Document:

Unassociated Document

    Exhibit 10.20

     

    Certain
portions of the exhibit have been omitted based upon a request for confidential
treatment. The non- public information has been filed separately with the
commission.

     

     

    An
agreement dated 7th January 2009 between Omex Agriculture Ltd. ("Omex") whose registered office
is Bardney Airfield, Tupholme, Lincs. LN3 5TP and Pimi Agro Cleantech Ltd.
("Pimi") whose
registered office address is P.O. Box 117 Hutzot Alonim 30049  Israel.  Omex
and Pimi are together referred to hereafter as “The Parties”.

     

    
      	
               

            	
              Whereas

            

    

     

    
      	
              1.  

            	
              Pimi
      has developed a storage protocol and formulations for Stabilised Peroxide
      used in the treatment of vegetables and fruit in stores and has filed for
      patent registrations for such applications and
    formulations;

            

    

     

    
      	
              2.  

            	
              Pimi
      has developed a product, 20% Storomex, the specification of which is more
      particularly described in Appendix A ("The
      Product").

            

    

     

    
      	
              3.  

            	
              Pimi
      has developed a Storage and Application Protocol for the Product ("The Storage Protocol"),
      which is set out at Appendix E and which may be changed from time to time
      by notice in writing given by Pimi.

            

    

     

    
      	
              4.  

            	
              Omex
      has the experience, resources and manpower in order to market , sell,
      distribute and install the systems and equipment required for the
      application of the Product in the countries identified in Appendix C
      ("The
      Territories");and

            

    

     

    
      	
              5.  

            	
              In
      order to further develop the business of marketing and sales of The
      Product in the Territories, The Parties wish to enter into a marketing and
      distribution agreement, under which Omex will take upon itself to market,
      sell, distribute, and install systems and equipment required for the
      application of The Product in the Territories and Pimi will grant to Omex
      exclusive distribution rights in the Territories and will sell The Product
      to Omex under the terms and conditions set forth
  herein.

            

    

     

    Agreement

     

    
      	
              1.  

            	
              Pimi
      will deliver The Product to Omex in accordance with the Specification set
      forth in Appendix A, and subject to the tolerances stated
      therein.  Pimi will indemnify Omex from any loss directly
      resulting from any deviation from specification of The Products, from any
      toxic or other matter in The Products not identified in the Specification,
      and from the implementation of the advice contained in the Storage
      Protocol. However Pimi will not indemnify Omex in respect of any loss
      relating to any application in respect of which the application conditions
      differ materially from the Storage Protocol and/or the instructions given
      by Pimi to Omex from time to time.

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    
      	
              2.  

            	
              During
      efficacy tests Omex will follow fully the instructions given by Pimi and
      will report to Pimi throughout the
tests.

            

    

     

    
      	
              3.  

            	
              Omex
      and Pimi will maintain Product Liability insurance in a sum of not less
      than $ 1 million in respect of the above liability per claim, and will
      upon request give each other evidence of renewal of such
      policy.

            

    

     

    
      	
              4.  

            	
              Subject
      to the terms and conditions stipulated herein Pimi hereby grants Omex
      exclusive distribution rights in the Territories for the Term as herein
      defined to market, promote and sell The Product for use only in the
      Territories identified in Appendix C. The parties may from time to time
      agree on adding new countries to The Territories by a written agreement
      signed by both parties.  Pimi will not sell The Product or any
      other product derived from it for use as a storage enhancer to any
      purchaser other than Omex in The Territories or to any other purchaser
      elsewhere for distribution in The Territories during the
    Term.

            

    

     

    
      	
              5.  

            	
              The
      price of The Product will be as agreed in Appendix B. Pimi has the right
      to change the price from time to time in order to recover any increased
      cost of such changes. Pimi will show Omex evidence that the raw material
      has changed in price.

            

    

     

    
      	
              6.  

            	
              Pimi
      will have The Product available for delivery within 2 weeks of receipt of
      a written or emailed order from Omex.  Minimum order quantity is
      1,000 Lt. 
      Omex will submit a forecast each quarter in
  advance.

            

    

     

    
      	
              7.  

            	
              Omex
      will pay Pimi by the end of the month following delivery.  Pimi
      shall at the end of each seasonal year September-August credit Omex with a
      sales rebate calculated in accordance with Appendix B and shall remit such
      rebate to Omex by October 31st
      each year.

            

    

     

    
      	
              8.  

            	
              Risk
      in and Title to The Product passes from Pimi to Omex at the point of
      delivery in the Territory.

            

    

     

    
      	
              9.  

            	
              Omex
      will use all reasonable endeavours to market and promote The Product in
      the Territories, and will perform at least the marketing activities as
      described in Appendix D.  All costs of marketing will be borne
      by Omex. The Product will be marketed under a Trade Name Storomex which is
      owned by  Omex. All costs in relation to such name will be borne
      by Omex.  The title to the name shall remain with Omex on
      termination of this Agreement.  Omex shall display on the label
      of the Product as well as all other commercial literature that the
      supplier is Pimi and Omex is the distributor of the
    Product,

            

    

     

    
      	
              10.  

            	
              Should
      in the opinion of Omex, The Product require registration with any
      government agency, Omex undertakes to execute such registration and will
      bear all costs in obtaining such registration.  The registration
      will be in Omex’s name and title to such registration will be retained by
      Omex on termination of the
Agreement.

            

    

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              11.  

            	
              Omex
      accepts the following minimum targets for the sale of 20% Storomex for the
      seasonal years September to August:

            

    

     

     

    9/ 2008-
8/2009: 2.2k litres

     

     

    9/2009-
8/2010: 15k litres

     

     

    9/2010-
8/2011: 37k litres

     

     

    9/2011-
8/2012: 85k litres

     

     

    
      	
              12.  

