Document:

Unassociated Document

     

    
      
        Execution
Copy

      

       

      EXCLUSIVE
MARKETING AGREEMENT

      

      This
Agreement is effective as of July 15, 2009 by and between Cardio Vascular
Medical Device Corp., a company organized and existing under the laws of the
State of Delaware listed on the OTCBB under Ticker CVSL (the “Marketing Arm”), and Elgressy
Engineering Services (1987) Ltd., a company incorporated in the State of Israel
with principal place of business located in 16 Schechterman Street, Industrial
Zone Netanya (hereinafter “Elgressy”); each of the
Marketing Arm and Elgressy may be referred to as a "Party" and collectively as the
"Parties".

       

      RECITALS

       

      
        	
                1.  

              	
                Elgressy
      is engaged in the business of designing and manufacturing products for
      cooling tower water treatment systems, parts of which currently are either
      patented  or have patents pending (the "Products") and desires
      that the sale and use of such Products be actively and diligently promoted
      in the Territory and in the Fields (both as defined below);
      and,

              

      

       

      
        	
                2.  

              	
                The
      Marketing Arm desires to actively and diligently promote the use of the
      Products in the Territory and in the Fields, with the aim of locating
      customers in the Territory and in the Field and entering into Lease
      Agreements or Sale Agreements, as defined below, for the Products with
      such customers.

              

      

       

      
        	
                 

              	
                IN
      CONSIDERATION OF THE MUTUAL BENEFITS TO BE DERIVED HERETO AND MUTUAL
      AGREEMENTS HEREIN, THE PARTIES, INTENDING TO BE LEGALLY BOUND, HEREBY
      AGREE AS FOLLOWS:

              

      

      

       

      
        	
                1.  

              	
                DEFINITIONS

              

      

       

      
        	
                1.1   

              	
                "Additional Installation"
      means as defined in Section 3.12
below.

              

      

       

      
        	
                1.2   

              	
                "Affiliate" means all
      persons and business entities that now or here­after, directly or
      indirectly, i) control, or ii) are owned or controlled by, or iii) are
      under common control of such Party.

              

      

       

      
        	
                1.3   

              	
                "Agreement" means this
      document and any annex, exhibit, attachment, schedule, addendum, or
      modification hereto, unless the context otherwise
    indicates.

              

      

       

      
        	
                1.4   

              	
                "Claims" means any and
      all costs, losses, liabilities, damages, lawsuits, judgments, claims,
      actions, penalties, fines and expenses (including, without limitation,
      interest, penalties, reasonable attorneys’ fees and all monies paid in the
      investigations, defense or settlement of any or all of the
      foregoing).

              

      

       

      
        	
                1.5   

              	
                "Confidential
      Information" means any invention, know-how or idea of a Party
      hereto or any other scientific, business, technical or financial
      information of Party hereto including any proprietary information relating
      to the Products or the business of a Party hereto, its financials and
      business, marketing and sales plans that may be divulged to the other
      Party in the course of the performance of this Agreement provided however,
      that any of the above which is either (i) already known to the disclosing
      Party at time of its disclosure; or (ii) becomes publicly known through no
      wrongful act of the disclosing Party or as a result of a breach of this
      Agreement; or (iii) received from a third party free to disclose it to
      the

              

      

       

      
        
          
          

        

        
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                1.6   

              	
                disclosing
      Party and without any obligations to keep confidential; or (iv)
      communicated to a third party with express written consent of the other
      Party, shall not be deemed to be Confidential
  Information.

              

      

       

      
        	
                1.7   

              	
                "Customer” means a lessee
      or purchaser(s) of Products pursuant to a Lease or a Sale Agreement under
      the Revenue Based Model (as defined in Section
  9).

              

      

       

      
        	
                1.8   

              	
                "Field" means any and all
      types of power plants in the United States (the “Power Plants”) or the
      hotel chains set forth in Schedule1.8 hereto, in
      the United States (the "Hotels"); the Power Plants
      and the Hotels are hereinafter collectively referred to as the "Fields".

              

      

       

      
        	
                1.9   

              	
                "Initial Installation"
      means as defined in Section 3.12
below.

              

      

       

      
        	
                1.10         

              	
                "Installation" means to
      install and execute the initial operation of a Pilot Products and/or the
      Products (as the case may be) at the Customer's
  facility.

              

      

       

      
        	
                1.11         

              	
                "Intellectual Property
      Rights" means any and all patent and patent application rights,
      copyrights, moral rights and any other rights in works of authorship,
      rights to trademarks and service marks and applications, and all other
      intellectual property rights in connection with inventions, improvements,
      designs, configurations, ideas, concepts, innovations, know how, drawings,
      schematics, original works of authorship, formulae, concepts, techniques,
      methods, systems, processes, compositions of matter, software, databases
      and mask works; all of the foregoing, in any jurisdiction, whether or not
      patentable, copyrightable or protectable as trade secrets, irrespective of
      whether registered as a patent, copyright, trademark or in another form,
      and irrespective of whether constituting a commercial, professional or
      trade secret, including, without limitation, with respect to Elgressy, the
      Manufacturing Technology and the Production Data
  Package.

              

      

       

      
        	
                1.12         
      

              	
                "Lease Agreement" means a
      lease agreement entered into by the Marketing Arm or a subsidiary thereof,
      with a Customer, for the lease of the Products, for a period of up to ten
      (10) years.

              

      

       

      
        	
                1.13         
      

              	
                "Lease Price" means the total
      consideration paid by the Customer in connection with the lease of the
      Products.

              

      

       

      
        	
                1.14         

              	
                "Manufacturing
      Technology" means
      hardware, software, inventions, data, trade secrets, works of authorship,
      know-how, methods and methodologies, inventions, ideas, processes and
      practices, technical data, drawings, formulations, technical reports,
      operating and testing procedures, instruction manuals, raw material or
      production specifications, computer software, the results of research and
      development work, whether in hard copy or in computer held form, including
      without limitation the Production Data Package and all Intellectual
      Property Rights underlying the
Products;

              

      

       

      
        
          
          

        

        
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        Exclusive
Marketing Agreement

      

       

      
        	
                1.15         

              	
                "Material Breach" a
      material breach of this agreement shall be a default of a Party under
      Sections 3.3('Non-competition), 3.15
      ('Title to
      Modifications'),  4.15 ('Elgressy IP rights')
      and any other breach which a Party fails to rectify, if rectifiable,
      within a period of thirty (30) days after receipt of a written notice of
      default. In order to remove doubt, failure to reach the sales targets
      whether pursuant the Short Marketing Plan or the Five Year Marketing Plan
      will not be considered a Material
Breach.

              

      

       

      
        	
                1.16         
      

              	
                “Pilot Product” means as
      defined in Section 4.5 below.

              

      

       

      
        	
                1.17         

              	
                "Product" means as
      defined in the recitals above.

              

      

       

      
        	
                1.18         
      

              	
                “Production Data Package”
      means the design, engineering, functional and technical specifications,
      bill of materials and testing procedures for the Products, including net
      lists, schematics, enhancements, designs, formulae, processes, drawings,
      routines, subroutines, techniques, concepts, computer software programs or
      applications (in both source code and object code form), flow charts,
      diagrams, work product and other materials or any types whatsoever,
      know-how, and tangible or intangible information or material, including
      third party software to the extent permitted by law or
      contract.

              

      

       

      
        	
                1.19         
      

              	
                "Regulatory Requirements"
      means any laws, rules, regulations, certifications and standards under any
      applicable law or that are promulgated or provided by a governmental or
      regulatory agency, as they may be from time to time, which apply to or are
      required for certain activity in connection with or arising out of this
      Agreement.

              

      

       

      
        	
                1.20         
      

              	
                A
      “Sale Agreement”
      means an agreement for the sale of the Products entered into by the
      Marketing Arm or its subsidiary with a
Customer.

              

      

       

      
        	
                1.21         
      

              	
                "SLA" means a service
      level agreement. "Elgressy SLA" means the
      SLA which sets forth the level of service Elgressy is required to provide
      to the Marketing Arm, and is attached hereto as Schedule 1.21A. "MA SLA" means the SLA
      which sets forth the minimum level of service the Marketing Arm, directly
      or indirectly, is required to provide to a Customer and is attached hereto
      as Schedule
      1.21.B.

              

      

       

      
        	
                1.22         

              	
                "Territory" means (i)
      Germany and (ii) the states of the United States of America listed in
      Schedule
      1.22 hereto
      (the "States").

              

      

       

      
        	
                2.  

              	
                APPOINTMENT
      AND SCOPE

              

      

       

      
        	
                2.1   

              	
                Appointment. Elgressy
      hereby appoints the Marketing Arm as: (1) its exclusive independent sales
      and marketing representative for the Products in the Territory and the
      Fields, and (2) its exclusive service provider relating thereto, and the
      Marketing Arm hereby accepts such appointments, all subject to the terms
      and conditions of this Agreement.

              

      

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      
        	
                2.2   

              	
                Activity Outside Territory.
      The Marketing Arm shall be entitled to act outside the Territory
      and/or the Fields with respect to marketing and sale of the Products, only
      with the prior written consent of Elgressy, for each
  sale.

              

      

       

      
        	
                2.3   

              	
                Subagents.

              

      

       

      
        	
                2.3.1    

              	
                The
      Marketing Arm may use subcontractors and/or subagents including the
      Marketing Arm’s subsidiaries (“Subagent(s)”), to
      promote the sale, lease and use of the Products and for the Installation
      (as defined below) and the supply of the after sale technical and other
      required services in the Territory and/or in the Fields; provided that: (i) the
      Marketing Arm shall provide Elgressy with the name, address and field of
      activity of any such Subagent, (ii) all agreements with Subagents relating
      to the Products (“Subagent’s
      Agreement(s)”) shall be consistent with this Agreement and shall
      include the provisions attached hereto as Schedule 2.3.1,
      and (iii) Elgressy shall have the right to demand that the Marketing Arm
      replace any Subagent in the event of a breach of this Agreement and/or the
      Subagent's Agreement, if such breach is not cured within sixty (60) days
      of receiving a notice by the Marketing Arm from Elgressy regarding such
      breach. It is agreed that the Marketing Arm shall consult Elgressy
      regarding the criteria which may be applied for selecting local Subagents.
      The Marketing Arm shall inform Elgressy, as soon as practical, of it
      becoming aware, of any breach by Subagent which constitutes a breach of
      this Agreement or a breach of a Subagent's Agreement, affecting Elgressy’s
      IP rights . The Marketing Arm shall assist Elgressy in protecting
      Elgressy’s rights against such acts and
  infringements.

              

      

       

      
        	
                2.3.2    

              	
                The
      Marketing Arm shall require its Subagents, acting on behalf of the
      Marketing Arm with respect to this Agreement, to purchase and maintain
      insurance at all times throughout the term of the Subagent's Agreement, at
      such Subagent's own account, with respect to the operation of the Products
      (“Subagent's Insurance Policies”).
      The Subagent's Insurance Policies will have terms and conditions and a
      limit of liability in an amount as shall be advised by an independent
      insurance expert, to be appointed by the Marketing Arm at no expense to
      Elgressy. The Subagent's Insurance Policies shall name each of the
      Marketing Arm and Elgressy as additional insured or loss
      payee.

              

      

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      
        	
                3.  

              	
                ADDITIONAL
      UNDERTAKINGS OF THE MARKETING ARM

              

      

       

      
        	
                3.1   

              	
                The
      Marketing Arm undertakes that it will make reasonable commercial efforts
      to promote the sale/lease and use of the Products in the Territory and in
      the Fields.

              

      

       

      
        	
                3.2   

              	
                The
      Marketing Arm agrees to make reasonable commercial efforts to carry out
      the marketing, promotion and sale/lease of the Products in the Territory
      and in the Fields, by different means, at its sole discretion, but in no
      case less than reasonable commercial means pursuant to the Short Marketing
      Plan and the 5 Year Marketing Plan (both as defined below). Any and all
      marketing, promotional, sales and administrative costs, including any and
      all costs associated with attendance at or participation in trade shows,
      congresses or similar conferences, shall be borne by the Marketing Arm,
      unless otherwise is expressly stated in this
  Agreement.

              

      

       

      
        	
                3.3   

              	
                Non-competition. The
      Marketing Arm declares that it is not currently selling or promoting
      products that are competitive with the Products in the Territory and/or
      the Fields, and that the Marketing Arm does not have, nor during the term
      of this Agreement will it have, any conflict of interest or otherwise be
      subject to any restriction or third party agreement that would
      substantially adversely impair or prevent the Marketing Arm from
      representing the Products in the Territory and in the Fields faithfully
      and diligently, and during the term of this Agreement and for a period of
      two (2) years following its termination,  will not sell or
      promote products that are competitive with the Products.
  

              

      

       

      It is
hereby clarified that for the purposes of this Section 3.3 "products that are competitive with
the Products" means products with the same functionality of the Products
and that an end user customer may consider purchasing as an alternative to the
Product for the same purpose, and further provided that such products, which may
be competitive,  utilize electro-chemical technologies for water
purification.

       

      
        	
                3.4   

              	
                Marketing and Sales
      Plan. Prior to the signing of this Agreement the Marketing Arm has
      provided Elgressy with a detailed marketing and sales plan for the first
      year, including quarterly sales targets (“Short Marketing Plan”). The
      signing of this Agreement by the parties hereto is deemed consent of the
      Parties to the content of the Short Marketing Plan. The Short Marketing
      Plan includes the following:

              

      

       

      
        	
                3.4.1    

              	
                An aggregate sales
      target of US$750,000 (seven hundred and fifty thousands US dollars) for
      Germany;
      and,

              

      

       

      
        	
                3.4.2    

              	
                An aggregate minimum
      sales target of US$750,000 (seven hundred and fifty thousands US dollars)
      for 3 States chosen out of those listed on Schedule 1.15 (the
      "Chosen
      States"),
      for the first calendar year. It is agreed that
      the Marketing Arm shall inform Elgressy by written notice within 3 months
      of signing this Agreement of the identity of the Chosen
      States.

              

      

       

      
        	
                3.4.3    

              	
                An additional
      aggregate sales target of US$750,000 (seven hundred and fifty thousands US
      dollars) for the Power
Plants;

              

      

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      
        	
                3.4.4    

              	
                An additional
      aggregate target of two Pilots in the Hotels chosen out of Schedule 1.5,
      within 6 months of signing this Agreement (the "Chosen
      Hotels")
      and a sales target of US$100,000 (one hundred thousand US dollars) for the
      Chosen Hotels together (at least US$50,000 in each of the two Hotels) for
      the first calendar year. It is agreed that the Marketing Arm shall inform
      Elgressy, by written notice, within 3 months of signing this Agreement, of
      the identity of the Chosen Hotels.

              

      

       

      
        	
                3.4.5    

              	
                It is clarified that
      the aggregate total sales target for the first year commencing upon
      signing this Agreement is US$2,350,000 (two million three hundred and
      fifty thousand US dollars).

              

      

       

      
        	
                3.4.6    

              	
                Each
      of the sales targets set forth in the Short Marketing Plan or annual
      targets for the Five Year Marketing Plan, respectively, shall be deemed to
      be achieved, if the annual aggregate Contract Value of the agreements
      relating to each of such Territory or Field entered into by the Marketing
      Arm and/or any of its Subagents within the relevant year, shall be equal
      to or greater than 75% of US$750,000 (seven
      hundred and fifty thousands US dollars), and, with respect to the Chosen
      Hotels, equal to or greater than US$100,000 (one hundred thousand dollars)
      with respect to the Short Marketing Plan and 75% of the sales
      target for each year specified in the Five Year Marketing
      Plan.

