Exhibit 10.14
MEMORANDUM OF UNDERSTANDING
This memorandum of understanding (the "MOU") shall confirm that Conserver
Corporation of America ("CCA") having an address of 0000 XxXxxxx Xxxx, Xxxxx,
000, Xxxxx Xxxxxx, Xxxxxxx 00000, as one party, and Xxxxxx Xxxxxxxxx, having an
address of 000 Xxxx 00xx Xxxxxx, Xxx. 00-X, Xxx Xxxx, Xxx Xxxx, on her own
behalf or on behalf of an entity to be formed by her (collectively referred to
as "Streco"), as the other party, have entered into a preliminary agreement
concerning the formation of a joint venture for the procurement, use and
distribution of the CCA food preservation products (the "Products") in the State
of Israel. The terms of this MOU are set forth below:
1. Joint Venture. (a) Streco and CCA, jointly, shall form
either a Delaware Corporation or a Delaware Limited Liability Company ("Newco"),
as determined by the mutual agreement of the parties, which shall enter into an
exclusive contract with CCA for the rights to: (i) the exclusive use of all CCA
patents and trademarks issued in connection with the Products in the State of
Israel; and (ii) purchase from CCA the Products for the use and distribution by
Newco in the State of Israel.
(b) The membership interests or shares of stock, as the case may be, in
Newco shall be owned 50% by CCA and 50% by Streco. Profits of Newco shall be
distributed to the parties on a 50/50 basis. Newco shall have an initial Board
of Members/Directors comprised of five (5) Members/Directors, two (2) appointed
by CCA and Streco respectively and one (1) appointed by the mutual agreement of
the parties.
(c) Streco and CCA shall enter into a Shareholders/Operating Agreement
governing the internal operation, management and control of Newco. This
Shareholders/Operating Agreement shall include, among other things: (i) that
Streco shall have control of the business operations in the State of Israel
(including exports); (ii) that provided Streco operates the business in
accordance with the business judgment rule Newco shall be free from interference
of any kind by CCA in the Israeli operations; (iii) that CCA shall, however, be
entitled to exercise a unilateral veto right granted pursuant to an irrevocable
limited power of attorney over any activities of Newco which have or could have
a direct negative impact on the CCA name, business activities or reputation in
the World and (iv) that notwithstanding the grant of voting authority in
subsection (iii), above, the exercise of any rights by CCA to protect or
preserve the reputation of CCA, its patents, trademarks or the Products shall
require: (x) only a vote of 50% of the Newco membership interests/stock; and (y)
the affirmative action of two (2) members of the Board of Directors/Members (the
provision shall be added to the by-laws as well).
(d) CCA shall provide to Newco all technical expertise, developments and
support concerning the use and distribution of the Products. This expertise may
include "loaning" Newco certain necessary personnel to commence business
operations in Israel using the Products. CCA shall sell the Products to Newco
the lessor of: (i) at its cost of manufacture; or (ii) the price at which CCA
sells the product to any other party in the World.
(e) Streco shall be responsible for all activities and costs involved in
commencing business operations in the State of Israel including but not limited
to hiring personnel, obtaining warehouse facilities, procuring any governmental
permits or authorizations and establishing distribution channels.
2. Exclusive. (a) Streco shall have the exclusive right
for the sale and use of the Products in the State of Israel set forth in this
MOU. Upon the formation of Newco, Streco shall assign all of its rights
hereunder to Newco. Neither CCA nor Streco, each on their respective behalf,
shall directly or indirectly solicit, undertake or enter into any negotiations
to commence business activities contemplated by this MOU except as between each
other. CCA shall take all affirmative actions necessary to ensure that no other
party with whom CCA contracts for the Products undertakes any activities which
violate the transaction contemplated by this Memorandum or the exclusive rights
granted to Newco.
(b) Newco shall be granted a right of first refusal for the: (i) the
exclusive use of all CCA patents and trademarks issued in connection with the
Products; and (ii) purchase from CCA the Products for the use and distribution
by Newco in: Jordan, Egypt, the United Arab Emirates, Morocco, Greece, and
Cyprus.
3. Information. (a) In connection with this MOU Streco
shall from time to time be provided with certain non-public information
concerning CCA. This information may include but not be limited to financial and
related business activities and prospects of CCA. In connection with this MOU
CCA shall from time to time be provided with certain confidential information
concerning Streco, its business activities in the State of Israel and the
activities of Streco under this MOU.
(b) Each party, on their respective behalf, agrees that they will hold
all information delivered or obtained pursuant to Section 3(a) strictly
confidential and in no event shall either use any such information for any
purpose other than in connection with this MOU or in any manner detrimental to
the party providing the information.
4. Term. Unless sooner terminated, for cause, by either
party, upon delivery of five (5) days advance written notice, this MOU shall
expire at 12:00 midnight (New York City time) on December 31, 1997.
5. Indemnification. Each of the parties, on their
respective behalf, agrees to indemnify and hold harmless the other party from
and against any loss, liability, claim or cause of action, including attorney's
fees and other costs of litigation incurred in connection with such claim, which
the other party may incur or be subject by reason of the breach or alleged
breach of the provisions of this MOU by this indemnifying party or by any of
such party's affiliates, associates, officers, employees or agents.
6. Time is of the Essence. Time is of the essence with
respect to performance and the undertakings contemplated by this MOU. Each party
further covenants and agrees to use good faith in the discharge of the
undertakings contemplated by this MOU.
2
7. Independence. It is expressly agreed and acknowledged by
the parties that neither party is an agent or affiliate of the other and,
accordingly, neither party has any authority (actual or apparent) to bind the
other to any third party contracts or agreements.
8. Assignment. The parties acknowledge that the skills,
business relationships and Products to be supplied under the MOU are unique.
Accordingly neither party may assign any of its rights or obligations hereunder.
Notwithstanding the foregoing Streco may assign its rights hereunder to an
entity owned or controlled by Xxxxxx Xxxxxxxxx.
9. Survival. The provisions of Paragraphs 3, 5 and 7 shall survive the
expiration or termination of this MOU.
It is expressly agreed that the foregoing MOU articulates the general terms
outlining the parties proposed business venture and that any final arrangement
will require negotiation, drafting and execution of documents prepared in
accordance with this MOU. Further, the parties acknowledge that these documents
will include but not be limited to articles of incorporation, by-laws,
shareholders agreement and an exclusive distribution agreement each of which
must be prepared and agreed to by the parties in the exercise of their
respective discretion.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
If the foregoing correctly restates the terms and conditions discussed and
agreed to on Wednesday August 20, 1997 please countersign in the space provided
below.
ATTEST CONSERVER CORPORATION OF AMERICA
/s/ Xxxxxxx Xxxxx
------------------------------- ----------------------------------
By: ___________________________ By: Xxxxxxx Xxxxx
Its: Secretary Its: Chairman
Date __________________________
WITNESS
/s/ /s/ Xxxxxx Xxxxxxxxx
------------------------------- ----------------------------------[SEAL]
XXXXXX XXXXXXXXX
Date 9/4/97
--------------------------