            	
              Omex
      accepts the following targets to retain exclusive distributorship in the
      territory for 20% Storomex, for the seasonal years September to
      August:

            

    

     

     

    9/2008-
8/2009: 4.2k litres

     

     

    9/2009-
8/2010: 29.6k litres

     

     

    9/2010-
8/2011: 74.4k litres

     

     

    9/2011-
8/2012: 170.4k litres

     

     

    
      	
              13.  

            	
              Omex
      will set the  following sales targets for 20% Storomex for the
      seasonal years September to August:

            

    

     

     

    9/2008-
8/2009: 8.6k litres

     

     

    9/2009-
8/2010: 59.2k litres

     

     

    9/2010-
8/2011: 148.8k litres

     

     

    9/2011-
9/2012: 340.8 k litres

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

     

    
      	
              14.  

            	
              Pimi
      will provide Omex with all relevant technical information concerning The
      Product and will provide technical support to Omex by means of telephone
      calls, emails and support visits as required. In all papers and
      publications it will be presented that the protocol of usage and the
      formulation and patent are the intellectual property of Pimi and were
      supplied by Pimi Marion to Omex under license as its distributor in the
      territory. Pimi is entitled to use the data from efficacy trials to
      promote SpuDefender in other
territories.

            

    

     

    
      	
              15.  

            	
              Omex
      will provide Pimi with information concerning the development of the
      market, including market potential, sales projections on an annual basis,
      reports on product performance and details of all customers with Storage
      facilities in more than one
country.

            

    

     

    
      	
              16.  

            	
              Omex
      and Pimi will have at least two semi annual meetings in the UK according
      to product development and crop seasons, including a budget meeting which
      will be done in the last quarter of each year to decide on sales budget as
      well as proposed marketing activities for the coming year. Each Party will
      pay its own costs in relation to the meetings.  Prior to each
      semi annual meeting each party will forward to the other a paper
      summarising the results of all product trials undertaken in the previous
      season and all data received from customers concerning the efficacy of the
      product.

            

    

     

    
      	
              17.  

            	
              Omex
      acknowledges that the patent applications and all other intellectual
      property rights other than the rights to Trade Names and Product
      Registrations are, and upon the termination of the Agreement, will remain
      the property of Pimi. Omex will write on the label as well as on written
      articles and paper that there is an IP to the product that belongs to Pimi
      and is used under licence of Pimi.   Omex undertakes not to
      copy or re-engineer the Patented Product.  All costs in relation
      to patent applications and costs undertaken to defend the patents from
      infringements by third parties are for the account of
      Pimi.  Pimi further undertakes to indemnify Omex in respect of
      any costs or liabilities resulting from claims by third parties that the
      Product infringes that party’s patent
rights.

            

    

     

    
      	
              18.  

            	
              Omex
      will nominate a project manager who will support the farmers in the
      implementation of the Storage Protocol. The project manager will supervise
      all new applications and trials.

            

    

     

    Term

     

    
      	
              19.  

            	
              Subject
      to Omex having fully complied with all the terms of this Agreement this
      agreement shall be in effect from the date hereof until 31st
      December 2012 (the "Term"), and shall
      continue thereafter for consecutive one year terms, until terminated by
      either party giving to the other six months notice in writing, and if such
      notice is given six months prior to 31st
      December 2012 it will terminate on that date. In the event that a party
      commits a serious breach of this agreement and such breach is not remedied
      within 30 days of receipt of written notice of said breach, the other
      party may terminate this Agreement
forthwith.

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              20.  

            	
              Should
      Omex not make appropriate sales, or efforts to achieve sales, as shown in
      section 12 above and  Appendix D, then Pimi may change the
      distribution terms granted to Omex to semi-exclusive (i.e. appointing one
      additional distributor), after giving notice in writing of the shortfalls
      and a period of time to rectify the situation
  (90days).

            

    

     

    
      	
              21.  

            	
              Should
      Omex not achieve the minimum sales stated in section 11 above, then Pimi
      may terminate the distributorship granted to Omex, after giving notice in
      writing of the shortfalls and a period of time to rectify the situation
      (90days). In this event, Pimi will allow Omex to retain supply of the
      Product to its current customers until the end of the Agreement under
      section 19 above and will supply Omex sufficient Product at the price set
      out in Appendix B.

            

    

     

    Entire
Agreement

     

    
      	
              22.  

            	
              This
      Agreement constitutes the entire agreement between the parties with
      respect to the subject matter hereof and supersedes all prior agreements,
      representations, understandings and arrangements of the parties related to
      these matters, whether written or oral. No modification of any of the
      terms of this Agreement shall be valid unless in writing and signed by an
      authorized representative of each
party.

            

    

     

    
      	
               
      

            	
              Reports

            

    

     

    
      	
              23.  

            	
              Omex
      will report to Pimi in real time on any results of any trial to enable
      Pimi to instruct on any change in the working parameters if required .
      Additionally Omex will furnish to Pimi the results and conditions of any
      storage which was done with the Product including, crop, quantities,
      number of treatments, amount of the Product used, and the results of the
      any such treatments.

            

    

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              Law

            

    

     

     

    
      	
              24.  

            	
              This
      agreement shall be interpreted in accordance with the Laws of England and
      is subject to the jurisdiction of the Courts of
  England.

            

    

     

    
       

      
        
          
            
              	 	 	 	 	 
	
                      /s/
      Youval Saly 

                    	 	 	
                      /s/
      D. Featherstone

                    	 
	
                      Name: Youval
      Saly

                    	 	 	
                      Name: . D.
      Featherstone

                    	 
	
                      Position:
      CEO

                    	 	 	
                      

                        Position: Managing
      Member

                      

                    	 
	 	 	 	 	 
	For and on Behalf of
      Pimi Marion Holdings 	 	 	For and on Behalf of
      Omex Agriculture Ltd. 	 