              

      

       

      
        
          	
                   

                	
                  For
      the purposes of this Agreement the term "Contract Value" means
      the minimum projected total aggregate amount of all income to be generated
      over 12 (twelve) months from signing a specific contract, in accordance
      with the terms of that contract, commencing upon the signing of such
      specific contract regardless whether such period will extend beyond the
      year with respect to which sales targets are being calculated, according
      to the terms of such specific contract; provided however that if
      the actual total
      aggregate amount of all income generated, with respect to each Lease and
      Sale Agreements - during the twelve (12) months period from its signing,
      from Lease and Sale Agreements entered into during the relevant (relevant
      for the purposes of sale target calculations) year is less than the
      amounts specified in this Section 3.4.6 above then the said sales targets
      shall be deemed not to have been achieved, and the provision of Section
      3.8 below shall apply, including the Marketing Arm Option, as defined
      therein.

                

        

      

       

      It is
further clarified and agreed for the purposes of assessing whether a sales
target is met, that:

       

      (i) if
such Lease or Sale Agreement has been cancelled
-  then   the shortfall projected income as from the
cancelation date shall be deducted from the calculation as to whether a
performance target has been achieved with respect to the relevant year (it is
hereby clarified that any income due or actually generated from a cancelled
contract shall be taken into account when calculating Contract Value and sales
targets, respectively, for the purposes of this Agreement); and

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      (ii)
notwithstanding the above, if such Lease or Sale Agreement has been cancelled
and such cancellation is caused by Elgressy's delay in the supply of the
Products and/or Elgressy's breach of its undertakings under this Agreement
and/or as a direct result from any act or omission of Elgressy, Elgressy's
agents and/or representatives and/or any third party on Elgressy's behalf the
aggregate projected income originally anticipated from such Lease or Sale
Agreement shall be deemed to be actually generated for the purposes of
determining whether a sales target is met.

       

      
        	
                3.5   

              	
                Hotels and States. If
      the Marketing Arm achieves the aforesaid targets with respect to the
      Chosen Hotels (both Pilot targets and sales targets), then in the
      following year the Marketing Arm shall be entitled to the rights granted
      under this Agreement with respect to two additional Hotels and to one
      additional State, out of the list attached hereto as Schedule
      1.8,  and this mechanism shall continue in the years thereafter,
      granting the Marketing Arm the rights to sell to two additional Hotels a
      year, and one additional State  for each subsequent year,
      subject to its meeting the previous year's sales target for such Chosen
      Hotels or Chosen States (including for the States added as aforesaid), as
      applicable.

              

      

       

      
        	
                3.6   

              	
                Five Year Marketing Plan.
      Attached to this Agreement as Schedule 3.6,
      are the five year sale targets including projections for each of the
      different States, Territories  and Fields, for the first five
      (5) years following the first calendar year of this Agreement (the “Five Year Marketing
      Plan”).

              

      

       

      
        	
                3.7   

              	
                Updated Targets.  It is agreed that
      each of the annual sale targets in the Five Year Marketing
      Plan,  for subsequent five (5) year periods and thereafter shall
      be at least 4%
      greater than the targets for the previous calendar
      year.

              

      

       

      
        	
                3.8   

              	
                Non-Performance. If the
      Marketing Arm does not meet at least 75% of its annual targets as set out
      in the Short Marketing Plan and in the Five Year Marketing Plan and/or
      with regard to the Pilot targets (“Non-Performance”), as
      updated from time to time in accordance with Section 3.7 above, then
      subject to Marketing Arm Option, as defined below, (i) Elgressy may at any
      time and in its sole discretion, terminate the Marketing Arm's rights to
      exclusivity
      with respect to the Territory and/or the Field regarding which the
      Non-Performance occurred, by giving ninety (90) days written notice to the
      Marketing Arm. For as long as Elgressy has not granted any third party
      exclusive rights for such Territory or Field, the Marketing Arm will be
      allowed to continue and operate on a non-exclusive basis in such Territory
      or Field, or part thereof, which is not subject to third party exclusivity
      rights) as the case may be. Upon the appointment by Elgressy of an
      exclusive representative or agent in a Chosen State or Germany or Field,
      the Marketing Arm will have no further rights in such Chosen State or
      Germany or Fields, as the case may be, except under existing Sales or
      Lease Contracts. The Marketing Arm shall not have any claims and shall not
      be entitled to any remedy against, and compensation from, Elgressy or
      anyone acting on its behalf, in connection with any such termination of
      rights. It is hereby clarified, that if the Marketing Arm does not achieve
      75% of the aforesaid annual targets with respect to the States, it shall
      lose its exclusivity with respect to all the States. However
      notwithstanding the above, if an annual target is not met, the Marketing
      Arm shall have the option to pay Elgressy a cash payment equal to
      Elgressy's share in the shortfall with regard to 75% of the relevant
      annual target, in order to keep its exclusivity in the aforementioned
      Territories or Fields (the "Marketing Arm Option").
      The Marketing Arm Option must be exercised and funded within sixty (60)
      days of the end of a relevant year, after which it shall
      expire.

              

      

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      Notwithstanding
the above, in the event that (i) the Marketing Arm did not exercise the
Marketing Arm Option, and (ii) Elgressy has not granted any third party
exclusive rights for any Chosen State or Germany or Field, and (iii) in the year
following the Non-Performance, the Marketing Arm has achieved the relevant
targets for a Chosen State or Germany or Field for the year for which
Non-Performance occurred and for the following year, the exclusivity shall be
reinstated for such Chosen State or Germany or Fields, as the case may be and
the above paragraph of this Section 3.8 shall apply. For the purpose of this
section, the target for the Chosen States shall be reduced proportionally for
the Chosen  States  in which exclusivity has been granted by
Elgressy to a third party. (i.e., if Elgressy grants exclusivity with respect to
one of the Chosen States, and assuming there are three Chosen
States,  the annual target with respect to the
Chosen  States  left shall be reduced from US$750,000 (seven
hundred and fifty thousands US dollars) to US$500,000 (five hundred thousands US
dollars).

       

      
        	
                3.9   

              	
                Reports.

              

      

       

      
        	
                3.9.1    

              	
                Subject
      to any applicable law and regulation, the Marketing Arm shall provide
      Elgressy with a written report, not later than thirty (30) days following
      the completion of each quarter, indicating the Marketing Arm’s
      sales/leases in the Territory in the previous calendar quarter, with the
      Customer’s name and address. The Marketing Arm will also provide Elgressy
      copies of all agreements, in connection with the Products, which were
      entered into  with Customers and Subagents. The Marketing Arm
      shall maintain complete and accurate records of the location, quantities,
      catalog number, place of sale in the Territory and lot numbers of all
      shipments as part of its in-house tracking program for a period not less
      than the longer of: (i) three (3) years after the last Product was
      dispatched by Elgressy to the Marketing Arm, and (ii) the period required
      under any applicable law or
regulation.

              

      

       

      
        	
                3.9.2    

              	
                In
      addition, the Marketing Arm shall provide Elgressy with: (i) a report once
      every calendar quarter specifying the Revenues actually received during
      the previous calendar quarter for which payments are due to Elgressy,
      signed by the Marketing Arm's Chief Financial Officer or Chief Executive
      Officer, and (ii) not later than twenty one (21) days following the
      publication of the Marketing Arm's annual a copy of financial statements
      as published subject to the Marketing Arm being a corporation whose stock
      is publicly traded.

              

      

       

      
        
          
          

        

        
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          Exclusive
Marketing Agreement

        

         

      

      It is
hereby clarified, that for the purpose of this Agreement the term "Revenues"
shall mean any and all payments actually received by the Marketing Arm from
Customers and Subagents (with regard to Products).

       

      
        	
                3.10         

              	
                Lease Agreements. The Marketing Arm
      undertakes that all Lease Agreements shall be consistent with this
      Agreement and shall include the following provisions: (i) all Customers
      shall be connected to Elgressy’s control center, if available, and (ii) in
      the event that the Marketing Arm shall breach the Elgressy SLA which
      breach shall not be cured within thirty (30) days from the receipt of
      written notice from Elgressy to this effect, the Lease Agreement
      (including all rights and obligations thereof) will be assigned by the
      Marketing Arm to Elgressy or its designee, upon Elgressy’s written request
      to such assignment. The Marketing Arm shall provide Elgressy with an
      electronic copy of all signed Lease Agreements. The aforementioned
      provisions shall apply mutatis mutandis to any
      Sales Agreement.  It is hereby agreed that the Marketing Arm
      shall make its best efforts that a Lease Agreement shall not include any
      provision with respect to penalty in case of delay in delivery; however,
      in the event that a Customer insists on such a provision in its Lease
      Agreement or Sale Agreement, such provision in the Lease Agreement or Sale
      Agreement will be subject to Elgressy's prior written consent and approval
      ("Special
      Provision"), in order for Elgressy to be deemed liable for payment
      thereof.

              

      

       

      
        	
                3.11         
      

              	
                Permits and Approvals.
      If any Installation (as defined below) requires any permits and
      approvals under the jurisdiction of the Territory and/or the Field, as
      applicable, the Marketing Arm shall obtain such permits and approvals at
      its sole expense - all, subject to Section 6
  below.

              

      

       

      
        	
                3.12         

              	
                Additional
      Installations. With respect to
      any Installation following the first two Installations ("Additional
      Installations") in each of Germany, each Field and the States
      (together) the Marketing Arm, by itself or through suitable contractors
      located by the Marketing Arm ("Contractors"), shall execute the
      Installation, as well as provide technical support to the Customers for
      the entire Lease Agreement period, subject to the terms and conditions of
      such Lease Agreement and this Agreement.  All  the
      costs and expenses relating to these Additional Installations will be
      borne by the Marketing Arm.  It is clarified that the first two
      Installations in each of Germany, each Field and the States (together) (8
      Installations in total) (the "Initial Installations")
      shall be carried out according to Section 4.8
  hereto.

              

      

       

      
        	
                3.13         
      

              	
                Subagents/Contractors.
      Any agreement with a Subagent and/or Contactor shall include a
      provision according to which any such agreement, including all rights and
      obligations thereof, may be assigned by the Marketing Arm to Elgressy or
      its designee, subject to Elgressy's prior written
  consent.

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                3.14         

              	
                Service Warranty. Upon Customer's
      request only, the Marketing Arm shall provide each Customer with a service
      warranty consistent with the MA
SLA.

              

      

       

      
        	
                3.15         

              	
                Title to Modifications.
      The Marketing Arm agrees that Elgressy shall have any and all right, title
      and interest in and to any modifications, design changes or improvements
      arising directly out of or in direct connection to the Products'
      technology suggested by the Marketing Arm, its employees, Subagents,
      Customers, or other persons, without the payment of any additional
      consideration therefor either to any of such persons, except to the
      extent, and then only to the extent, required by applicable law otherwise.
      The Marketing Arm will execute (and/or cause the execution) of all
      reasonable documents and take (and/or cause to be taken) all other
      reasonable action necessary to vest all such right, title and interest in
      such modifications, design changes or improvements in Elgressy; provided
      however that any costs and expenses incurred by the Marketing Arm and/or
      its Contactor or Subagents with respect to this Section shall be borne
      and/or reimbursed by Elgressy, subject to its prior written consent. For
      removal of doubt the Marketing Arm and/or its Contractor and/or Subagents'
      undertakings under this Section shall be subject to such reimbursement by
      Elgressy, and the reasonable availability of the Marketing Arm and/or is
      Contractor and/or Subagent's.

              

      

       

      
        	
                4.  

              	
                ADDITIONAL
      OBLIGATIONS OF ELGRESSY

              

      

       

      
        	
                4.1   

              	
                Sales Support. Elgressy
      shall provide the Marketing Arm with any and all sales and marketing
      information available with regard to the Products and shall furnish,
      without charge, such promotional literature, and other materials
      pertaining to products as are available from time to time. Elgressy hereby
      authorizes the Marketing Arm and any of its employees and Subagents to use
      such material and information in connection with the Products as well as
      with any other material and information available on the Elgressy website
      as may be updated from time to
time.

              

      

       

      
        	
                4.2   

              	
                Control Center. Subject
      to the terms of this Agreement, the Lease Agreements and the Sale
      Agreement, Elgressy hereby undertakes to (i) enable the connection of each
      and every Customer's Product to its control center within thirty (30) days
      following such request from the Marketing Arm and through provision of the
      Products with the relevant functionality to allow such connection; (ii) to
      provide control, malfunction assessments and diagnosis in real time
      pursuant to the Elgressy SLA for a period equal to the term of each Lease
      Agreement.

              

      

       

      
        	
                4.3   

              	
                Warranty
      and Process Guarantee.

              

      

       

      
        	
                4.3.1    

              	
                THE
      WARRANTIES SET FORTH IN THIS SECTION 4.3 ARE
      IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ALL OF WHICH ARE
      HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED BY ELGRESSY, INCLUDING, WITHOUT
      LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
      PURPOSE OR USE.

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                4.3.2    

              	
                The
      warranties and performance guarantee in this Section 4.3 do not extend to
      any Product that is modified or altered, is not maintained according to
      Elgressy’s maintenance recommendations attached hereto as Schedule 4.3.2
      (the "Maintenance
      Recommendations"), is operated, handled or stored in a manner other
      than that specified in the Maintenance Recommendations (as such
      recommendations are reasonably amended by Elgressy from time to time with
      respect to its customers generally), has its serial number removed or
      altered or is treated with abuse, negligence or other improper treatment.
      .

              

      

       

      
        	
                4.3.3    

              	
                Product
      Warranty. Elgressy warrants and represents, for a period of 18
      (eighteen) months commencing upon installation of a Product at the
      Customer's premises (the "Warranty Period") that
      the Products (including any spare parts) shall be free from defects in
      material and workmanship and shall comply with the specifications. The
      Marketing Arm will provide a back-to-back warranty to the Customer in the
      States and the Fields. In Germany, the Marketing Arm shall provide the
      Customers with an Elgressy product warranty unless otherwise demanded by
      Customer, and Elgressy undertakes to provide such Product warranty.

              

      

       

      
        	
                4.3.4    

              	
                Warranty for
      Repairs. Without derogating from the warranty provided in the
      preceding clause, Elgressy warrants and represents that any repair of a
      Product shall be free from material defects in material and workmanship,
      and shall comply with the applicable specifications, for a period of
      eighteen (18) months from the date of repair of such
    Product.

              

      

       

      
        	
                4.3.5    

              	
                Performance
      Guarantee. Elgressy shall provide the Marketing Arm with a
      performance guarantee for the Warranty Period, with respect to the
      Product, as may be adjusted on a project-by-project basis, upon receiving
      the Customer's specifications, whereby Elgressy shall guarantee the due
      performance of the Product pursuant to the specifications and Customer's
      requirement, as set forth in the request for quotation, as may be
      thereafter amended by the consent of the parties. The Marketing Arm will
      provide a back-to-back performance guarantee to the Customer in the States
      and the Fields. In Germany, the Marketing Arm shall provide the Customers
      with an Elgressy performance guarantee, and the latter undertakes to
      supply such performance guarantee

              

      

       

      
        	
                4.3.6    

              	
                Remedies.
      Should there be any defect covered by the warranties and guarantees set
      forth in Sections 4.3.3 to 4.3.5 above, Elgressy shall, at its own
      expense, repair or replace the non-conforming Product pursuant to and
      within the time frame set forth in the Elgressy SLA. It is understood by
      the Parties that neither the Marketing Arm nor any of its Subagents shall
      be entitled to any other remedy from Elgressy under such warranties and
      guarantees unless otherwise expressly stated herein). Notwithstanding the
      aforesaid, it is hereby clarified, that in the event of a malfunction or
      breakdown of a Product within 30 days of Installation, in a way that
      Elgressy is not able to repair or replace such Product, Elgressy shall (i)
      remove the Product from the Customer’s premises, at its own expense, and
      (ii) will return to the Marketing Arm the consideration paid for such
      Product and this shall be the sole and exclusive liability of
      Elgressy.

