EXHIBIT 10.9
TECHNOLOGY DEVELOPMENT AGREEMENT
This Technology Development Agreement is made as of the 14th day of December,
1998, by and between Medis-El LTD., an Israeli Corporation, (hereafter
"Medis-El," which term shall include all of Medis-El's related companies) and
The Coca-Cola Company, a Delaware Corporation, ("TCCC").
RECITALS
TCCC and Medis-El each have continuing programs to develop and commercialize
new technologies, and desire, as they may agree from time-to-time, to work
together to apply some of these technologies to the Beverage Field (defined
below in Section 2.3.1).
In particular, Medis-El is the owner or licensee of various technologies
having application to the Beverage Field, including technologies relating to
stirling cycle engines, toroidal compressors, and fuel cells. TCCC desires to
assist in the development of the stirling cycle engine, and to have the first
right to obtain, in connection with the Beverage Field, exclusive rights to
the other technologies, and to new technologies of Medis-El.
TCCC and Medis-El desire to set forth their agreement with respect to
Medis-El's technologies that may apply to the Beverage Field.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. NEW TECHNOLOGY
1.1 PERIODIC MEETINGS
Recognizing that both parties will benefit from a close working
relationship, TCCC and Medis-El will periodically meet (in-person
or electronically, with the frequency to be agreed upon) to discuss
new technology developed by Medis-El that may apply to the Beverage
Field. Medis-El will disclose such technologies to TCCC before it
discloses them to others for use in the Beverage Field.
1.2 RIGHTS TO NEW TECHNOLOGY
If Medis-El decides to develop or make available technology having
application to the Beverage Field, then TCCC shall have a right of
first refusal to obtain exclusive rights to use such technology in the
Beverage Field, on the best terms and conditions offered by Medis-El.
TCCC shall have a reasonable period of time to notify Medis-El if it is
interested in the technology. A
reasonable period of time is targeted at three months, but may be longer
depending on the maturity and complexity of the technology. If TCCC is
interested, then Medis-El and TCCC will negotiate an appropriate
agreement.
2. DEVELOPMENT OF STIRLING CYCLE ENGINE
2.1 DEVELOPMENT
Medis-El has developed certain technology for a stirling cycle engine.
TCCC desires to assist in further development of Medis-El's stirling
cycle engine, for use in the Beverage Field, according to the attached
development plan (Exhibit A). Throughout the development effort, the
parties will openly discuss progress of the work and any issues that
arise, and discuss these issues reasonably as soon as they arise. TCCC
may choose, at any time, to discontinue its development efforts on
this development project, with no further obligation or liability
hereunder. If TCCC so chooses, it will be deemed to have notified
Medis-El that it is not interested in obtaining exclusive rights to
the stirling cycle technology pursuant to Section 1.2.
2.2 INTELLECTUAL PROPERTY
2.2.1 OWNERSHIP OF PRIOR INVENTIONS
Any inventions or technology made or developed, or patent
applications and patents filed or owned by or licensed to a party
hereto, prior to the effective date of this Agreement shall continue
to belong to such party.
2.2.2 OWNERSHIP OF SOLELY MADE INVENTIONS
All patent rights to any inventions or technology made solely by
either party shall vest in and be the property of the party that
made it.
2.2.3 OWNERSHIP OF JOINTLY MADE INVENTIONS
If any inventions or technology are jointly made by Medis-El and
TCCC, then Medis-El shall own the patent rights, but TCCC has a
royalty-free, fully paid-up, perpetual, world-wide, irrevocable,
non-exclusive license under any resulting patents on such inventions
or technology to make, have made, use, sell, import, and sublicense
products to the extent covered by such patents, but only for TCCC
and the Coca-Cola system and only in the Beverage Field. This
license shall not be construed as a license to Medis-El's solely
made inventions or technology. Furthermore, for
such jointly-made inventions or technology, the parties will meet to
determine a royalty to TCCC for sales by or licensed by Medis-El,
of any products covered by such resulting patents. Such royalty is
to be in the same proportion to the total royalty received by
Medis-El on the product as the relative contribution of the jointly-
made invention is to other royalty-bearing inventions in the product.
