EXHIBIT 10.10
AGREEMENT
Made and signed on the 17th day of October 1991 in Ramat Gan
between:- The University of Bar-Ilan (hereinafter to be called: "the
University")
ON THE ONE PART
and between:- Israel Aircraft Industry Ltd.
a company registered in Israel
under the number 00-000000-0
(hereinafter to be called: "IAI")
ON THE SECOND PART
Whereas The University has declared that it had for a long time invested
considerable monetary resources in the research of diagnosing
cancer, and has developed an instrument, know-how, products and
processes in the field of cell scanning for the early diagnosis of
cancer, as well medical diagnostics and other biological tests, in
a system presently known as "Cellscan", but has not yet finalized
the development of the system. The University has declared that it
is the owner of all rights in the system, and holds patents
pertaining to it (the list of patents is detailed in Appendix "A"
to this agreement, which constitutes an integral part thereof).
And Whereas IAI had declared that it had invested considerable monetary
resources in the above mentioned development, and has constructed
the infrastructure necessary for further development and serial
manufacture, and it has expressed its willingness to invest
further resources from its own and for exterior sources.
And Whereas The parties have declared that it is their wish to cooperate in
the continuing development of the Cellscan, with the aim of
completing the development, manufacture and marketing of the
system, all this as per the conditions of this agreement.
And Whereas An agreement to cooperate in the development of the Cellscan has
been signed between the parties on the 12th of February 1989
(Hereinafter: "the Original Agreement").
And Whereas The parties wish to end the Original Agreement, and sign a new
agreement, as detailed hereabove.
IT HAS BEEN AGREED AND CONDITIONED BETWEEN THE PARTIES AS FOLLOWS:
1. GENERAL
1.1 The preamble to this agreement, the declarations therein and the
Appendices thereto are an integral part of the agreement, and shall
be construed as a condition thereof.
1.2 The headings of the paragraphs in the agreement are for the purpose
of convenience only, and shall be not be used for its
interpretation.
2. DEFINITIONS
2.1 "CELLSCAN SYSTEM"
The system includes the instrument known as the "Cellscan",
including all or part of its derivatives and components as well the
testing kits used by the "Cellscan" for performing blood tests for
the purpose of diagnosing malignant diseases, their classification
and repeat testing at the level of the individual cell at the time
of its exposure to a series of manipulations, as well as their
derivatives, which were and will be developed in the course of
development of the "Cellscan" system.
The system also includes assemblies bearing blood cells, technology,
mechanical and dynamic components, light sources, optical
components, electronic components including a computer used as
controller of the tests analyzing their results in real time, all of
which are integrated in the system. It also includes irritants,
by-products and exhaustible support materials needed for the tests,
which were and will be development in the course of research and
development of the "Cellscan" system, for the purpose of their use
in the system.
2.2 SALES OF THE "CELLSCAN"
All income deriving from the sale, or from charges for use or lease
of the "Cellscan" system, or from sale of spare parts and training
and maintenance services of the "Cellscan" received by IAI, or by
the joint venture, or by any entity in their direct control or the
control of their subsidiaries, or deriving from the sale of the
"Cellscan" system by entities granted a license for production and
sale of the "Cellscan" systems produced by said licensee according
to the license, except for sales of the "Cellscan" systems by
licensee to IAI or to the joint venture, for resale.
And after deduction of:-
2.2.1. Commercial rebates and returns from customers.
2.2.2. Sales commissions.
2.2.3. Reasonable transport and transport insurance, packing and
shipping expenses.
2.2.4. Customs and sales taxes, including V.A.T.
included in the above receipts.
In order to avoid doubts, it is agreed and declared hereby, the the
amounts paid to IAI or to the joint venture for the manufacturing
license by licensees shall not be included in the sales of the
"Cellscan" systems. Sales by distributors only, who
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purchase the "Cellscan" systems for resale, and do not produce such
systems, shall also not be included in the sales.
2.3 "Quarter" A period of three months' beginning on the 1st of January,
the 1st of April, the 1st of July or the 1st of October.
2.4 "Year" A calendar year, beginning of the 1st of January and ending
on the 31st of December.
2.5 "Dollar" United States Dollar.
2.6 "Joint-Venture" A corporation founded by IAI, owned solely by IAI or
together with additional factors, which will deal with the
development of the "Cellscan" system, the manufacture and sale of
serial products made on the basis of the know-how and Patents.