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                4.4   

              	
                SLA. All of Elgressy's
      obligations hereunder shall be performed at the times and under the terms
      prescribed in the Elgressy SLA.

              

      

       

      
        	
                4.5   

              	
                Products Supply. Elgressy
      undertakes to supply, during the term of this Agreement the Products to
      the Marketing Arm, for the consideration set out in Section 5. In
      addition, Elgressy shall supply to the Marketing Arm, upon the latter’s
      request and free of any consideration, two (2) pilots of the Product
      (“Pilot
      Products”), provided that (i) the cost of each of these Pilot
      Products based on the price set forth in the Price List (as defined below)
      (in this Section only, the "Cost") shall not exceed
      US$10,000 (ten
      thousand US dollars), and (ii) Installation  of the Pilot
      Products shall be as provided for Initial Installations or Additional
      Installations, as applicable, and any, additional expenses such as
      shipment shall not be borne by Elgressy and (iii) the Lease/ Sale
      Agreement with such Customer shall include a provision according to which
      the Customer undertakes to lease/purchase the Product within thirty (30)
      days of Installation, if, the Pilot Products fulfils the performance
      criteria set out in such Lease Agreement or Sale Agreement. It is hereby
      clarified, that (a) in the event that  the Marketing Arm
      requires Pilot Products with a Cost greater than US$10,000,
      Elgressy shall be entitled to receive payment of the difference between
      the Cost of the Pilot Products required and US$10,000 (ten
      thousand dollars); (b) upon the reimbursement of Elgressy for a
      Pilot Product, the Marketing Arm shall be entitled to  a
      replacement Pilot Product such that at all times the Marketing Arm shall
      have at its disposal two (2) Pilot Product
  installations.

              

      

       

      
        	
                4.6   

              	
                Technical Support.
      Elgressy (directly or through its designees) undertakes to provide the
      Marketing Arm and the Customers, as may be required by the Marketing Arm
      and/or by the Customers, with technical support by e-mail or telephone, in
      accordance with the Elgressy SLA. In the event of a malfunction or
      breakdown of a Product during the Warranty Period and subject to the above
      Warranty, Elgressy undertakes that it will, at its expense, solve any
      problems that the Marketing Arm's technical support or the Subagents and
      Contractors are (i) unable to resolve despite the reasonable efforts by
      duly trained personnel, or (ii) unauthorized to resolve pursuant to this
      Agreement, or (iii) if resolved by them would void the warranty granted by
      Elgressy to the Product, and in such cases, to repair or replace such
      Product (or its spare parts), at its own expense upon receipt of a written
      notice of such malfunction or breakdown.  The repaired or
      replaced the Product (or its spare parts) shall be returned to the
      Customer via a commercially acceptable carrier, freight prepaid within
      seven (7) days from the date of the aforementioned notice for parts which
      are considered critical (as defined as in the Elgressy SLA) or within
      thirty (30) days in other cases.

              

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                4.7   

              	
                Customer Information.
      Elgressy undertakes to provide the Marketing Arm with contact information
      of any potential clients that approach it with regard to the Products in
      the Territory and/or in the Fields. Elgressy shall not be entitled to sell
      and/or lease Products and/or provide services with respect to the Products
      in the Territory and/or in the Fields as long as the Marketing Arm is
      entitled to do the same, exclusively, pursuant to this
      Agreement.

              

      

       

      
        	
                4.8   

              	
                Initial Installations.
      Elgressy undertakes that it will ensure that Elgressy's
      professional and suitably trained technical personnel are available to
      execute the Initial Installations. It is agreed that the Parties shall
      take all reasonable efforts to coordinate the Initial Installations in
      order to minimize travel to the States and Germany. Elgressy shall not be
      entitled to any consideration with respect to the above-mentioned Initial
      Installations. The Marketing Arm shall bear costs and expenses incurred by
      Elgressy personnel with respect to such Initial Installations (e.g. flight
      tickets, hotels, etc.). It is clarified that the costs and expenses
      relating to all the personnel of the Marketing Arm and the Customers
      and/or the infrastructure costs relating to these Initial Installations
      will not be borne by Elgressy. Elgressy agrees that the Subagents and/or
      Contractors appointed by the Marketing Arm for the purpose of Additional
      Installations, after sale support and maintenance of the Product at the
      Customer site, will be trained by Elgressy on site and will be permitted
      to observe and participate in all the aforementioned Initial Installations
      in order to acquire the skills which will enable them to undertake
      subsequent Additional Installations to Elgressy’s satisfaction and to
      provide continuous support to Customers, in accordance with
      the  MA SLA provided that
      all expenses thereto will be borne by the Marketing Arm or the Subagent or
      a Contractor  It is hereby
      clarified, that the Marketing Arm shall be responsible for the Additional
      Installations and providing support, in accordance with the MA SLA, and
      Elgressy shall only be obliged, without derogating from any of its
      warranties and guarantees set forth above, to provide for no additional
      consideration, the technical support set forth in Section 4.6 above and in accordance with the Elgressy
      SLA. 

              

      

       

      
        	
                4.9   

              	
                Notification of Changes.
      Elgressy reserves the right to change a Product or its
      specifications or to discontinue the manufacture of one or more of the
      Products, without payment of any compensation to the Marketing Arm,
      subject to Elgressy providing the Marketing Arm with: (i) one hundred
      twenty (120) days advance notice of any material changes or
      discontinuations of Products; and (ii) one hundred twenty (120) days
      advance notice of any changes in Products that are expected to result in a
      change in the catalog number or model number of a Product. Elgressy shall
      notify the Marketing Arm promptly of any material changes in the Products
      or affecting prices, new products, supplementary products, new versions
      and/or generations of the Products, terms, and conditions of sale, sales
      policies, projected delivery dates, schedule changes, and other matters
      that may affect the processing and completion of orders solicited by the
      Marketing Arm. The provisions of this Section 4.9 shall not be applicable to Products with
      respect to which a quotation has been provided by Elgressy, but only to
      Products with respect to which Elgressy has not yet provided a
      quotation.

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                4.10         

              	
                In
      any event of a material change to product and/or material modification of
      its specifications or the replacement of a product by another product all
      in a way that results in material change of the Product functioning or its
      Installation, Elgressy shall train anew the Marketing Arm, its Contractors
      and its Subagents at their premises and/or on site for the first two (2)
      Installations in a Territory or a Field, in accordance with the mechanism
      set out in Section 4.8 above, and maintenance
      of the modified products or new products, in order to enable them to
      install such products in a professional manner and to provide services
      pursuant to Elgressy's SLA.

              

      

       

      
        	
                4.11         

              	
                Elgressy
      hereby grants the Marketing Arm an irrevocable license with a right to
      sublicense, to use the Production Data Package and the Manufacturing
      Technology to manufacture, market and sell, within the Territory and the
      Fields in the event that Elgressy, by itself or through third parties,
      discontinues its engagement in the business (including in case of
      liquidation whether voluntary or otherwise) of selling products for water
      treatment or alternatively if Elgressy discontinues the manufacture of the
      Products or any "product that is competitive with the Products" (as such
      phrase is defined in Section 3.3 above) by itself or through third parties
      (including in case of sale of the business or assets of Elgressy in the
      framework which the purchaser reserves the rights of the Marketing Arm
      pursuant to this Agreement); provided,
      however,
      that Elgressy shall be entitled to a royalty payment equal to 10% (ten
      percent) of any and all of the consideration, excluding VAT, sales
      tax or any similar tax, actually paid by the end-user
      Customer  to either the Marketing Arm or any of its subsidiaries
      or affiliate or sub-licensees with respect to any use, sale, license,
      distribution or any other manner, of such Production Data Package and the
      Manufacturing Technology or products relating thereto, as long as the
      Marketing Arm uses such license or any of the rights connected to or
      arising thereof out of, the Production Data Package and the Manufacturing
      Technology. It is hereby clarified that the Marketing Arm shall be
      entitled to withhold taxes from the amounts due to Elgressy to the extent
      required by any applicable law, unless Elgressy has provided the Marketing
      Arm with the required document which under the applicable law, removes the
      Marketing Arm's legal requirement to withhold taxes. The Marketing Arm
      shall provide Elgressy with documentary evidence of any such
      payments.

              

      

       

      
        
          	
                   

                	
                  For
      the purposes of the license granted to the Marketing Arm under this
      Section,  within ninety (90) days of signing the first Lease
      Agreement, Elgressy will deposit the Production Data Package and the
      Manufacturing Technology of all Products and any other relevant
      information required for the manufacture of the Product with Escrow Europe
      in Israel, who will act as a trustee for the parties hereto and shall be
      required to release such material to the Marketing Arm
    only:

                

        

      

       

      
        	
                (a) 
       

              	
                 If
      Elgressy, by itself or thorough third parties, discontinues its engagement
      in the business of selling products for water treatment (including in case
      of liquidation whether voluntary or otherwise);
  or

              

      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                (b) 
       

              	
                If
      Elgressy, by itself or through third parties, for a period of 6 (six)
      months, is unable to provide
  a  Product;

              

      

       

      
        	
                 
      

              	
                The
      Marketing Arm shall bear all costs with respect to the
      trustee.

              

      

       

      
        	
                4.12         
      

              	
                Spare Parts. Elgressy
      undertakes to supply to the Marketing Arm, such amount of inventory in
      order to meet all undertakings set forth in the Lease Agreements,
      including without limitation to provide spare parts for any Products sold
      by the Marketing Arm in accordance with the Lease Agreements. The
      Marketing Arm will pay for these spare parts according to the Price List.
      Elgressy undertakes to hold, during the term of this Agreement and with
      respect to each Product installed at a Customer's site for a period equal
      to the lease period, as may be extended or renewed from time to time, a
      minimum level of inventory in order to meet all undertakings set forth in
      this Agreement and in the Lease Agreements. Such inventory will be kept at
      all time in good order and in marketable
  conditions.

              

      

       

      
        	
                4.13         

              	
                Capacity. Without
      derogating from the generality of the foregoing in Section 5, Elgressy
      warrants that given a two (2) month lead-time it is able to manufacture
      and dispatch such number of Products equal to the quantity forecast by the
      Marketing Arm for any given three (3) month period pursuant to Section 5 below above. In addition, Elgressy warrants
      that it is able to manufacture and supply Products pursuant to the Short
      Marketing Plan and the Five Year Marketing Plan as to enable the Marketing
      Arm to meet the sales targets set forth therein, and further, that such
      capacity shall be maintained, and if necessary increased, throughout this
      Agreement. Elgressy agrees to supply to the Marketing Arm, subject to
      reasonable allocations among all of Elgressy’s distributors based on
      relative sales and gross margins resulting from these sales, in their
      respective territories, sufficient quantities of any discontinued Products
      to cover reasonable Customer orders or tenders applied for by the
      Marketing Arm prior to a notice of discontinuance of a
      Product.

              

      

       

      
        	
                4.14        
       

              	
                Meetings. Upon the
      Marketing Arm's request that a representative of Elgressy attends a
      meeting with a potential customer, Elgressy undertakes, at its expense, to
      ensure that a competent Elgressy representative shall be available in
      person to attend such meeting, provided, however that Elgressy will not be
      required to participate in meetings in the United States and Germany more
      than twice a year each. Elgressy may attend additional meetings upon the
      Marketing Arm’s requests and at the Marketing Arm’s expense, subject to
      Elgressy’s sole discretion.

              

      

       

      
        	
                4.15        
       

              	
                Elgressy IP Rights.
      Elgressy hereby represents and warrants to the Marketing Arm that: (i) to
      the best of Elgressy's knowledge, none of the Intellectual Property
      related to the Products, the Manufacturing Technology and the Production
      Data Package infringes any rights of any third party and there are no
      notices and/or claims pending against Elgressy alleging that the
      production process and/or the use of the Products infringes the rights of
      any third party; (ii) any and all transfers of Intellectual Property
      rights by Elgressy shall be carried out subject to and without derogating
      from the rights of the Marketing Arm pursuant to this Agreement (iii) to
      the best of Elgressy's knowledge, Elgressy owns all Intellectual Property
      Rights necessary for the operation of the business of the Elgressy as
      presently conducted and as  proposed to be conducted under this
      Agreement, except for future developments or adjustments to the Products
      that may be required.

              

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                4.16        
       

              	
                Performance Standard.
      Elgressy represents and warrants that the performance table
      attached hereto as Schedule 4.16 accurately
      represents the range of savings of water and chemicals which occur
      directly as a result of the use of the Products under reasonable
      conditions.

              

      

       

      
        	
                5.  

              	
                METHOD
      OF ORDERING AND ACCEPTANCE OF
ORDERS

              

      

       

      
        	
                5.1   

              	
                Forecast. The Marketing
      Arm undertakes to provide Elgressy, within ten (10) days before the end of
      every calendar quarter, with a sales forecast for the following three (3)
      months. Elgressy undertakes to supply the forecasted sales within 2 months
      from the relevant order date. It is hereby agreed and clarified that the
      forecast provided by the Marketing Arm is for administrative purposes only
      and shall not be deemed an obligation of the Marketing Arm to purchase
      Products pursuant to the forecast, in any way
  whatsoever.

              

      

       

      
        	
                5.2   

              	
                Quotations. Within
      seventy two (72) hours after receiving a request for a quotation
      (submitted in accordance with the form set out in Schedule 5.2
      attached hereto) from the Marketing Arm, Elgressy shall submit a
      quotation, valid for three (3) months, whereby Elgressy will be committed
      to supply the Product with respect to which the quotation is given
      pursuant to the terms and conditions of this Agreement including without
      limitation pursuant to the Price List, as defined
  below.

              

      

       

      
        	
                5.3   

              	
                Purchase Order.
      Following the receipt of a quotation from Elgressy as set forth above, the
      Marketing Arm shall be entitled to provide Elgressy during the three (3)
      month term, with a binding Purchase Order (as defined below), with respect
      to Products covered by the quotation. Such purchase order shall reference
      the quotation, and shall specify: (i) the Products covered by the purchase
      order; (ii) requested delivery date; (the "Purchase Order").
      Elgressy will confirm receipt of a Purchase Order within two (2) business
      days in Israel from its receipt. Elgressy undertakes to meet the delivery
      dates set forth in each Purchase Order, only to the extent consistent with
      the terms of this Agreement, including payment terms, unless otherwise
      agreed by the Parties. A Product shall not be deemed to have been ordered
      by the Marketing Arm unless and until Elgressy receives a signed Purchase
      Order which has been confirmed pursuant to this Agreement by Elgressy,
      which confirmation shall not be withheld if such Purchase Order complies
      with the terms set forth in this
Agreement.

              

      

       

      
        	
                5.4   

              	
                Elgressy
      may decline to provide a quotation
only:

              

      

       

      
        	
                5.4.1    

              	
                in
      the event that for the compliance with a Regulatory Requirement within the
      Territory and/or the Fields or a Customer’s requirement, material
      technological adjustments/modifications of Products and/or any
      technological development work are required;
or

              

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                5.4.2    

              	
                 LSI at in-let
      water > 1 and pH >8

              

      

       

      
        	
                6.  