            

          

        

      

       

       

                        

    

    

     

     

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	 

    

    

    
 

    

    

    

    Appendix
A

    

    StoromexTM Specification

     

    November 2008

     

    

     

    1. Name:StoromexTM 

     

    2. Properties:

     

    2.1 Appearance: colorless
transparent liquid

     

    2.2 Smell: slightly
pungent

     

    2.3
Ingredients:   _______________18-20%

     

      _______________    8- 10%.

     

      _______________  ____%

     

       _________________% 

     

            2.4
Stability: Stable as Hydrogen Peroxide for 12 hours after applying.

     

    Pimi will
deliver COA confirming the stability and specification of the product with each
delivery. 

     

    

     

     

    

     

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    

    APPENDIX
B

    

    Prices

    

    

    Product
Prices delivered UK.

    

    Storomex
20           _____ Euro per Lt
delivered in IBC.

    Rebate
programme:

    Sep 2009/
Aug10:

    
      	
              1.  

            	
              Purchases
      above 50,000 Litres-  2% on all purchases for the
      year

            

    

    
      	
              2.  

            	
              Purchases
      above 60,000 Litres-  4% on all purchases for the
      year

            

    

    
      	
              3.  

            	
              Purchases
      above 70,000 Litres – 5% on all purchases for the
  year

            

    

    

    Rebate
programme:

    Sep 2010/
Aug 11:

    
      	
              1.  

            	
              Purchases
      above 130,000 Litres-  2% on all purchases for the
      year

            

    

    
      	
              2.  

            	
              Purchases
      above 150,000 Litres-  4% on all purchases for the
      year

            

    

    
      	
              3.  

            	
              Purchases
      above 160,000 Litres – 5% on all purchases for the
  year

            

    

    

    Sep 2011/
Aug 12:

    
      	
              4.  

            	
              Purchases
      above 300,000 Litres-  2% on all purchases for the
      year

            

    

    
      	
              5.  

            	
              Purchases
      above 350,000 Litres-  4% on all purchases for the
      year

            

    

    
      	
              6.  

            	
              Purchases
      above 370,000 Litres – 5% on all purchases for the
  year

            

    

    

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    Appendix
C

    

    

    Countries
for exclusivity

    

    

    
      	
              ·  

            	
              UK

            

    

    

    

    

    

    Appendix
D

    

    

    Sales and
Marketing activities by Omex will include:

    

    

    
      	
              ·  

            	
              Production
      of sales and promotional literature

            

    

    

    
      	
              ·  

            	
              Production
      of PowerPoint presentations- Pimi will be included as the supplier and
      owner of the Product in it

            

    

    
      	
              ·  

            	
              Farmer
      meetings and demonstrations –,

            

    

    

    
      	
              ·  

            	
              Promotion
      at relevant shows and exhibitions, including Potato
  Events.

            

    

    

    
      	
              ·  

            	
              Website
      promotion – there will be a link to Pimi  as the
      supplier

            

    

    

    
      	
              ·  

            	
              Targeted
      sales campaigns led by an appointed person to see the following number of
      farmers each seasonal year (September –
August):

            

    

    
      	
              o  

            	
              2008/9:                        75

            

    

    
      	
              o  

            	
              2009/10:                      110

            

    

    
      	
              o  

            	
              2010/11                      255

            

    

    
      	
              o  

            	
              2011/12                      500

            

    

    

    
      	
              ·  

            	
              Developing
      new applications (e.g. usage in onions, leeks, soil applications
      etc)

            

    

    

    

    

     

    

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    

    

    

    Appendix
E

    

    

    Application
Protocol for Storomex __% concentration for
use in potatoes and vegetables

    

    1. Storage room
preparation:

    1.1 Make
sure that the air circulation system functions correctly,

          clean
air ducts, fans and plenum.

    1.2
Maintenance treatment should be performed to the room and its equipment in order
to

          protect
against corrosion due to continuous exposure to high relative
humidity.

    1.3
General cleaning of the store

    1.4 Check
proper functioning of the humidity control. Temperature control and CO2
control.

    3. Room
filling:

    Filling
the room with stored goods has to be done while taking in consideration air
circulation needs in order to ensure good and homogenous air movement through
the store.

    4. Operating the room
controllers:

    4.1
Temperature: control according to the customer protocol.

    4.2
Humidity: keep constantly at 90%-92% R.H

    5.
Applying  Storomex:

    5.1  Prior
to treatment take care that temperature and relative humidity is
stable.

    5.2  Close
all doors, widows and air outlets.

    5.3  Close
mechanical cooling system.

    5.4  Check
that air circulation is proper functioning.

    5.6  Open
the Storomex feed to the Ultrasonic Atomizers.

    5.7  Treat
the crop at a ratio of 400-ml per 1 Ton of crop for potatoes; 200 ml/tonne for
brassicas. + adding 5 liters per 1,000 cubic

           meter
of room head space

    5.8
Treatment duration is approximately 20 hours.

    6. Resting period (after the
end of the Storomex treatment):

    6.1 Close
Storomex feeding valve.

    6.2 Close
air feeding valve.

    6.3 Close
air circulation system.

    6.4 Keep
the room under full rest for more 4 hours.

    7. Normal
operation:

    7.1
Operate the air circulation system.

    7.2
Operate the cooling system.

    7.3
Operate the Temp Controller, the humidity controller.

    7.5 Open
air feed and water feed to the Ultrasonic Atomizers.

    7.6
Continue to operate the room under the controlled Temperature and Humidity as
described on chapter 4.

    8. The program through the
whole storage period:

    8.1 Once
a month storage manager should conduct steps 5, 6, 7.

    
 

     

     

     

    10ex1021.htm

    Exhibit
10.21

     

    Letter of Intent
dated 20th Day of January
2009

     

    

    Between : Vegiesafe LLC a
Limited Liability Company registered in New York whose address is 126 Fifth
Avenue 4th Floor New York, NY 10011-5629 USA ("Vegiesafe") and Between Pimi Agro CleanTech
Ltd. a company registered in Israel whose address is POB 107 Kibutz Alonim,
Israel ("Pimi").

