Exhibit 10.1
PURCHASE AGREEMENT
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PURCHASE AGREEMENT, made as of the 18 day of August 2003 by and between Natali
the company for emergency medical services in Israel Ltd, a company organized
under the laws of Israel and having offices at 00 Xxxxx Xx., Xxx Xxxx 00000
Xxxxxx (the "BUYER") and Voice Diary Inc., a company organized under the laws of
the State of Delaware and having offices at 000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000,
XXX (the "SELLER").
WHEREAS, the Seller is engaged in developing, manufacturing and marketing of
Personal Digital Assistants (the "BUSINESS"); and
WHEREAS, the Buyer wishes to acquire certain products from the Seller under the
terms and agreements detailed herein; and
WHEREAS, the Seller wishes to sell certain products to the Buyer under the
terms and agreements detailed herein.
THEREFORE, in consideration of the premises and the mutual covenants and
agreements detailed below, the parties hereby
agree as follows:
1. Sale of Products
1.1. Products To Be Sold. According and subject to the conditions
of this Agreement, the Buyer hereby undertakes to purchase
from the Seller, and the Seller hereby undertakes to sell and
transfer to the Buyer, 50,000 (Fifty Thousand) units of a
cellular medical PDA product that is described in more details
in Appendix A attached and incorporated hereby by reference
(the "Purchased Products"). To remove doubt it is hereby
agreed that the Purchased Products will include all the
software necessary to operate according to the Product
Specification (as defined above). However, the software to
manage the subscribers and the center will be the Buyer's
including the taking care of the EKG data to be transferred.
1.2. Conformity to the Specification. All Purchased Products
produced by Seller pursuant to this Agreement shall conform to
the Product Specification set in Exhibit A, which will be
changed or corrected by the parties from time to time, and is
hereby attached by reference. The signing of the exhibits is a
necessary condition and this order will not have validity
without them.
Quality Control. All Purchased Products produced by Seller
pursuant to this Agreement shall be manufactured in accordance
with the Quality Control Program to be prepared by the
Parties.
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1.3. The Seller shall make no deviation from the Product
Specification and Quality Control Program without a prior
written consent of the Buyer. To the Buyer will pertain the
right to reject any ordered product that did not stand in the
Product Specification and the Quality Control Program that are
agreed, unless the failure is directly connected to actions or
failures of the Buyer.
1.4. To remove doubt, it is hereby clarified that the Buyer shall
not be considered in any form or way responsible to the debts
of the Seller, to all his obligations and undertakings of any
kind whatsoever, whether accrued, absolute or contingent,
whether known or unknown, whether due or to become due and
whether related to the Purchased Products or otherwise,
regardless of their time of claim.
2. Delivery
2.1. The Seller shall deliver the Purchased Products in the
quantities and dates as detailed:
2.1.1. No later than the lapse of twelve (12) months
following the Closing Date (as defined hereinafter),
the Seller shall deliver to the Buyer 1,000 Purchased
Products and maximum 24 months after the date of this
agreement;
2.1.2. Thereafter, the Seller shall deliver to the Buyer
1,000 Purchased Products (the "Monthly Purchased
Units") on the 1st day of each month, commencing on
the month that follows after the month in which were
delivered the first products.
2.1.3. The Buyer shall be given the right, at any time and
from time to time, upon a three (3) months advance
notice, to increase or to decrease the Monthly
Purchased Units, under the condition that the number
of the Purchased Monthly Units shall not exceed 3,000
and shall decrease 200.
For this purpose, the Closing Date shall mean the date on
which the Seller will close the sale of its shares under the
Prospectus filed with the United States Securities and
Exchange Commission for Seller's shares under the United
States Securities Act of 1933, as amended, provided that the
sum of all the monies of this sale will be at least US$
3,000,000.
2.2. Without derogating from the foregoing, the Parties acknowledge
and agree that the Seller will not be obligated to deliver
Purchased Products to the Buyer unless the Seller will be able
to raise said amount under the Prospectus, regardless of the
reason for the Seller's failure to do so.
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2.3. Sole and Exclusive distributor. The Buyer shall be the sole
and exclusive distributor of the Purchased Products in Israel
as long as the Buyer will fulfill all its undertakings under
this agreement and the Buyer will not use the cancellation
option as discussed in clause 4 of this agreement.