              	
                REGULATORY
      REQUIREMENTS

              

      

       

      Elgressy
manufactures and will manufacture the Products at all times in compliance with
the CE standard applicable to Europe and the UL standard applicable to United
States. Elgressy further undertakes to comply in material respects with the
applicable Regulatory Requirements in Israel including without limitation: (i)
to possess a valid business license and any other permits and licenses to enable
it to perform its obligations hereunder; and (ii) to comply with applicable
environmental laws in all material respect; and (iii) to comply with
occupational health and safety standards and regulations, in each case expect
where such failure would not materially adversely affect its performance
pursuant to this Agreement. Elgressy further undertakes to comply in material
respects with the applicable Regulatory Requirements in other regions in which
it has activity, to the extent required to fully comply with its obligations
pursuant this Agreement.

       

      The
Marketing Arm undertakes to comply in material respects with all applicable
Regulatory Requirements required for its activities under this Agreement
including without limitation: (i) to possess a valid business license and any
other permits and licenses to enable it to perform its obligations hereunder;
and (ii) to comply with occupational health and safety standards and
regulations, in each case expect where such failure would not materially
adversely affect its performance pursuant to this Agreement.

       

      The
Marketing Arm shall inform Elgressy of any applicable specific regulatory
requirements in each of the Fields or States to the extent that it is aware of
any. Elgressy shall make commercially reasonable efforts to comply with such
regulations, subject to Section 5.4 above, to the
extent applicable to its obligations under this Agreement, if these changes
affect the cost of the Product, the price of the Product will be updated
accordingly.

       

      
        	
                7.  

              	
                INDEMNIFICATION

              

      

       

      
        	
                7.1   

              	
                Indemnification by Elgressy.
      Elgressy shall indemnify, defend and hold the Marketing Arm and its
      affiliates, and its and their respective officers, directors, employees,
      agents and shareholders, and its and their respective assigns, heirs,
      successors and legal representatives harmless from and against, any and
      all Claims, that arise out of any claim of a third party asserted against
      the Marketing Arm arising as a result of : (a) any Elgressy Liability (as
      defined below) including without limitation in connection with any defect
      in the design, built, manufacture and the performance of the Product; (b)
      any infringement or
      misappropriation of any patent or intellectual property rights of such
      third party relating to a Product(s) including without limitations in
      connection with the Trademarks, as defined below; (c) any claim covered by
      the warranties and guarantees provided by Elgressy under this Agreement;
      or (d) any other negligent or intentional act or omission of Elgressy, its
      employees or representatives.

              

      

       

      
        	
                7.2   

              	
                Indemnification by the
      Marketing Arm. The Marketing Arm shall indemnify, defend and hold
      Elgressy and its Affiliates, and its and their respective officers,
      directors, employees, agents and shareholders, and its and their
      respective assigns, heirs, successors and legal representatives harmless
      from and against, any and all Claims, that arise  out of any
      claim of a third party asserted against the Elgressy arising as a result
      of (a) any Marketing Arm Liability (as defined below); or (b) any other
      negligent or intentional act or omission of the Marketing Arm, its
      employees or representatives, Contractors and Subagents; or (c) any
      Special  Provision to which Elgressy did not agree in advance as
      set forth in Section 3.10
    above.

              

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                7.3   

              	
                It
      is further agreed that the indemnification obligations of the Parties
      hereto as set forth in Section 7.1 and 7.2 above shall be limited to the
      amount actually received by the indemnifying party under its insurance
      policy purchased pursuant to Section 7.6 (Insurance) below, if and to the
      extent that such insurance policy covers such liability and such amount
      are actually received from the insurance company and if such liability is
      not covered by insurance and/or no amounts are actually received from the
      insurance company, the liability will be as otherwise provided in this
      Agreement. Notwithstanding the foregoing with regard to IP Infringement
      Awards (defined in Section 8.1) Elgressy’s liability shall be
      unlimited.

              

      

       

      
        	
                7.4   

              	
                Without
      derogating from Marketing Arm's rights to be indemnified pursuant to this
      Agreement, if a Claim is to be made by a third party with regard to
      intellectual property infringement relating to any or all Products, the
      Party that received the Claim shall immediately notify the other Party.
      After such notice, Elgressy shall advise the Marketing Arm within the time
      specified in such Claim,  if it elects at its own cost, risk and
      expense, to assume the defense and investigation of such lawsuit or action
      and/or, to compromise or settle such claim. It is hereby agreed that the
      aforementioned defense, investigation and/or compromise shall not derogate
      in any way whatsoever from the Marketing's Arm's rights pursuant to this
      Agreement. In the event Elgressy decides not to pursue the defense and/or
      compromise and/or settle such claim, it shall promptly notify the
      Marketing Arm of its decision which shall constitute an irrevocable
      authorization for the Marketing Arm to assume the defense at its own risk
      and expense, and in such case (A) if a judgment is given against the
      Marketing Arm or Elgressy with regard to such Claim, the provisions of
      this Agreement shall continue to be in effect to the extent practical, or
      (B) if the Marketing Arm wins such a Claim, then: (i) Elgressy shall grant
      the Marketing Arm exclusivity with respect to the Territories and/or
      Fields to which such Claim relates, without the Marketing Arm's need to
      fulfill the targets relating to such Territories and/or Fields, and (ii)
      until the Marketing Arm has recouped from sales of the Products an amount
      equal to the actual out of pocket costs and expenses incurred by the
      Marketing Arm with respect to defending such Claim, the Marketing Arm
      shall not be required to pay Elgressy the Additional Payment (as defined
      in Section 9.1.2 below)  for the Products relating to such Claim
      with respect to the specific Territory, State or Field to which the Claim
      relates, however, once the Marketing Arm recoups from sales or leases of
      the Products the amount equal to the actual out of pocket costs and
      expenses incurred by it with respect to defending such Claim, it shall
      again begin paying Elgressy the Additional Payments in accordance with
      Section 9.   However,  in the event that other
      distributors of the Products also wish to assume the defense – the costs
      and expenses shall be allocated pro-rata between
  them.

              

      

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      In the
event that the Marketing Arm assumes the defense of the Claim, Elgressy will
provide all documents and information reasonably required for such defense
and  the Marketing Arm shall not compromise the Claim if such
compromise contains any admission of liability by Elgressy or an undertaking of
payment by Elgressy, without Elgressy’s prior written consent.

       

      It is
hereby clarified, that in case of a Federal claim, the mechanism stated in this
Section 7.4 shall not apply, and the Parties shall decide on a case to case
basis how to handle such Claim.

       

      
        	
                7.5   

              	
                Indemnification
      Procedure. The indemnification obligations herein shall be subject
      to the following conditions and limitations: (i) any of the parties
      entitled to be indemnified pursuant to the above (the "Indemnified Party")
      shall notify the other party (the “Indemnifying Party”)
      promptly after the assertion of any claim, demand, complaint, other action
      by a third party or occurrence of any event which may give rise to
      indemnification hereunder; (ii) the Indemnifying Party shall be entitled
      to assume the defense against such claim, demand, complaint or other
      action, in which case the Indemnified Party shall provide the Indemnifying
      Party with reasonable access to its records and personnel relating thereto
      during normal business hours, and shall otherwise cooperate with the
      Indemnifying Party in the defense or settlement thereof; and (iii) whether
      or not the Indemnifying Party has assumed the defense as aforesaid, none
      of the Indemnified Party or the Indemnifying Party shall settle or
      compromise any such action or claim, without the prior written consent of
      the other party, which shall not be unreasonably
  withheld.

              

      

       

      
        	
                7.6   

              	
                Insurance. Each Party
      undertakes that at all times throughout the term of this Agreement it
      shall maintain in effect, on its own account, with respect to the Products
      and its obligations under this Agreement, product liability insurance,
      third party liability insurance, employer's liability insurance and
      property insurance policies. The insurance policies will be issued by a
      reputable insurer and will each have a limit of liability per occurrence
      and in the yearly aggregate as shall be agreed by the parties in writing
      within forty five (45) days following the signing of this Agreement and
      following the receipt of an insurance expert's advice. Such policies shall
      name the other Party as an additional insured or loss payee and shall be
      cancelable only after sixty (60) days advance written notice to the other
      Party. The above policies shall, to the extent insurable, also cover
      contractual liability and shall provide for the protection of a waiver of
      subrogation by all insurance carriers in favor of the other party. Without
      derogating from the obligation to produce insurance policies as set forth
      above, each Party shall from time to time furnish to the other party
      certificates of insurance evidencing such insurance policies, at the
      Marketing Arm's request. In the event that the Parties hereto will be
      advised to purchase a single insurance policy (regarding third party
      claims and product liability) for both Parties, subject to the consent of
      all Parties to do so, the provisions of this Section 7.6 shall apply to such insurance policy, mutatis mutandis.

              

      

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                7.7   

              	
                The
      Parties hereto hereby agreed that the costs of the product liability
      insurance policy with respect to the Products purchased by the Marketing
      Arm shall be borne by the parties hereto in equal parts. However,
      Elgressy's share of the said costs shall be deducted each year from the
      Additional Payments due to Elgressy in the first four transactions under
      this Agreement (hereinafter "Elgressy Insurance
      Participation
Costs").  

              

      

       

      
        	
                8.  

              	
                LIABILITIES

              

      

       

      
        	
                8.1   

              	
                Subject
      to the terms and conditions of this Agreement, including the Elgressy
      limited warranty according to Section 4.3 above, Elgressy shall be liable
      for all debts, liabilities and obligations of any kind, including without
      limitation under applicable Regulatory Requirements or to any third party,
      incurred in direct or indirect connection with the manufacture of the
      Products and the performance of its obligations under this Agreement
      during the term of this Agreement commencing after its signing by both
      parties hereto and/or resulting from any product liability or intellectual
      property infringement, environmental law or similar claim filed against
      the Marketing Arm by Elgressy or any third party with respect to any
      Products manufactured by Elgressy (the "Elgressy Liability").
      Notwithstanding the foregoing, with regard to third party claims with
      regard to intellectual property infringement by
      Elgressy,  Elgressy’s liability to indemnify the Marketing Arm
      for all amounts awarded in favor of such third party by a final judgment
      of a competent court against the Marketing Arm with respect
      to  breach by Elgressy of such third party’s intellectual
      property rights (“IP
      Infringement Awards”), shall be
  unlimited.

              

      

       

      
        	
                8.2   

              	
                Subject
      to the terms and conditions of this Agreement, the Marketing Arm shall be
      liable for all debts, liabilities and obligations of any kind, including
      without limitations under applicable Regulatory Requirements or to any
      third party, incurred in direct or indirect connection with the marketing,
      sale installation, support and service of the Products pursuant to this
      Agreement, during the term of this Agreement commencing after its signing
      by both parties hereto (the "Marketing Arm
      Liability").

              

      

       

      
        	
                8.3   

              	
                It
      is hereby agreed and clarified that in no event whatsoever, shall the
      liability of either Party except with respect to Elgressy unlimited
      liability with regard to IP Infringement Awards, under this Agreement
      exceed the amount actually received by such Party in consideration during
      three years (as from Installation), for the specific project in connection
      with which the liability will arise. For the purposes of this Section the
      amount actually received by the Marketing Arm shall be deemed to be the
      amount received by the Marketing Arm after deduction of any amount paid to
      Elgressy under this Agreement with respect to the relevant Product.
      Furthermore, the indemnification obligations of either Party shall not be
      enforceable in the event of intentional acts and/or omissions and/or gross
      negligence on the part of the Party claiming for
      indemnification.

              

      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                8.4   

              	
                IN
      NO EVENT WILL ANY PARTY HERETO, OR ITS RESPECTIVE SUBSIDIARIES,
      AFFILIATES, EMPLOYEES, OFFICERS, AND DIRECTORS, HAVE ANY LIABILITY UNDER
      THIS AGREEMENT, REGARDLESS OF THE BASIS ON WHICH THE OTHER PARTY IS
      ENTITLED TO CLAIM DAMAGES (INCLUDING BREACH, NEGLIGENCE,
      MISREPRESENTATION, OR OTHER CONTACT OR TORT CLAIM) FOR ANY SPECIAL,
      INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES, OR FOR ANY ECONOMIC
      CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR SAVINGS), EVEN IF
      FORESEEABLE OR EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
      SUCH DAMAGES. FOR THE REMOVAL OF DOUBT, THE FOREGOING LIMTATION SHALL NOT
      APPLY TO LEGAL FEES INCURRED BY ANY PARTY
  HERETO.

              

      

       

      
        	
                9.  

              	
                REVENUE
      BASED MODEL

              

      

       

      
        	
                9.1   

              	
                Elgressy
      shall be entitled to the following consideration for all Products
      leased/sold to Customers (the "Revenue Based Model")
      under a Lease/Sale Agreement:

              

      

       

      
        	
                9.1.1    

              	
                Payment for the
      Products on the basis of the "ex–works" price set forth in the Elgressy
      price list attached hereto as Schedule 9.1.1 (a) (the
      "Price
      List")
      multiplied by a factor of 1.10 (one point ten) (the “Product’s
      Price”)
      upon payment conditions attached hereto as Schedule 9.1.1 (b). Packing,
      shipment, insurance and delivery costs will be at the Marketing Arm's
      expense; and,

              

      

       

      
        	
                9.1.2    

              	
                An additional payment
      with respect to each Product, in the amount of 40% of the Lease Price
      actually received after deduction of: (i) any "sales tax", VAT (Value
      Added Tax) or similar tax, if applicable; and (ii) the Product's Price (as
      defined in Section 9.1.1 above), to be paid
      monthly, until the 15th of each month with
      respect to the amounts actually received in the previous month
      (hereinafter the "Additional
      Payment.)
      Such Additional Payment will be made in accordance with and subject to the
      amounts actually received by the Marketing Arm, in the relevant month,
      from the Customers  or Subagents (as applicable) following
      receipt of an invoice from Elgressy. It is clarified that the amounts
      payable under this Section 9.1.2 with respect to each
      specific Product, shall commence being paid to Elgressy after the
      Marketing Arm has deducted from the consideration for such specific
      Product actually received from the relevant Customer, or Subagents (as
      applicable) an aggregate amount equal to the sum paid to Elgressy for the
      Product. Notwithstanding the
      foregoing it is agreed by the parties that the Marketing Arm shall be
      entitled to deduct the "Elgressy Insurance Participation Costs" as defined
      in Section 7.6 above, from any
      Additional Payment the latter is entitled
  to.

              

      

       

      
        	
                9.1.3    

              	
                It is agreed that in
      the event that the Marketing Arm purchases a Product from Elgressy for the
      purpose of selling it to a Customer pursuant to a Sales Agreement, upon
      Customer’s request, the consideration to Elgressy shall the price
      specified in the Price List multiplied by three (3). The terms and
      conditions of this Agreement shall apply to any of the Sale Agreements,
      mutatis
      mutandis.

              

      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                10.  

              	
                INTELLECTUAL
      PROPERTY

              

      

       

      
        	
                10.1         
      

              	
                Elgressy
      owns and shall retain all rights, title and interest in the intellectual
      property associated with the Products (except for off the shelf components
      purchased from third parties) and in the Elgressy Trademarks (as defined
      below), including intellectual property rights  and any
      derivatives thereof, updates, enhancements, modifications or improvements
      made thereto.

              

      

       

      
        	
                10.2         
      

              	
                The
      Marketing Arm acknowledges and agrees that Elgressy is the sole owner of
      all rights, title and interest in the Products and the Elgressy
      Trademarks, copyrights, know-how, trade secrets, patents and other
      proprietary rights, and all proprietary, trademark or copyright markings
      thereon throughout the world. Without limiting the above, all use by the
      Marketing Arm of Elgressy Trademarks shall inure to the benefit of
      Elgressy and the Marketing Arm shall not obtain any rights
      thereto.

