AGREEMENT
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made on the 31 of March, 1981
between
THE GOVERNMENT OF ISRAEL, on behalf of the State of Israel, represented by the
Assistant Director-General for Administration of the Ministry of Energy and
infrastructure and the Controller of the said Ministry (hereinafter - the
Government)
of the first part
and
THE BEN-GURION UNIVERSITY OF THE NEGEV (The Research and Development Authority -
RDA) and ADVANCED PRODUCTS BEER SHEVA Ltd. the business arm of the RDA, jointly
and severally (hereinafter - the Ben-Gurion University)
of the second part
and
SOLMECS (Israel) Ltd. and the SOLMECS CORPORATION N.V., jointly and severally
(hereinafter - SOLMECS)
of the third part
WHEREAS The Ben-Gurion University has conducted research and developed
know-how in the field of energy utilization by means of the Liquid
Metal Magnetohydrodynamic (MHD) system (hereinafter - the Research);
and
WHEREAS the Research indicates potential for commercial exploitation,
particularly for the production of commercial and industrial MHD
generators; and
WHEREAS after the stage where US Patent #4,191,901 was applied for, the
Government financed part of the Research costs and has acquired
certain rights to the same under the agreements signed between it and
Ben-Gurion University; and
WHEREAS the purpose of the Government in providing the said financing and in
acquiring the said rights was to ensure that the Israeli economy would
benefit from the results of the Research should the same be
successful; and
WHEREAS the Ben-Gurion University and SOLMECS have come to an understanding
under which SOLMECS would acquire the rights to exploit commercially
the Research in accordance with the provisions of the agreement
attached hereto as Annex A; and
MOE-BGU-SOLMECS Contract, cont. Page 2/4
WHEREAS to give full effect to the provisions of Annex A the rights to be
acquired by SOLMECS include the rights of the Government in the
Research and, therefore, the consent of the Government is necessary so
that the Ben-Gurion University can lawfully enter into Annex A; and
WHEREAS The Ben-Gurion University and Solmecs have asked the Government to
give its consent; and
WHEREAS the Government is agreeable to giving its consent provided the same
would further the said purpose of the Government in participating in
the financing of the Research.
NOW, THEREFORE, the parties agree as follows:
1. The Preamble and all Annexes to this Agreement constitute an integral part
hereof.
2. The Government gives its consent to the Ben-Gurion University entering into
Annex A with SOLMECS and consents that its rights in the Research be
included among those which SOLMECS shall acquire under Annexe A, subject to
the respective undertakings of SOLMECS and the Ben-Gurion University
hereinafter.
3. SOLMECS undertakes:
3.1 to make best efforts in keeping with the sound management of the
entire commercialisation venture for which it is acquiring rights as
per Annex A, to maximise opportunities for Israeli Industry to produce
MHD generators and components thereof and other products based on the
Research should the production of such products become feasible and
commercially viable;
3.2 to build the first prototype of the MHD generator in Israel; the
Government accepts and agrees that certain supplementary research
activities will be sub-contracted to the Argonne National Laboratory
in the U.S., or to other bodies abroad, as it is not feasible to
perform them in Israel;
3.3 to inform the Government, in writing, of the manner in which it
intends to commercialize its rights acquired under Annex A,
particularly as regards the division of production between Israel and
abroad (hereinafter - the Commercial Plan); the Commercial Plan as
envisaged by SOLMECS at the time of the signing of this Agreement is
appended hereto as Annex B; Solmecs shall inform the Government in
writing of substantive changes in Annex B;
3.4 to inform the Government in writing of any production done by or for
Solmecs and of any licences or other production rights granted in
Israel and abroad; the proceeds received by Solmecs on the same shall
be submitted in an annual audited statement.
MOE-BGU-SOLMECS Contract, cont. Page 3/4
4.
4.1 For the purpose of this clause the term "Financial Support" shall mean
- the total amount of money provided by Ben-Gurion University by the
Government for the execution of the Research the nominal sum being
linked to the consumer price index (including fruits and vegetables)
and bearing 4% linked interest until repayment of the Financial
Support in accordance with sub-clause 4.2 hereinafter; the amount of
the Financial Support including linkage and interest till the 31st.
March, 1981 is 645,125.12 Shekels as detailed in Annex C hereto.
4.2.1 The Ben-Gurion University undertakes to pay the Government
sums equal to 1.0% of the Sales Price (as this term is defined
in Annex A) of MHD generators produced by or for SOLMECS and
5% of the income received by SOLMECS from licencing or
otherwise allowing the use of rights acquired under Annex A
(hereinafter - Licencing Income) until repayment of the
Financial Support and thereafter sums equal to 0.3% of the
Sales Price and 2% of the Licencing Income for as long as the
Ben-Gurion University is entitled to receive royalties from
SOLMECS under Annex A;
4.2.2 Payments due to the Government under clause 4.2.1 hereinabove
shall be made within 30 days of the date on which the
Ben-Gurion University is entitled to receive payment from
Solmecs under Annex A;
4.3 The Ben-Gurion University shall make best efforts to verify the sums
upon which payments are due to the Government hereunder;
4.4.1 Solmecs guarantees the payments due to the Government under
clause 4.2.1 hereinabove and shall make payment within 30 days
of Ben-Gurion University being in default of payment;
4.4.2 In the event of default, as aforesaid, the Government shall
take all reasonable actions to receive payment from Solmecs as
guarantor before taking action against the Ben-Gurion
University.
5.1 The representation of the Ben-Gurion University under clauses 5.01,
5.02, 5.03 and 5.04 of Annex A and the compensation undertaking toward
SOLMECS under clause 7.03 thereof shall apply mutatis mutandis to the
Government.
5.2 Should rights to the Research remain with or revert to the Ben-Gurion
University under clause 5.07 of Annex A and should the Ben-Gurion
University not commercialize these rights within a reasonable period,
the Government shall be entitled to acquire the rights with suitable
compensation to be paid to the Ben-Gurion University and SOLMECS
should the Government commercialize the rights.
MOE-BGU-SOLMECS Contract, cont. Page 4/4
6. Disputes under this Agreement between any two or among all parties shall be
referred to Arbitration under the Israeli Law of Arbitration, with a single
arbitrator to be appointed by consent of the Parties to the dispute.
7. This agreement shall be governed by the Law of the State of Israel.
8. Stamp duties in this Agreement shall be borne by Solmecs.
9. The representatives of the Parties for the purpose of this agreement and
the addresses thereof shall be:
The Government The Chief Scientist
Ministry of Energy and Infrastructure
000, Xxxxx Xx. Xxxxxxxxx
Xxx-Xxxxxx University The General Manager
Advanced Products Beer Sheva Ltd.
P.O.B. 1023
Beer-Sheve 84 110
SOLMECS The Managing Director
SOLMECS (Israel) Ltd.
00, Xxxxx Xxxxxx
Xxxxxxxxx 00 226
In Witness Whereof, the Parties hereto have set their signature on the date
first above appearing
THE GOVERNMENT SOLMECS BEN-GURION UNIVERSITY
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/s/ [ILLEGIBLE] /s/ Xxxxx Xxxxxxxxx /s/ X. Xxxxxxxxx
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/s/ [ILLEGIBLE]
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