Exhibit 10.1
COMPANY CONFIDENTIAL
BUSINESS COOPERATION
AND
DISIRIBUTION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1 day
of May, 2006 by and between More Energy Ltd., a company duly organized and
registered under the laws of the State of Israel and having its principal place
of business at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇ ("MORE") and Oy
Hydrocell Ltd., a company duly organized and registered under the laws of
Finland and having its principal place of business at ▇▇▇▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇
("Hydrocell").
WITNESSETH:
WHEREAS MORE, inter alia, has proprietary technology in the area of
portable direct liquid fuel cells, including various initial
commercial and military applications of same; and
WHEREAS Hydrocell, inter alia, has proprietary technology in the
area of hydrogen gas based alkaline fuel cells, including an
initial dual use commercial and military application which
provides greater than 20 ▇▇▇▇▇ of energy; and
WHEREAS The Parties are interested in investigating further the
possibilities in pursuing a technological cooperation,
including (1) determining whether certain materials and/or
technologies of one party may be advantageous to the other
parties products and if so agreeing on a process for
cooperating in those technological areas and (2) in jointly
developing certain new products that incorporate substantial
technological elements of both Parties; and
WHEREAS Hydrocell is interested that MORE act as its distributor of
its products for military applications to certain markets
defined herein and MORE agrees to act as such distributor,
NOW THEREFORE, the Parties mutually agree as follows:
1. Definitions
In this Agreement, the following terms shall have the meaning ascribed thereto
in this Section 1:
"Business Day" A day which is a business day both in Israel and Finland.
"Customer" The Departments of Defense, Police, Homeland Security, and
the like, whether at
the Federal, State or local jurisdictional level, of the
following Countries:
The United States, Israel, Singapore, The Republic of China,
Taiwan, India, Japan, and Turkey. Additional markets may be
added by a written Addendum to this Agreement signed and
dated by both Parties.
"Hydrocell Patents" shall mean any Patents owned or controlled by Hydrocell, or
Patents filed and not yet issued, and in existence as of the
Effective Date, and Patents issued subsequent to the
Effective Date to Hydrocell and which Hydrocell establishes
by written record are derived from and contain Hydrocell
Technology without MORE Technology.
"Hydrocell
Technology" shall mean Technology owned or under the legal control of
Hydrocell as of the Effective Date, as well as Technology
developed by Hydrocell based on Hydrocell Technology after
the Effective Date and which does not contain MORE
Technology.
"Joint Technology" shall mean Technology which is developed by either or both
Parties under this Cooperation Agreement and separate
project specific agreement, and which contains significant
elements of both Hydrocell Technology and MORE Technology.
The Parties will identify Joint Technology in a written
addendum to this Agreement from time to time.
"MORE Technology" shall mean Technology owned or under the legal control of
MORE as of the Effective Date, as well as Technology
developed by MORE based on MORE Technology after the
Effective Date and which does not contain Hydrocell
Technology.
"MORE Patents" shall mean any Patents owned or controlled by MORE, or
Patents filed and not yet issued, and in existence as of the
Effective Date, and Patents issued subsequent to the
Effective Date to MORE and which MORE
establishes by written record are derived from and contain
MORE Technology without Hydrocell Technology.
"Patents" shall mean any patent issued in any country of the world,
including continuation in parts, divisional and reissues
thereof and shall also include any patent pending until same
is denied or issued.
2. Technological Cooperation
2.1 The Parties respective fuel cell technologies are both alkaline based
systems, however in all other respects there are major differences
between them. First, Hydrocell uses gas hydrogen as its fuel while
MORE uses a proprietary liquid fuel based upon sodium borohydride.
Hydrocell also studies the use of ethanol, RME, diesel, glucose and
possibly other hydrocarbon liquids and gases to be used as a fuel.
Second, Hydrocell has developed regenerative carbon dioxide filtering
technology, which is used in Hydrocell's fuel cells. Each party has
developed its own unique anode technology as well as its own power
management elements to its systems. In addition the architecture and
design of the respective Party's systems are very distinct. The
Parties believe however that they may each have technological value to
contribute to the other and they have decided to investigate areas of
cooperation. In the event that during their cooperation hereunder the
Parties create Joint Technology, then each Party will have equal
rights of ownership and use of such Joint Technology in its products
when separately agreed for the specific project, provided however that
the sale of such Joint Technology or the grant of the right to use
same to a third Party will require the written agreement of both
Hydrocell and MORE.
2.2 The first area of cooperation to be studied will be in the use of an
alkaline gel divider that Hydrocell and MORE are developing for use
with MORE's power pack products. The Parties have been developing the
gel prior to this Agreement and they intend to complete that effort in
accordance with the Statement of Work GEL Development ("SOW GEL")
attached hereto as Annex 1. The Parties will enter into a separate
supply and license agreement which will come into effect upon
successful completion of that development and which will provide:
2.2.1 The supply by Hydrocell of quantities of the gel in the early
stages of the MORE development phase of its new products using
the gel. The price of the gel for the development phase will be
15 US$/ 100ml of gel in orders less than 20 liters and 10 US$/
100ml in orders more than 20 liters.
2.2.2 A transfer to MORE of the production data package, including the
sale of the necessary tooling to MORE by Hydrocell, to enable
MORE to manufacture large quantities of the gel for its products.
Hydrocell will be paid its costs in this transfer phase.
Thereafter MORE will either purchase the gel from Hydrocell at a
mutually agreed price or manufacture (or have manufactured by a
subcontractor) the gel for its use and pay to Hydrocell a royalty
of the lesser of 20% of the price to MORE per product for the gel
manufactured or 1 US cents per current type product and up to 3
cents per product for larger systems above 20 Watt. Hydrocell
will be entitled to obtain a certified statement of said costs
from MORE's outside Auditors.
2.2.3 Hydrocell will undertake not to sell the gel or derivatives
thereof directly or indirectly (e.g., by license or otherwise) to
third parties for inclusion in an alkaline fuel cell product
which either uses sodium borohydride as a fuel source or which
provides under 30 ▇▇▇▇▇ of power.
2.3 Annual payments for R&D
MORE shall pay Hydrocell annually 100,000 US$ per annum during two
years after agreement is signed, 200,000 US$ in all for R&D
cooperation as described prior in this clause. Annual payment is
divided in four parts, 25,000 US$ each.
3. Joint Product Development
3.1 The Parties are interested in investigating a joint development of a
new line of products which would combine key elements of Hydrocell's
existing technology of tubular shaped 20 Watt modular systems with key
elements of MORE's existing technology of proprietary fuel as well as
catalytic materials and electrode technology. The performance envelope
for such new Products will be no less than 20 ▇▇▇▇▇ and no more than
200 ▇▇▇▇▇ and will be for applications in the area of military
programs, automotive uses, and stationary power systems. Any marketing
or sale for other applications will require the prior written approval
of both Parties which they may deny at their sole discretion. The
Parties will jointly own the resulting product and they will agree on
the commercialization sharing including allocation of markets,
cross-licensing terms and royalty terms. Both Party's reserve the
right to offer their own products to the above markets in parallel to
the new jointly owned Product. It is the intention that in each
instance where a party intends to offer its own products as well it
will first discuss the situation with the other Party without limiting
its absolute discretion to make its own decision.
3.2 The Parties will finalize a Statement of Work and separate agreement
for this joint development as soon as practicable. It is
assumed that each Party would absorb its own costs in such development
effort and would share joint expenses (such as testing). The Parties
will make efforts to find customer funding if possible and they will
equitably share in any such funding.
4. Distributorship
4.1 Appointment. Subject to MORE's undertaking according to Section 4.3
hereinafter, Hydrocell hereby grants to MORE, and MORE hereby accepts,
a license to distribute Hydrocell's products to the Customers. Once
MORE initiates a marketing activity to a Customer, Hydrocell will not
take any competitive action with such Customer. Furthermore, prior to
taking any marketing action with a Customer, Hydrocell will consult
with MORE.
4.2 Exclusivity. Hydrocell shall grant to MORE and MORE hereby accepts, an
exclusive license to distribute Hydrocell's products to the Customers
in Israel and US for following years when MORE meets the annual sales
targets as presented in Appendix 2. The exclusivity ceases if MORE
does not meet the annual sales targets as soon as Hydrocell has
terminated it by written registered notice, provided that any
outstanding proposals to Customers by MORE will be honored by
Hydrocell. The license to distributor however survives.
4.2 Term of Distributorship. The term of the distributorship discussed
above shall be three (3) years from the Effective Date of this
Agreement. The three year term shall automatically be extended for an
additional three (3) years as to each Customer to whom a sale of
Hydrocell product has been concluded within the initial term.
4.3 MORE's Undertakings. More undertakes, directly or through a permitted
sub-distributor in accordance with Section 4.4 hereof, to promote
Hydrocell's products to the Customers. It is understood that MORE will
initially introduce the products to the Israeli military customer and
thereafter the United States military customer and upon successful
results to the other listed Customers. MORE will report to Hydrocell
in writing upon any material event related to the distributorship.
4.5 Sub-distributors. MORE is entitled to appoint sub-distributor/s for
one or more Customers provided that MORE will remain directly and
solely responsible to Hydrocell for all of the efforts of such
sub-distributor/s. Hydrocell has however a right to reject
sub-distributors.
4.6 Hydrocell's Developments and Support. Hydrocell shall, during the Term
of the Distributorship, keep MORE currently advised of Hydrocell's
technological and product developments based on its own decisions.
Hydrocell shall support MORE's marketing presentations with
appropriate technical literature and data and, upon MORE's request,
assist in actual presentations in a level decided solely by Hydrocell.
The travel costs of Hydrocell personnel in such presentations shall be
covered by MORE.
4.7 Pricing. The Parties agree to negotiate a reasonable price to MORE for
the products sold by MORE to Customers.
4.8 Warranty and Indemnity. Hydrocell shall provide at least a one year
warranty against defects in design, workmanship and materials to the
Customers purchasing from MORE products hereunder. Hydrocell will also
indemnify MORE against any damage resulting from a patent or
intellectual property claim by a third party regarding the marketing,
sale, or use of the products hereunder, as well as against any third
party claim for personal or property injury caused by the products or
product liability claims.
5. Proprietary Rights and Confidentiality
5.1 Proprietary Rights. Hydrocell reserves all right, title and interest
in and to all Hydrocell Technology, Hydrocell Patents, and trade
secrets, trade names and trademarks relating in any way to Hydrocell's
products and technology. MORE reserves all right, title and interest
in and to all MORE Technology, MORE Patents, and trade secrets, trade
names and trademarks relating in any way to MORE's products and
technology.
5.2 Confidentiality.
5.2.1 During the term of this Agreement and/or the distributorship,
certain information that is considered proprietary or
confidential may be disclosed or exchanged between the parties.
The term Confidential Information shall include MORE Technology,
Hydrocell Technology or other information considered confidential
or proprietary by the Party disclosing same when same is
disclosed hereunder by one party to the other in accordance with
the following procedure:
(i) When disclosed in writing, Confidential Information shall be
labeled as being confidential; and
(ii) When disclosed orally, Confidential Information shall be
identified as confidential at the time of disclosure,
with subsequent confirmation to the other party in writing
within thirty (30) days after disclosure, identifying the
date and type of information disclosed.
5.2.2 During the term of this Agreement and for a period of five (5)
years after the termination of this Agreement, each party shall
hold in confidence the other's Confidential Information and shall
not, without the prior written consent of the other party,
disclose such information to any person except its own employees
having a need to know, and shall not use the other's Confidential
Information for any purpose except to exercise its rights in
accordance with this Agreement. These obligations shall not apply
to any Confidential Information that:
(i) Is generally available to the public in printed publications
before its disclosure under this Agreement,
(ii) Becomes generally available to the public in printed
publications without default by either party under this
Agreement, or
(iii) Is lawfully in the possession of one party in written or
other recorded form before the time of disclosure by the
other party.
Upon the request of the disclosing party, the other party shall
return all copies of Confidential Information and destroy any
other copies of same in its possession.
6. Termination. (A) The provisions of Article 4 of this Agreement shall
terminate upon the later of the end of the Term of the Distributorship as
defined above or three years, unless terminated by mutual written agreement
of the Parties prior thereto.
(B) The balance of this Agreement shall continue in effect notwithstanding
the termination under Paragraph (A) above, provided however that in the
event that one of the Parties declares bankruptcy or is declared bankrupt
by a court of law, the other Party will be entitled to terminate this
entire Agreement by written notice. In the case of such termination, each
Party will have equal rights in jointly developed products (under
Paragraphs 2 and 3 above) and be free to deal with same without further
agreement of the other party and MORE will continue to have the right to
manufacture, have manufactured and sell the Gel described in Paragraph 2.2
subject to the continuing payment of the applicable royalty to the
successor entity to Hydrocell if any and the provisions of 2.2.2 and 2.2.3
of this Agreement shall continue to apply to both Parties .
(C) Notwithstanding the termination or expiration of this Agreement the
terms of Section 5 above shall continue on its terms to be binding on the
Parties. Furthermore, any obligations under any specific purchase
order/agreement or an obligation of payment, warranty or delivery of
products which came into effect prior to the termination or expiration of
this Agreement shall continue in force as if this Agreement did not
terminate.
7. Governing Law
This Agreement shall be governed under English Law and any dispute will be
submitted to the exclusive jurisdiction of the arbitration tribunal of the
International Chamber of Commerce in Geneva. Nothing hereinabove will prevent a
party to seek injunctive relief in any court having jurisdiction for the purpose
of stopping an illegitimate use of its proprietary information by the other
party.
8. Notices. The following addresses shall apply for Notice hereunder:
Oy Hydrocell Ltd.:
Address: ▇▇▇▇▇▇▇▇▇▇ ▇-▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
Fax No.: ▇▇▇▇▇▇▇▇▇▇▇
E-Mail: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇
MORE Energy Ltd.:
Address: 2 Yodfat Street, Global Park, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attention:▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: +972 - ▇ - ▇▇▇▇▇▇▇
E-Mail: ▇▇▇▇@▇▇▇▇▇▇▇.▇▇.▇▇ and ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇.▇▇
9. Effective Date.
This Agreement shall enter into effect upon the later of (i) signature by the
last party hereto to sign and (ii) approval by the Board of Directors of MORE's
parent company, Medis Technologies Ltd. (herein the "Effective Date").
10. Miscellaneous
10.1 Preamble The preamble and annexes attached hereto form an integral
part of this Agreement.
10.2 Language. All correspondence, information, specifications, reports,
notices and any other written or oral communication between the
Parties shall be in the English language.
10.3 Waivers. The failure of a party to insist in any one or more instances
upon strict performance of any of the terms of this Agreement or to
exercise any rights herein conferred shall not be construed as a
waiver or relinquishment to any extent by said party of said party's
right to assert or rely upon any such term or right on any future
occasion.
10.4 Assignment. This Agreement may not, in whole or in part, be assigned
or otherwise transferred by Hydrocell or MORE, without the prior
written consent of the other Party and any assignment or transfer
without such consent shall be null and void.
10.5 Entire Agreement; Amendments. The terms and conditions of this
Agreement constitute the entire agreement between the parties and
shall supersede all previous communications, representations or
agreements, whether oral or written, between said parties with respect
to the subject matter hereto. No agreement or understands, either oral
or written, between the parties will be binding upon either party
unless in writing, signed by a duly authorized representative of each
party.
IN WITNESS WHEREOF, the Parties hereto have caused their respective duly
authorized representatives to execute this Agreement in two (2) duplicate
originals, of which one (1) is left with MORE and one (1) with Hydrocell, all as
of the date first hereinabove written.
Oy Hydrocell Ltd. More Energy Ltd.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director Title: General Manager
By: By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Title: CFO
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Appendix 2.
Minimum sales levels to apply from Year beginning 2009 and to be set by
agreement by mid 2008.