              

      

       

      
        	
                10.3         

              	
                The
      Marketing Arm shall cooperate to a reasonable extent with Elgressy, in
      protecting Elgressy’s proprietary rights, including intellectual property
      rights in the Products within the jurisdictions that the Marketing Arm is
      entitled to sell the Products pursuant to this Agreement without the need
      for prior consent of Elgressy, and in those jurisdictions where the
      Marketing Arm has actually leased or sold Products, subject however to
      reasonable availability of the Marketing Arm and its personnel and further
      provided that all out of pocket expenses incurred by the Marketing Arm
      and/or its personnel shall be borne by Elgressy, as shall be agreed upon
      in advance. Additionally, without derogating from any other obligations
      hereunder, the Marketing Arm shall ensure that any potential clients
      and/or Customers  are aware of all of the Elgressy’s
      rights.

              

      

       

      
        	
                10.4         
      

              	
                The
      Marketing Arm agrees to market the Products in the Territory under any
      trademarks and trade names used by Elgressy (including Elgressy’s name or
      any other trademark or trade name used or claimed by Elgressy during the
      term of this Agreement, collectively referred to herein as
      the  “Elgressy Trademarks”). Elgressy
      hereby consents to the use of the Trademarks in the Territory and
      elsewhere, if applicable, by the Marketing Arm solely in connection with
      the marketing and sale of Products and otherwise in accordance with the
      terms of this Agreement.

              

      

       

      
        	
                10.5         
      

              	
                The
      Marketing Arm’s use of the Trademarks shall be limited to use for
      distribution of the Products in the manner contemplated by this Agreement.
      The Marketing Arm shall use its best efforts to seek the prior written
      consent of Elgressy prior to the use of the Trademarks in connection with
      any packaging or brochures. The Marketing Arm further agrees that it will
      not contest, during or after the term of this Agreement, any Trademark and
      it will not use, after the term of this Agreement, any Trademark, or other
      intellectual property rights of Elgressy, except as expressly provided
      hereunder.

              

      

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                10.6         
      

              	
                The
      Marketing Arm agrees not to remove, alter, obscure or destroy any
      Trademark, copyright markings or confidentiality legends placed upon or
      contained within materials related to Elgressy and/or its Products or
      documentation related thereto. The Marketing Arm agrees not to attach or
      apply to the Products and any promotional materials related thereto, any
      label, marking or other information which has not been approved by
      Elgressy in writing in advance.

              

      

       

      
        	
                10.7         
      

              	
                Notwithstanding
      any of the aforementioned, during the term of this Agreement and with
      respect with (i) and (iii) below for 2 years following termination of this
      Agreement, and with respect to the remaining subsections of this Section
      11.7 with no limitation of time, the Marketing Arm shall: (i) not engage,
      by itself or through the assistance of any third party (including
      Subagents) directly or indirectly, in the research, development,
      manufacturing, marketing, distribution, sale, lease or licensing of any
      product which is or may constitute a derivative work of the Products (or
      any part thereof); (ii) not represent that it possesses any proprietary
      interest in the Product (or any part thereof); (iii) not directly or
      indirectly, take any action to contest the company’s intellectual property
      rights or infringe them in any way; (iv) not register, nor to have
      registered, any, domain names, trademarks, trade names or symbols of
      Elgressy (or which are similar to Elgressy’s); and (v) save for the
      specific purpose contained in this Agreement, it shall not use the
      Trademarks, trade-names of Elgressy in any manner
    whatsoever.

              

      

       

      
        	
                10.8         
      

              	
                Subject
      to the Marketing Arm's non-compete and confidentiality undertakings, after
      termination of this Agreement, no party shall be restrained in any way
      from approaching any Customer(s) and/or from doing any business with such
      Customer(s) whether in the Territory or the Field or
    without.

              

      

       

      
        	
                11.  

              	
                CONFIDENTIALITY

              

      

       

      
        	
                11.1         

              	
                Each
      of the Parties hereto acknowledges that the Confidential Information of
      the other Party comprises valuable trade secrets and is proprietary to
      such other Party. At all times during and after the termination of this
      Agreement, each of the Parties hereto shall hold the Confidential
      Information of the other Party in strict confidence and shall not disclose
      the same to any other person, firm, or corporation except as reasonably
      required to perform its obligations under the Agreement. The foregoing
      obligation shall not extend to information that: (a) is contained in
      a generally available publication; (b) it can be documented that is or
      becomes available to the public or the trade during or after termination
      of this Agreement, other than as a result of any disclosure by the
      disclosing Party of its own Confidential Information or any other person
      receiving Confidential Information from such Party; (c) the disclosing
      Party has documentation showing that the information is known to it prior
      to the disclosure thereof by the other Party from a source independent of
      it.

              

      

       

      
        	
                11.2         

              	
                Each
      of the Parties hereto shall ensure that each of its employees, agents,
      subcontractors,  sub-distributors and Subagents (as applicable)
      shall be subject to a written agreement for the benefit of the other Party
      containing terms comparable to the terms in this Agreement with respect to
      the maintenance and non-use of Confidential
  Information.

              

      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                11.3         

              	
                Each
      Party will promptly report to the other Party any actual or suspected
      violation of the terms of this Section 11, and will take all reasonable
      further steps requested by such Party to prevent, control or remedy any
      such violation.

              

      

       

      
        	
                11.4         

              	
                Each
      Party hereto shall, upon the termination of this Agreement or the request
      of the other Party at any time, return to the requesting Party all
      tangible manifestations of Confidential Information (and all copies and
      reproductions thereof), including, without limitation, any and all
      results, data, financial results, business plans, or other information
      produced using Confidential
Information.

              

      

       

      
        	
                11.5         

              	
                At
      any time during or after the term of this Agreement and for 2 years
      following termination of this Agreement, the Marketing Arm shall not take
      any action to challenge or assist any other person in challenging the
      validity of any patents of Elgressy registered as Patents or patent
      applications filed prior to the termination of this
    Agreement.

              

      

       

      
        	
                11.6         

              	
                Elgressy
      hereby acknowledges that the Marketing Arm is a  corporation
      which has stock listed for trading in the USA and in light of the above,
      it undertakes not to purchase or sell any of the Marketing Arm's
      securities, not to use any information received from the Marketing Arm for
      trading in the latter's securities, whether directly or indirectly, and
      further not to provide any third party with any information relating to
      the Marketing Arm which could be used for trading in Marketing Arm's
      securities in any way whatsoever, in each case, to the extent that any
      such activity  may constitute a breach of any applicable
      law.

              

      

       

       

      
        	
                12.  

              	
                TERM
      AND TERMINATION

              

      

       

      
        	
                12.1         

              	
                Term. Subject to the
      provisions of this Section 11, the term of this agreement shall be for a
      period of twenty years (20) years from   the Effective
      Date. 11.2

              

      

       

      
        	
                12.2       
       

              	
                Termination. This
      Agreement may be terminated in its entirety prior to expiration of the
      term, as provided in Section 12.1 above, by prior written notice to the
      other Party, whom shall have no claim whatsoever with respect to such
      termination of Agreement, as
follows:

              

      

       

      
        	
                12.2.1   

              	
                Immediately,
      by either Party, by written notice, in the event of a Material Breach,
      subject to the grace period set forth in Section 1.15
    above;

              

      

       

      
        	
                12.2.2   

              	
                By
      either Party, effective immediately, if the other party should become the
      subject of any voluntary or involuntary bankruptcy, receivership, or other
      insolvency proceeding or make an assignment or other arrangement for the
      benefit of its creditors;

              

      

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                12.2.3   

              	
                By
      Elgressy, effective immediately, if the Marketing Arm attempts to sell,
      assigns, delegates or transfers any of its rights and obligations under
      this agreement, without having obtained Elgressy’s prior written consent
      thereto;

              

      

       

      
        	
                12.2.4   

              	
                By
      Elgressy, effective immediately, if the Marketing Arm sells the Products
      out of the Territory and/or the Field in breach of this
      Agreement;

              

      

       

      
        	
                12.3         
      

              	
                Rights of Parties on
      Termination or Expiration. The following provisions apply upon the
      termination or expiration  of this
  Agreement.

              

      

       

      
        	
                12.3.1   

              	
                The
      Parties will work together in good faith to wind down their relationship
      in an orderly manner.

              

      

       

      
        	
                12.3.2   

              	
                Each
      of the Parties hereof will return to the other Party, or destroy, as the
      other Party shall instruct all Confidential Information (and any and all
      copies thereof), any patents, drawings, formulae, samples, documents,
      literature and any other information in its possession. No Party shall
      make or retain any copies of Confidential Information of the other party
      that it may have received.

              

      

       

      
        	
                12.3.3   

              	
                The
      Marketing Arm shall cease soliciting orders for the Products, shall
      transfer to Elgressy all Pilots and demonstration material and immediately
      cease all use of Confidential Information and marketing materials
      previously furnished by Elgressy and then in the Marketing Arm’s
      possession;

              

      

       

      
        	
                12.3.4   

              	
                Subject
      to Elgressy's rights of assignment of any and all Subagents Agreements,
      any Subagents Agreements entered into by the Marketing Arm with respect to
      any Products shall terminate without any liability to Elgressy and the
      Marketing Arm shall indemnify Elgressy and hold Elgressy harmless from and
      against any and all liabilities, costs and expenses (including without
      limitation reasonable attorneys fees) associated with, arising out of or
      as a result of the termination of any such
  Subagents.

              

      

       

      
        	
                12.3.5   

              	
                The
      Marketing Arm shall immediately prepare a statement listing all active
      Customers and the type and amount of orders of Products that were expected
      to be sold to such Customers by the Marketing Arm during the sixty (60)
      day period following the date of expiration or termination of this
      Agreement. The Marketing Arm shall deliver to Elgressy all open orders for
      Product received by the Marketing Arm on or prior to the date of the
      notice of termination or
expiration.

              

      

       

      
        	
                12.3.6   

              	
                Upon
      Elgressy’s election, the Lease and Sale Agreements and all the rights and
      obligations therein shall be assigned to Elgressy and Elgressy will
      undertake all the obligations vis–a-vis the Customers deriving from such
      Leasing Agreements and sign all required documents to give effect to this
      Section 12.3.6 and further that such assignment shall have full force and
      effect vis-à-vis the Customers, including, without limitations, by way of
      signing any reasonably required documents, provided however, that Elgressy
      shall have provided the Marketing Arm with an irrevocable waiver from any
      claim and/or liability on the part of the Marketing Arm under such Lease
      and Sale Agreements;

              

      

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                12.3.7   

              	
                With
      respect to all Lease Agreements within and outside the Territory and the
      Fields, the Marketing Arm shall be entitled to payment of the following
      sum with regard to all Lease Agreements entered into by the Marketing Arm
      and assigned to Elgressy:

              

      

       

      
        
          	
                	
                  § 

                	
                  For the first year
      after termination or expiration - 20% of the revenue generated by the
      Lease Agreements;

                

        

      

      
        
          	
                	
                  § 

                	
                  For the second year
      after termination or expiration - 15% of the revenue generated by the
      Lease Agreements;

                

        

      

      
        
          	
                	
                  § 

                	
                  For the third year
      after termination or expiration - 5% of the revenue generated by the Lease
      Agreements;

                

        

      

       

      
        	
                12.3.8   

              	
                Sole Remedy.
      The Marketing Arm’s right to receive the post-termination commission
      provided in Section 12.3.7 above shall constitute the Marketing Arm’s sole
      remedy for or arising out of termination or expiration of this Agreement
      under Section 12.1 above.

              

      

       

      
        	
                12.3.9   

              	
                Outstanding Purchase
      Orders. Purchase Orders entered into prior to the expiration or
      termination of this Agreement shall be valid and remain in effect for the
      period of time necessary to fulfill the terms of the Purchase Order,
      provided that: (a) Elgressy shall have no obligation to confirm Purchase
      Orders requesting delivery after expiration of this Agreement, and (b)
      after a notice of termination is given, the Marketing Arm will remain
      obligated to confirm purchase orders requesting delivery prior to the
      effective date of termination. The provisions of this Agreement shall be
      applicable to an otherwise valid purchase order, notwithstanding the
      termination or expiration of this
Agreement

              

      

       

      
        	
                12.4         
      

              	
                Survival. Sections
      2.3.1, 3.9, 4.2- 4.4, 4.6, 4.12, 7.1-7.3, 7.5, Error! Reference source not
      found.,11.1 12.3.7 and 12.5 shall
      survive the expiration or termination of this Agreement for any reason
      whatsoever.

              

      

       

      
        	
                12.5       
       

              	
                Payments to Elgressy. In
      the event of termination or expiration, following which (i) there are
      Lease Agreements in force, which were not assigned to Elgressy, and (ii)
      the Marketing Arm continues to receive the Lease Price with respect to
      such Lease Agreement, then Elgressy shall be entitled to the forty percent
      (40%) set out in Section 9.1.2 for as long as the Marketing Arm
      receives any part of the Lease
Price.

              

      

       

      
        	
                13.  

              	
                MISCELLANEOUS

              

      

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                13.1       
       

              	
                Applicable Law. This
      Agreement shall be construed, enforced, and performed in accordance with
      the laws of Israel and the competent court of Tel Aviv shall have
      exclusive jurisdiction over all matters arising in connection with this
      Agreement.

              

      

       

      
        	
                13.2       
       

              	
                Taxes. Each of the
      Parties hereto shall bear his own taxes under any applicable
      law.  Notwithstanding the above, it is hereby clarified that the
      Marketing Arm shall be entitled to withhold taxes from the amounts due to
      Elgressy to the extent required by any applicable law, unless Elgressy
      provided the Marketing Arm with the required document which under the
      applicable law, removes the Marketing Arm's legal requirement to withhold
      taxes.

              

      

       

      
        	
                13.3       
       

              	
                Entire Agreement. This
      Agreement, including the Appendices, Schedules and Exhibits hereto, if
      any, represents the entire Agreement between the Parties on the subject
      matter hereof. There are no conditions to this Agreement not expressed
      herein. No modification of this Agreement will be effective unless in
      writing and signed by both parties.

              

      

       

      
        	
                13.4       
       

              	
                Notices. All notices
      under this Agreement shall be sent by certified mail, return receipt
      requested, addressed to the Parties at the addresses immediately below
      their respective signatures hereto, or to such other address of which
      either Party may advise the other in
writing.

              

      

       

      
        	
                13.5       
       

              	
                Force Majeure. No Party
      shall be in default hereunder by reason of any failure or delay in the
      performance of any obligation under this Agreement (excluding payment
      obligations) where such failure of delay arises out of any cause beyond
      the reasonable control and without the fault or negligence of such Party.
      Such causes shall include, without limitation, storms, floods, other acts
      of nature, fires, explosions, riots, war or civil disturbance, strikes,
      embargoes and other governmental actions or regulations that would
      prohibit a Party from ordering or furnishing Products or from performing
      any other aspects of the obligations hereunder, delays in transportation,
      and inability to obtain necessary labor, supplies, or manufacturing
      facilities.

              

      

       

      The Party
affected by a force majeure event shall inform the other Party in writing as
soon as practicable of (i) the occurrence of the force majeure event; (ii) the
reasonable estimation of the effect of the force majeure event has on the
party's Agreement's obligation; (iii) the measures being taken in order to limit
and minimize the effects of the force majeure event; and (iv) the probable
duration of the force majeure event to the extent known to the affected Party.
The Party affected by the force majeure event shall inform the non-affected
party, as soon as practicable following the end of the force majeure event with
respect to such termination and as soon as practicable thereafter begin to
perform its Agreement obligations anew at such time. In the event that Force
Majeure exists for a consecutive period of 120 days, either Party may terminate
this Agreement by written notice to the other Party.