     

    
      	
              Whereas

            	
              Pimi developed
      Stabilized Hydrogen Peroxide (STHP) ("The Product") and a
      storage protocol ("the
      Storage Protocol") used in the treatment of fruits and vegetables
      in storage and has filed for patent registrations for such applications
      and formulations;

            

    

     

    
      	
              And
    Whereas

            	
              Pimi has registered
      patents and patents application for the Product and the Storage Protocol
      (hereinafter the Product and Storage Protocol are
      collectively referred to as the "Technology") in various
      countries among them the USA.  The
      patents, patent applications and all enhancements, improvements,
      derivatives and additions thereto, whether now in existence or created in
      the future are hereinafter referred to as the Patents. Set forth in Exhibit A attached
      hereto is a list of the registered Patents and
    applications.

            

    

     

    
      	
              And
    Whereas

            	
              Pimi has introduced the
      Technology for use in storage of
potatoes.

            

    

     

    
      	
              And
    Whereas

            	
              Pimi is active currently
      in Europe and Israel and desires to expand and start activity in the US, Canada and
      Mexico.

            

    

     

    
      	
              And
    Whereas

            	
              Vegiesafe and its
      affiliated companies are marketing, brand and product development
      companies which do business with mass-market retailers and supermarket
      stores in the US
      such as Wal-Mart
      ("WM"), Target and others.

            

    

     

    
      	
              And
    Whereas

            	
              Vegiesafe has
      represented to Pimi that its affiliated
      companies have relationships with WM and other mass-market
      retailers and major supermarket chains in North America ("Retailers") and will
      seek to build a business for CIPC free potatoes and
      potato products using the Technology for the
  Retailers.

            

    

     

    
      	
              And
    Whereas

            	
              The
      parties have agreed to cooperate in the development and expansion of Pimi activities in the
      US.

            

    

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
               
      

            	
              Now
      it has been Declared and Agreed between the
  Parties:

            

    

     

    
      	
              1.  

            	
              Preamble
      and Appendices

            

    

     

    
      	
              1.1  

            	
              The
      Preamble and appendices to this LOI is one and integral
      part of it.

            

    

     

    
      	
              1.2  

            	
              The
      headings of the section are for convenient only and would not serve for
      inter­pretation to this LOI.

            

    

     

    
      	
              2.  

            	
              Incorporation
      a US Subsidiary by Pimi

            

    

     

    
      	
              2.1  

            	
              Pimi intends to
      incorporate a fully owned subsidiary in the US ("NEWCO" or "NC") which might be the
      main vehicle for Pimi activities in the
      US.

            

    

     

    
      	
              2.2  

            	
              Pimi will grant to NC licenses for the use
      of the under the Patents.  The licenses for the US will be an
      exclu­sive license and the licenses for Canada and Mexico will be
      non-exclusive.

            

    

     

    
      	
              3.  

            	
              The
      Joint Venture between the Parties

            

    

     

    
      	
              3.1  

            	
              On
      or before January 15, 2009 NC or Pimi and Vegiesafe will enter
      into a joint venture agree­ment ("JV Agreement")
      incorporating the terms and conditions set forth in this LOI  ("The Joint Venture"). The
      Joint Venture will be in the form of an American LLC or partnership as the
      parties will agree. The LLC or the partnership will be incorporated when
      the Joint Venture will commercially justify it. In the event a JV
      Agreement is not entered into by February 15, 2009, the terms of this LOI
      and the terms stated herein to be set forth or provided in the JV
      Agreement shall constitute the parties JV
  Agreement.

            

    

     

    
      	
              3.2  

            	
              In
      the event any Retailer, any fast-food chain or any major packaged, frozen
      or snack food marketers or any major or national vegetable (or fruit)
      growers and major or national distributors (all collectively referred to
      herein as "Distributor"), in the US (such Distributors, being subject to
      the mutual approval of Vegiesafe and Pimi,
      which approval shall not be unreasonably withheld) expresses an interest
      in launching CIPC
      free potatoes or CIPC free potato
      products at any Retailer or by any Distributor by requesting its
      supplier/s to use the Technology  for  potatoes or
      potato products, in order to produce or to supply CIPC
      free  potatoes or CIPC
      free  potato products for its consumption, such request
      hereinafter referred to as a "Trigger Event". The Parties will continue to
      operate the Joint Venture under the terms hereof and the JV Agreement, so
      long as such Trigger Event occurs prior to December 31,
    2009.

            

    

     

    
      	
              4.  

            	
              Scope
      of the Joint Venture

            

    

     

    
      	
              4.1  

            	
              The
      Joint Venture will market, sell and distribute the Technology throughout
      of the USA on an
      exclusive basis,
      and throughout Canada and Mexico on a
      non-exclusive basis. The Technology will be distributed under the
      Trademark/s or such other name/s as shall be mutually agreed upon by the
      Parties as well as under Earthbound LLC’s (“EB”), an affiliated company of
      Vegiesafe umbrella brand known as
"Galapagos".

            

    

     

    
      	
              4.2  

            	
              The
      Joint Venture will have exclusivity for marketing, sales and distribution
      of the Technology for treatment and storage of potatoes in the USA subject to Section
      4.3 below. Treatment and storage of other fruits and vegetables will be
      added to the Joint Venture in the future based upon the milestone and
      vision set forth in Exhibit B.

            

    

     

    Notwithstanding
the above, the Parties agree that opportunities may come along with respect to
other fruits and vegetables.  The Parties mutually agree that when
these opportunities come along, the Parties will decide together whether or not
to include such additional categories within the scope of this
Agreement.

     

    The Joint
Venture will also market, sell and distribute the Technology for treatment and
storage of potatoes in Canada and Mexico, but not on an exclusive
basis.

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              4.3  

            	
              The
      exclusivity of the Joint Venture will be subject to fulfillment of certain
      milestones of annual sales set forth in the Exhibit
    C.