3. Payment
3.1. The Buyer will pay the Seller the following prices of the
finished goods ("Contract Price") for each Purchased Product
delivered to the Buyer according to this Agreement the higher
between (i): US$ 300; or (ii) Cost + 20%. The Cost will
include the cost of the material and the labor necessary to
produce thousand products and will not include other costs
whatsoever.
3.2. The payment will be given in U.S Dollars. The Seller will
issue an invoice to debit the Buyer on the required payment
under this Agreement upon shipment of the finished Purchased
Products. The payment terms will be net thirty (30) days from
the date of delivery of the products.
3.3. The Contract Prices includes charge for the Warranty under
Article y7.
3.4. The Contract Price includes (i) shipping, handling, packaging,
insurance fees and (ii) taxes, duties, fees or any other
payment that was collected from the Seller because of the
selling, the provision, the shipping, the import or the export
of Purchased Products in accordance with this Agreement, all
of which will be paid promptly by the Seller.
3.5. To remove doubt the Parties hereby agree and acknowledge that
Buyer's undertaking to pay the product price is subject and
conditioned by full compliance of Seller in all of his
obligations and undertakings that are included in this
agreement, including but without limitation, to the Seller's
undertakings that: (i) all the Purchased Products that will be
produced by the Seller according to this Agreement will
conform to the Product Specification as described in Exhibit
A, and to the Quality Control Program, and (ii) the Purchased
Products will be delivered to the Buyer in the amounts the
dates as set in Section y2.1.
4. Cancellation Option
Despite all that is said in this agreement, Buyer shall have the right
to cancel the amount of Purchased Products according to this Agreement,
at any time and from time to time, without fine, penalty,
indemnification or charge, by providing the Seller with written notice
on cancellation by the Seller ("Cancellation Notice"), in any one of
the following cases:
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(i) After the Buyer acquired 10,000 units.
(ii) If the Seller did not deliver the first 1,000 units prior to the
lapse of 24 calendar months following the date of this agreement.
(iii) If the price of the product will exceeds $350.
(iv) If a third party will claim that his patents rights were infringed.
5. Representations and Warranties of the Seller
The Seller hereby represents and declares to the Buyer as follows:
5.1. Organization, Power. The Seller is a public company, limited
by shares, legally organized and existing under the laws of
Delaware state, with power and full authority to execute this
Agreement, to perform the undertakings detailed in what
follows and consummate the transactions considered hereby.
5.2. Authority Relative to Agreement. The execution, delivery and
performance of this Agreement by the Seller have been with
power and authority by all corporate action necessary with the
Seller.
5.3. Binding Undertaking. This Agreement constitutes the valid and
binding obligation of the Seller, enforceable in accordance
with its terms.
5.4. No Breach. The execution and performance of this Agreement and
the consummation of the transaction described below will not
be a breach of or avoidance of any agreement to which the
Seller is party.
5.5. Approvals. No approval or consent of any person, authority or
entity in connection with the execution and delivery of this
Agreement or in connection with the execution by the Seller of
all the obligations described hereby.
5.6. Title and Ownership of the Purchased Products. The Seller will
have marketable rights and ownership on all of the Purchased
Products, free of lien, pledge, collaterals, encumbrances and
claims of any type (collectively "LIENS"). No person other
than the Seller will have ownership rights, part, claim or
Lien on the Purchased Products. The execution of this
Agreement by the Seller, and the delivery of the Purchased
Products pursuant to the terms set hereby, will suffice to
transfer marketable rights of the Purchased Products to the
Buyer, free of any Lien.
5.7. Intellectual Property.
5.7.1. For purposes of this Agreement, the meaning of
"Intellectual Property" will be patents (utility or
design), trademarks, trade names, service marks,
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designs, logos, rights, technology, know-how,
process, software, trade secrets,
private/confidential information and all other
rights, licenses or other permissions of intellectual
property (all of which whether registered or pending)
that are required (i) to operate the Seller's
business as it is operating today or as it is
proposed to be operating, and (ii) in order to
fulfill in time all of the Seller's above
undertakings, including, but not limited to the
Seller's obligation to develop and manufacture the
Purchased Products in accordance with the
specification o requirements described in this
subject.