       

      
        	
                13.6       
       

              	
                Severability. If any
      provision of this Agreement is held to be illegal or unenforceable or
      invalid, that provision shall be limited or eliminated to the minimum
      extent necessary so that this Agreement shall otherwise remain in full
      force and effect and enforceable.

              

      

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                13.7       
       

              	
                Non-assignment. This
      Agreement shall be binding on and inure to the benefit of [Missing Graphic
      Reference]the successors and assigns of the business interests of a Party
      and may be assigned by a Party to an acquirer of substantially all of a
      Party’s assets in conjunction with such an acquisition, subject to the
      assumption by the acquirer of Elgressy's obligations pursuant to this
      Agreement and its undertaking to respect in full the Marketing Arm's
      rights under this Agreement, as the case may be. In addition, Elgressy may
      assign any of its rights or obligations hereunder to any parent, Affiliate
      or subsidiary corporation of Elgressy provided Elgressy is controlling or
      controlled by such assignee. Other than as set forth immediately above, a
      Party may not sell, assign, delegate, or otherwise transfer any of its
      rights or obligations hereunder without the prior written consent of the
      other Party.

              

      

       

      
        	
                13.8       
       

              	
                Headings. Any headings
      used herein are for convenience in reference only and are not a part of
      this Agreement, nor shall they in any way affect the interpretation
      hereof.

              

      

       

      
        	
                13.9       
       

              	
                Multiple Counterparts.
      This Agreement may be executed in one or more counterparts, each of which
      shall be deemed an original, by all of which together shall constitute one
      and the same instrument.

              

      

       

      
        	
                13.10     
       

              	
                Relationship Between The
      Parties. This Agreement is not intended by the parties to
      constitute or create a joint venture, pooling arrangement, partnership,
      agency or formal business organization of any kind. Elgressy and Marketing
      Arm shall be independent contractors with each other for all purposes at
      all times and no Party shall act as or hold itself out as agent for the
      other, nor shall either Party create or attempt to create liabilities for
      the other party.

              

      

       

      

      [Signature
Page Follows]

       

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      IN WITNESS WHEREOF, Elgressy
and the Marketing Arm have caused this instrument to be executed as of the day
and year first above written.

      

      

      

       

      CARDIO
VASCULAR MEDICAL DEVICES CORP.

       

      By:/s/
Lavi Krasney

       

      Name:
Lavi Krasney

       

      

      

      ELGRESSY
ENGINEERING SERVICES (1987) LTD

       

      By: /s/
Elroy Amitzur

       

      By: /s/
Gaby Elgraisy

       

      

      

      

      

      [Signature
Page for Marketing Agreement between Cardio and Elgressy]

       

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
1.8

      FIELDS

       

      
        
          	
                  1. 

                	
                  any
      and all power plants in the USA, whether privately or publicly
      owned

                

        

      

       

      
        
          	
                  2. 

                	
                  the
      following hotel chains in the USA, subject to Sections 3.4.4 and 3.6 and
      3.8  of the
Agreement:

                

        

      

       

      
        
          	
                	
                  o 

                	
                   AmeriHost Inn
      Hotels

                

        

      

      
        
          	
                	
                  o 

                	
                   Best Western
      International, Inc.

                

        

      

      
        
          	
                	
                  o 

                	
                   Days Inn of America,
      Inc.

                

        

      

      
        
          	
                	
                  o 

                	
                   Hampton
      Inns

                

        

      

      
        
          	
                	
                  o 

                	
                   Hilton
      Hotels

                

        

      

      
        
          	
                	
                  o 

                	
                   Holiday Inn
      Worldwide

                

        

      

      
        
          	
                	
                  o 

                	
                   Howard
      Johnson

                

        

      

      
        
          	
                	
                  o 

                	
                   Hyatt Hotels and
      Resorts

                

        

      

      
        
          	
                	
                  o 

                	
                   Marriott
      International

                

        

      

      
        
          	
                	
                  o 

                	
                   Motel
      6

                

        

      

      
        
          	
                	
                  o 

                	
                   Quality
      Inn

                

        

      

      
        
          	
                	
                  o 

                	
                   Radisson
      Hotels

                

        

      

      
        
          	
                	
                  o 

                	
                   Ramada Limited
      Inns

                

        

      

      
        
          	
                	
                  o 

                	
                   Plaza
      Hotels

                

        

      

      
        
          	
                	
                  o 

                	
                   Travelodge
      Hotels

                

        

      

      
        
          	
                	
                  o 

                	
                   Westin Hotels and
      Resorts

                

        

      

      

      
        	
                 

              	
                The
      Marketing Arm should choose only 2 hotel chains out of this list for the
      1st
      year and an additional Hotel chain in each subsequent year according to
      Section3.5

              

      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
1.14A

      ELGRESSY
SLA

       

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
1.14B

      MA
SLA

       

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
1.22

      TERRITORY

      1.
Germany

      2. The
following States:

      
        	
                §  

              	
                California

              

      

      
        	
                §  

              	
                Texas

              

      

      
        	
                §  

              	
                Florida

              

      

      
        	
                §  

              	
                Nevada

              

      

      
        	
                §  

              	
                Pennsylvania

              

      

      

      
        	
                The
      Marketing Arm should choose 3 States out of this list for the 1st
      year, and an additional State in each subsequent year according to Section
      3.5.

              

      

      
      

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      
        	
                SCHEDULE
      2.3.1

              

      

      PROVISIONS
TO BE INCLUDED IN SUBAGENT’S AGREEMENT

      

      
        
          	
                  1. 

                	
                  Elgressy’s
      right to terminate such Subagent Agreement in the event of breach of this
      Agreement and/or the Subagent Agreement, if such breach is not cured
      within 30 days of receiving a notice by the Marketing Arm from Elgressy
      regarding such breach.

                

        

      

      
        
          	
                  2. 

                	
                  Undertaking
      to purchase and maintain for the period of Subagent Agreement the
      Insurance Policies, to name each of the Marketing Arm and Elgressy as
      additional insured or loss
payee.

                

        

      

      
        
          	
                  3. 

                	
                  Confidentiality
      and Non-Compete provisions.

                

        

      

      
        
          	
                  4. 

                	
                  Restriction
      with respect to the modification of the
Product.

                

        

      

      
        
          	
                  5. 

                	
                  Undertaking
      to provide the MA with
Reports.

                

        

      

      
        
          	
                  6. 

                	
                  Provisions
      with respect to Elgressy’s IP rights, as are included in the
      Agreement.

                

        

      

      
        
          	
                  7. 

                	
                  Provisions
      regarding termination including provisions with respect to Subagent’s
      liability to act in accordance with existing contracts, to the extent
      required, the duty to pay all amounts due and the duty to transfer to
      Marketing Arm any payments it receives following termination with respect
      to the Product.

                

        

      

      
        
          	
                  8. 

                	
                  All
      Subagent's rights shall terminate upon termination of the Marketing Arm's
      rights.

                

        

      

      
        
          	
                  9. 

                	
                  Elgressy
      liability shall be limited – all as set out in the
    Agreement.

                

        

         

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

        
           

          
            Exclusive
Marketing Agreement

          

           

        

        
        

      

      SCHEDULE
3.6

      FIVE
YEAR MARKETING PLAN

      

      

      1. The sales target for the
field and the territory (New deals):

      
        	
                Year

              	
                USA

              	
                Power station

              	
                Germany

              	
                Hotels

              
	
                1

              	
                900,000$

              	
                900,000$

              	
                900,000$

              	
                200,000$

              
	
                2

              	
                1,100,000$

              	
                1,100,000$

              	
                1,100,000$

              	
                400,000$

              
	
                3

              	
                1,500,000$

              	
                1,500,000$

              	
                1,500,000$

              	
                600,000$

              
	
                4

              	
                1,800,000$

              	
                1,800,000$

              	
                1,800,000$

              	
                700,000$

              
	
                5

              	
                2,200,000$

              	
                2,200,000$

              	
                2,200,000$

              	
                800,000$

              

      

      

      2. Hotels- 2 more chain's
for each following year.

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
4.3

      PERFORMANCE
TABLE

       

       

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
5.2

      FORM OF REQUEST FOR QUOTATION AND
PURCHASE ORDER]

       

       

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE  9.1.1(a)

      PRICE
LIST

      

      The Ex-Works prices for the
various sizes of plants shall be as follows:

      
        	
                §  

              	
                A plant module for the
      treatment of 1-5 cubic meter of in-let water is US$6,000 (six thousands US
      Dollars);

              

      

      
        	
                §  

              	
                A plant module for the
      treatment of 5-10 cubic meter of in-let water is US$7,500 (Seven thousands
      five hundred US Dollars);

              

      

      
        	
                §  

              	
                A plant module for the
      treatment of 10-20 cubic meter of in-let water is US$8,200 (Eight
      thousands and two hundred US
Dollars).

              

      

      

      In the event that any of the
raw materials and industrial inputs (such as electricity) used in manufacture of
the Products increase by more than 30% relative to the cost of such item at the
date hereof the price of the Products shall be adjusted in accordance with any
such increase (from the first cent) relative to the respective percentage cost
of each relevant item in the Products as determined in good faith by the
Parties.

       

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      
         

        
          Exclusive
Marketing Agreement

        

         

      

      SCHEDULE
9.1.1(b)

      INVOICE
AND PAYMENT TERMS

      

      
        	
                §  

              	
                Elgressy
      shall invoice the Marketing Arm at the time of acceptance of the order by
      Elgressy.

              

      

      

      
        	
                §  

              	
                Payment
      terms for the Products shall be:

              

      

      30% upon Order

      30% upon loading on exporting
vehicle.

      30% upon arrival to port of
destination

      10% 60
days after arrival to port of destination

      

      
        
          
          

        

        
          39Unassociated Document

    

    CONSULTING
AGREEMENT

    

    THIS
CONSULTING AGREEMENT (“Agreement”) is made on July
21, 2009 by and between Cardio Vascular Medical Device Corp, a company
incorporated under the laws of the State of Delaware, U.S.A. (the "Company") and N.D.Raz Business
and Project Development Ltd., a company formed under the laws of Israel, located
at Neot Golf Cesarea
,Cesarea, Israel (hereinafter "N.D. Raz")
and Mr. Yossi Raz, I.D. 005512355, residing at Neot Golf Caesarea (hereinafter
“Mr.
Raz”).  N.D
Raz and Mr. Raz are jointly and severally liable and are hereinafter jointly and
severally referred to as “Consultant”.

     

     

    WITNESSETH:

    

    
      	
              WHEREAS,

            	
              the
      Company is in the business of utilizing existing and new technologies;
      and

            

    

    

    
      	
              WHEREAS

            	
              the
      Company is negotiating Exclusive Marketing Agreement with Elgressy
      Engineering Services (1987) Ltd. (hereinafter: the "Exclusive Marketing
      Agreement"); and

            

    

    

    
      	
              WHEREAS

            	
              Subject
      to the execution of the Exclusive Marketing Agreement the Company desires
      to engage the services of the Consultant and the Consultant desires to
      provide such consulting services to the Company as a nonexclusive
      independent contractor on such matters within the experience and expertise
      of the Consultant, under the terms and conditions contained herein;
      and

            

    

     

    
      	
              WHEREAS

            	
              the
      Consultant is ready, qualified, willing and able to carry out his
      obligations and undertakings towards the Company pursuant hereto;
      and

            

    

     

    
      	
              WHEREAS

            	
              the
      parties hereto wish to regulate their relationship in accordance with the
      terms and conditions set forth under this Agreement, which will commence
      upon the entering into effect of the Exclusive Marketing Agreement (the:
      "Effective
      Date");

            

    

     

    NOW,
THEREFORE, in consideration of the foregoing premises, representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the parties do hereby mutually agree as
follows:

     

     

    
      	
              1.

            	
              The
      Consulting Services

            

    

     

    
      	
               
      

            	
              1.1.

            	
              Commencing
      on the Effective Date, the Consultant shall provide the Company with
      managing services, business development services and marketing services,
      subject to the specifications set forth by the Company as may be amended
      by the Company from time to time and other appropriate duties and
      responsibilities as required and delegated to him from time to time by the
      CEO or by the Company Board of Directors (the: “Consulting
      Services").

            

    

     

    
      	
               
      

            	
              1.2.

            	
              The
      Consultant shall perform his obligations hereunder solely and exclusively
      through Mr. Raz and may not use any other persons or entities to perform
      the duties under this Agreement without prior written approval of the
      Company.

            

    

     

    
      	
               
      

            	
              1.3.

            	
              The
      Consultant shall report to the CEO and to the Board of Directors of the
      Company with respect to all matters relating to the Consulting
      Services.

            

    

     

    
      	
               
      

            	
              1.4.

            	
              The
      Consultant will provide the Consulting Services as directed and instructed
      by the CEO or by the Company Board of Directors in accordance with
      Company’s needs.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 2 -

     

    
      	
               
      

            	
              1.5.

            	
              The
      Consultant shall devote his full business time, attention, best efforts
      and ability to the performance of the Consulting Services. While rendering
      the Consulting Services to the Company, the Consultant will not engage in
      any other gainful employment, business or activity without the written
      consent of the Company, including serving as a board member of private or
      public companies.

            

    

     

    
      	
               
      

            	
              1.6.

            	
              Notwithstanding
      the above mentioned in Section 1.5, the Company acknowledges and approves
      hereby that the Consultant serves as a consultant to International Power
      Group, and as a partner in Drinking Water Wells contract with the
      government of Israel for the next 15 years. The Company's approval is
      based on the Consultant's declaration that the scope of these services is
      limited and shall not exceed 40 hours per month cumulative and no more
      than 20% of  Mr. Raz business time  and on the
      Consultant's obligation that these services shall not in any way interfere
      with the Consulting Services provided by him to the Company under this
      Agreement and shall not cause any conflict of interest with the Company
      current or future activities or with the execution and promotion of the
      Exclusive Marketing
      Agreement.

            

    

     

    
      	
               
      

            	
              1.7.

            	
              During
      the first six months of Consulting Services the Consultant shall provide
      the Company's CEO and Board of Directors with a written outline of his
      planned events for each following month, at least 7 days prior to the
      beginning of the month, in order to allow both parties to plan the
      Consultant's activities for each month. Following the first six months of
      Consulting Services the Consultant shall provide the Company's CEO and
      Board of Directors with a quarterly written outline of his planned events
      for each following quarter.

            

    

     

    
      	
               
      

            	
              1.8.

            	
              In
      addition the Consultant will report to the Company's CEO and Board of
      Directors the result of the Consulting Services on a monthly basis and as
      may be requested by the Company from time to
  time.

            

    

     

    
      	
               
      

            	
              1.9.

            	
              In
      carrying out the Consulting Services the Consultant shall not use or
      disclose to the Company any proprietary or confidential information
      belonging to any third party unless he has first received a written
      approval of that third party and present it to the
  Company.

            

    

     

     

    
      	
              2.

            	
              Representations
      and warranties

            

    

     

    
      	
               
      

            	
              2.1.

            	
              The
      Consultant represents and warrants that he has the requisite knowledge,
      skills and experience for providing the Consulting Services. The
      Consultant undertakes to perform his duties and obligations under this
      Agreement with the highest degree of professionalism and to the full
      satisfaction of the Company. The Consultant further undertakes to comply
      with all the Company’s internal procedures and
  regulations.

            

    

     

    
      	
               
      

            	
              2.2.

            	
              The
      Consultant represents and warrants that he has no outstanding agreement or
      obligation that is in conflict with any of the provisions of this
      Agreement or the performance thereof, or that would preclude the
      Consultant from complying with the provisions hereof, or that would create
      a conflict of interests with the provisions hereof, including his
      engagement with International Power Group, and with the government of
      Israel and further represents and warrants that he will not enter into any
      such conflicting agreement or obligation during the term of this
      Agreement.

