Exhibit 99.1
Memorandum of Understanding
This Memorandum of Understanding ("MOU") memorializes the principal terms
between Founder Technology Group Corp. ("Founder"), an entity organized under
the laws of the People's Republic of China ("PRC"), with address at Zhongguancun
Founder Building, ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
and its affiliates; and More Energy Ltd., an Israeli company ("More") and a
wholly owned subsidiary of Medis Technologies, Ltd. ("Medis"), a Corporation
organized under the laws of Delaware in the United States of America ("USA")
with address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10022, USA, and its affiliates;
reflecting the parties' understanding and agreements concerning their
cooperation on the manufacturing and distribution of products based on Medis'
technologies ("Products") in the Greater China (PRC, Hong Kong and Taiwan)
region.
WHEREAS, Founder is a premier conglomerate in the PRC, with one of its
principal lines of business being in the Information Technology arena, including
consumer electronics, with manufacturing and distribution infrastructures
throughout China; and
WHEREAS, Medis and its affiliates have developed a proprietary Direct
Liquid Fuel Cell technology and have qualified the first product application
based on such technology in the form of a small portable pack for charging
various hand-held electronic devices (herein referred to as "Power Pack"). Power
Pack has already passed Underwriters Laboratory ("UL") testing in the US. Medis
is continuing to develop other products based on the same Direct Liquid Fuel
Cell technology; and
WHEREAS, Medis is starting mass production of Power Packs in fully
automated manufacturing lines in June of 2007 in Ireland; and this represents
the beginning of mass distribution and mass usage by end users of Power Packs
from mass production lines;
WHEREAS, both parties would desire a partnership where Founder will
manufacture and distribute Medis Products, starting with the Power Pack, for the
Greater China market consisting of both consumers ("B2C") markets and the
enterprises ("B2B") markets (such as government and Chinese Mobile Phone
carriers.); and.
WHEREAS, in the People's Republic of China, Power Pack falls in a category
of products that must undergo certain Chinese governmental agencies testing, and
appropriate permits must be issued ("Chinese Regulatory Approval") before it can
be sold to the public; and
WHEREAS, the Chinese Ministry of Information Industry ("MII") has recently
mandated that starting June 14, 2007 all cell phones in China, regardless of
manufacturer, will have a standard charger, with a USB access, so that all cell
phones can be charged through lap tops ("Chinese MII Cell Phone Charger
Standard").
NOW THEREFORE, Founder and Medis (the "Parties") agree to the following terms
and conditions to commence the cooperation:
1. Upon the signing of this MOU, Founder will immediately purchase 100 Power
Packs for $9 per unit [and appropriate number of connector tips ($.25 per
unit) and Power Management System ("PMS") ($3 per unit]. The 100 Power
Packs will be used for Chinese Regulatory Approval as described in (2)
below, and to commence B2B marketing as described in (3) below and B2C
marketing as described in (4) below. Founder will immediately form a
dedicated Project Team ("Project Team") that will coordinate with Medis for
the purpose of gaining Chinese Regulatory Approval; understanding the
Chinese B2B and B2C markets, and jointly formulating product and marketing
plans specific to the Chinese market. The Project Team will coordinate,
conduct status meetings with, and report periodically to its Medis counter
part(s).
2. Founder will immediately submit Power Pack samples to relevant Chinese
regulatory agencies for testing, approval and permits so that Power Pack's
can be sold to the Chinese public ("B2C" markets).
2.1.1. Founder will be responsible for costs associated with Chinese
Regulatory Approval and specific project management that will expedite
and effectuate the approval and required permits.
2.1.2. In order to take full advantage of the Medis experience in
successfully completing the US UL approval process (including the
definition with UL of the test protocols to apply), Medis may
participate in all aspects of the Chinese Regulatory Approval process
as appropriate to achieve a successful result. The Founder Project
Team will coordinate with Medis such efforts that are required. This
participation may include all meetings with Chinese regulatory
authorities and in the actual performance of the necessary tests and
test result analysis to the extent appropriate. The Project Team and
Medis will coordinate the details of this interaction to ensure Medis
representatives can add value in the process.
3. Concurrent with the signing of this MOU, Founder will immediately begin
marketing of the Power Pack to Chinese governmental entities, Chinese
mobile phone carriers, and entities that might provide an entry for Power
Pack to be used by the 2008 Beijing Olympics support personnel ("B2B"
markets).
3.1. Medis will assign a senior sales / marketing executive to physically
accompany Founder personnel in meetings with Chinese mobile phone
carriers and the Chinese government. Medis will provide marketing and
technical support to Founder as needed to explore the Chinese B2B
markets.
3.2. Founder will immediately provide the Chinese MII Cell Phone Charger
Standard specifications. Medis will provide (if not already available,
develop and provide) a Power Management System / Connector Tip that
conforms to the Chinese MII Cell Phone Charger Standard within a
commercially reasonable amount of time. Medis will be prepared to make
such statements to Chinese mobile phone carriers.