2.7 "IAI or Joint Venture" Each time the work "IAI" or "Joint Venture"
appears in this agreement, it shall be construed to mean IAI - as
long as the Joint Venture has not been founded, and it shall be
construed to mean the "joint Venture" after it has been founded.
2.8 "Patents" The patents, and applications for registration of patents,
detailed in Appendix "A" to this agreement, which constitutes an
integral part thereof.
2.9.1. "Specific Equipment" - The equipment detailed in Appendix "B"1 to
this agreement, which constitutes an integral part thereof.
2.9.2. "Universal Equipment" - The equipment detailed in Appendix "B"2 to
this agreement, which constitutes an integral part thereof.
2.10 "Know-How" All the information pertaining to the "Cellscan" system,
which has been developed, or acquired during the development of the
"Cellscan" system by the University, from the day it began
researching this subject, through signature of the Original
Agreement, and up to the day of transfer of the know-how to IAI or
to the Joint Venture as per instructions of this agreement.
3. ESSENCE OF THE ALLIANCE
3.1 IAI or the Joint Venture shall deal in the development of the
"Cellscan" system, in manufacture and marketing of serial products
which will be manufactured on the basis of the know how and patents.
In remuneration for the rights granted to the University by this
agreement, the University hereby grants IAI or the Joint Venture
universal, final sole license to use the patents, the know how and
specific equipment, as construed by this agreement, and to develop,
manufacture, market and sell all the products and/or parts which
will be developed and/or manufactured on the basis and/or by use of
the patents, the know how and specific equipment in their entirety
or in part. IAI
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or the Joint Venture are also granted rights in the universal
equipment as detailed in para 6.2.2.
3.2 IAI's or the Joint Venture's undertakings are given against the
University's declaration as detailed in paras 14.1 and 14.2
hereinafter.
To avoid doubts, the University declares that it only is responsible
for payment of amounts due to NPCD according to its declaration, for
its past investments in the development of the "Cellscan" in the
University.
3.3 The academic good name of the University will be ensured and guarded
an detailed in para 7 hereinafter.
4. THE JOINT VENTURE
4.1 In case the Joint Venture is founded, IAI shall be responsible
toward the University for fulfillment of all the Joint Venture's
obligations toward the University, deriving from this agreement.
Should additional investors join the Joint Venture, IAI shall have
the right to exchange, subject to the University's prior written
agreement, part of its responsibilities by the responsibility of
such investors. The University will not withhold its agreement
without reasonable grounds. An offer from an investor with inferior
financial ability, or an offer from an investor who refuses to take
part of IAI's or the Joint Venture's obligations toward the
University upon himself, will be construed as reasonable grounds for
the University's refusal to the exchange of responsibility.
4.2 In case the Joint Venture is founded, IAI undertakes to cause that
such Joint Venture take upon itself the obligations toward the
University, set out in this agreement, and that the University take
upon itself the obligations toward the Joint Venture, as imposed by
this agreement.
4.3 In case of change in ownership rights of the Joint Venture,
instructions of para 11 hereinafter shall not apply.
5. JOINT VENTURE INVESTMENTS
5.1
5.1.1. IAI or the Joint Venture undertake to purchase from the
University, or from its subsidiary company, who shall have
at its disposal the researchers, the infrastructure and
everything needed to execute R&D tasks as if executed by
the University itself (hereinafter: "the Subsidiary
Company), Research and Development Services for the
"Cellscan" according to a research plan to be proposed by
the Chief Scientist as set out in para 7.1 (hereinafter: "R
& D Services") and which shall be confirmed by IAI or by
the Joint Venture before the beginning of the research year
1991-1992 (1.1.1991-31.12.1992), for a sum of not less than
$250,000 (two hundred and fifty thousand dollars) per
annum. IAI or the Joint Venture shall not refuse to confirm
the
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research plan unless reasonable grounds exist. Reasonable
grounds shall be deemed to exist, among others, if the plan
includes activities which are not compatible with the needs
of the "Cellscan" plan, or which includes activities
deviating from the amounts appearing in paras 5.1 and 5.2.
The University is entitled to refuse execution of R&D
services which are not within the scope of its scientific
activities.
It is declares and agree that the above mentioned sum
include overhead expenses of 25%.
It is agreed that the research plan also include the
possibility of use of the equipment serving the "Cellscan"
program, held by IAI or by the Joint Venture by University
scientists without remuneration, for the purpose of
executing R&D Services, this upon prior coordination with
IAI or the Joint Venture.
5.1.2. Payments according to paras 5.1 and 5.2 above shall be made
monthly, at the end of each month for the month before, as
an advance payment of 8.33% of the annual budget.
Payments shall be made against invoices and a report on the
course of research during the relevant period.
At the end of a quarter, the accounting for actual
financial activities during the relevant period, shall be
made.
The accounting according to this paragraph shall be made
according to the representative rate of exchange of the
dollar on the day of actual payment. Should a
representative rate of exchange not be published on the day
of actual payment, accounting will be made according to the
representative rate of exchange of the dollar published on
the earliest date thereafter.
5.1.3. The sum registered in the University's account books as
expended for the "Cellscan" project during 1991, shall be
paid to the University for the year 1991. Should IAI, or
the Joint Venture claim that part of these sums were not
spend on the "Cellscan" project, the parties shall
negotiate, and arrive at an agreement on how to deal with
such sums, subject only to the condition, that the general
amount transferred to the University for R&D Services in
1991, shall not be more than $250,000.
The entire amount due to the University for 1991 according
to and up to the date of signature of this agreement, will
be paid by IAI to the University within 30 days from the
date of signature of this agreement, and this in spite of
the fact that the research plan has not yet been confirmed
as mentioned in para 5.1.1 above.
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5.1.4. The proposed budget for the research plan shall include the
activities ongoing in the University only, including
materials and services needed for those activities. Upon
determination of the Chief Scientist, the proposed budged
will also include activities to be executed outside the
university.
The University shall have the right, within the framework
of the budget proposal, to claim a relative part of its
expenses on universal equipment maintenance, according to
the use of that equipment by IAI or the Joint Venture in
view of the research plan approved. Such expenses shall be
calculated by the University according to customary
accounting practices.
During the period in which the University receives the
research budget mentioned in para 5.1 and 5.2 of the
agreement, it shall maintain the specific equipment during
up to 10 maintenance hours per month. The above mentioned
10 maintenance hours shall be included in the budget of the
confirmed research plan. Expenses for materials and spare
parts for the above mentioned maintenance will be financed
by IAI or by the Joint Venture.
Any expense for service, work, supply of materials etc.,
which is not included in the research budget to be
approved, and which will be claimed by IAI or by the Joint
Venture, will be financed by IAI or by the Joint Venture.
5.2 IAI or the Joint Venture further undertake, that during 1993-1994
(1.1.1993 - 31.12.1994), they will purchase from the University, or
from the Subsidiary Company, R&D services confirmed as per above,
for an amount which will not be less that $350,000 (three hundred
and fifty thousand dollars) per annum. It is declared and agreed,
that no overhead expenses shall be deducted from the additional
$100,000 (one hundred thousand dollars) which will be invested by
IAI or by the Joint Venture in each of the years 1993-1994.
5.3 IAI and/or the Joint Venture undertake to invest and bear expenses
in 1991-1994, amounting to not less than $4,000,000 (four million
dollars), in research, development, manufacture and marketing to the
"Cellscan" system. These expenses to be made according to details
appearing in Appendix "C" attached to this agreement, and which
constitutes an integral part thereof. It is declared and agreed that
the above mentioned amount includes the amounts detailed in, and
covers IAI's or the Joint Venture's undertakings according to paras
5.1 and 5.2 above.
5.4 IAI declares that investments and expenses for research,
development, manufacture and marketing of the "Cellscan" system as
mentioned in para 5.3 above, together with investments and expenses
made by IAI for this system in the past, will reach the amount of
$5,000,000 (five million dollars).
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5.5 Each software file, and any other means, containing the information,
know-how and patents produced and/or purchased by the University
within the framework of R&D services, will be transferred to IAI or
to the Joint Venture on a current basis immediately upon their
production and/or purchase, to be used solely by them permanently in
the entire world, at no further remuneration. IAI or the Joint
Venture shall have the right to make any use they consider fit of
the information, the know-how and the patents transferred to them,
including giving license of use to others. The University shall not
make any use of the information, the know- how and patens produced
or purchased by it as mentioned above, except of use for the purpose
of executing R&D orders, and it shall not transfer the information,
know how and patents to any other body.
5.6 The University undertakes to act according to the research plan
mentioned in paras 5.1 and 5.2 above, and should R&D services be
performed by the Subsidiary Company, the University is responsible
that the Subsidiary Company acts according to the research plan at
the same standard as if performed by the University itself.