            

    

     

    
      	
               
      

            	
              In
      case such milestones are not achieved, either party will have the right,
      but not the obligation to terminate the Joint Venture's
      exclusivity.

            

    

     

    
      	
              4.4  

            	
              The
      Joint Venture will relate initially to process potatoes such as,
      French-Fries, Chips and fresh table potatoes. Once the Joint Venture has
      achieved the milestones set forth in Exhibit B, the Joint
      Venture's rights will be extended to other fruits and vegetables by mutual
      agreement, taking into account resources, funds availability, and vision
      for such expansion.  Vegiesafe acknowledge that Pimi is in
      R&D stages for other usages of the Technology such as soil treatment
      and disinfection, and grain treatment and other potential solutions and
      usages which are not part of the
LOI/Agreement.

            

    

     

    
      	
              5.  

            	
              Parties
      share in the Joint Venture and its
Management

            

    

     

    
      	
              5.1  

            	
              The
      parties' share in the Joint Venture will be: NC 70%, Vegiesafe 30% of all net
      revenues.  "Net revenues": will include all sums received for
      the Technology regardless of whether such sums are paid in the form of a
      royalty or payment for the sale of the Products or use of the Storage
      Protocol less any cost and expenses relating to achieving the
      revenues.

            

    

     

    
      	
              5.2  

            	
              The
      Joint Venture will have a board of directors.  Pimi will be entitled to
      have two directors and Vegiesafe will be
      entitled to have one director.  Notwithstanding the above, all
      decisions regarding expenditures of Company funds relating only to the
      first investment of the $250,000 will require unanimous approval of the
      Board. Notwithstanding the above, expenses relating to the EPA approval of
      up to $100,000 as set forth in Exhibit E, efficacy
      tests/demonstration room/s of up to $50,000, and travel expenses to the US
      of Pimi staff or to Israel by Vegiesafe or the staff
      of its affiliated companies for working session of up to $50,000 will be
      considered as approved in advance, and will not require additional
      approval of the Board of the JV.

            

    

     

    
      	
              5.3  

            	
              At
      such time as the activities of the Joint Venture warrant and upon mutual
      agreement of the Parties, the Joint Venture will employ a CEO and/or such other
      employees as may be necessary for the successful operation of the Joint
      Venture, including without limitation an agronomist who will be in touch
      with the customers in the USA.

            

    

     

    
      	
              5.4  

            	
              The
      Parties will have a meeting every quarter to review the busi­ness of
      the Joint Venture.  Such meeting may be in person or by
      conference call.

            

    

     

    
      	
              6.  

            	
              Pimi/NC
      Responsibilities.

            

    

     

    
      	
              6.1  

            	
              NC and Pimi responsibilities
      and missions under the Joint Venture are as
  follows:

            

    

     

    
      	
              6.1.1  

            	
              Pimi/NC will give sub
      license to the Joint Venture for the use of the Technology, and all other
      intellectual property and know-how including any research and
      develop­ment relating to the formula and any new product developed
      ("IP") for the
      term of the Joint Venture.

            

    

     

    
      	
              6.1.2  

            	
              Training
      of core personnel and technical support required for the activity in the
      US, until the
      Joint Venture will engage sufficient personnel who will take upon itself
      the technical support for the installa­tion and the treatment and
      Storage Protocol.

            

    

     

    
      	
              6.1.3  

            	
              Receiving
      of all approvals and consents required for the activity of the Joint
      Venture in the USA.

            

    

     

    
      	
              6.1.4  

            	
              Installation
      of the initial trials and demonstration
rooms.

            

    

     

    
      	
              6.1.5  

            	
              Pimi, its owners,
      officers, and managers agree (i) they will not, directly or indirectly,
      initiate contact with any Retailer or Distributor for the purpose of
      proposing or soliciting a license, sales, or other agreement for any
      Products or the Technology that are exclusive to the Joint Venture
      hereunder, and (ii) if contacted by any such Retailer or Distributor,
      Pimi will refer
      such Retailer or Distributor to Joint Venture.  In the event of
      a violation of this paragraph by Pimi, the Parties agree
      that the measure of Vegiesafe's damages will
      be based on its share of net revenue set forth in Paragraph
      5.1.

            

    

     

    
      	
              7.  

            	
              Vegiesafe
      Responsibilities:

            

    

     

    
      	
              7.1  

            	
              Vegiesafe
      responsibilities and missions under the Joint Venture are as
      follows:

            

    

     

    
      	
              7.1.1  

            	
              Marketing
      and sales activities of the Joint
Venture.

            

    

     

    
      	
              7.1.2  

            	
              Seeking
      to have a Retailer and/or major Distributor in the US, which will be
      mutually agreed upon by the parties, to start treatment of a line of CIPC free potatoes or
      CIPC free potato
      products, by recommending its producer/s and/or supplier/s to manufacture
      and supply such CIPC free pota­toes
      or CIPC free
      potato products; and following up with a line of products for extending
      shelf life of fruits and vegetables with CropDefender, Pimi
      products and other products treated by or that include the
      Technology.  Such next step will be discussed and mutually
      agreed upon by the parties once the milestones set forth In Exhibit B have
      been achieved.

            

    

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      	
              7.1.3  

            	
              Assisting
      with the allocation of required personnel for the Joint
      Venture.

            

    

     

    
      	
              8.  

            	
              Services
      and Goods provided by the Parties to the Joint
  Venture

            

    

     

    
      	
              8.1  

            	
              All
      services provided to the Joint Venture by any party will be charged to the
      Joint Venture at cost basis.

            

    

     

    
      	
              8.2  

            	
              Pimi
      will sell the Products to the Joint Venture on cost basis including but
      not limited to any external work done and
  transportation.

            

    

     

    
      	
              9.  

