it in future.
4.10 RDA shall keep all contemporary records of research and all financial
records in good and efficient order, and preserve for the benefit of
Solmecs all records and archives relating thereto. Solmecs shall be
entitled to access thereto and copies thereof.
4.11 Subject to the provisions of paragraph 5.07 hereof RDA shall not
during the currency of this Agreement, and while AP is entitled to
Royalties hereunder, perform research or development work in
connection with the process for any party other than Solmecs and the
results of all research or development work carried out by it in
connection with the process are hereby assigned to Solmecs.
5. Patent Applications - Ownership etc.
APRDA covenants and represents as follows:
5.01 That RDA is the sole owner of all right, title and interest in the
Patents and that the subject matters of such Patents
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and Patent Applications do not, as far as it is aware, infringe upon
any other patents heretofore issued.
5.02 That, as far as APRDA is aware, there is no other person, firm or
corporation having any title or interest in the Patents or claiming
title through any other person, firm or corporation, which bar APRDA
from undertaking upon itself its obligations hereunder.
5.03 That subject to the situation described in paragraph 5.06 hereof,
there are no outstanding licenses or agreements of any kind on the
part of APRDA relating to the process or to the manufacture, use or
sale of the process.
5.04 That subject to the provisions of paragraph 5.07 hereof it has full
power to make the assignment and to grant the rights and privileges
herein given.
5.05 That any development or modifications made by RDA to the said Patents
and process and amounting to a substantial improvement shall accrue
for the benefit of Solmecs.
5.06 That RDA has entered into some kind of an arrangement whereby it
appointed representatives to assist RDA in commercializing U.S. Patent
No. 4191901 which is part of the process, in the United States. RDA
hereby assigns to Solmecs all its rights and powers under the said
arrangement, and Solmecs, at its own discretion, will be entitled,
inter alia, to accept or reject any offer brought forward by the said
representatives. Copy of said arrangements was given to Solmecs.
5.07 If at any stage after the discontinuation of research and development
of the process at RDA, Solmecs does not proceed with commercializing
the process, then the rights will remain with, or revert to, as the
case may be, APRDA, and if APRDA later makes commercial use of the
process a way will be found to involve Solmecs, or to reimburse
Solmecs for its investments.
6. Assignment of Rights to the Process
6.01 APRDA hereby grants unto Solmecs the sole right to exploit the
process. Solmecs will exploit the process through manufacturing and/or
licensing others to manufacture products based on the process.
6.02 After a pilot LMMG is built, APRDA will assign and transfer to Solmecs
all title and interest in the Patents and all title and interest in
the Patents and all
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research and development know-how, and all other rights which it may
possess in and to the process and howsoever relating to the process.
APRDA undertakes to execute any and all documents reasonably required
by Solmecs to implement the assignment to Solmecs the sale and
exclusive ownership in and to the Patents and the process know-how.
6.03 In virtue of the aforesaid Solmecs shall have the sole and exclusive
right to the production, marketing, sale and distribution of the
Products, the Patents and the process and/or any other patents filed
pursuant to this Agreement or any renewals or extension for the said
Patents and improvements thereon.
6.04 APRDA hereby covenants and represents that the assignment to Solmecs
of Patents and research and development know-how referred to in this
Agreement, constitutes a full and complete irrevocable assignment and
transfer, as the case may be, of all information, matters, patents and
all other rights which RDA may possess with respect to the process and
that APRDA has the full power to licence, assign and transfer the
same.
6.05 Every intention, process, device or other benefit, including know-how
relating to the process as shall be invented or otherwise accrue in
the course of or pursuant to the research conducted by RDA under this
Agreement, shall be considered part of the process and shall be
assigned to Solmecs. RDA shall assist Solmecs in securing the
registration in favour of Solmecs of Patents and/or other legal
protection for all such inventions, processes, devices, know-how or
other benefits as aforesaid.
7. Infringements.
7.01 In the event any Rights or Patents hereunder shall be infringed,
Solmecs may, at its own expense, prosecute any action necessary to
protect its rights under this Agreement, and any moneys received
through such action shall be retained by Solmecs. APRDA shall, at the
request and cost of Solmecs, furnish Solmecs with such assistance as
it is capable. APRDA will be entitled to receive royalties from
compensation received by Solmecs for loss of income.
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7.02 In the event that any action is commenced against Solmecs which
alleges that the subject of Patents and/or Patent Applications or any
of its improvements included within the scope of this Agreement
infringes the claims of any patent, or is otherwise invalid, Solmecs
shall have the privilege but it shall not be obligated to defend such
action at its expense.