5.7.2. On the Closing Date the Seller will be the sole owner
of all Intellectual Property, or will have sufficient
rights, ownership and involvement, or he will have
valid licenses in scope and time for all Intellectual
Property - all free of lien, claims and encumbrances.
5.7.3. The Seller has not granted rights to and in the
Intellectual Property. To the Seller's knowledge, as
of the date of this agreement, there are no infringes
to Intellectual Property, or conflicts, or seemingly
infringes or infringes of the intellectual property
rights of any third party.
5.7.4. The Seller will duly protect the secrecy,
confidentiality and value of the Intellectual
Property and other technological information, through
contract undertakings, including confidentiality and
non-disclosure agreements with every third party who
may be exposed to the Intellectual Property of the
Seller, including all of the contractors, the
consultants and employees who have access to
proprietary information.
5.7.5. As of the Closing Date, the Intellectual Property is
not infringing upon any other intellectual property.
No person has declared claim to the Seller or
questioned regarding the Seller's rights in the
Intellectual Property.
5.8. Contracts Relating to the Purchased Products. There is no
contract, agreement or understanding between the Seller and
any other party that will prevent or impede the delivery of
the Purchased Products to the Buyer, or use of the Purchased
Products by the Buyer following their delivery. To the
Seller's knowledge, no party to any contract or agreement
related to the Purchased Products is or will be in breach or
default because of this contract, and all contracts or
agreements related to the Purchased Products are in full
validity and are effective.
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5.9. Miscellaneous.
5.9.1. All renewal fees, which are due, and the steps
required for the maintenance and protection of the
Purchased Products have been paid and taken.
5.9.2. None of the Purchased Products are subject to any
law, valid order, condition or agreement of the
Seller, restricting the use of them.
5.9.3. Following their delivery, the Buyer will not be
subject to any obligation to pay any royalties or
other payments with respect to the marketing, sale,
distribution, manufacture or use of the Purchased
Products to third party.
6. Representations and Warranties of the Buyer
The Buyer represents and warrants to the Seller as follows:
6.1. Organization; Power. The Buyer is a private company, limited
by shares, duly organized and existing under the laws of the
State of Israel, with power and full authority to execute this
Agreement, to perform its undertakings detailed below, and to
consummate the transactions considered hereby.
6.2. Authority Relative to Agreement. The execution, delivery and
performance of this Agreement by the Buyer have been
authorized in time and as required by all corporate actions
necessary by the Buyer.
6.3. Binding undertaking. This Agreement authorizes the binding
undertaking of the Buyer, which is enforceable according to
the terms.
6.4. No Breach. The execution and performance of this Agreement and
the consummation of the transaction described below will not
end in a breach of, or default of any agreement in which the
Buyer takes part.
6.5. Approvals. No approval or permit of a person, authority or
entity in regard to the execution and delivery of this
Agreement or the performance of the Buyer of its undertakings
that are described below.
7. Warranty and Service
7.1. Scope of Warranty. The Seller is responsible in front of the
Buyer that the Purchased Products will conform to the
description, the specification and standards described in this
Agreement (including its APPENDICES), and there will be in
them no material defects and manufacturing faults under normal
operating conditions (the "WARRANTY"). The Warranty does not
relate to any defect found (1) in product that was altered,
repaired or that some work was done on it by someone other
except the Seller and without the Seller's written consent,
(2) which is caused by not correct storage, not correct
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operation, improper assembly and maintenance, non-standard use
of the Buyer, (3) which results by use with un-fit parts or
malfunction or un fit hardware of the Buyer, or (4) defect
caused (after the delivery to the Buyer) from fire, power
interruption or voltage surge, or any other thing outside of
the Seller's control. The Warranty shall be in effect only for
the warranty period ("WARRANTY PERIOD"), which shall be twelve
(12) months from the date of delivery of the Purchased
Products to the Buyer.