The University/Subsidiary Company shall report on the advance of
research and its termination, according to requirements of IAI or
the Joint Venture.
6. RIGHT OF USE OF THE KNOW-HOW, THE PATENTS AND THE EQUIPMENT
6.1 IAI or the Joint Venture are hereby granted the rights in the
know-how, the patents and the equipment as detailed in para 3.1 and
para 5.5 above.
6.2 Within 30 days from the signature of this agreement, the University
shall transfer to IAI or to the Joint Venture the specific
equipment, and any document, software and other mean containing the
know-how and the patents.
6.2.1.During the period it receives payment for R&D services as mentioned
in paras 5.1 and 5.2 above, the University shall maintain the
universal equipment in a serviceable condition, fit for execution of
the work connected with the "Cellscan", which is to be executed by
the University or by IAI or the Joint Venture.
6.2.2.The University hereby grants during that period, and upon prior
coordination with the University, the right of use, at not cost, of
the universal equipment to IAI or to the Joint Venture, for
execution of work connected with the "Cellscan".
6.3 IAI or the Joint Venture shall have the right to grant a sub-license
to other bodies for the purpose of manufacture and/or sale of the
"Cellscan" system, on condition only that the terms of such licenses
granted as above, will be subject to the rights of the University
toward IAI or the Joint Venture. In its agreement with those granted
the sub-license for production (hereinafter: "Grantee"), IAI or the
Joint Venture shall include an instruction granting it the right to
assign its rights only to the University according to the agreement.
At their discretion, IAI or the Joint Venture are entitled to submit
the identity of the Grantee for the University's approval. The
University shall not withhold its approval unless reasonable grounds
exist.
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If IAI did not submit the identity of the Grantee of the License to
the University for approval, or if the University did not approve
the Identity of the Grantee, than in case of cancellation of this
agreement according to instruction of para 12 hereinafter, the
rights of the Grantee shall expire not later that 12 months from the
date of cancellation as mentioned above. Did the University approve
the identity of Grantee, that at the time of cancellation of this
agreement as mentioned in para 12 hereinafter, the rights of IAI or
the Joint Venture according to the license agreement shall be
assigned to the University.
The granting of a sub-license is not to be construed as release of
IAI or of the Joint Venture from any of its undertakings toward the
University according to this agreement.
6.4 IAI or the Joint Venture has sole discretion in everything connected
with management of the business activities in connection with
development, manufacture, marketing and commercialization of the
"Cellscan" system. Nothing mentioned above is to be construed as
injuring the instructions of paras 7.1 - 7.4 hereafter.
6.5 Without derogating the generality of the above mentioned, IAI or the
Joint Venture shall be granted sole and independent discretion in
the following subjects:
6.5.1. Determining the kind of Joint Venture and the way of its
management.
6.5.2. Determining the identity of the parties involved in the
Joint Venture and relations between them.
6.5.3. Preparing the long term, and the short term business action
plan of the Joint Venture.
6.5.4. The ways of investing the Joint Venture monies, the purpose
and scope of investment.
6.5.5. Division of profits of the Joint Venture, subject to the
mentioned in para 8 hereinafter.
6.5.6. Determination of marketing strategy, marketing means,
commercial advertising (subject to the mentioned in para
7.4 hereinafter), and any other commercial activity.
6.5.7. The ways of use of know-how.
6.5.8. Choice of intended clients for the "Cellscan" system.
6.5.9. Connections with Grantees - subject to the mentioned in
paras 6.3 and 12.4 of this agreement.
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7. INTERRELATIONSHIP BETWEEN THE UNIVERSITY AND IAI OR THE JOINT VENTURE
7.1 The head of the research group and the chief scientist for
researches connected with the "Cellscan" activity will be nominated
by the University, with the agreement of IAI or the Joint Venture.
It is agreed that a scientist who can ensure an efficient and
advanced high grade research plan, able to exploit the University's
and IAI's or the Joint Venture's resources for the scientific and
business advancement of the "Cellscan" project, shall be nominated
as the head of the group mentioned above.
7.2 At the meetings of the Board of Directors of IAI or of the Joint
Venture (hereinafter: "the Board of Directors"), at which subjects
connected to the "Cellscan" project will be discussed, an
appropriate representative from the University will take part as an
Observer.
