Exhibit 10.29



Distribution Agreement



This Agreement is made this 14th of
February, 2006 by and between Ophthalmic Imaging Systems, a California corporation, with
its principal place of business at 221 Lathrop Way, Suite I, Sacramento, California 95815,
U.S.A. (hereinafter “Supplier”), and CCS Pawlowski GmbH, a German company with
its principal place of business at Humboldt Str. 23, 07743 Jena, Germany (hereinafter
“Distributor”) (each a “Party” and collectively the
“Parties”). 



	Whereas:  	  	Supplier
 manufactures  and markets  certain  products  and  desires to  increase  the sales of
such                products; and, 






	Whereas:  	  	Distributor
has  represented  that it possesses the necessary  expertise and marketing  organization
               to promote and sell such products; and, 






	Whereas:  	  	Supplier
is willing to appoint  Distributor  and  Distributor is willing to accept such
 appointment                as an exclusive distributor of Supplier's products in the
Territory; 






Now, therefore, in consideration of
the mutual promises and covenants hereinafter set forth, Supplier and Distributor agree as
follows:  



Article 1: Definitions 



For purposes of this Agreement, the
following words, terms and phrases shall have the meanings assigned to them below unless
the context otherwise requires: 



	1.1  	  	 “Products” — those
products listed in Exhibit 1 hereto and the applied software and/or any upgrades and/or
enhancements of the said products and/or any replacing technology. The Exhibit may be
amended by mutual consent of both Parties.  






	1.2  	  	"Territory"
- the area specifically described in Exhibit 2 hereto. 






	1.3  	  	 “Distributor
Price List” — the prices then being quoted by Supplier for sales of Products to
its distributors listed in Exhibit 3 hereto as that Exhibit may be amended by mutual
consent of both Parties.  






	1.4  	  	 “Supplier
Information” — all information expressly designated by Supplier as
confidential, which is directly or indirectly disclosed to Distributor or embodied in
Products provided hereunder, regardless of the form in which it is disclosed, relating in
any way to Supplier’s markets, customers, products, patents, inventions, procedures,
methods, designs, strategies, plans, assets, liabilities, costs, revenues, profits,
organization, employees, agents, distributors or business in general.  






	1.5  	  	 “Quota” — the
minimum quantities of Products which Distributor shall be expected to purchase from
Supplier in accordance with the terms and conditions of Article 5 of this Agreement and
detailed in Exhibit 4 attached hereto.  






	1.6  	  	 “Advance
Order” – Orders provided by the Distributor with signature of the agreement and
are to be supplied by the Supplier in the future, as detailed in Exhibit 5 attached
hereto.  





1











	1.7  	  	 “Trademarks” and
“Patents” — Supplier trademarks, tradenames, and patents listed in Exhibit
6 attached hereto and any other trademarks, tradenames and patents that Supplier may
require thereafter.  






Article 2: Appointment 



	2.1  	  	Scope  






	  	
Supplier
 hereby appoints Distributor and Distributor hereby accepts appointment, as Supplier’s
exclusive distributor for the purpose of resale, marketing, distribution and maintenance
of the Products during the term of this Agreement with the right to sell or otherwise
distribute Products in the Territory under Supplier’s name, logotypes, and
trademarks, subject to all the terms and conditions of this Agreement.  






	2.2  	  	Sales
Outside the Territory 






	  	
Distributor
shall not deal with the Products in any territory other than the Territory without the
prior written permission from Supplier. Distributor shall not sell or deal with other
customers, which Distributor can reasonably know that they might use or re-sell the
Products outside the Territory.  






	2.3  	  	Reserved
Sales Rights 






	  	
Notwithstanding
any other provision of this Agreement, Supplier reserves the right to sell, rent or lease
Products under the Supplier’s name, logotypes and trademarks directly to any of the
customers listed in Exhibit 6, as that Exhibit may be amended by mutual consent of both
Parties from time to time.  






Article 3: General
Obligations of Distributor and Supplier 



	3.1	  	Marketing






	  	
Distributor
shall have the following obligations with respect to the marketing and distribution of
Supplier Products:






	  	(a)	  	 To
use its best efforts to further the promotion, marketing, sale                      and
other distribution of Products in the Territory;  






	  	(b)  	  	To maintain an adequate and balanced inventory of Products, supplies, and spare
                    parts;  







	  	(c)  	  	To
promptly respond to all inquiries from customers, including
                    complaints, process all orders, and  effect all shipments of
Products;  






	  	(d)  	  	To diligently investigate all leads with respect to potential customers
                    reffered to it by Supplier;  






	  	(e)  	  	To permit Supplier to visit Distributor ’s  customers and to visit
Distributor’s place of business, subject to prior coordination with the
Distributor.  






	  	(f)  	  	To
maintain throughout the Territory an adequate sales force dedicated, inter
               alia, to the sale of Products;  






	  	(g)  	  	To
use its best efforts to participate actively in sales or merchandising
               programs prepared by Supplier; to participate in all fairs and exhibitions
in                the Territory where such participation will, in the judgement of both
Parties,                promote the Products; and to develop and implement sales programs
for the                promotion of the Products;  






	  	(h)  	  	To
continue using its existing demonstration WinStation capture system for
               future demonstrations and to continue using its existing 3 WinStation
Review                Licenses for demonstration and service purposes (not for sale).  