7.2. Remedy. The Seller's undertaking and the Buyer's remedy under
the Warranty are limited to the replacement or repair, at the
Seller's decision (and at the Seller's premises in the State
of Israel) of defective units at no charge to the Buyer. To
exercise the Warranty the Buyer must send the defective part
of the unit to the Seller's laboratory as the Seller notified
him from time to time during the Warranty Period. The Seller
shall then repair or replace the part or the unit, on
condition that the defect and the unit correspond to the scope
of the Warranty. The Seller shall pay for the cost of shipping
to him, and the cost of shipping the repaired or replaced
parts (under the Warranty) back to the Buyer. The Buyer
accepts upon himself the risk of loss of the unit that is sent
for repair until the Seller was received by the Seller. From
the moment of receipt of the unit, the Seller accepts upon
himself the risk of loss of the unit until it arrives back to
the Buyer.
In case that the Seller is unable to repair or replace the
defective Purchased Product, the Seller shall reimburse the
Buyer the payment for purchasing the product, subject to the
provisions of Section y8 below.
7.3. Warranty on Repaired Items. The Warranty and repair (described
in Sections y7.1 and y7.2) shall be valid for repaired or
replaced units for six (6) months following redelivery to the
Buyer, or the end of the Warranty Period, whichever will be
later between the two.
7.4. Other Maintenance. The Seller will charge the Buyer for any
maintenance work performed beyond the coverage of the Warranty
at the standard service price at that time. To the Buyer
remains the right to insure the Purchased Products after their
warranty period for an annual payment of 15% of the Contract
Price. The Purchased Products under the insurance will receive
under the same repair service described in sections 7.1, 7.2.
8. Limitation of Liability
In no event will the parties or their officers, directors, agents or
employees be responsible for losses of profit payment or information,
consequential or direct, or of indirect damage as a result of this
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agreement, or of damage or loss related to the inability to use the
Purchased Products, separately or in addition to another product or
from any other reason whatever, except as specifically indicated in
this agreement.
8.1. Ownership Retention. All right, title, in all tangible and
intangible property, work products, ideas, inventions,
discoveries and improvements, whether patentable or not, owned
by the Seller, shall remain in his sole property. The Buyer
did not consider in the use of the Seller of trademarks, trade
names, registered signs, copyrights, trade secrets, or
designs, and there is nothing in this Agreement that gives the
Buyer an interest in these.
8.2. The Buyer acknowledges hereby that all the rights for the
intellectual property are and will remain in the ownership of
the Seller, and will include without limitation copyrights and
other proprietary rights, in all of the Purchased Products and
documents delivered for this subject (including translations),
and in any time during or after this Agreement the Buyer will
not claim or demand assert or claim any right or do anything
that will negatively affect on validness or enforceability of
any patent, trademark, trade name, trade secret, copyright,
designation, logo, or other practical know-how that belongs to
or licensed to the Seller (including, without limitation, any
act or assistance to any act that may infringe or lead to the
infringement of the rights of the Purchased Products).
8.3. The Buyer will have the right to attach any additional
trademarks, trade names, logos, or designations to any of the
Purchased Products.
8.4. The Buyer acknowledges he does not get by virtue of this
Agreement any proprietary right in connection with the
Purchased Products. Indemnification
9. Despite what is said in this agreement (including the provisions of
Section y8 above), the Seller shall indemnify the Buyer (and its
employees, officers, directors, successors and assigns) and hold the
Buyer (and its employees, offices, directors, successors and assigns)
harmless from all loss, cost, damage, liability and expense (including
reasonable payments and expenses for attorney), however caused, arising
from any claim of a third party that the Purchased Products infringe
its intellectual property rights. If requested by the Buyer, the Seller
shall defend, on its account, the Buyer in all actions or legal
proceedings that will be initiated against the Buyer in connection with
any subject in which the Seller is required to indemnify the Buyer
below.
10. Termination of Agreement
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10.1. Termination. Either Party may terminate the Agreement if the
other Party fails to comply with the provision of this
Agreement and does not cure the failure within thirty (30)
days of its receipt of notice of the failure.
10.2. This Agreement terminates automatically, with no further act
of the parties if: (i) on or prior to September 15, 2003, the
Seller does not consummate the Prospectus, regardless of
reason; (ii) the Seller makes an assignment for the benefit of
its creditors; (iii) any proceedings are commenced by the
Seller, for or against the Seller under any bankruptcy,
insolvency, or debtor's relief law, provided that such
proceeding or order for their execution has not been canceled
within 30 days subsequent to the filing date thereof; or (iv)
the Seller was liquidated or dissolved. Without derogating
from the provisions of Sections y7.2 and y8 herein, the rights
of termination described in this Section 10, are in addition
to any other remedy that the Buyer has.