7.3 An Advisory Committee will be established next to the Board of
Directors. The head of the research group and the chief scientist
will head the committee. The committee will have six member in all:
three nominated by the University and three by IAI or the Joint
Venture. The parties shall nominate properly qualified
representatives. The University shall ensure that its
representatives in the advisory committee will not have adverse
interests to those of IAI or the Joint Venture. Representatives in
the committee shall not be entitled to financial remuneration.
7.4 Any academic publication, or a publication which may affect the
scientific good name of the University, shall be made only after
prior full coordination with the University.
7.5 The University's name will be mentioned in any publication
concerning the "Cellscan" and the process of its development, in
such a way as to ensure proper mention of the University's part in
the project, suitable to its academic standing. The names of Xxxx.
Xxxxxxx and Dr. Mordecay Deutsch will be mentioned in any scientific
publication concerning the "Cellscan" and the process of its
development.
7.6 The University undertakes not to take any direct or indirect action,
which may in any way injure IAI's or the Joint Venture's rights
according to para 3.1 of this agreement, and not to aid and abet
directly or indirectly any act which might be construed as aiding
any third party in breached the rights of IAI or the Joint Venture
according to para 3. 1 of this agreement.
7.7 The University undertakes not to compete, by itself or in
cooperation with others, with IAI's or the Joint Venture's
activities concerning the "Cellscan" system, by development,
manufacture, marketing and sale, or through any other commercial
activity whatsoever.
7.8 Near to the founding of the Joint Venture, if the Joint Venture
decides to sell its shares on the stock exchange, and it shall have
representatives of the public, then before recommending nominees for
this office, the Joint Venture shall enable the
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University to point out a recommended representative from the list,
and the Joint Venture shall recommend the same nominee to the
Directors of the stock exchange, on condition that the nominee is
fit to represent the public.
7.9 During the period of this agreement, IAI or the Joint Venture shall
not be entitled to employ directly or indirectly, for the "Cellscan"
purposes, without prior written agreement from the University,
researches who dealt in this field in the University. This
prohibition shall be in force during the researcher's employment by
the University and for 18 additional months after he has stopped
being employed by the University.
8. ROYALTIES
IAI or the Joint Venture shall pay the University royalties from the sale
of the "Cellscan", for twenty years, as detailed hereafter: -
8.1 The University shall be entitled to chose during which year between
1991 - 1995 it shall begin receiving royalties from the sale of the
"Cellscan", subject only that announces its choice not later than 15
days after receipt of the thirst quarterly report an mentioned in
para 10.4 hereinafter, for the year for which the University will
begin receiving royalties. Once the University has announced its
choice, it will not be able to retract its choice. The University's
decision shall be a one-time decision, and payment shall begin from
the year of decision onward.
8.2 During the first 10 years of royalty payments, the University will
receive royalties amounting to 5% of the "Cellscan" sales, as well
as 3% from the sum which a distributor who is not a manufacturer
shall pay IAI or the Joint Venture for distribution rights
(hereinafter: "payment for distribution rights"). These royalties
will be paid at the end of each quarter, within 30 days from end of
quarter.
8.3 If, at the end of any of the first ten years, it becomes clear that
26% of IAI's or the Joint Venture's distributable profits from sales
of the "Cellscan", is an amount higher that the royalties received
by the University according to para 8.2 above during that same year,
the University shall be entitled to demand and to receive that
difference between the two amounts within 30 days from the date of
receipt of a confirmation from a CPA agreed upon by both parties as
set out in para 10.2 hereinafter.
8.4 During the remaining 10 years, during which the University is
entitled to royalties, it shall receive royalties amounting to 2% of
the sale of the "Cellscan" and 2% of "payment for distribution
rights". These royalties shall be paid within 30 days from the end
of each quarter.
9. GRANTS
During the first year in which IAI's or the Joint Venture's profits from
the sales of the "Cellscan" which can be paid to shareholders will rise
over the sum of $300,000 (three hundred thousand dollars) as confirmed by
the CPA of IAI or the Joint Venture, IAI or
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the Joint Venture will pay the University the amount of $100,000 (one
hundred thousand dollars).
10. THE JOINT VENTURE ACCOUNTS
10.1 IAI or the Joint Venture undertake to keep full and exact records,
financial reports and account books which will include all the
required information for computation of the royalties due to the
University (hereinafter: "the Records").