	  	(i)  	  	To
furnish Supplier regularly and at least once a year with written reports
               which will include customer call reports, business trend, make forecasts,
               activities of competitors in the Territory, and such other information as
may be                requested, from time to time by Supplier.  





2











	3.2  	  	Service 








	  	(a)  	  	To
carry out all service requirements (warranty period included) of customers for Products
sold by Distributor in the Territory. Distributor shall have the following obligations
with respect to the service for Supplier Products:  







	  	(b)  	  	                To
provide and maintain appropriate service and shop facilities in the
               Territory, as shall be determined by both parties.  






	  	(c)  	  	                To
comply with any reasonable request from Supplier for minor engineering
               changes in the Products according to Supplier’s instructions the
costs of                which shall be born by the Supplier.  






	  	(d)  	  	                To
maintain throughout the Territory an adequate and competent service force to
               give service to the Products sold by Distributor;  






	  	(e)  	  	To
send, on his own account, his personnel to participate in one week
               application course and one week service course which will be performed by
               Supplier in the Supplier place of business. Tuition will be borne by
Supplier.  






	  	(f)  	  	                To
maintain spare parts’ stock at a level sufficient to the number of units
               sold in the Territory.  






	3.3  	  	Advertising  






	  	
Distributor
shall diligently undertake to advertise the Products in the Territory by mailing, in
exhibitions and demonstration sessions. Supplier shall furnish Distributor with
reasonable quantity of Supplier’s brochures, in the English language, for use by the
Distributor in preparing its own advertising materials.  






	3.4  	  	Manufacture
or Distribution of Competitive Products  






	  	
Distributor
shall not develop in any way, manufacture or distribute any products or items which are
directly competitive with the Products nor represent or provide either directly or
indirectly marketing services of any sort to any other manufacturer or distributor for
any such item; nor enter into other agreement which is conflicting or not consistent with
the purpose of this Agreement. The above mentioned undertaking of the Distributor shall
not apply to: (i) any of the Distributor’s current products (including but not
limited to the products listed in Exhibit 3.4) and/or any update and/or upgrade of same
and/or any new products replacing such current Distributor’s products and/or
technology. The provision herein allowing Distributor to continue selling his existing
competing product listed in Exhibit 3.4 is limited till the end of 2007. Starting
beginning of 2008, unless the Parties agreed otherwise in writing, Distributor will cease
developing, manufacturing or selling the products outlined in Exhibit 3.4 or any other
competing product not supplied by the Distributor.  






	3.5  	  	Customer
Support  






	  	
Distributor
agrees to cooperate with Supplier in dealing with any customer complaints concerning the
Products and to take any reasonable action requested by Supplier to resolve such
complaints. Distributor also agrees to assist Supplier in arranging for any customer
warranty service. On site repairs in the Territory will be performed by Distributor by
replacing defective parts complete units with spare parts or units from Distributor’s
stock. The defective parts or units will be sent for repair or replacement to Supplier’s
maintenance center.  






	  	
Parts
will be repaired or replaced (at Supplier’s discretion) — at no charge if under
and during the warranty period, or at the regular price if outside the scope of the
warranty defined herein.  






	3.6  	  	Expenses  






	  	
Distributor
assumes full responsibility for all costs and expenses which it incurs in carrying out
its obligations under this Agreement, including but not limited to all rentals, salaries,
commissions,  





3











	  	
advertising,
demonstration, travel and accommodation expenses without the right to reimbursement for
any portion thereof from Supplier unless otherwise agreed upon by the Parties and/or
stipulated in this Agreement.  






	3.7  	  	General
obligations of Supplier  






	  	(a)  	  	Supplier
undertakes to supply the products, manufactured with good workmanship           and
materials between 14 to 30 days of receiving Distributor’s Purchase           Order.  






	  	(b)  	  	Supplier
undertakes to supply Distributor with spare parts currently at           supplier’s
stock within 10days of receiving Distributor’s purchase           order.  






	  	(c)  	  	Supplier
undertakes to replace any defected products shipped to Distributor, or           in case
of delivering items not ordered by Distributor and/or not delivered in
          accordance with the purchase order served by the Distributor to the Supplier.
          Distributor may further, upon forty five (45) days written notice, return,
          shipping prepaid, undamaged, unused Products in its original packaging. For all
          such returns Supplier shall re-pay Distributor the cost of such returned
          Products as provided in the Distributor’s purchase order and not later
than           30 days from Distributor’s request for such refund.  






	  	(d)  	  	Supplier
shall allow Distributor to check the content of each delivery prior to           shipment
to conform with the purchase order. Such a check will be performed by
          Distributor at Supplier’s facility and will be the confirmation for
          accepting the products. Notwithstanding the abovementioned the conformance
check           can be done also at the Distributor facilities as long as it will take
place 24           hours from shipment arrival, at the Distributor’s facilities.  






	  	(e)  	  	Supplier
shall provide Distributor with reasonable amount of user manuals,           technical
materials and related writings published by the Supplier with regard           to the
Product.  