2.2.4 ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
Medis-El will take reasonable efforts to obtain, maintain, and
enforce intellectual property rights covering the stirling cycle
engine developed hereunder.
2.3 EXCLUSIVITY AND CONTINUING RIGHTS
2.3.1 EXCLUSIVITY
Medis-El will not make, have made, use or sell, or license others
to do the same, directly or indirectly, any stirling cycle engine
for use in connection with the Beverage Field, except for and to
TCCC and its designees (as designated by TCCC in writing), subject
to the conditions below. The "Beverage Field" includes all uses in
connection with the marketing, selling, presentation, or
distribution of beverages, including, without limitation, uses in
vending machines, coolers, and fountain dispensing equipment,
(post-mix and pre-mix), including for commercial, office, and home
use, but not including refrigerators (which does not include
fountain dispensers) for home or office refrigeration not intended
for the sale of beverages.
The exclusivity of the foregoing paragraph applies (1) during the
carrying out of the development plan, and (2) then, if TCCC funds,
in its sole discretion, $500,000.00 worth of manufacturing tooling
for the stirling cycle engine for use in the Beverage Field (to be
covered by the attached Bailment Agreement and subject to a
recoupment fee for TCCC to be added to the cost of units made on
the tooling, regardless of whether exclusivity is continued), for
the following periods:
Two (2) years after first commercialization (not field testing) of
the stirling cycle engine in the Beverage Field; and
Yearly thereafter, for a total of 10 years (years three through
ten) after first commercialization, if TCCC or its designees
purchase at least the following amounts (these amounts are
conditions of exclusivity, not commitments to purchase):
Year 3 50,000
Year 4 100,000
Year 5 100,000
Year 6 200,000
Year 7 200,000
Year 8 300,000
Year 9 500,000
Year 10 500,000
2.3.2 TCCC'S CONTINUING RIGHTS TO STIRLING TECHNOLOGY
In no event will Medis-El grant another a license or any rights that
restrict or disadvantage TCCC's and its designees' ability to
purchase Medis-El's stirling cycle engines for the Beverage Field,
and TCCC and its designees will always have the right to purchase
Medis-El's stirling cycle engines for the Beverage Field. While
exclusivity is in effect, TCCC and its designees shall have the
first call on manufacturing capacity. Furthermore, if TCCC's
exclusivity lapses, TCCC and its designees will have, through
year 10, the first call on manufacturing capacity for uses in the
Beverage Field.
2.4. THIRD-PARTY MANUFACTURERS AND DUE DILIGENCE
2.4.1 THIRD-PARTY MANUFACTURERS
If TCCC chooses to move forward with tooling funding as provided in
Section 2.3 above and advises Medis-El, Medis-El will grant
manufacturing licenses at terms acceptable to Medis-El in its sole
discretion, and, once Medis-El reaches terms with a manufacturer at
the terms as provided below, TCCC will then release such funding. If
Medis-El is not able to reach terms with a third party
manufacturer, TCCC will not fund tooling in the event that TCCC had
decided to fund tooling. Medis-El will ensure that any third-party
licenses are limited in accordance with TCCCs exclusive license
rights as provided herein. Furthermore, Medis-El will require that
third-party manufacturers sell to TCCC and its designees, and that
such sales will be on terms and conditions, including price and
delivery scheduling, that are at least as favorable (from the
standpoint of the buyer) as the third-party manufacturer offers to
others. Furthermore, Medis-El and any third party manufacturer will
provide commercial warranties on the products, including warranties
of quality and against intellectual property infringement claims,
and indemnification against third party claims of personal injury
and intellectual property infringement.