            

    

     

    
      	
               
      

            	
              2.3.

            	
              The
      Consultant represents and warrants that he has received all required
      authorizations and consent (if needed) from the International Power Group
      and from the Israeli government, with respect to the Consulting Services
      provided by him to the Company under this
  Agreement.

            

    

     

    
      	
               
      

            	
              2.4.

            	
              The
      Consultant shall inform the Company, immediately upon becoming aware, of
      every matter in which he or his immediate family has a personal interest
      and which might give rise to a conflict of interest with his duties under
      the terms of this Agreement.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 3 -

     

    
      	
               
      

            	
              2.5.

            	
              In
      carrying out his duties under this Agreement, the Consultant shall not
      make any representations or give any guarantees on behalf of the Company,
      except as the Consultant is authorized to do so by the Company Board of
      Directors .

            

    

     

    
      	
               
      

            	
              2.6.

            	
              The
      Consultant shall not receive any payment and/or benefit from any third
      party, directly or indirectly in connection with his engagement by the
      Company. In the event the Consultant breaches this Sub-section, without
      derogating from any of the Company’s rights by law or contract, such
      benefit or payment shall become the sole property of the Company and the
      Company may set-off such amount from any sums due to the
      Consultant.

            

    

     

    
      	
               
      

            	
              2.7.

            	
              The
      Consultant undertakes to use the Company’s equipment and facilities only
      for the purpose of the Consulting Services. The Consultant acknowledges
      that the Company is permitted to have access to any files and
      transmissions stored or held in the Company’s computers and that such
      content is owned by the Company.

            

    

     

     

    
      	
              3.

            	
              Consulting
      Fees

            

    

     

    
      	
               
      

            	
              3.1.

            	
              Monthly
      Retainer

            

    

     

    
      	
               
      

            	
              (a)

            	
              Subject
      to the fulfillment of the Consultant's tasks and obligations under this
      Agreement, the Company shall pay the Consultant a monthly fee of USD
      10,000 (the “Monthly Retainer”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Consultant may take up to 28 days off per year of service, without
      reduction in the Monthly Retainer. The days off will include all types of
      absence excluding Jewish Holidays. The Monthly Retainer will be reduced if
      the Consultant takes more than 28 days off. The Consultant will not be
      entitled to accumulate the unused balance of the days off or to redeem the
      days off.

            

    

     

    
      	
               
      

            	
              3.2.

            	
              Annual Success
      Bonus

            

    

     

    
      	
               
      

            	
              (a)

            	
              12
      months following the Effective Date the Consultant will be eligible to
      receive in addition to the Monthly Retainer an annual success bonus if the
      Company through the Consultant reaches the total aggregate sales under the
      “Short Marketing Plan” of the Exclusive Marketing Agreement (the: "Short Marketing Plan")
      of US$1,900,000 as
      determined under the Company's annual financial reports as approved by the
      Company’s Board of Directors and the Company’s accountant. (the:
      “Company's Annual Financial Reports”) The annual success bonus will be 7%
      of the Company net profits from the Exclusive Marketing Agreement income
      up to a maximum bonus of  150,000$. (the: “Annual Success
      Bonus”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Annual  Success Bonus for the following years of service will
      determined by the Company each year  according to the same
      principles under sections 3.2(a), 3.2(c) and according to the fulfillment
      of the  required 75% sales targets under the "Five Year
      Marketing Plan" of the Exclusive Marketing Agreement (the: "Five Year Marketing
      Plan").

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Annual Success Bonus will be paid out of the Company net profits 30 days
      following the approval of the Company's Annual Financial
      Reports.

            

    

     

    
      	
               
      

            	
              (d)

            	
              In
      the event that six months following the Effective Date, the Consultant closed deals
      and sales, in the aggregate
      value of at least 700,000$
      and install 4 pilots (2 in the USA and 2 in hotels), the Consultant
      will be paid a monthly advance payment of 2,500 USD on account of the
      first year Annual Success Bonus which  will be offset from any
      amount of Annual Success Bonus to which the Consultant may be entitled
      to.

            

    

     

    
      	
               
      

            	
              (e)

            	
              In
      the event that twelve months following the Effective Date the Company
      through the Consultant reaches the total sales under the Short Marketing
      Plan of US$1,900,000 as
      determined under the Company's Annual Financial Reports, the Consultant
      will be paid a monthly advance payment of 5000 USD on account of the
      second year Annual Success Bonus which will be offset from any amount of
      Annual Success Bonus to which the Consultant may be entitled to. This
      advance payment will cease if the semi-annual sales results indicate that
      the annual sales target under the Exclusive Marketing Agreement will not
      be reached.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 4
-

     

    
      	
               
      

            	
              3.3.

            	
              Signing
      Bonus

            

    

     

    Upon
execution of the Exclusive Marketing Agreement and following the Effective Date,
the Consultant shall receive a one time signing bonus in the amount of 6,300 US
dollar for his efforts in connection
with the execution of the Exclusive Marketing Agreement.

     

     

    
      	
               
      

            	
              3.4.

            	
              Expenses

            

    

     

    The
Company shall reimburse the Consultant for all reasonable business expenses
actually incurred by Consultant directly in performing the Consulting Services,
within an advance approved budget, and subject to an itemized account of such
expenses substantiated by appropriate receipts, all in accordance with the
Company’s policy from time to time.

     

     

    
      	
               
      

            	
              3.5.

            	
              General

            

    

     

    
      	
               
      

            	
              (a)

            	
              All
      Payments to the Consultant shall be made in US dollar, and shall be wired
      to N.D. Raz bank account.

            

    

     

    
      	
               
      

            	
              (b)

            	
              All
      payments shall be made against proper invoices in accordance with an
      applicable law and shall include V.A.T., if required by law, which shall
      be added to the amounts set forth
above.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Consultant is aware that the consideration set forth in this Section 3
      constitutes the Company’s whole obligation towards the Consultant and he
      shall not be entitled to any other remuneration or payment
      whatsoever.

            

    

     

     

    
      	
              4.

            	
              Options

            

    

     

    
      	
               
      

            	
              4.1.

            	
              Mr.
      Raz will be granted options to purchase 5,000,000 shares of common stock
      of the Company at an exercise price per share equal to the par value of
      the shares which is 0.05 USD [the “Options”]. The Options will be granted
      in accordance with Section 3(i) of the Israeli Tax Ordinance and will be
      subject to the following terms:

            

    

     

    
      	
               
      

            	
              (a)

            	
              12
      months of service following the Effective Date if the Company through the
      Consultant reaches the total sales under the Short Marketing Plan of US$1,900,000 as
      determined under the Company's annual financial reports, 1,250,000 out of
      the 5,000,000 shares granted will be vested and
    exercisable.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      remainder 75% of the Options (3,750,000 of the Options) will vest annually
      over a period of 3 years, so that at the end of each year, 1,250,000 of
      the Options will become fully vested and exercisable, subject to
      Consultant's continuing to provide the Consulting Services to the Company
      through such dates and subject to the validity of the Exclusive Marketing
      Agreement, and the Company's achievement through the Consultant 75% of the
      Sales Targets set for each year as determined under the Five Year
      Marketing Plan.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 5 -

     

    
      	
               
      

            	
              (c)

            	
              In
      the event that the Company does not succeed in maintaining its exclusive
      marketing rights for any territory or for any field under the Exclusive
      Marketing Agreement, for each lost territory or for each lost field
      1,250,000 out of the Options whether vested or not shall ipso facto terminate
      and Mr. Raz or the Consultant shall have no further rights with respect to
      such Options, including, without limitation, to purchase the shares
      subject thereto.

            

    

     

    
      	
               
      

            	
              (d)

            	
              In
      the event that the Consultant ceases to be a service provider for any
      reason other than termination for  Justifiable Cause (as defined
      below ), the outstanding vested Options on the date of such termination of
      engagement shall be exercisable for 6 months after the date of such
      termination following which any unexercised Option (whether vested or not)
      shall expire immediately.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Notwithstanding
      the above, if the Consultant ceases to be a service provider for
      Justifiable Cause (as defined below), the entire unexercised Options
      (whether vested or not) shall ipso facto terminate
      and Mr. Raz or the Consultant shall have no further rights with respect to
      such Options, including, without limitation, to purchase the shares
      subject thereto.

            

    

     

    
      	
               
      

            	
              4.2.

            	
              In
      the event the Company decides to terminate the engagement with the
      Consultant for reasons unrelated to the Company's achievement of the Sales
      Targets determined under the Five Year Marketing Plan and not for
      Justifiable Cause (as defined below), the Consultant will be entitled, in
      addition to the Options which have already vested by this date in
      accordance with the vesting schedule outlined above, to 50% of the Options
      which have not yet vested upon the date of the termination of engagement.
      These vested Options granted to the Consultant shall be exercisable during
      6 months, following which, any unexercised Option (whether vested or not)
      shall expire immediately. To prevent any doubt Mr. Raz or the Consultant
      shall have no rights for any of the unvested Options on termination if the
      Company did not reach the any of the sales targets under the Exclusive
      Marketing Agreement or the Consultant did not reach any of the sales
      targets under the
      Annual Success Bonus herein or the semi annual targets as described herein
      under section 3.2 (d).

            

    

     

    
      	
               
      

            	
              (a)

            	
              Any
      tax  consequences including V.A.T arising from the grant or
      exercise of any Option, from the payment for shares covered thereby, from
      the sale or disposition of such Shares or from any other event or act
      (of  Mr. Raz or the Company), shall be borne solely by the
      Consultant. The Company shall withhold taxes according to the requirements
      under the applicable laws, and it may take steps as it may deem necessary
      for withholding all due taxes, including, but not limited to (i) to the
      extent permitted by applicable laws, deducting the amount so required to
      be withheld from any other amount then or thereafter payable to
      Consultant, and/or (ii) requiring the Consultant to pay to the Company the
      amount so required to be withheld as a condition for the issuance,
      delivery, distribution or release of any Shares. Furthermore, the
      Consultant shall agree to indemnify the Company, and hold it harmless
      against and from any and all liability for any such tax or interest or
      penalty thereon, including without limitation, liabilities relating to the
      necessity to withhold, or to have withheld, any such tax from any payment
      made to the Consultant.  Except as otherwise required by
      applicable laws, the Company shall not be required to release any share
      certificate to the Consultant until all required payments have been fully
      made.

            

    

     

    
      	
               
      

            	
              (b)

            	
              It
      is hereby made clear that the above Options allocation does not affect the
      parties' ability to terminate this Agreement, subject to Section 5 below,
      with or without cause, and such grant shall not obligate the Company to
      engage the Consultant for any particular length of
  time.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 6
-

     

    
      	
              5.

            	Status of
      Parties

    

     

    
      	
               
      

            	
              5.1.

            	
              The
      Consultant is an independent contractor and is elected to provide the
      Consulting Services to the Company as an independent contractor. Nothing
      in this Agreement shall be interpreted or construed as creating or
      establishing any partnership, joint venture, employment relationship,
      franchise or agency or any other similar relationship between the Company
      and the Consultant and/or Mr. Raz.

            

    

     

    
      	
               
      

            	
              5.2.

            	
              The
      parties hereby deny and waive any demand, claim and/or allegation that an
      employment relationship of any kind has resulted from this Agreement or
      from the rendering of the Consulting
Services.

            

    

     

    
      	
               
      

            	
              5.3.

            	
              It
      is agreed between the parties that in the event that, despite Paragraph
      4.1 above, a duly authorized legal body or other authorized forum, orders
      the Company to grant the Consultant and/or Mr. Raz the rights and
      privileges of an employee for the Consulting Services rendered in
      accordance with this Agreement, the Consultant’s compensation/salary
      (including for all over-time hours, if relevant) shall be 55% of the total
      compensation to which the Consultant is entitled pursuant to this
      Agreement commencing on the Effective Date and the Consultant shall return
      to the Company the remaining 45% of the total compensation paid to the
      Consultant from the date of payment by the Company up to the date of
      return by the Consultant.

            

    

     

    
      	
               
      

            	
              5.4.

            	
              In
      the event the Company is demanded and/or obligated to pay the Consultant
      and/or Mr. Raz, any amount, or give the Consultant and/or Mr. Raz or any
      third party any right, deriving from the existence of employer-employee
      relationship between the Consultant and/or Mr. Raz and the Company, the
      Consultant shall indemnify the Company for any and all costs, liabilities
      and expenses it may have in connection with such demand and/or obligation,
      including the economical value of such right and including legal
      expenses

            

    

     

    
      	
               
      

            	
              5.5.

            	
              On
      the basis of his status as an independent contractor, the Consultant will
      file and be liable for his own tax reports including all income, social
      security and other taxes due and owing on the consideration received by
      him under this Agreement.  The Consultant shall be solely
      responsible for, and shall pay, such taxes in accordance with all
      applicable laws. The Consultant shall indemnify the Company, its officers,
      directors and employees (the “Indemnified Parties”),
      and hold them harmless from and against any and all claims, losses,
      liabilities, damages, judgments, fines, fees, costs or expenses, including
      without limitation reasonable attorneys’ fees and disbursements incurred
      in connection with any claim, action, suit, proceeding or investigation,
      whether civil, criminal, administrative or investigative, arising out of
      or in connection with any taxes payable in connection with the
      compensation for the Consulting Services provided
    hereunder.

            

    

     

     

    
      	
              6.

            	
              Term
      of the Agreement

            

    

     

    
      	
               
      

            	
              6.1.

            	
              This
      Agreement shall commence on the Effective Date and shall continue until
      terminated by either party as set forth
below.

            

    

     

    
      	
               
      

            	
              6.2.

            	
              Termination of the
      Agreement by the Consultant

            

    

     

    The
Consultant may terminate this Agreement upon a two (2) month advance written
notice to the Company (herein: the “Notice Period” and “Termination Notice”,
respectively).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
    

    
      - 7 -

       

      
        
          	
                   
      

                	
                  6.3.

                	
                  Termination of the
      Agreement by the Consultant

                

        

         

      

    

    
      	
               
      

            	
              (a)

            	
              During
      the first 12 months of this
Agreement-

            

    

     

    
      	
               
      

            	
              (i)

            	
              In
      the event the Consultant has not reached
      100% of the semi-annual targets under section 3.2 (d) herein, the Company
      may terminate this Agreement, with or without cause, upon a two (2) month
      advance written notice to the
Consultant.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              In
      the event the Consultant has reached the
      targets determined under section 3.2 (d) herein the Company may terminate
      this Agreement, with or without cause, upon a four (4) month advance
      written notice to the Consultant.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Following
      the first 12 months of this Agreement, the Company may terminate this
      Agreement, with or without cause, upon a four (4) month advance written
      notice to the Consultant.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Notwithstanding
      anything to the contrary, in the event of a Justifiable Cause (as defined
      below and subject to any applicable law), the Company shall be entitled to
      terminate this Agreement immediately without any advance written notice
      and this Agreement and the relationship shall be deemed effectively
      terminated as of the time of delivery of such notice. The term "Justifiable Cause"
      shall mean: (i) the Consultant's conviction of a felony deemed by the
      court to be of disgraceful nature; (ii) the Consultant's material breach
      of the terms and conditions of this Agreement including but not limited to
      willful breach of his confidentiality and/or non-competition duties; (iii)
      the Consultant's involvement with an act which constitutes a breach of the
      Company’s trust including but not limited to: fraud, misappropriation,
      embezzlement, theft from the Company, or other acts of material dishonesty
      against the Company; or (iv) the Consultant’s willful engagement in gross
      misconduct materially injurious to the Company. It is hereby agreed that
      in the event of termination for Justifiable Cause, the
      Consultant’s contractual relationship shall be terminated immediately and
      unilaterally, and the Consultant shall not be entitled to any Monthly
      Retainer fee and/or Annual Success
      Bonus.