	  	(f)  	  	Supplier
shall provide Distributor with a yearly one week application course and           one
week service course which will be performed by Supplier in the Supplier           place
of business. Additional training shall be rendered by Supplier to           Distributor
under the terms and conditions mutually agreed to between the           Parties.  






	3.8  	  	Representations
and Warranties of the Supplier  






	  	
Supplier
represents and warrants that: (i) it has full power to grant Distributor the distribution
rights as provided under the Agreement, and (ii) it has obtained all necessary
governmental approvals and is complying with all other applicable laws and regulations
(including, without limitation, federal and state laws and regulations concerning medical
devices) in connection with the Products in the United States; and (iii) it is the sole
owner and holder of title in and rights to the Products, and no third party approval is
required for granting Distributor rights under the Agreement; and (iv) in all respects,
the Products do not and shall not infringe upon nor violate any patent, copyright, trade
secret, trade name or trademark or other proprietary right of any person not a party to
this Agreement; and (v) the Products shall perform in accordance with Supplier’s
user documentation; and (vi) the Products sold under the Agreement will perform in
accordance with specifications described in user manuals, technical materials and related
writings published by Supplier, and further that such Products will achieve any such
function.  






	  	
Supplier’s obligations pursuant to Article 3.8 hereof shall survive termination of this Agreement.






Article 4: Orders for
Products 



	4.1  	  	Purchase
Orders  






	  	
Distributor
shall submit purchase orders for the Products to Supplier in writing, telefax or email
with the following information (at minimum): an identification of the Products ordered,
including model numbers, quantity, requested delivery dates, shipping instructions and
shipping address, insurance instructions, insurance agent and insured value.  





4











	  	
When
sufficient instructions are not furnished by Distributor, Supplier should contact the
Distributor for any additional information required by it.  






	4.2  	  	Acceptance
of Orders  






	  	
All
purchase orders from Distributor are subject to acceptance in writing by Supplier at its
principal offices, which acceptance shall be delivered by mail, telefax or email within
10 days from delivery. Each purchase order shall be deemed to be an offer by Distributor
to purchase the Products pursuant to the term of this Agreement and, when accepted by
Supplier as hereinabove provided, shall give rise to a contract under the terms set forth
herein to the exclusion of any additional or contrary terms set forth in the purchase
order. In any case Supplier will not unreasonably withhold its acceptance.  






	4.3  	  	Delivery
Terms  






	  	
All
deliveries of the Products shall be Free On Board (FOB) at the Supplier’s
manufacturing or warehouse facility in Sacramento, CA. Supplier shall have no further
responsibility for the Products, and all risk of damage to or loss or delay of the
Products shall pass to Distributor upon their delivery at the FOB delivery point to (i) a
common carrier or (ii) an agent or any other person specified by Distributor acting on
behalf of Distributor. Supplier shall insure each shipment of Products with a reputable
insurer for the full invoice of such shipment. Such shipment shall provide for full
coverage from the time the Products are delivered at the Free Carrier point until
Distributor shall have paid Supplier for such Products in full.  






	4.4  	  	Transfer
of title  






	  	
Supplier
retain title to the Products and reserves all rights with respect to delivered Products
permitted by law including, without limitation, the right of recission, repossession,
resale, and stoppage in transit until the full amount due from Distributor including any
charges, in respect of all delivered Products has been paid. Notwithstanding the above
mentioned if a Product’s end-user has paid the full price of such Product
to the Distributor, the Distributor shall then be entitled to transfer the title in such
Product to such end-user, without derogating from any of Supplier’s rights
hereunder with respect to the consideration due to it from the Distributor in connection
with such Product according to the terms of this agreement.  






	4.5  	  	Modification
of Orders  






	  	
No
accepted purchase order for custom-made products shall be modified or cancelled except
upon a prior written confirmation by Supplier. Distributor’s purchase orders or
mutually agreed changed orders shall be subject to all provisions of this Agreement,
whether or not the purchase order or change order so states.  






	  	
In
the event Distributor requests modifications in an accepted order Supplier may, in
consideration for accepting such change order, require Distributor to pay a change order
charge  






	4.6  	  	Product
Changes  






	  	
Supplier reserves the right,  in its sole  discretion and without  incurring any liability to
Distributor,         to: 







	  	(a)	  	Alter
the specifications for any Product; 






	  	(b) 	  	Discontinue
the manufacture of any Product;








	  	
Supplier
will make reasonable efforts to inform Distributor regarding such changes in advance as
soon as such information is available. Notwithstanding the above, Supplier shall provide
Distributor with prompt written notice of such decisions and shall fill all accepted
purchase orders from Distributor for any such altered or discontinued Products.  





5











	  	
In
cases where the Distributor is already participating in tenders, the old configuration
will be kept for units’ intended for these tenders for 30 days. In these cases,
Distributor will have to prove his participation by sending the relevant documents  






	4.7  	  	Forecasts  






	  	
Distributor
agrees to provide Supplier every twelve (12) months, with a twelve (12) months forecast
indicating Distributor’s intended purchases of Products during each calendar quarter
of such period as well as such other information as Supplier may reasonably request in
the format mutually agreed upon by the Parties from time to time. Distributor will inform
major changes in plan as soon as such information is available.  