10.3. When the agreement seizes to be valid or is terminated,
Neither Party shall be liable to the other Party reimbursement
of expenses or damages for loss of goodwill, prospective
profits or anticipated orders, or on account of any
expenditures, investments, leases, or commitments made by
either party or for any other reason whatsoever, based upon or
relating to such validation or termination.
11. Miscellaneous
11.1. Survival of Representation and Warranties. Each of the parties
hereto covenants and agrees that its representations,
warranties and covenants contained in this Agreement and any
document delivered or to be delivered pursuant to this
Agreement and in connection with the Closing as defined in
this agreement, shall survive the Closing Date until the
expiration of the validity of the applicable statute of
limitations.
11.2. Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to the subject
matter hereof, and supersedes all prior agreements and
understandings with respect thereto.
11.3. Amendment. No amendment or alteration of the terms or
provisions of this Agreement, including any Schedules or
Exhibits in this subject or in addition to it, will be valid
unless it will be in writing and signed by the Party against
whom such amendment or alteration is to take place.
11.4. No Assignment. This Agreement is not assignable or
transferable by any party without the prior written consent of
all other parties hereto. Subject to all restrictions against
assignments contained elsewhere herein, this Agreement shall
inure to the benefit of, and shall be binding upon the
assigns, successor in interest, personal representatives,
estates, heirs and legatees of each of the parties hereto.
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11.5. Notice. Any notice, demand, consent or other communication
under this Agreement shall be in writing addressed to the
other Party at its address on the first page to this
Agreement, or to such other address as such Party shall have
theretofore furnished by like notice, and either served
personally, sent by registered or certified first class mail,
postage prepaid, sent by facsimile transmission, or delivered
by reputable commercial courier. Such notice shall be deemed
given (i) when so personally delivered, or (ii) if mailed as
aforesaid, seven (7) days after the same shall have been
posted, or (iii) if sent by facsimile, one (1) business day
following the date on which the transmission of the facsimile
was confirmed, or (iv) if sent by reputable commercial
courier, four (4) days after the same shall have been sent.
11.6. Delays or Omissions; Waiver. No delay or omission to exercise
any right, power, or remedy accruing to either the Seller or
the Buyer upon any breach or default by the other under this
Agreement shall impair any such right, or remedy nor shall it
be construed to be a waiver of any such breach or default, or
any acquiescence therein or in any similar breach or default
thereafter occurring.
11.7. Governing Law And Jurisdiction. This Agreement shall be
governed by and construed solely in accordance with Israeli
law and the courts of Tel-Aviv-Jaffa shall have exclusive
jurisdiction over any dispute or claim arising out of or in
connection with this Agreement.
11.8. Severability. Any provision hereof prohibited by, or that is
unlawful or unenforceable under, any applicable law of any
jurisdiction, shall as to such jurisdiction be ineffective
without affecting any other provision of this Agreement;
provided, however, that if the provisions of such applicable
law may be waived, they are hereby waived, to the end that
this Agreement be deemed to be a valid and binding agreement
enforceable in accordance with its terms.
11.9. Headings. The headings and titles to the articles of this
Agreement are inserted for convenience only and shall not be
deemed a part hereof or affect the construction or
interpretation of any provision hereof.
11.10. Indemnification. The Seller will indemnify the Buyer for any
sum that the Buyer shall pay by decision of an authorized
court to a third party because of this order and/or the
quality of the product and/or violation of patent rights
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and/or violation of copyrights and/or violation of property
rights and/or any other right that a third party will claim to
his right by law or agreement.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as of the date first above written.
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NATALI the company for emergency medical services in VOICE DIARY INC.
Israel Ltd
By: Xxxx Xxxxxx
BY: _______________________ Title: CEO
TITLE: ______________________ Date: _____________________
DATE: _____________________
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EXHIBIT A
[Description and Specifications of the Purchased Products]
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EXHIBIT B
[Quality Control Program for the Purchased Products]
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