Medis-El will provide, to any third-party manufacturers, product
designs, manufacturing plans, and ongoing engineering support for
the product and
its manufacture, as well as appropriate de-bugging support of
production. Furthermore, Medis-El will provide engineering support
for on-going improvement to the product design and its manufacture,
throughout the life of the product.
Medis-El will require that any manufacturers implement
state-of-the-art quality control management processes.
2.4.2 DUE DILIGENCE
Medis-El will use good faith efforts to have the stirling cycle
engine commercialized in products suitable for the Beverage Field,
as soon as reasonably possible, and throughout the world.
2.5 WARRANTY OF RIGHT TO GRANT RIGHTS
Medis-El warrants to TCCC that Medis-El has the full right and power to
grant the rights referred to in this Agreement and to enter into this
Agreement.
2.6 WARRANTY OF NON-INFRINGEMENT
Medis-El warrants that the stirling cycle engine developed hereunder will
not infringe any patent, copyright, or other proprietary right of any
other person.
3. COMPENSATION
TCCC shall pay Medis'Inc. (designated by Medis-El as its agent for receipt of
funds) $100,000.00 within 30 days of the signing of this Agreement for the
rights granted in Section 1 above.
TCCC shall pay Medis'Inc. (designated by Medis-El as its agent for receipt of
funds) $100,000.00 within 30 days of the signing of this Agreement to assist
in the development of the stirling cycle engine as provided in Section 2
above. During the carrying out of the development plan, TCCC will consider
paying an additional $50,000.00 to assist in development, to be paid in
TCCC's discretion, depending upon the progress of the project.
Neither party will be liable hereunder to the other for the party's indirect,
special, or consequential damages.
4. SECRECY
4.1. SECRECY PROVISION
During the term of this Agreement, Medis-El and TCCC may exchange
information of a confidential or proprietary nature that the
disclosing party does not want published or disclosed to third
parties. Medis-El and TCCC agree that all confidential information
which has been disclosed in writing by one party and received by
the other party, or which has been confidentially disclosed orally
shall be held in confidence for a term of five (5) years from the
date of the disclosure, and shall not be disclosed to a third party
without the prior written consent of the disclosing party.
4.2. EXCEPTIONS
Neither party shall be obligated to maintain in confidence:
4.2.1 Information which is, or subsequently may become within
the knowledge of the public generally, through no fault of
the receiving party;
4.2.2 Information which the receiving party can show was
previously known to it at the time of receipt;
4.2.3 Information which may subsequently be obtained lawfully from
a third party who has obtained the information through no
fault of the receiving party; or
4.2.4 Information which the receiving party can establish was
subsequently developed by the receiving party independently
of the disclosure.
5. PUBLICITY
Medis-El shall not publish, reveal, or use, without TCCC's prior written
approval, this Agreement, its terms, or the fact that it has been
entered, or any advertising, sales, promotion or publicity material
relating to this Agreement, services, equipment, materials, products,
or reports furnished by Medis-El wherein in any of the foregoing the
names of TCCC, its subsidiaries, affiliates or authorized bottlers are
mentioned or their identity implied.
6. PATENT AND TRADEMARK RIGHTS
Other than as expressly provided in this Agreement, nothing contained
nor resulting from this Agreement shall give either party any rights in
the patents or trademarks of the other party.
7. TERMINATION AND SURVIVAL
7.1. TERMINATION FOR BREACH
This Agreement may be terminated at any time by either party in
the event that the other party has breached this Agreement, by
giving the breaching party thirty (30) days notice in writing of
the intention to terminate and the reasons therefor. Should the
breaching party cure such breach and perform its obligation during
the notice period, the Agreement shall continue in full force and
effect.
7.2 SURVIVAL
Sections 2.2, 2.3.2, 2.4, 2.5, 2.6, 4, 5, 6, 9, 10, 11, 12, and 13 will
survive the expiration or earlier termination of this Agreement.