Article 5: Minimum
Purchase Requirement 



	5.1  	  	General
Requirement  






	  	
Distributor
agrees to purchase and take delivery, during each Supplier fiscal year during the term of
this Agreement, of the Quota of Products and spare parts established for such period
(divided into four quarters) as specified in Exhibit 4 hereof as to the orders of which
Supplier will be obligated to issue acceptance notice. Distributor understands and agrees
that the establishment and achievement of every fiscal year Quota is the essence of this
Agreement, and that failure by Distributor to satisfy its obligation under this Article 5
shall not constitute a breach by the Distributor of his obligations under this Agreement,
but shall entitle Supplier to terminate Distributor’s exclusivity (as detailed in
Section 2 hereinabove), subject to a 90 days prior written notice to the Distributor and
failure by it to achieve the said Quota within such period of time. .  






	5.2  	  	Determination
of Quota  






	  	
Distributor’s
Quota for the initial term of this Agreement shall be as set forth in Exhibit 4 hereto.
The Quota for any succeeding Supplier fiscal year after the term of this Agreement shall
be agreed between the Parties at the beginning of each year. If the Parties fail to set a
new Quota in any succeeding year, the Quota for such succeeding year will be the same
Quota of the last fiscal year Quota mutually agreed upon by Distributor and Supplier
pursuant to this Section 5.2.  






	5.3  	  	Placement
of Orders  






	  	
Distributor
agrees to qualify with the orders signed and specified in Exhibit 5.  






Article 6: Prices and
Payments



	6.1  	  	Prices  






	  	
The
prices to be paid by Distributor for Products purchased pursuant to this Agreement shall
be the Distributor List Prices listed in Exhibit 3 attached hereto which such discount as
detailed thereunder in Exhibit 3.1, as those Exhibits may be amended upon mutual consent
of both Parties, from time to time. In cases where the Distributor is already
participating in tenders, the old prices will be kept for units’ intended for these
tenders for 90 days. In these cases, Distributor will have to prove his participation by
sending the relevant documents. All Distributor List Prices are FOB Supplier’s
manufacturing or warehouse facility and include packing in accordance with Supplier’s
standard commercial export practices in effect at the time of shipment. Special packing
or handling shall be at the sole expense of Distributor.  






	6.2  	  	Payment
Terms  






	  	
Payments
by Distributor hereunder shall be due net sixty (60) days from the date of shipment of
the Products, or from the date of invoice for such charges as taxes, duties, interest or
like special charges, payable to the bank or banks specified by Supplier in writting from
time to time, and made in Euro. Supplier shall not be obligated to ship Products against
accepted orders in the event Supplier’s outstanding accounts receivable from
Distributor then exceed or would after any such  





6










	  	
shipment
exceed fifty percent (50%) of the U.S. dollar value of then delivered and unpaid
Products. In the event of any dispute arising over any part of an invoice or the total
amount due under an invoice, all undisputed amounts shall be promptly paid by Distributor
in accordance with this Section 6.2.  






	6.3  	  	Resale
Prices  






	  	
Distributor
may resell Products at such prices as Distributor, in its sole discretion, shall
determine but resale price will not exceed in any event 100% (one hundred percent) more
than the Distributor List Prices. Distributor shall, however, provide Supplier with a
list of its initial sales prices for the Products to be charged to its customers and
shall keep Supplier fully informed by providing Supplier with any new list sales prices
within ten (10) days of any change in such list prices.   






	6.4	  	Overdue
Payments  






	  	
If
and for so long as any payment from Distributor to Supplier under this Agreement shall be
overdue: 






	  	(a)  	  	Interest
at the rate of two tenth of percent (0.2%) per week shall automatically become due on all
 balances outstanding.  






	  	(b)  	  	Supplier
shall have the right, in its sole discretion, to require payment for
               additional shipments of Products either by cash in advance or by an
irrevocable,                transferrable, divisible letter of credit in U.S. dollars
confirmed by a U.S.                bank specified by Supplier, instead of by open account
as provided above.  






Article 7: Acceptance
and Warranty 



	7.1  	  	Acceptance
of Products  






	  	
In
the event of any shortage, damage or discrepancy in or to a shipment of Products, on
which Distributor reported to Supplier and furnished such written evidence or other
documentation, within thirty (30) days of arrival of the Products at Distributor’s
shipping address in the Territory, that Supplier is responsible for such shortage, damage
or discrepancy, Supplier shall promptly deliver additional or substitute Products to
Distributor in accordance with the delivery procedures set forth herein; provided that in
no event shall Supplier be liable for any additional costs, expenses or damages incurred
by Distributor directly or indirectly as a result of such shortage, damage or discrepancy
in or to a shipment.  






	7.2  	  	Product
Warranty  






	  	
Supplier
warrants for a period of twelve (12) months after the date of delivery of the Product to
the Distributor’s customer, (but no more then sixteen (16) after the delivery of the
Product to the Distributor) hereof that the Products shall be free from defects in
material and workmanship and shall be and remain in full working condition. Supplier’s
sole obligation in the event of a breach of such warranty shall be to provide, at no
charge to Distributor, replacement parts for all defective parts. In no event shall
Supplier have any responsibility or bear any liability for the cost of labor for the
repair of any defective Products or parts, the removal of defective parts or the
installation of replacement parts. All costs of shipment of the replacement parts to
Distributor shall be borne by Supplier. Distributor shall retain all replaced parts
subject to the foregoing warranty for Supplier’s inspection for a period of six (6)
months after their replacement. All parts so replaced shall become the property of
Supplier upon their replacement.  