            	
              Financing
      the Joint Venture

            

    

     

    
      	
              9.1  

            	
              Vegiesafe will invest in
      the Joint Venture an aggregated amount of $250,000 which will be used for
      expenses reflected in a budget prepared for the Joint Venture and approved
      by Vegiesafe and
      Pimi.  The
      budget shall include such items as EPA approval, flights,
      accommodations, legal/accounting and first Potato treatments tests, etc.
      The above sum will be provided on an as required basis according to a
      working quarterly budget prepared by NewCo or Pimi and as shall be
      determined by the board of directors of the Joint Venture in accordance
      with section 5.2 above. Vegiesafe will deposit
      $40,000 with Pimi on or before January 26, 2009 which will be an advanced
      of the above amount out of which the sum of $12,400 which Pimi has already
      expended will be reimbursed to Pimi.  Once this amount has been
      used Vegiesafe will deposit additional amount of $40,000 and so forth.
      Decision as to costs and expenses relating to the expending the above
      investment will be taken by mutual
consent.

            

    

     

    
      	
              9.2  

            	
              The
      Joint Venture will open a bank account when practical. Signature rights in
      the Joint Venture bank account will be as decided by the Joint Venture
      Board of Directors.

            

    

     

    
      	
              9.3  

            	
              Any
      additional investment in excess of the $250,000 set forth in section 9.1
      above shall be contributed by the parties to the Joint Venture upon the
      mutual consent of the parties taking into account the Joint Venture's
      business and needs and will be paid to the Joint Venture as
      follows:  70% to be paid by Pimi and 30% to be paid by
      Vegiesafe.

            

    

     

    
      	
              9.4  

            	
              Breach
      by Vegiesafe of its obligation to invest under section 9.1 above, will be
      considered a fundamental breach of this LOI and/or the JV Agreement and
      will enable Pimi or NC to terminate the JV Agreement or this LOI by an
      advance written notice to Vegiesafe of its default under which it will
      provide Vegiesafe with a period of 15 days from the date of receipt of
      Pimi or NC’s notice to cure its default of payment of any of the
      installments payable under section 9.1. In case of termination in the
      above circumstance Vegiesafe will not be entitled to receive any
      compensation or the consideration under section 11.4 herein
      under.

            

    

     

    
      	
              9.5  

            	
              A
      breach by Vegiesafe of its obligations to invest in the Joint Venture
      under section 9.1 above shall not affect EB’s rights with respect to EB’s
      investment in Pimi under Section
10.

            

    

     

    
      	
              10.  

            	
              Vegiesafe
      investment in Pimi

            

    

     

    
      	
              10.1  

            	
              EB,
      an affiliate of Vegiesafe will invest directly in Pimi Agro CleanTech Ltd
      $300,000 at a valuation of $8M pre-money ("EB Investment") for
      226,642 Ordinary Shares of 0.01 NIS each representing 3.61% of the issued
      capital of Pimi at the time of investment. The investment will be paid to
      Pimi in tranches as follows:  first tranche of $60K will be paid
      on the 15th
      of March 2009.  The balance of $240,000 will be paid in four
      installments as follows: $60,000 on the 15th
      June, 2009, $90,000 on 15th
      of September, 2009 and $90,000 on the 15th
      of January 2010.  EB will receive the allocated shares pro rata
      to the EB Investment against each payment of the EB Investment. Attached
      to this LOI as Exhibit
      D is the Term Sheet for EB investment in
  Pimi.

            

    

     

    
      	
              10.2  

            	
              In
      the event Pimi
      raises funds from a VC, or from an institutional investor ("The Outside
      Investment"), or will issue shares in an IPO, for a valuation which is
      higher than $8Million then EB will have the option
      to pay the balance of the EB Investment prior to the funding of the
      Outside Investment. If EB, in its sole
      discretion elects not to pay the balance of the EB Investment at such
      time, it will then lose its right to pay the balance of the EB Investment
      and will not receive the balance of the shares, and will be left only with
      those shares that have been already allocated under paragraph 10.1
      above.

            

    

     

    
      	
              10.3  

            	
              In
      case that prior to the first payment of the Investment by EB, there will
      be a conversion of the shares of Pimi to shares in a US company, as a part
      of the plan to register the shares of the US company on the NASDAQ OTC/BB,
      then instead of shares in Pimi, EB will receive shares in the US company
      at the same rate of conversion which applies to all other holders of the
      Ordinary Shares 0.01 NIS each of
Pimi.

            

    

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              10.4  

            	
              Breach
      by EB of its obligation to invest in Pimi under section 10.1 above, will
      be considered a fundamental breach of this LOI and/or the JV Agreement by
      Vegiesafe and will enable Pimi or NC to terminate the JV Agreement or this
      LOI by an advance written notice to Vegiesafe of its default and providing
      Vegiesafe with a period of 15 days from the date of receipt of Pimi or
      NC’s notice to cure its default of payment of any of the installments
      payable under section 10.1. In case of termination in the above
      circumstance Vegiesafe will not be entitled to receive any compensation or
      the consideration under section 11.4 herein
  under.

            

    

     

    
      	
              11.  

            	
              Termination
      of the LOI or the Joint Venture

            

    

     

    
      	
              11.1  

            	
              Either
      Party shall have the right to terminate this LOI and/or the Joint
      Venture and the JV Agreement if the Trigger Event, as that term is defined
      in Section 3.1, does not occur by December 31, 2009. Notice of the
      exercise of the right to terminate this LOI and/or the Joint
      Venture and the JV Agreement shall be sent to the other party as provided
      in Section 17 within 60 days after December 31, 2009.  In the
      event of a termination as provided in this Section 11.1, Vegiesafe acknowledges
      that its investment made in the Joint Venture will not be returned, except
      for its investment which was used for acquiring the EPA approval for
      registration of the Technology in the US including without
      limitation the expenses set forth in Exhibit E including expenses added to
      the EPA registration budget after the date hereof and such additional
      direct expenses associated with EPA registration if actually
      incurred.