8. NOTICE
All notice and correspondence shall be sent by either party to the other
in all matters dealing with this Agreement to the following addresses:
If to TCCC:
The Coca-Cola Company
Xxx Xxxx-Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Director, Engineering Development Function
with a copy by facsimile to the Senior Patent and Technology Counsel of
The Coca-Cola Company, at (000) 000-0000.
If to Medis-El, to:
Medis El LTD.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Chairman of the Board
with a copy by facsimile to the project manager at Medis-El LTD., in
Jerusalem, at 972-5870454.
or any other address provided written notice is given to the other party.
9. INDEPENDENT CONTRACTOR
Medis-El shall be deemed to be an independent contractor, and neither TCCC
nor Medis-El shall have the authority to contract on the other's behalf.
10. ENTIRE AGREEMENT
The Agreement constitutes the entire agreement between TCCC and Medis-El.
This Agreement supersedes all prior oral or written agreements between TCCC
and Medis-El. This Agreement shall be binding upon and inure to the benefit
of Medis-El and TCCC and their respective successors and permitted assigns.
11. APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the State of
Georgia and appliable laws of the United States, regardless of any other laws
chosen by choice-of-law rules. Any disputes arising under this Agreement
shall be brought exclusively in the federal or state courts located in the
State of Georgia, and the parties consent to the jurisdiction of such courts.
12. AMENDMENT
No amendment to the Agreement shall be binding unless it is in writing and
signed by both parties.
13. ASSIGNMENT
Neither party shall assign or transfer this Agreement or any interest herein
without prior written consent of the other party, and any unauthorized
assignment shall be null and void, except that TCCC may assign this Agreement
to a wholly owned subsidiary after notice to Medis-El.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate effective as of the date first above written.
THE COCA-COLA COMPANY MEDIS-EL LTD.
By: [Illegible] By: /s/ Xxxxxx X. Xxxxxx
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Name: [Illegible] Name: Xxxxxx X. Xxxxxx
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Title: [Illegible] Title: Chairman of the Board
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Exhibit A
DEVELOPMENT PLAN
This Development Plan is incorporated by reference into the Agreement to
which it is attached. All dates below are target dates, it being understood
that actual completion may be before or after the targets. Medis-El will,
however, use its best efforts to perform the development to reach the target
dates.
PHASE I - DEVELOPMENT OF 100 WATT PROTOTYPES
Starting at the execution of the Agreement, Medis-El will develop two 65 watt
prototype stirling cycle engine prototypes, to be completed by May 1999. TCCC
will own these physical units (but not any Medis-El intellectual property in
the units), and will analyze them in its, or a third-party laboratory. The
analysis will measure the units against various criteria to be established
between the parties, relating to performance, cost (manufacturing and total)
scalability, and reliability, among others. The parties agree to share
information on such criteria.
During the same period, TCCC and Medis-El will work together to determine the
size of the units that will be needed for TCCC's applications in coolers and
vending machines, and Medis-El will begin development of these larger units.
PHASE II - DEVELOPMENT OF LARGER UNITS
Once prototypes of Phase I meet the requirements of TCCC and Medis-El, then
Medis-El will complete development of the larger units suitable for TCCC's
applications in coolers and vending machines. It is estimated that it will
take approximately three months to make prototypes of the larger units.
Medis-El will provide TCCC with at least four prototypes of the larger units.
During this same period, Medis-El and TCCC will share information on
projected performance, manufacturing and total costs, scalability, and
reliability, and Medis-El will develop manufacturing processes for the
larger units.
PHASE III - TESTING OF THE LARGER UNITS
Once prototypes are available that are substantially the same as the
projected commercial units, TCCC will test the larger units for up to 7
months to evaluate their performance and reliability, and share the results
with Medis-El. At the end of this testing and evaluation of the data from the
testing, TCCC will make a decision, in its sole discretion, on whether to fund
tooling as provided in the Agreement, to obtain exclusivity in the Beverage
Field. Before TCCC makes such a decision, Medis-El will commit to a
not-to-exceed price for the stirling cycle engines, to facilitate TCCC's
decision.