	7.3  	  	Notice  






	  	
Warranty
claims hereunder must be made promptly and in writing; must recite the nature and details
of the claim, the date the cause of the claim was first observed and the serial number of
the Product concerned; and must be received by Supplier no later than fifteen (15) days
after the expiration of the warranty period provided for in Section 7.2 hereof.  





7











	7.4  	  	Excluded
Claims  






	  	
Supplier
shall have no obligation under Section 7.2 above in the event that:  






	  	(a)  	  	Repair
or replacement of Products or parts shall have been required through
               abnormal wear and tear or necessitated in whole or in part by force
majeure as                defined in Section 15.1 hereof, or by the fault or gross
negligence of                Distributor or its customers; or  






	  	(b)  	  	The
Products or parts have not been properly used, maintained, or repaired in
               accordance with Supplier’s then applicable operating and/or
maintenance                manuals, whether by Distributor or its customers, or shall
have been modified in                any manner without prior written consent of
Supplier; or  






	  	(c)  	  	A
cause external to the Products such as, but not limited to power failure or
               air conditioning failure or connection the Products to equipment
un-authorized                by Supplier.  






	7.5  	  	Limited
Warranty  






	  	
The
warranties set forth in this Article 7 are intended solely for the benefit of
Distributor. All claims hereunder shall be made by Distributor and may not be made by
Distributor’s customers. The warranties set forth above are in lieu of all other
warranties, express or implied, which are hereby disclaimed and excluded by Supplier,
including without limitation any warranty or merchantability or fitness for a particular
purpose or use and all obligations or liabilities on the part of Supplier for damage
arising out of or in connection with the use, repair or performance of the Products.  






	7.6  	  	Compatibility  






	  	
The
parties declare and agree that where Distributor installs the Products as a part of a
system in which the Products are intended for use in conjunction with other equipment,
the responsibility and liability for the compatibility and the combined operation of the
Products and the other equipment lies with Distributor and not Supplier. The foregoing
shall apply, and not be prejudiced, even if Supplier provides assistance to the design of
the forementioned system and to the installation of the Products in it.  






Article 8: Limitation of Remedies 



	  	
Distributor
understands and agrees as follows:  






	8.1  	  	Delay  






	  	
Supplier
shall not be liable for any loss or damage caused by delay in furnishing Products and
services or any other performance under or pursuant to this Agreement during a period of
up to 30 days.  






	8.2  	  	Sole
Remedies  






	  	
The
sole and exclusive remedies for breach of any and all warranties and the sole remedies
for Supplier’s liability of any kind (including liability for negligence) with
respect to the Products and services covered by this Agreement and all other performance
by Supplier under or pursuant to this Agreement shall be limited to the remedies provided
in Section 7.2, Product warranty.  






	  	
Such
limitation shall not apply to breach of representations pursuant to Section 3.8 above The
parties agree that any warranties, obligations and liabilities which exist, by law or by
contract, between Distributor and its clients shall be the exclusive responsibility of
Distributor.  







8











	8.3  	  	Consequential
Damages  




	  	
In
no event shall Supplier’s and/or Distributors liability of any kind include any loss
of use, sales or profits or any special, indirect, incidental or consequential losses or
damages, even if Supplier and/or Distributor shall have been advised of the possibility
of such potential loss or damage.  






Article 9: Confidential Information 




	9.1  	  	Confidential
Information  






	  	
Distributor
acknowledges and agrees that all Supplier Information is confidential and proprietary to
Supplier. Distributor agrees not to use any of such Supplier Information during the term
of this Agreement and thereafter, for any purpose other than as permitted or required for
performance by Distributor of its obligations under this Agreement. Distributor further
agrees not to disclose or provide any of such Supplier Information to any third party and
to take all necessary reasonable measures to prevent any such disclosure by its
employees, agents, contractors, consultants and affiliates during the term hereof and
thereafter. Nothing herein shall prevent Distributor from using, disclosing or
authorizing the disclosure of any Supplier information which is: (a) now or subsequently
becomes generally available to the public through no fault or breach of Distributor, or
(b) is received from a third party through no fault of the Distributor, or (c) is in
Distributor’s possession at the time of disclosure and was not acquired directly or
indirectly under obligations of confidentiality to the Supplier, or (d) is demonstrated
by Distributor to have been independently developed or discovered by it without actual
access to the Confidential Information.  






	9.2  	  	Improvement  






	  	
In
the event that Distributor or any of its principals, employees or agents shall make,
develop or invent any improvement to the Products which enhances their usefulness,
efficiency or value, such improvements will be regarded as part of the Supplier
Information and the terms herein relating to Supplier Information and to exclusive
distribution thereof shall also relate to such improvements.  