            

    

     

    
      	
              11.2  

            	
              Pimi
      and/or NC shall have the right but not the obligation to terminate the
      exclusivity of the Joint Venture, if the milestones set forth in Exhibit C
      (“Milestones”) are not achieved. If, however, good faith negotiations with
      Retailers or Distributors, that are, in both parties good faith
      determination, reasonably expected to achieve the Milestones are ongoing
      at the time of any Milestone deadline, the parties will discuss the
      potential of such negotiations and give consideration to such negotiations
      prior to terminating the exclusivity of the Joint Venture for failure to
      achieve a Milestone.

            

    

     

    
      	
              11.3  

            	
              Upon
      termination of the Joint Venture the Technology and EPA approval and any
      other license or consent, will remain the sole property of Pimi and/or
      NC.

            

    

     

    
      	
              11.4  

            	
              Upon
      termination of the Joint Venture NC or Pimi, if NC has not
      been formed will continue to pay Vegiesafe its share of
      revenue from the sales as agreed under the JV Agreement as long as Vegiesafe continues to
      provide services required under any agreement to which it is a
      party.

            

    

     

    
      	
              11.5  

            	
              Upon
      termination of the Joint Venture, all rights in and to EB's Galapagos brand and
      such customized trademark, other than the actual Licensed Mark used in
      conjunction with the Products, will belong exclusively to EB.  Pimi and/or NC shall own
      all right, title and interest in and to the underlying Technology, IP, and
      to the under­lying artwork in the brand collateral produced by the
      Joint Venture, including but not limited to, any Product specifications,
      copyrights, names, seals, logos and art­work developed in connection
      therewith, Pimi agrees it will not use, either during or after the term of
      this LOI or the JV
      Agreement, any intellectual property, including but not limited to artwork
      and designs, created by Vegiesafe using or connected to the Technology or
      Licensed Mark for any purpose outside the scope of this LOI or the Joint Venture
      without the prior written consent of Vegiesafe upon such terms as are
      agreeable to Vegiesafe .

            

    

     

    
      	
              12.  

            	
              Confidentiality
      and non Compete

            

    

     

    
      	
              12.1  

            	
              The
      parties will keep their relationship confidential unless mutually
      pre-agreed in writing or required under any court order and or law or
      regulations of the USA or Israel.

            

    

     

    
      	
              12.2  

            	
              Any
      information disclosed by one Party to the other under this LOI or in connection
      with the Joint Venture will be kept confidential and will be used only for
      the mutual benefit of the Parties in furtherance of the purpose of the
      Joint Venture.

            

    

     

    
      	
              12.3  

            	
              Vegiesafe will not be
      involved in any other solution for fruit and vegetables that directly
      competes with the Technology for five (5) years after termination of this
      LOI or the Joint
      Venture.

            

    

     

    
      	
              12.4  

            	
              During
      the term of this LOI and the JV
      Agreement, neither party shall engage in any independent business
      enterprise in the US without the other in connection with any business
      enterprise that sells, promotes or markets products that are competitive
      with the Technology. Notwithstanding anything to the contrary set forth
      above, nothing contained herein shall preclude Vegiesafe from entering
      into a business relation­ship with Vego LLC which is extending shelf
      life for processed fruit and vegetables.  Vegiesafe shall be
      permitted to enter into any business relationship with Vego LLC even if
      the subject matter of such business competes with the Technology or other
      Pimi Products
      subject to Vego LLC not using the
Technology.

            

    

     

    
      	
              12.5  

            	
               The
      Parties agrees not to solicit the other Party's employees to work directly
      or indirectly for them or hire any former employees of the other Party for
      a period of three (3) years after the former employee's employment
      terminated.

            

    

     

    
      	
              12.6  

            	
              The
      provisions of this Section 12 shall survive the termination of this LOI.

            

    

     

    
      	
              13.  

            	
              Sale of Brand or
      Pimi.

            

    

     

    The Joint
Venture Agreement will provide the in case of sale of the JV or the JV
operations relating to fruit and vegetables by NC or Pimi, PIMI’s share will be 70% and
Vegiesafe’s share will
be 30% of the consideration of such sale, provided the Trigger Event has
occurred. The above entitlement is only in case that Vegiesafe has not received
consideration for its part in the JV directly which is intended to represent 30%
of the total consideration for such sale.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              14.  

            	
              Goodwill.

            

    

     

    
      	
              14.1  

            	
              The
      Parties acknowledge that any intellectual property, including but not
      limited to artwork and designs, created by Vegiesafe using or connected
      to the Technology or Licensed Mark is created for the mutual benefit and
      profit of the Joint Venture.  Vegiesafe  retains the
      perpetual right to use, solely as an historical example of its
      advertising, any advertising and promotional materials produced by or for
      Pimi or the Joint Venture hereunder which incorporate the Licensed Mark,
      provided that such use will be exclusively for award consideration and
      non-commercial internal and port­folio
  purposes.

            

    

     

    
      	
              14.2  

            	
              Pimi
      acknowledges that the Galapagos brand is solely the property of
      EB.  Pimi shall not, at any time, regardless of the duration of
      this LOI, dispute
      or contest, directly or indirectly, EB's ownership of the Galapagos
      brand.  Pimi recognizes the value of the goodwill associated
      with the Galapagos brand and agrees that all rights in the Galapagos Brand
      and goodwill associated with it, including all goodwill generated by use
      of the Galapagos brand in connection with the sale of the Technology
      belong to EB.  Pimi acknowledges that any intellectual property
      created by EB using the Galapagos brand is created for the exclusive
      benefit and profit of EB.  Pimi agrees it will not use, either
      during or after the term of this LOI or the JV Agreement,
      for any purpose, any intellectual property, including but not limited to
      artwork and designs, created by Vegiesafe using or connected to the
      Galapagos brand.

            

    

     

    
      	
              15.  

