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
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1.
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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,
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2.
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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.
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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:
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" Additional
Installation " means as defined in Section 3.12
below.
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"
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.
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"
Agreement " means this document and any annex, exhibit,
attachment, schedule, addendum, or modification hereto, unless the
context otherwise indicates.
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" 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).
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"
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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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.
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"
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).
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" 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
".
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" Initial
Installation " means as defined in Section 3.12
below.
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"
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.
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"
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.
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" 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.
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" Lease
Price" means the total consideration paid by the
Customer in connection with the lease of the Products.
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"
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
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" 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.
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“
Pilot Product ” means as defined in Section 4.5
below.
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"
Product " means as defined in the recitals above.
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“
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.
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" 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.
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A “
Sale Agreement ” means an agreement for the sale of
the Products entered into by the Marketing Arm or its subsidiary
with a Customer.
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" 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 .
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"
Territory " means (i) Germany and (ii) the states of the
United States of America listed in Schedule 1.22 hereto (the
" States ").
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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
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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.
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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.
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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
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3.
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ADDITIONAL
UNDERTAKINGS OF THE MARKETING ARM
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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.
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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.
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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.
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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.
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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:
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An aggregate
sales target of US$750,000 (seven hundred and fifty thousands US
dollars) for Germany; and,
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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.
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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
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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.
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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 ).
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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.
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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 howeve r 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.
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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
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.
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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.
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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 ”).
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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.
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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).
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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.
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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).
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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.
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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.
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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.
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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.
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Exclusive Marketing
Agreement
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Service
Warranty .
Upon Customer's request only, the Marketing Arm shall provide each
Customer with a service warranty consistent with the MA
SLA.
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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.
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4.
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ADDITIONAL
OBLIGATIONS OF ELGRESSY
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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.
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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.
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Warranty and
Process Guarantee.
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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.
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Exclusive Marketing
Agreement
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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. .
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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 .
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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.
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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
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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.
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Exclusive Marketing
Agreement
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SLA. All of Elgressy's obligations hereunder shall be
performed at the times and under the terms prescribed in the
Elgressy SLA.
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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.
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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.
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Exclusive Marketing
Agreement
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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.
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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. Th
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