10.2 The University is entitle to nominate an independent CPA, who is not
dependent in his business on the University, in order to investigate
IAI's or the Joint Venture's accounts (hereinafter: "CPA") of the
activities connected with the "Cellscan" system. IAI or the Joint
Venture will have the right to oppose nomination of such a CPA on
reasonable grounds only. The CPA will be permitted to examine the
records at any reasonable time, after giving of prior written notice
to IAI or to the Joint Venture through its employees or assigns.
10.3 The University shall bear all expenses deriving from examination of
the records as mentioned above, except if the examination reveals
substantial mistakes or irregularities in the records. In this case,
IAI or the Joint Venture shall indemnify the University for expenses
which it had made for the examination of the records.
10.4 IAI or the Joint Venture shall give the University, within 30 days
from the end of each quarter, a detailed statement of all their
activities in sales of the "Cellscan" during that quarter, together
with royalties due to the University for said quarter. Also, a CPA,
or an employee of the University will be entitled to examine the
audited balance sheet of the Joint Venture of the costing center of
the "Cellscan" project, within seven days from the date the balance
sheets are approved.
10.5 The University undertakes to keep secret any information in the
records.
11. ASSIGNMENT OF IAI'S OF THE JOINT VENTURE'S RIGHTS
11.1 IAI or the Joint Venture shall have the right to assign their rights
deriving from this agreement to a third party only after the
following conditions are met: -
11.1.1. IAI or the Joint Venture have informed the University of
the existence, identity, and any other detail needed by the
University, concerning any body interested in purchased the
rights (hereinafter: "Transferee").
11.1.2. IAI or the Joint Venture have ensured, to the University's
satisfaction, the continued existence of the Joint
Venture's undertakings toward the University according to
this agreement.
The University shall not claim that the continuing
existence of the undertakings toward the University has not
been ensured, unless reasonable grounds for such claim
exist. Should a disagreement exist between the parties
concerning such reasonable grounds, the decision concerning
the matter shall be turned over to the agreed upon
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arbitrator mentioned in para 17 hereinafter. No assignment
of rights shall be executed before the arbitrator's
decision.
11.2 In case IAI or the Joint Venture do not fulfill their obligations
toward the University according to para 11.1.2 of this agreement to
the University's satisfaction, the following conditions will apply:-
11.2.1. IAI or the Joint Venture shall have the right to assign
their rights deriving from this agreement to transferee,
only subject to prior written agreement from the University
to this assignment. The University shall not withhold its
agreement unless reasonable grounds exist. Withholding of
the agreement on the grounds that in the University's
opinion, remuneration for the assigned rights is too low,
shall be considered reasonable ground for the University's
refusal to give its agreement.
11.2.2. I rights have been assigned according to para 11.2.1 above,
IAI or the Joint Venture shall pay the University
compensation according to the following table within 30
days from the date of assignment of rights to transferee: -
Royalties which the The part of the sales price
University received until which the University will
the sale (in dollars) receive
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Less than $4,000,000 (four 25% (twenty five percent)
million)
Between $4,000,000 (four 15% (fifteen percent)
million to $7,500,000
(seven and a half million )
Between $7,500,000 (seven 10% (ten percent)
and a half million and
$10,000,000 (ten million)
More than $10,000,000 (ten 5% (five percent)
million)
11.2.3. In case the instructions of para 11.2.2 above shall apply,
all the University's rights in the agreement shall expire.
11.3 To avoid doubt, all mentioned in para 11 shall not apply to
assignment of rights in the agreement from IAI to the Joint Venture.
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12. CANCELLATION OF THE AGREEMENT
12.1 IAI or the Joint Venture shall have the right to cancel this
agreement, not for reason of its breach by the University, at any
time, by a written notice to the University 90 days before the date
of cancellation. At the end of 90 days, the agreement shall be
cancelled.
12.2 Cancellation of the agreement as mentioned above will not injure the
parties rights under the agreement until the time of cancellation,
including, and without derogating from the generality of the above
mentioned, the University's right to royalties from sales of the
"Cellscan" until the date of cancellation.
12.3 On the date of cancellation, all IAI's or the Joint Venture's rights
under this agreement shall expire, except for its rights according
to paras 12.4 and 12.5, and cancellation of this agreement will also
be construed as assignment of IAI's or the Joint Venture's rights to
the University. IAI and the Joint Venture shall take the necessary
steps needed to return to the University all rights deriving from
the "Cellscan" project, including, and without derogating from the
generality of the above mentioned, rights of development,
manufacture, marketing and distribution of the "Cellscan".
12.4 In case of cancellation as per the above, the University shall Pay
the Joint Venture 25% (twenty five percent) of the profits it shall
derive from the sale of the "Cellscan" beginning on the date of
cancellation, and until the sum paid by the University according to
this paragraph reaches the amount which IAI or the Joint Venture
invested in the "Cellscan" project from the 1st of January 1991,
after the amounts and dates of these investments have been proved to
the University's satisfaction. In order to avoid doubt, it is
declared and agreed hereby, that the above mentioned investment
shall be returned to IAI or to the Joint Venture only out of profits
derived by the University from the sale of the "Cellscan", if such
profits exist.
12.5 The investments made by IAI or the Joint Venture shall be returned
to the, according to para 12.4 above, in real dollar values, i.e.
considering the fall of the value of the dollar according to the
Consumer Price Index published in the USA in the Bulletin of Federal
Reserve, table A50 (para 15.2.(1)), the index for month of payment.
12.6 In case of breach of the instructions of this agreement, the
instructions of the law shall apply. In case of cancellation of the
agreement due to breach of its instruction by IAI or by the Joint
Venture, instruction of paragraphs 12.2 to 12.5 will also apply, the
amount of compensation due to the University, if it is due, for
damages caused the University, will be set off against amounts due
to IAI or to the Joint Venture according to paras 12.4-12.5.
13. SECRECY
13.1 The parties undertake to keep secret al the known-how and patents.
The parties undertake also to obligate their employees to keep such
secrecy. The above
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mentioned shall not apply to know-how and patents which will be in
the public domain - from the date they are in public domain.
13.2 In spite of the above mentioned, students and research
scientists/scientists from the University and IAI shall be able to
publish scientific papers concerning the "Cellscan" and its
technology, subject only that it be ensured that the business
interests of IAI or the Joint Venture not be injured. In order to
ensure guarding of these interests, a responsible factor shall be
appointed by the Joint Venture, who will examine each paper in view
of this policy before it is published. If no criticism in made
within 30 days, the paper shall be freed for publishing. A
scientific paper also needs the approval of the chief scientist.
13.3 In spite of the above mentioned, IAI or the Joint Venture and their
assigns, shall have the right to disclose the know-how which needs
to be disclosed to any factor in the course of IAI's or the Joint
Venture's usual course of business, such as disclosure to clients,
suppliers, licensees, sub-contractors, relevant government bodies
and investors. Each receiver of know-have shall sign an usual
undertaking of secrecy for the purpose of guarding the University's
and IAI's or the Joint Venture's rights.
14. PATENTS
14.1 The University declares that the patents developed by the
University, and applications for patents submitted by the University
during development of the "Cellscan" until the date of consummation
of this agreement, detailed in Appendix "A", which constitutes an
integral part of this agreement, are registered in the University's
name, and the University has the right to vest its rights vested
according to this agreement in these applications and patents. The
above mentioned is not to be construed as any declaration or
presentation of the University concerning validity of the patents
and applications for patents.
14.2 The University hereby declares, that it does not know of any third
party rights in the know-how, patents and equipment of the
"Cellscan". The University also declares that no claims or demands
for rights in the know-how, patents and equipment have been
submitted, and to the best of its knowledge, the know-how and
patents are free of any third party rights whatsoever.
14.3 Should a claim be submitted by any third party against IAI or the
Joint Venture, on the grounds that IAI or the Joint Venture have
breached such third party's ownership rights in the "patents" or
"know how", or that they are breaching other rights granted to the
third party by the University, IAI or the Joint Venture shall be
entitled to freeze, out of any sums due to the University, any
amounts which will be determined by a legal opinion of a jurist
jointly agreed upon by the parties, who will estimate the sums to be
given in judgment of the claim, and the sum of expenses deriving
from legal proceedings, which will be born by IAI or the Joint
Venture. The amounts due to the University, over and above the
frozen amount, will be paid to the University against warranties
given to the satisfaction of IAI or the Joint Venture.
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The frozen sum will be invested by IAI or the Joint Venture in an
interest bearing investment, in cooperation with the University.
It is agreed that the question whether third party rights derive
from information which the University has transferred to IAI or the
Joint Venture, shall be brought for decision of the arbitrator upon
demand of any party to this agreement.
If judgment is given against IAI or the Joint Venture in the above
mentioned claim is given on any of the above mentioned grounds, then
the frozen amount and its fruits shall first be used by IAI or by
the Joint Venture, to cover the amount given in judgment, and the
amount of expenses deriving from legal proceedings which have been
born by IAI or by the Joint Venture ("the expenses"). Any remaining
amount shall be returned to the University.