Article 10: Trademarks



	10.1  	  	Use
of Trademarks  






	  	
Supplier
 hereby grants to Distributor a non-exclusive, non-transferable, and royalty-free
right and license, without the right to grant sublicenses to any party, to use the
Supplier Trademarks specified in Exhibit 6 attached hereto, as such Exhibit may be
modified from time to time during the term of this Agreement, in connection with the sale
or other distribution, promotion, advertising and maintenance of the Products for as long
as such Trademarks are used by Distributor in accordance with Supplier’s standards,
specifications and instructions, but in no event beyond the term of this Agreement.  






	10.2  	  	Markings  






	  	
Distributor
shall not, without the prior written consent of Supplier, remove or alter any patent
numbers, trade names, trademarks, notices, serial numbers, labels, tags or other
identifying marks, symbols or legends affixed to any Products or containers or packages.  






	10.3  	  	Termination
of Use  






	  	
Distributor
acknowledges Supplier’s proprietary rights in and to the Supplier Trademarks and any
trade names regularly applied by Supplier to the Products, and Distributor hereby waives
in favor of Supplier all rights to any trademarks, tradenames and logotypes now or
hereafter originated by Supplier. Upon the termination or expiration of this Agreement,
Distributor shall cease and desist from the use of the Trademarks in any manner,
including but not limited to any use in connection with Distributor’s corporate or
trade name. In addition, Distributor hereby empowers Supplier and agrees to assist
Supplier, if requested, to cancel, revoke or withdraw any governmental registration or
authorization permitting Distributor to use Supplier Trademarks in the Territory.  





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Article 11: Patents 



	11.1  	  	Indemnification  






	  	
Supplier
shall, at its own expense, defend any suit instituted against Distributor which is based
on allegation that any Products manufactured by Supplier and sold to Distributor
hereunder constitute an infringement of any patent of the Territory and shall indemnify
Distributor against any award of damage and costs made against Distributor by a final
judgement of a court of last resort if it is determined therein that any such Product
constitutes an infringement of any patent of the Territory, provided that Distributor
gives Supplier immediate notice in writing of any notice or claims of infringement and
permits Supplier through Supplier’s counsel to defend the same and gives Supplier
all available information, assistance and authority to enable Supplier to assume such
defense. Supplier shall have control of the defense of any such suit, including appeals
from any judgement therein and any negotiations for the settlement or compromise. In the
event that any Product is held to infringe and its use is enjoined, Supplier shall, at
its option and expense, (i) procure for Distributor the right to continue using such
Product, (ii) provide the necessary parts and documentation to replace or modify such
Product so that it no longer infringes, or (iii) grant Distributor a credit for such
Product upon its return to Supplier, allowing for reasonable depreciation for use, damage
and obsolescence.  






	11.2  	  	Limitation
of Obligation  






	  	
Notwithstanding
the provisions of Section 11.1 hereof, Supplier shall have no liability whatsoever to
Distributor with respect to any patent infringement or claim thereof which is based upon
or arises out of (i) the use of any Product in combination with an apparatus or device
not manufactured or supplied by Supplier, if such combination causes or contributes to
the infringement, (ii) the use of any Product in a manner for which it was neither
designed nor contemplated, or (iii) any modification of any Product by Distributor or any
third party which causes the Product to become infringing. Section 11.1 hereof states the
entire liability of Supplier for or arising out of any patent infringement or claim
thereof with respect to Products furnished to Distributor under this Agreement.  






	11.3  	  	Supplier’s
obligations pursuant to Article 11 hereof shall survive termination of this Agreement.  






Article 12: Taxes 



	12.1  	  	 Distributor
shall be solely responsible for and shall pay all taxes, duties, import deposits,
assessments and other governmental charges authority or agency of its own.  






	12.2  	  	 All
payments to be made by Distributor to Supplier pursuant to this Agreement represent net
amounts Supplier is entitle to receive and shall not be subject to any deductions for any
reason whatsoever. In the event any of said charges become subject to taxes, duties,
assessments or fees of whatever kind or nature levied outside, USA said payments shall be
increased to such an extent as to allow Supplier to receive the net amounts due under
this Agreement.  






Article 13: Import and
Export of Products



	13.1  	  	Import
Documentation  






	  	
Distributor
shall be responsible for obtaining all licenses and permits and for satisfying all
formalities as may be reqiured to import Products into the Territory, in accordance with
then prevailing law and regulations.  






	  	
In
case that Distributor shall notify Supplier that engineering changes and modifications
are required in order to obtain local permits, Supplier shall make a best effort to
perform such changes — subject to prior agreement on the applicable price and other
terms.  





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	13.2  	  	Export
Regulations  






	  	
Distributor
shall supply Supplier on a timely basis with all necessary information and documentation
requested by Supplier in order to permit Supplier to export or re-export Products with
respect to any sale or order solicited by Distributor hereunder.  






Article 14: Term and
Termination 



	14.1  	  	Term  






	  	
This
Agreement shall enter into force as of the date first above written and shall continue in
force for an initial period of two (2) years. Thereafter, this Agreement shall be
automatically renewed for additional periods of one (1) year each, commencing on the date
of termination of this agreement, unless any of the Parties have given the other a prior
written notice of 3 months of intent to terminate the Agreement, , and provided that
Distributor will meet the new Quota set forth in Section 5.2 (in case the Distributor did
not meet the Quota it shall remain non-exclusive distributor of the Products).  