4. Immediately after the formation of the Project Team, Founder will, together
with Medis' input (and participation if desired by Medis), conduct B2C
market studies, including the use of focus groups, to ascertain and
quantify the demand and pricing elasticity of Power Packs in China. The
study results will be made fully available to Medis.
4.1.Medis will make quality statistics from its fully automated lines
available to Founder.
5. The Exclusive Negotiation Period will expire four months from the date
Chinese Regulatory Approval is granted, but not later than September 1,
2008. The Exclusive Negotiation Period will be used to reach a Definitive
Agreement on Distribution and Manufacturing for China ("Definitive
Agreement on D&M"). During this period, Medis will not enter into
discussions with any other Chinese entities on manufacturing or
distributing its technologies and Product(s) for the Chinese market. It is
anticipated that efforts described in (3) and (4) above are being conducted
concurrent with the Chinese Regulatory Approval period. These efforts will
yield quantitative and qualitative results that will be used by Medis and
Founder jointly in its negotiation of the Definitive Agreement on D&M.
6. In the event that Power Pack does not pass Chinese Regulatory Approval, the
parties will have no more obligations to each other.
7. Concurrent with the signing of this MOU, Founder will execute a
Non-Disclosure Agreement with Medis.
7.1.Medis will make available to Founder its future product plans and their
current state of development.
7.2. As part of the final Definitive Agreement on D&M signing and
implementation, Medis will also share details of its fully automated
manufacturing line in Ireland and assist in any studies that Founder
will undertake to quantify the capital costs and operating costs of
building its own manufacturing lines.
8. It is anticipated that at the execution of the Definitive Agreement for D&M
at the end of the four-month Exclusive Negotiation Period, the following
terms will be part of the Agreement:
8.1.Founder will have exclusive Product(s) manufacturing rights in China.
8.2. Founder will have exclusive Product(s) distribution rights in China if
and to the extent it elects to exercise its exclusive manufacturing
rights (by building additional manufacturing lines). This exclusive
distribution right has an exception for other Medis partners outside
of China who have worldwide distribution networks. This exclusive
Founder China distribution rights would include Founder servicing
Chinese mobile phone carriers and the Chinese government agencies.
8.3. If Founder elects to manufacture the Product(s) itself, Founder can
purchase the finished Product(s) from Medis as an interim step and
distribute them in Greater China while Founder's own manufacturing
lines are being ramped up. Founder understands that cost for each
Power Pack is $9 and costs for connector tips and PMS are additional.
Medis certifies that this cost is no more than what Medis is at that
time charging any of its resellers in the same quantities and
configuration ("Most Favored Nation"). Medis agree to act as a
purchaser for the manufacturing line(s) from the current Medis tooling
suppliers if Founder so desires; the parties will negotiate an
appropriate arrangement if Medis is to act in such a role for Founder.
8.4. Based on its understanding of Medis' future Product plans, Founder has
the option to build its first manufacturing plant specifically for
next generation Product(s) if Founder so elects.
8.5.If Founder elects to not manufacture the Product(s) itself, but would
still like to distribute the Product(s) in China; the Parties can
elect to negotiate and execute a distribution only agreement
("Distribution Agreement") under Most Favored Nation terms.
8.6. If Founder consummates a Definitive Agreement on D&M with Medis, it is
acknowledged that this Agreement would encompass the following
elements:
8.6.1. Founder will buy certain proprietary components from Medis on
Most Favored Nation terms; and
8.6.2. Founder will pay a royalty to Medis for each unit of Products
that it manufactures; and
8.6.3. If Founder elects to have a spin-off entity that manufactures
and distributes Direct Liquid Fuel Cell related products, Medis
would reserve the right to buy into 5% of this company (an option
to buy), the valuation will be negotiated as part of the
Definitive Agreement on D&M.
8.7. Founder will have a right of first negotiation on laptop related
Direct Liquid Fuel Cell joint development programs in China. This
right will expire the earlier of 120 days after Medis notifies Founder
in writing of its interest to commence a laptop product development or
upon notice from Founder that it is not interested in pursuing this
laptop opportunity.
8.8. Founder will have a right of first negotiation on a business concept
of "Charging Kiosks" related Direct Liquid Fuel Cell joint development
programs in China. This right will expire the earlier of
120 days after Medis notifies Founder in writing of its interest to
commence a kiosk product development or upon notice from Founder that
it is not interested in pursuing this kiosk opportunity.
The parties have indicated their full acceptance of this MOU as evidenced by
their signatures below:
Founder Technology Group Corp. More Energy Ltd.
/s/ /s/
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By: Date July 31, 2007 By: Date August 2, 2007
Its: Its: