Exclusive Agency Agreement

Exhibit 10.3


Exclusive Agency Agreement


This Agreement entered into as of the 1st day July, 1998, by and between MEDIS EL LTD, a Company organized and registered under the laws of State of Israel and having its principal place of business at 5 Kiryat Mada Street, Jerusalem, Israel 91450 (hereinafter: "MEDIS"), and CDS DISTRIBUTOR INC., a Delaware corporation and a wholly-owned subsidiary of Cell Diagnostics Inc., a Delaware corporation, having its principal place of business at 805 Third Avenue, New York, New York 10022 (hereinafter: the "Agent").


W I T N E S S E T H


WHEREAS, Medis is currently engaged in the research and development of technology for products designated the Synchronous Twin Piston Reciprocating Linear Compressor and expander displacer assembly for Stirling Cycle System and a Synchronous Reciprocating Electric Machine, and Media currently owns or has pending related patents;


WHEREAS, Medis has determined that the licensing of rights to such technology is necessary to properly bring such technology to the commercial markets in North America; and


WHEREAS, Medis desires to retain the Agent, and the Agent desires to be retained by Medis, to serve as the exclusive agent to coordinate Medis licensing arrangement in North America with respect to the Licensed Products (as hereinafter defined) and to help Media seek possible funding resources for all aspects of Medis' work with regard to the Patents and Licensed Know-How (as defined below).


NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS:


ARTICLE I


DEFINITIONS


"Licensed Patents" shall mean U.S. Patent No. 5693991 issued on December 2, 1997 entitled " Synchronous Twin Piston Reciprocating Apparatus", the continuation of Patent No. 569331, application of 599,206 Displacer Assembly for Stirling Cycle Systern, U.S. Patent Application No 08/933856 entitled "Synchronous Reciprocating Electric Machine", and any other United States and foreign patents and patent applications based upon the foregoing or in any manner related to the Licensed


Products owned or controlled by Medis on the date hereof or hereafter including subsequent application derived therefrom, and the foreign counterparts based thereon.


"Licensed Know How" shall mean any and all data, information, technology or special ability on the part of Medis including, without limitation, processes, techniques, methods, products, materials and compositions relating in any way to the research, development, manufacture, testing, marketing or use of Licensed Products owned or controlled by Medis on the date hereof or hereafter.


"Licensed Product" shall mean all devices, systems and products making use of or embodying in whole or in part the invention(s) covered by any or all of the Licensed Patents and Licensed Know-How, including, without limitation, a synchronous twin piston reciprocating linear compressor.


ARTICLE II


APPOINTMENT AND AGENCY


(A) Subject to the terms of this Agreement, Medis hereby appoints the Agent, and the Agent hereby accepts Medis' said appointment, as the exclusive agent of Medis to present Medis' technology for licensing (subject to the potential licensee signature on a non-disclosure agreement and any other document as shall be demanded by Medis) and to coordinate all aspects relating to the licensing arrangements between Medis and third parties within North America (hereafter the "Marketing Area") in respect of the licensing to such third parties under the Licensed Patents arid the Licensed Know-How to make, have made, use and sell the Licensed Products.


To avoid any doubt it is hereby expressly declared that the Agent has no authority to incur any obligation on behalf of Medis or any way to pledge Medis' credit and/or to submit or accept on behalf of Medis any proposal, contract, offer and/or order or otherwise commit Medis to any agreement or arrangement.


(B) In exchange for such agency services, Medis shall pay to the agent a fee equal to 10% of gross amount of all royalties and other amounts payable to Medis under all licensing arrangements entered into by Medis pursuant to the clause (A) above during the first ten years of each such arrangement and a fee of 5% of such amounts thereafter. Such fees shall be payable within 30 days after the end of each calendar month based upon the royalties and other amounts which have been paid to Medis under such licensing arrangements during such calendar month. To avoid any doubt it is hereby agreed that the delivery of promissory notes or any other security to ensure payment by the Licensee shall not be considered a payment and shall not entitle the Agent to any payment, until, and to the extent, that said notes are paid. Any sales tax, export duties or other charges imposed by any Israeli government authority, in connection with the licensing of the Licensed Products and the collection of royalties and other amounts with respect thereto, shall be the sole responsibility of and shall be paid for by Medis. If license fees paid to Medis are in a form of consideration other than royalty payment the parties will equitably adjust so that Medis makes appropriate compensation to Agent.


(C) Medis agrees to provide the Agent with written quarterly reports with respect to all royalties and other amounts payable pursuant to clause (B) above within 10 days after each calender quarter, whether or not any such royalties and other amounts are payable during such quarter.


(D) Medis shall not, during the term this Agreement, appoint in the Marketing Area, any other licensing agent for the Licensed Products, the Licensed Know How or the Licensed Patents. Medis shall promptly advise the Agent of any inquiries that Medis receives regarding the licensing of the Licensed Products, the Licensed Know-How and/or the licensed Patents in the Marketing Area.


ARTICLE III


LICENSING AND PROMOTION OF THE LICENSED PRODUCTS


(A) The Agent un ...