	14.2  	  	Additional
Termination Provisions  






	  	
Notwithstanding
the provisions of Section 14.1 above, this Agreement may be terminated in accordance with
the following provisions:  






	  	(a)  	  	Either
party may terminate this Agreement at any time by giving notice in                writing
to the other party, which notice shall be deemed effective within 60                days
from delivery and subject to the other party’s inability to cure
               and/or cancel the following proceedings, should the other party file a
petition                of any type as to its bankruptcy, be declared bankrupt, become
insolvent, make                an assignment for the benefit of creditors, go into
liquidation or receivership,                or otherwise lose legal control of its
business, or should the other party or                substantial part of its business
come under the control of a third party.;  






	  	(b)  	  	                Either
party may terminate this Agreement by giving notice in writing to the
               other party should an event of Force Majeure continue for more than six
(6)                months as provided in Section 15.5 below;  






	  	(c)  	  	                Either
party may terminate this Agreement at any time by giving notice in                writing
to the other party in the event the other party is in material breach of
               this Agreement and shall have failed to cure such breach within thirty
(30) days                of receipt of written notice thereof from the first party;  






	14.3  	  	Partial
Termination  






	  	
In
the event Supplier shall have the right pursuant to the provisions of Section 14.2(b) or
14.2(c) to terminate this Agreement in its entirety, Supplier may elect to terminate this
Agreement solely as it applies to any specific country or countries within the Territory
upon providing Distributor with written notice in accordance with the relevant Section
referred to above; provided, that nothing in this Section 14.3 shall be construed as
creating a precondition to or otherwise precluding Supplier from terminating this
Agreement in its entirety in accordance with the terms of Section 14.2.  






	14.4  	  	Rights
and Obligations on Termination  






	  	
In
the event of termination of this Agreement for any reason, the parties shall have the
following rights and obligations:  






	  	(a)  	  	Termination
of this Agreement shall not release either party from the obligation                to
make payment of all amounts then or thereafter due and payable;  





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	  	(b) 	  	Distributor shall have the right to require Supplier to repurchase any part of                all of
Distributor’s inventory of Products in Distributor’s possession
               as of termination date at Supplier’s invoiced price to Distributor
for such                Products, less depreciation calculated on a thirty six (36)
months,                straight-line basis and less any appropriate amount for excessive
wear and tear,                plus freight to the Supplier shipping point. Distributor
shall exercise its                option under this subsection by notifying Supplier in
writing no later than                thirty (30) days after the effective termination
date.  






	  	(c) 	  	Distributor’s
obligations pursuant to Article 9 hereof shall survive                termination of this
Agreement. 






	  	(d)  	  	Within
thirty (30) days of the effective date of termination of this Agreement, Distributor
shall furnish Supplier with a list of all Distributor’s customers and the place of
destination of all Products sold which are still covered by Supplier warranty. In
addition, Distributor agrees to furnish Supplier with complete information as to calls or
the status of any negotiations for the sale of the Products.  






	  	(e)  	  	Termination
of this Agreement shall not release Supplier from (a) obligation to
               deliver to Distributor the Products ordered by it under any accepted
Purchase                Order not yet delivered by the Supplier, and (b) any and all
other relevant                obligation detailed in this Agreement towards Distributor’s
customers which                have already purchased any of the Products (including but
not limited to the                warranty obligation set in Section 7 hereinabove);  






	14.5  	  	No
Compensation  






	  	
In the event either party terminates this Agreement for any reason in accordance with the
terms hereof, the parties hereby agree that, subject to the provisions of Section 14.4(a)
hereof and without prejudice to any other remedies which either party may have in respect
of any breach of this Agreement, neither party shall be entitled to any compensation or
like payment from the other as a result of such termination, subject to the other party’s
fulfillment of its obligations which survived the termination of this Agreement.  






Article 15: Force
Majeure 



	15.1  	  	Definition  






	  	
Force Majeure shall mean any event or condition, not existing as of the date of signature of
this Agreement, not reasonably foreseeable as of such date and not reasonably within the
control of either party, which prevents in whole or in material part the performance by
one of the parties of its obligations hereunder or which renders the performance of such
obligations so difficult or costly as to make such performance commercially unreasonable.
Without limiting the foregoing, the following shall constitute events or conditions of
Force Majeure: acts of State or governmental action, riots, disturbance, war, strikes,
lockouts, slowdowns, prolonged shortage of energy supplies, epidemics, fire, flood,
hurricane, typhoon, earthquake, lightning and explosion. It is in particular expressly
agreed that any refusal or failure of any governmental authority to grant any export
license legally required for the fulfillment by Supplier of its obligations hereunder
shall constitute an event of Force Majeure.






	15.2  	  	Notice  






	  	
Upon
giving notice to the other party, a party affected by an event of Force Majeure shall be
released without any liability on its part from the performance of its obligations under
this Agreement, except for the obligation to pay any amounts due and owing hereunder, but
only to the extent and only for the period that its performance of such obligations is
prevented by the event of Force Majeure. Such notice shall include a description of the
nature of the event of Force Majeure, and its cause and possible consequences. The party
claiming Force Majeure shall promptly notify the other party of the termination of such
event.  