7.03 In the event that Solmecs will be entitled to be compensated by APRDA,
because of damage caused to Solmecs as a result of one or more of
APRDA's representations in paragraphs 5.01 through 5.05 hereof being
incorrect, then such compensation will in no case exceed the total
amounts advanced or paid by Solmecs to APRDA as Royalties pursuant to
this Agreement - without interest, but linked to the U.S. Dollar.
8. Financial Provisions
8.01 Solmecs agrees to finance the research and development program to be
implemented by the Team during the 12 month period starting on June
1st, 1980 and ending on May 31, 1981, in accordance with the budget
attached hereto as Schedule "B" (the yearly budget). Solmecs'
obligation is to finance that part of the budget which is not covered
by government or other funds.
8.02 30 days from the end of every three months' period RDA will furnish
Solmecs with a report, detailing monies spent in accordance with the
budget within the said three months and monies received from the
Government of Israel as grants or otherwise towards the cost of the
research and development of the process. Solmecs will pay to RDA,
within 10 days as of receipt of such report, the excess of the
expenditures over monies received from the Government together with a
sum to cover the salaries for the next month period. Any excess monies
received from the Government over and above expenditures, will be
forwarded toward the expenditures in the next three months.
8.03 All payments made hereunder to RDA, shall be made against accounts
from RDA.
8.04 APRDA is advised that Solmecs intends to perform part of the research
and development program, more particularly
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that involved in the building of the Pilot LMMG outside of the RDA
Laboratory (hereinafter - "The Outside Development"). Solmecs will
bear all expenses involved in the Outside Development.
8.05 Solmecs will pay RDA the sum of $20,000 as an advance payment toward
the payments due to RDA from Solmecs for research for the first three
months period.
8.06 Solmecs intends, but does not oblige itself, to cause grants and
donations from abroad to be granted or donated to RDA. It is agreed
between the parties that such grants and donations, from whatever
source, will be allocated as follows:
25% - will belong to RDA
25% - will be used towards meeting Solmecs's obligations as per
paragraph 8.01 hereof and/or toward covering Solmecs's
activities towards the utilization of the process.
9. Royalties
9.01 In consideration of the sole licensing and assignment to Solmecs of
the Patents and of the research and development know-how, and other
rights in and relating to the process, and in consideration of APRDA's
other undertakings in their Agreement, Solmecs shall pay to RDA or
cause its subsidiaries to pay to RDA an amount equal to three (3%)
percent of the sale price of Solmecs' sales of the LMMG produced by
Solmecs or for Solmecs in accordance with the process and twenty (20%)
percent of Income received by Solmecs, Solmecs Israel and Solmecs
Netherlands from licensing or from allowing firms or bodies at arms'
length outside of Israel to use the process or any part of it.
9.02 "The sale price of Solmecs' Israel sales of LMMG produced in Israel" -
means their actual ex factory price less taxes included in the price
or levied thereon.
9.03 The date for payment of the Royalties based on sales, will be
quarter-annual for amounts received on account of sales during the
past three months. The date for payment of Royalties based on lump
sums for licensing the process abroad will be 30 days as of the
receipt of the Royalties by Solmecs.
9.04 Royalties due to RDA resulting from income from a country where one or
more of the patents is registered will last during the period for
which such patent gives protection to the process in accordance with
the laws of that country. Royalties deriving from countries where
there are no patents registered will be paid during a period of 8
years starting as of the date when the accumulated royalties paid to
RDA in accordance with this Agreement will reach the sum of $250,000
or until the expiration of the patent now registered in Israel,
whichever period is shorter.
10. Equipment
10.01 Whenever equipment is purchased for the purposes of the research they
shall be maintained by RDA in good and serviceable order, the cost of
such maintenance to be part of the research budget and upon
termination of the research all such equipment which is still
serviceable shall be delivered to Solmecs or disposed of on its
instructions.
11. Confidentiality
11.01 APRDA and Solmecs shall maintain in strict confidence all information
not in the public domain disclosed under this Agreement, shall oblige
their employees, both during the period of their employment and
thereafter, to maintain the said information in strict confidence, and
shall take all reasonable steps to enforce the fulfillment of such
obligations by their employees. Solmecs shall be entitled to import to
any assignee or licensee or sub-licensee such information as may
reasonably be required in the circumstances. In any Agreement signed
with a Licensee or Assignee the Agreement shall stipulate that they
shall maintain in strict confidence all information, not in the
public domain, disclosed to them and that they shall take all
reasonable steps to enforce the fulfillment of such obligations by
their employees.