            	
              Arbitration

            

    

     

    Parties
agree that any controversy or claim arising out of or relating to this LOI, the Joint Venture or the
JV Agreement or any breach or alleged breach of the provi­sions of this
LOI or the JV Agreement,
shall be settled by arbitration submitted to the American Arbitration
Association, to be conducted, in New York City, New York, and judgment upon the
award rendered may be entered in any court having jurisdiction
thereof.  The arbitration shall be conducted in accordance with the
then current commercial rules of the American Arbitration
Association.

     

    
      	
               
      

            	
              In
      the event of the actual or threatened breach of this LOI or the JV Agreement,
      the non-breaching Party shall be entitled to a preliminary restraining
      order or injunction restraining the breaching Party from violating its
      provisions.  Nothing contained in this LOI or the JV Agreement
      shall be construed to prohibit the non-breaching Party from pursuing any
      other available remedies for such breach or threatened breach, including
      the recovery of damages.  Any recourse by a Party to a court for
      interim or provisional relief shall not be deemed incompatible with the
      agreement to arbitrate or a waiver of the right to
    arbitrate.

            

    

     

    
      	
              16.  

            	
              Reports
      and transparency

            

    

     

    NC,
Vegiesafe and Pimi will report to each other on any meeting, and/or connection
and/or relations with Retailer or Distributor as well as potential Retailer or
Distributor, as well as any technical data or trials made in the US or Canada or
Mexico, and any other territory.

     

    
      	
              17.  

            	
              Joint
      Venture/Joint Venture Agreement

            

    

     

    
      	
              17.1  

            	
              The
      parties will instruct their lawyers to work on a JV Agreement which will
      incorporate and reflect the terms and conditions of this
    LOI.

            

    

     

    
      	
              17.2  

            	
              The
      parties will use their best commercial efforts to complete and sign the JV
      Agreement by no later than February 15, 2009. If the JV Agreement is not
      signed by January 15, 2009 this LOI shall be the JV
    Agreement.

            

    

     

    
      	
              18.  

            	
              Notices

            

    

     

    All
notices and other communications pursuant to this LOI shall be sent by telefax
with confirmation or by overnight courier service to the other Party at the
address stated above.  Each Party's address may be changed by notice
to the other party in accor­dance with this Paragraph.

     

    
      	
               
      

            	
              Any
      and all notices sent to Vegiesafe shall also require that a copy be sent
      to Kamerman & Soniker P.C., 470 Park Avenue South, 12th Floor South,
      New York, New York 10016 fax 212-400-4935.  Any and all notices
      sent to Pimi shall also require that a copy be sent to Advocate Eitan
      Shmueli, Sadot & Co Law offices of 12 Abba Hillel St. Ramat-Gan,
      Israel fax
      972-3-6122377.  In the
      event of delivery by overnight courier, the date of delivery is deemed to
      be the next business day (two business days for international delivery)
      after deposit to the overnight courier.  In the event of
      delivery by confirmed telefax, the date of delivery is deemed to be the
      date of transmission if transmission occurs before 4:00 PM at the location
      of receipt of the notice, otherwise the next business
  day.

            

    

     

    
      	
              19.  

            	
              Execution/Counterparts.

            

    

     

    This LOI
(or any subsequent amendment or addendum thereto) may be executed in
counterparts by the Parties with each such counterpart then being considered one
and the same and all of which shall constitute one and the same
agreement.  A signed e-mail or telefaxed copy of this LOI (or any subsequent
amendment or adden­dum thereto) shall have the same force and effect as an
original signed copy of this LOI.

     

     

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      In
witness whereof the Parties have signed this LOI on the 20th of
January 2009.

       

      /s/
JD                                                               
/s/ Eitan
Shmueli

      Vegiesafe
LLC.                                              
Pimi Agro Cleantech

      Jack
Deweck                                                  
Eitan
Shmueli ADV

    

                   
1/22/09                                                            
Alon
Carmel, Chairman

     

    EB's
consent

     

    We the
undersigned Earthbound LLC agree to terms of this LOI and to be bound by the
terms of section 10 above. We also agree to grant the JV and/or Pimi and/or the
NC the right to use our brand name "Galapagos" pursuant to the terms of this LOI
and for the purposes of the JV, as long as the JV or the partnership under it
will be in force, free of any charge and without any consideration to
us.

     

    Earthbound
LLC

     

    By :
___________________________________

     

    Signature:
_______________________________

     

    Date:
__________________________________

     

    Exhibit A
________________________________

     

    Patents
and Patent Applications

     

    
      	
              COUNTRY

            	
              Patent Register
      No.

            	
              Application
      No.

            	
              Status

            
	
              U.S.A

            	
              6,797,302;       6,946,155;

              7,147,872

            	 
      	
              Granted

            
	
              Canada

            	 
      	
              2,338,718

            	
              Pending

            

    

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    Exhibit
B

     

    Milestones
for other fruits and vegetables to be added

     

    The Joint
Venture has achieved sale target of 300,000 tons potatoes using the
Technology.

     

    Vision:

     

    Vegetables:
Cabbage, Onions, Mushrooms, Sweet Potatoes, carrots, Broccoli
cauliflower.

     

    Fruits:
Citrus, Apples , Pear, Peach.

     

    Priority
will be decided according to market information and demand as well as product
development.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

     

    Exhibit
C

     

    Milestones
to maintain exclusivity:

     

    
      	
              1.  

            	
              Trigger
      Event until December 31, 2009.

            

    

     

    
      	
              2.  

            	
              Entering
      a CIPC free branding program with 2 Retailers or Distributors before crop
      season started Sep 2010.

            

    

     

    
      	
              3.  

            	
              Treatment
      of 150,000 tons of potatoes in season which starts on Sep.
      2011.

            

    

     

    
      	
              4.  

            	
              Treatment
      done to 350,000 tons of potatoes in season starts on Sep.
      2012.

            

    

     

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    Exihibit
D

     

    Term Sheet and POA

     

    

     

    

     

    

     

    

     

    

     

    

    10

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