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	15.3  	  	Confirmation  






	  	
The
party invoking Force Majeure shall provide to the other party confirmation of the
exsistence of the circumstances constituting Force Majeure. Such evidence may consist of
a statement or certificate of an appropriate governmental department or agency where
available, or a statement describing in details the facts claimed to constitute Force
Majeure.  






	15.4  	  	Suspension
of Performance  






	  	
During
the period that the performance by one of the parties of its obligations under this
Agreement has been suspended by reason of an event of Force Majeure, the other party may
likewise suspend the performance of all or part of its obligations hereunder to the
extent that such suspension is commercially reasonable.  






	15.5  	  	Termination  






	  	
Should
the period of Force Majeure continue for more than six (6) consecutive months, either
party may terminate this Agreement without liability to the other party, except for
payments due to such date, upon giving written notice to the other party.  






Article 16: Disputes,
Indemnification and Governing Law 



	16.1  	  	Disputes  






	  	
Any
dispute, controversy or claim arising out of or relating to this Agreement, or the breach
thereof, shall be finally and exclusively settled by the Court of Law in the state of
California.  






	16.2  	  	Indemnification  






	  	
This
Article 16 provides the sole recourse for the settlement of any dispute arising under or
in connection with this Agreement. Each Party shall and hereby agrees to indemnify the
other Party against any award or judgement, which relates to this Agreement, made by any
court, tribunal or arbitral panel of any kind, in any jurisdiction, except as provided in
this Article 16.  






	16.3  	  	Governing
Law  






	  	
This
Agreement shall be governed by, and interpreted and construed exclusively in accordance
with the laws of the State of California and the United States.  






Article 17:
Miscellaneous 



	17.1  	  	Relationship  






	  	
This
Agreement does not make either party the employee, agent or legal representative of the
other for any purpose whatsoever. Neither party is granted any right or authority to
assume or to create any obligation or responsibility, express or implied, on behalf of or
in the name of the other party. In fulfilling its obligations pursuant to this Agreement
each party shall be acting as an independent contractor.  






	17.2  	  	Assignment  






	  	
Each
Party shall not have the right to assign or otherwise transfer its rights or obligations
under this Agreement except with the prior written consent of the other Party.  






	17.3  	  	Notices  






	  	
Notices
permitted or required to be given hereunder shall be deemed sufficient if given (i) by
registered or certified air mail, postage prepaid, return receipt requsted, addressed to
the respective addresses of the parties as first above written or at such other addresses
as the respective parties may designate by like notice from time to time, or (ii)
telegram or telefax to the telefax number first written above. If given by mail or post,
notices shall be effective upon receipt by the party to which notice is given, or on the
twenty-first (21st) day following the date such notice was posted,  





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whichever
 occurs  first.  If given by telegram or telefax, notices shall be effective upon the
third (3rd) business day following dispatch of a confirmed notice of receipt sent by like
medium.  






	17.4  	  	Entire
Agreement  






	  	
This
Agreement, including the Exhibits attached hereto and incorporated as an integral part of
this Agreement, constitutes the entire Agreement of the parties with respect to the
subject matter hereof, and supersedes all previous agreements by and between Supplier and
Distributor as well as all proposals, oral or written, and all negotiations,
conversations or discussions heretofore had between the parties related to this
Agreement. Distributor acknowledges that it has not been induced to enter into this
Agreement by any representations or statements, oral or written, not expressly contained
herein.  






	17.5  	  	Amendment  






	  	
This
Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled
or waived, in whole or in part, except by written amendment signed by the parties hereto.  






	17.6  	  	Publicity  






	  	
The
mere fact of the signing of this Agreement is not confidential but no party shall issue
press releases or engage in other types of publicity of any nature dealing with the
commercial and legal details of this Agreement without the other party’s prior
written approval, which approval shall not be unreasonably withheld. However, approval of
such disclosure shall be deemed to be given to the extent such disclosure is required to
comply with governmental rules, regulations or other gonernmental requirements. In such
event, the publishing party shall furnish a copy of such disclosure to the other party.  






	17.7  	  	Severability  






	  	
In
the event that any of the terms of this Agreement are in conflict with any rule of law or
statutory provision or are otherwise unenforceable under the laws or regulations of any
government or subdivision thereof, such terms shall be deemed stricken from this
Agreement, but such invalidity or unenforceability shall not invalidate any of the other
terms of this Agreement and this Agreement shall continue in force, unless the invalidity
or unenforceability of any such provision hereof does substantial violence to, or where
the invalid or unenforceable provisions comprise an integral part of, or are otherwise
inseperable from, the remainder of this Agreement.  






	17.8  	  	Waiver  






	  	
In
case either party failed (legally) to take an action referring a right in the agreement,
this failure will not prevent that party from the same legal right in similar situations
or circumstances.  





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IN WITNESS WHEREOF, The parties have
caused this Agreement to be executed on the date first above written. 



	Supplier

	Distributor


	By: Gil Allon

	By: Dirk Pawlowski


	Title: CEO

	Title: General Manager


	Date: February 14, 2006

	Date: February 14, 2006


	Signature: /s/ Gil Allon	Signature: /s/ Dirk Pawlowski





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