If the amount judged against IAI or the Joint Venture, and the
amount of expenses will be more that the sum frozen and its fruits,
the University will pay IAI or the Joint Venture any additional
amount as mentioned within 60 days.
To prevent doubt, payments which the University will be obliged to
pay IAI or the Joint Venture as mentioned above, will not be more
than it had received from IAI or from the Joint Venture in dollar
values together with interest as usual for government bonds, from
the day of submission of the claim.
The University will aid IAI and the Joint Venture in the above
mentioned proceedings. Legal defense will be coordinated with the
University.
14.4 Once the parties to this agreement have determined that a third
party is injuring one or more rights connected with the know-how or
the patents, and once they decided that a claim is to be submitted
in the case, such claim will be submitted against the injurer. The
University shall grant aid to IAI or to the Joint Venture in any
legal or other proceeding, the aim of which will be protection of
the rights.
If IAI or the Joint Venture win compensations, the University shall
have the right to receive 25% of the lose of profit component in the
compensation. If a judgment is given which includes loss of profit
and other components without details, the parties shall chose a CPA
who will determine, as an arbitrator, what in his best professional
judgment is the loss of profit factor in the compensation.
In the above mentioned case, loss of sales, or lose of profits
judged, will be set off from the amounts to be used as a basis for
computation of royalties according to para 8 of the agreement. All
expenses for legal proceedings will be financed by IAI or by the
Joint Venture, and set off from compensation paid to the University
according to its proportional share in any compensation judged.
14.5 The patents shall continue to be registered in the name of the
University, and expenses for the upkeep of the patents from the 1st
of January 1991 an onward will be financed by IAI or by the Joint
Venture. Registration of the patents in the University's name is not
to be construed as derogating from the rights of IAI or the Joint
Venture in the patents according to para 3.1.
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15. BEARING PAST INVESTMENTS
15.1 The University only shall bear all investment invested in the
"Cellscan" project, and any obligation it has undertaken in
connection with the above mentioned project, except for expenses
detailed in para 5.1.3 above, which will be paid to the University
as detailed there.
15.2 In order to prevent doubt, is it agreed and declared hereby, that
the University shall solely bear any expenses and undertakings
toward NPDC.
16. TRANSFER OF INSTRUMENTS TO THE UNIVERSITY GROUP
One of the "Cellscan" instruments, installed at present in hospitals, will
be put at the disposal of the University on the Campus in Ramat Gan, in
order to aid its research group, immediately after an instrument which has
been manufactured within the framework of industrial manufacture will be
installed in its place, but not later than the 1.1.1992.
17. ARBITRATION
In any case of differences of opinion between the parties concerning this
agreement, the differences of opinion shall be brought before a sole
arbitrator appointed by agreement of the parties. Should the parties not
reach an agreement concerning the identity of the arbitrator, such an
arbitrator shall be appointed by the President of the Israel Bar
Association. The arbitrator shall be required to give his decision within
60 days from the time one of the parties to the agreement approaches him.
18. CANCELLATION OF PRIOR AGREEMENTS
This agreement comes instead of any notices, presentations, promises and
agreements which came before the signature of this agreement, Any such
promise, agreement or presentation, will not obligate the parties.
It is agreed and declared hereby, that without derogating from the
generality of the above mentioned, the original contract is cancelled
hereby.
19. JURISDICTION
Sole jurisdiction over this agreement shall be vented in the competent
court in Tel-Aviv-Jaffa, subject to para 17 above.
20. CONFIRMATION
This agreement shall come in force immediately after its confirmation by
the managements of both parties. It in agreed that if, until the
1.12.1991, one party does not give the other a copy of a document
confirming that the agreement has been confirmed by the management of that
party - the agreement shall become null and void.
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21. ADDRESSES
The addresses of the parties for the purpose of this Agreement shall be as
follows -
The University:- The University at Bar-Ilan, Ramat Gan 52100.
IAI:- TAMA Precision Instruments Manufacturing, X.X.X. 00, Xxxxxxxxxx
Xxxx, Yahud.
Any notice sent by registered mall by one party to the other, shall be
deemed received by the addressee 96 hours after delivery to the post
office.
WITNESS TO WHICH THE PARTIES HAVE SIGNED
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University of Bar Ilan Israel Aircraft Industry
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