11.02 Articles and the like relating to any research hereunder prepared by
scientists engaged by RDA shall not be published unless previously
approved for publication in writing by Solmecs, but Solmecs shall not
be entitled to withhold such approval unless publication would
prejudice any of Solmecs' rights hereunder.
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12. Non Partnership or Joint Venture
12.01 Nothing in this Agreement shall be deemed to create any relationship
of Partnership, Joint Venture or otherwise between the Parties, it
being expressly agreed and understood that the rights and obligations
between the parties shall be only as specifically set forth herein.
13. Arbitration
13.01 In the event of any differences or dispute between the parties,
arising under this Agreement, such dispute shall be referred to
arbitration under the Israel Law of Arbitration. The Arbitrator shall
be such person as shall be appointed by consent by the President of
RDA and the Chairman or failing him the Managing Director for the time
being of Solmecs, and his award or decision shall be final and not
subject to appeal or review.
14. Law
14.01 This Agreement shall be governed by the Laws of the State of Israel.
15. Stamp Duty
15.01 Solmecs will bear all stamp duties due on this Agreement.
16. Addresses
16.01 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 in Israel shall be
deemed received within ten (10) days of dispatch of such notice.
APRDA - Xxx Xxxxxx University, Beer Sheva, Israel
Solmecs - Handelskade 8, Curacao, Dutch Antilles.
IN WITNESS WHEREOF, the parties hereto have hereunto set their signatures
on the date first above appearing.
[UNINTELLIGBLE] /s/ Xxxxx Xxxxxxxxx
---------------------------------- --------------------------------
XXX XXXXXX UNIVERSITY OF THE NEGEV SOLMECS CORPORATION, N.V.
/s/ X. Xxxxxxxxx
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ADVANCED PRODUCTS BEER SHEVA LTD.
SCHEDULE 'A'
Patent Applications and Patents registered in the name of RDA.
1. USA Patent No. 4,191,901 granted June 1979
2. ISRAEL Application No. 57,200 4/5 1979
3. UNIFIED EUROPEAN APPLICATION Applies 2/5 1980
3.1 BRITAIN
.0 XXXXXX
.0 XXXXXXX
.4 SWEDEN
.5 HOLLAND
.0 XXXXXXXXXXX
.0 XXXXX
.8 AUSTRIA
.0 XXXXXXX
.00 XXXXXXXXX
4. CANADA
5. SOUTH AFRICA
6. AUSTRALIA
7. BRAZIL
8. MEXICO
9. JAPAN
AGREEMENT
Budget for SOLMECS' contribution to R&D costs of APRDA within laboratory.
1. BUDGET ($,USA)
1st Quarter
ITEM PER ANNUM 1/6-31/8/80
.1.1 Salaries 52,000 13,000
.1.2 Overhead loading (see 2.4) 17,333 4,333
.2 Materials and equipment 55,000 13,750
.3 Travel expenses 5,000 1,250
.4 Sundries 4,000 1,000
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Subtotal 133,333 33,333
.5 Less Grants due:
.5.1 Ministry Of Energy* 63,000
.5.2 Binational Foundation 33,000
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Subtotal deduction of grants -96,000 -24,000
---------------------------
Net Budget 37,333 9,333
.6 ADVANCES (1st Quarter only)
.6.1 *Against future receipt of Ministry of Energy funds 10,000
SUM TO BE TRANSFERED TO APRDA WITHIN 7 DAYS
OF AGREEMENT DATE $19,333
.6.2 Against refurbishment of laboratory extension
Cheque 144538 handed to Xx. Xxxxxx 30/5/80 for
a/c 5507249 within Mechanical Eng. Dept. to be
credited to SOLMECS from MOE funds $ 4,500
.7 Disbursed on extension of patent cover 7,000
Other expenses incured/committed 12,500
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TOTAL SOLMECS COMMITTED FUNDS AS AT AGREEMENT $43,333
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2. NOTES
.1 The budget is intended to cover costs incurred by APRDA directly
related to the development of the system as outlined in Para. 4 of the
Agreement.
.2 The sum stated are estimates and will therefore be revised by mutual
agreement in the light of actual expenditures reported quarterly by
APRDA to SOLMECS (8.02)
.3 'Salaries' is taken to mean that proportion of salaries paid by the
University or the RDA that relates to work carried out on the
development of the system and excludes that proportion that relates to
teaching or other responsibilities of the 'team' not directly related
to the project.
.4 An overhead 'loading' of 33.33% will be added to the salaries as
defined in 2.3.
.5 SOLMECS agrees to accept retroactive salary increases implemented by
APRDA.
.6 No overhead 'loading' will be applied to materials and equipment if
handled by SOLMECS.