            

    

     

    
      	
               
      

            	
              6.4.

            	
              During
      the advance written notice the Consultant shall continue upon the
      Company’s sole discretion, to provide the Consulting Services to Company.
      To avoid any doubt, the Consultant’s entitlement to any remuneration
      during this period, shall be subject to the Consultant’s ongoing
      cooperation with the Company and fulfillment of any duty reasonably
      required of him during such period. Nevertheless, the Company retains the
      right, at its sole discretion, at any time within the this period, to
      terminate, immediately and unilaterally, its contractual relationship with
      the Consultant, without cause, by giving written notice to the Consultant
      of the Company’s election to terminate the Agreement immediately. In such
      event, the Consultant shall be entitled to the Monthly Retainers fee to
      which he would have been entitled had he provided the Consulting Services
      throughout said advance written notice
period.

            

    

     

    
      	
               
      

            	
              6.5.

            	
              Without
      derogating from the Company’s rights pursuant to any applicable law, in
      the event that the Consultant terminates this Agreement with immediate
      effect or upon shorter notice than the Notice Period, the Company shall
      have the right to offset any payments to which the Consultant shall be
      otherwise entitled for his Consulting Services hereunder during the Notice
      Period, or any part thereof, as the case may be, from any other payments
      payable to the Consultant.

            

    

     

    
      	
               
      

            	
              6.6.

            	
              Upon
      termination of this Agreement for any reason whatsoever, and before the
      Company pays the Consultant the final payment, the Consultant undertakes:
      (1) to return to the Company all documents, drawings, magnetic media,
      letters, reports and all other documents belonging to the Company and/ or
      related to the Company’s activities and/or to the Consulting Services; and
      to return any equipment and/or other property of the Company; (2)
      to erase, at the Company’s offices and in the presence of the Company’s
      representative and upon scheduling in advance with the Company, all
      information relating to the Company or its activities which exists in the
      Consultant’s personal computer(s); (3) to assist in the transferring of
      the position, matters and documents under the Consultant’s supervision to
      whomever the Company shall determine. If the Company’s equipment shall be
      returned damaged, the Company shall have the right to set off the costs of
      such damages from the payment due to the
  Consultant.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 8
-

     

    
      	
              7.

            	
              Confidentiality,
      Non-Competition and Intellectual Property
  Assignment

            

    

     

    The
Consultant acknowledges that he will be exposed to confidential information
related to the Company in connection with the Consulting Services and this
Agreement. Therefore, upon execution of this Agreement, the Consultant shall
execute the Confidentiality, Non-Competition and Intellectual Property
Assignment Agreement in the form attached hereto as Appendix
A, which is an integral part of this Agreement.

     

     

    
      	
              8.

            	
              General

            

    

     

    
      	
               
      

            	
              8.1.

            	
              Neither
      party hereto shall assign any of its rights and obligations hereunder
      without the prior written consent of the other party. The Company,
      however, may assign this Agreement to a subsidiary or affiliate of the
      Company or to a purchaser of all or part of the Company’s assets or
      shares.

            

    

     

    
      	
               
      

            	
              8.2.

            	
              Either
      party's failure at any time to require strict compliance by the other
      party of the provisions of this Agreement shall not diminish such party's
      right thereafter to demand strict compliance therewith or with any other
      provision. Waiver of any particular default shall not waive any other
      default.

            

    

     

    
      	
               
      

            	
              8.3.

            	
              In
      the event that any provision of this Agreement shall be deemed unlawful or
      otherwise unenforceable, such provision shall be severed from this
      Agreement and the balance of the Agreement shall continue in full force
      and effect.

            

    

     

    
      	
               
      

            	
              8.4.

            	
              This
      Agreement, together with its Appendix, contains and sets forth the entire
      agreement and understanding between the parties with respect to the
      subject matter contained herein, and it supersedes all prior discussions,
      agreements, representations and understandings in this regard. This
      Agreement shall not be modified except by an instrument in writing signed
      by both parties.

            

    

     

    
      	
               
      

            	
              8.5.

            	
              The
      captions contained herein are for the convenience of the parties only and
      shall not affect the construction or interpretation of any provision
      hereof.

            

    

     

    
      	
               
      

            	
              8.6.

            	
              It
      is hereby agreed between the parties that the laws of the State of Israel
      shall govern this Agreement, and that the competent court in Tel-Aviv
      shall have exclusive jurisdiction over any matter arising out of, or in
      connection with, this Agreement.

            

    

     

    
      	
               
      

            	
              8.7.

            	
              All
      notices, requests, reports, consents and other communications hereunder
      shall be in writing, and shall be delivered either (i) by hand,
      (ii) by e-mail or facsimile transmission, with a written
      acknowledgement of the recipient, (iii) by courier, or (iv) by
      registered mail, return receipt requested.  Until changed by a
      written notice given by either party to the other party, the addresses of
      the parties shall be as set herein.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 9
-

     

    In
witness whereof, the duly authorized representatives of the Company and the
Consultant have executed this Agreement as of the date stated
below.

    

    
      
        	CARDIO
      VASCULAR MEDICAL DEVICE CORP	 	 	 	 
	 	 	 	 	 	 
	By:
      	
                /s/
      Lavi Krasney

              	 	 	
              	 
	Title: 	
                CFO

              	 	 	
              	 
	 	 	 	 	 	 

      

      
        	 	
                /s/
      Yossi Raz

              	 	 	
              	 
	 	YOSSI
      RAZ	 	 	 	 
	 	 	 	 	 	 

      

      
        	N.D.Raz
      Business and Project Development Ltd.,	 	 	 	 
	By:	/s/
      Yossi Raz 	 	 	 	 
	Title: 
      	 President	 	 	 	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 10 -

     

    Appendix
A

    

    

    Confidentiality,
Non-Competition and Intellectual Property Assignment

    Agreement

    

    My
obligations under this Confidentiality, Non-Competition and Intellectual
Property Assignment Agreement (hereafter “Agreement”) are towards (i)
CARDIO VASCULARMEDICAL DEVICE CORP. (the “Company”) (ii) its present and
future parent companies, subsidiaries and affiliates and successors. All of the
aforementioned entities shall be referred to collectively as the “Company’s
Entities”.

    

    
      	
              1.

            	
              Confidentiality

            

    

     

    
      	
               
      

            	
              1.1.

            	
              I
      will regard and retain as confidential and will not divulge to any third
      party, or use for any unauthorized purposes either during or after the
      term of my service with the Company, any confidential information, as
      defined below, that I have acquired during my service or in connection
      with my service or contacts with the Company’s Entities, without the
      written approval consent of an authorized representative of the
      Company.

            

    

     

    
      	
               
      

            	
              1.2.

            	
              I
      will not use the Company's Confidential Information for any purpose
      whatsoever other than the performance of the services on behalf of the
      Company. Without limiting the scope of this duty, I shall only use the
      Confidential Information for the benefit of the Company, and only to the
      extent required for the performance of the services and may not disclose
      the Confidential Information to any other third party who is not
      performing the service.  Without limiting the scope of this
      duty, I shall not design or manufacture or develop any products, which
      incorporate any Confidential
Information.

            

    

     

    
      	
               
      

            	
              1.3.

            	
              All
      Confidential Information remains the property of the Company and no
      license or other rights in the Confidential Information is granted
      hereby.

            

    

     

    

    
      	
              2.

            	
              Confidential
      Information

            

    

     

    
      	
               
      

            	
              2.1.

            	
              Confidential
      Information shall include, but will not be limited to, information
      regarding research and development related to actual or anticipated
      products, inventions, whether patentable or non-patentable, discoveries,
      innovations, designs, drawings, sketches, diagrams, formulas, computer
      files, computer programs, hardware, software or other products, product
      definitions, product research, manuals, selection processes, data, methods
      of manufacture, planning processes, trade secrets, business secrets,
      business plans, copyrights, proprietary information, customer lists, names
      of clients, list of suppliers, marketing plans, strategies, forecasts,
      business forecasts, processes, finances, costing, sales,
      prices,  terms of payment, formulae, know-how, improvements and
      techniques and any other data related to the business or affairs of the
      Company's Entities,  its clients, including clients with whom
      the Company is negotiating. Confidential Information will include
      information in written, oral and/or any other form of
      communication

            

    

     

    
      	
               
      

            	
              2.2.

            	
              Confidential
      Information shall not include information that (i) has become part of
      public knowledge other than as a result of a breach of this undertaking;
      (ii) was already in my possession at the time of disclosure, as shown by
      my written documents dated prior to the disclosure; or (iii) is rightfully
      received by me from a third party without a duty of confidentiality, as
      shown by me in written documents. I shall have the burden of proof
      establishing that any or more of these exceptions
  applies.

            

    

     

    
      	
               
      

            	
              2.3.

            	
              I
      undertake to notify, disclose and bring to the Company’s knowledge any
      information coming to my knowledge in any way, including information being
      the product of any idea or development of
mine.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 11
-

     

    
      	
              3.

            	
              Return
      of Confidential Information

            

    

     

    All
materials including, but not limited to, documents, notes, memoranda, records,
diagrams, blueprints, bulletins, formulas, reports, computer programs, and any
other material of any kind and in any form, coming into my possession or
prepared by me in connection with my service, are the exclusive property of the
Company (hereinafter: the "Documents").  I
agree to return to the Company all such Documents upon termination of my
service, unless I acquire the Company’s specific written consent to release any
such Document.

     

    

    
      	
              4.

            	
              Ownership
      Rights

            

    

     

    
      	
               
      

            	
              4.1.

            	
              I
      agree that the Confidential Information and all memoranda, books, notes,
      records, charts, formula, specifications, presentations, lists, drafts,
      patent applications and other documents, as well as any inventions,
      improvements, mask works, discoveries or works, whether or not capable of
      being patented or copyrighted, and any and all derivatives related thereto
      (together "Work
      Products"), which I may conceive, make, develop, author, or work
      on, in whole or in part, independently or jointly with others during the
      term of my service with the Company or following my service with the
      Company, which are either (i) related to the Company’s Entities’ business
      or actual or demonstrably anticipated research or development;
      (ii)  resulting directly or indirectly from any work I performed
      for the Company; or (iii) developed in whole or in part on the Company’s
      time or with the use of any Company’s equipment, supplies, facilities, or
      trade secret, are and shall be the Company’s sole and exclusive
      property.

            

    

     

    
      	
               
      

            	
              4.2.

            	
              Furthermore,
      without additional compensation or consideration, I hereby assign and will
      in the future assign to the Company, any right, title and interest I may
      have worldwide in such Work Products and any copyrights, patents, mask
      work rights or other intellectual property rights, including any and all
      derivatives relating thereto.

            

    

     

    

    
      	
              5.

            	
              Disclosure
      of Inventions

            

    

     

    I will
promptly disclose and describe to the Company all of the Work Products which I
may conceive, make, reduce to practice, develop, author, or work on, in whole or
in part, independently, or jointly with others, during the period of my service
with the Company, which either; (i) relate to the Company’s Entities’ business
or actual or demonstrably anticipated research or development; (ii) are
developed in whole or in part on the Company's time or with the use of any of
the Company's equipment, supplies, facilities or trade secret information, or
(iii) result directly or indirectly from any work I performed for the
Company.

     

    

    
      	
              6.

            	
              Consultant’s
      Assistance

            

    

     

    I will,
at the Company’s expense, assist in preparation and registration of patents and
any other intellectual property right in favor of the Company, in any
jurisdiction deemed appropriate by the Company. Such assistance shall include,
without limitation, the preparation of documents, drawings and other data and
execution of assignments, applications and other forms. I agree to perform this
obligation during and after my service with the Company. In order to give full
effect to this section I hereby irrevocably appoint the Company (and its
representatives) as my attorney in fact, authorized in my name and on my behalf
to execute all such documents.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    -12 -

     

    
      	
              7.

            	
              Non
      Competition

            

    

     

    
      	
               
      

            	
              7.1.

            	
              During
      the term of my service with the Company and for a period of 12 months
      after the termination of my service with the Company by any side and for
      any reason I will not either alone or jointly with others or as an agent,
      consultant or employee of any person, firm or company, directly or
      indirectly, carry on or engage in any activity or business which shall be
      in competition with the business of the Company’s Entities (hereinafter
      "Competing
      Entities").

            

    

     

    
      	
               
      

            	
              7.2.

            	
              Without
      derogating from the generality of the above, for the purpose of this
      Agreement, Competing Entities shall include any person or entity that are
      engaged in development, services, production, or commercial activities
      similar to those of the Company's
Entities.

            

    

     

    

    
      	
              8.

            	
              Non-Solicitation

            

    

     

    
      	
               
      

            	
              8.1.

            	
              During
      the term of my service with the Company and thereafter for a period of 12
      months, I will not solicit or encourage or cause others to solicit or
      encourage any employees of the Company’s Entities to terminate their
      employment with the Company's Entities, and I will not assist any
      employees of the Company’s Entities to engage with any Competing
      Entities.

            

    

     

    
      	
               
      

            	
              8.2.

            	
              During
      the term of my service with the Company and thereafter for a period of 12
      months, I will not solicit any customers of the Company’s Entities for any
      business that is similar to or competitive with business of the Company as
      then being conducted.

            

    

     

    

    
      	
              9.

            	
              No
      Conflicting Obligations

            

    

     

    I will
not disclose to the Company any proprietary or confidential information
belonging to any third party, including any prior or current employer or
contractor, unless I have first received the written approval of that third
party and present it to the Company. I undertake not to perform any activity
related to my service with the Company on the premises of any third party, or
while using any equipment or materials that belong to any such third party,
unless instructed to do so by the Company.

     

    

    
      	
              10.

            	
              Third
      Party Information

            

    

     

    I
recognize that the Company has received and will in the future receive from
third parties their confidential or proprietary information, subject to a duty
on the Company’s part to maintain the confidentiality of such information and to
use it only for certain limited purposes.  I agree to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any person or entity or to use it except as necessary in carrying
out my services for the Company, consistent with the Company’s agreement with
such third party.

     

    

    
      	
              11.

            	
              Breach
      of Obligation

            

    

     

    I am
aware that a breach of any of the obligations under this Agreement will cause
the Company or the Company’s Entities’ serious and irreparable harm, to which no
monetary compensation can be an appropriate remedy. Therefore, I agree that if
such a breach occurs, the Company shall be entitled, without prejudice, to take
all legal means necessary, including any injunctive relief, to restrain any
continuation or further breach of this Agreement, without any objection from my
side.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    - 13
-

     

    
      	
              12.

            	
              Assignment

            

    

     

    This
Agreement may be assigned by the Company. I may not assign or delegate my
obligations under this Agreement, without the Company's prior written
approval.

     

     

    
      	
              13.

            	
              Governing
      Law

            

    

     

    This
Agreement shall be construed under the laws of the State of Israel.

     

    

    
      	
              14.

            	
              Survival

            

    

     

    Unless
specifically limited under the provisions in this Agreement, my obligations
under this Agreement shall remain in full force during my service with the
Company and following the termination, for any reason, of my service with the
Company.

     

    

    
      	
              15.

            	
              Condition
      to Engagement

            

    

     

    I
acknowledge that the execution of this Agreement is a condition to the Company's
engagement with me and the disclosure of any Confidential
Information.

     

    
      
        	Signature:	
                /s/
      Yossi Raz

              	 	 	
              	 
	Name:	
                Yossi
      Raz

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