DISTRIBUTION AGREEMENT

(1)

At its own expense to promote and increase in every reasonable manner possible to the reasonable satisfaction of the Company the sale of the Company’s Products in the Territory and to purchase from the Company in each period of 12 (twelve) months, beginning on the commencement date, Company Products to a total value of at least the value stipulated in the second schedule hereto or such other value as shall be agreed from time to time in writing.

(2)

To keep the Company informed of all its marketing activities with regard to the Company’s Products and also of any developments in market conditions within the Territory and to submit a bi-annual Marketing Report.

(3)

Not to seek customers or otherwise directly or indirectly to solicit orders for the Company’s Products outside the Territory or knowingly sell to a third party who intends to sell the Company’s Products outside the Territory.

(4)

To comply with or, as the case may be, to assist the Company to comply with any procedure or regulation laid down or imposed by any governmental body or agency which affects any of the Company’s Products within the Territory.

The Distributor agrees that in carrying out its duties under this Agreement, it will neither undertake nor cause or permit to be undertaken any activity which is illegal under any laws in or outside the Territory. In particular, the Distributor covenants and warrants that it shall comply in all respects with all laws, decrees, rules and regulations of the Territory. The Distributor warrants thai it is duly licensed or otherwise authorized by all laws applicable in the Territory and accepts all liability for breach of this warranty.

(5)

That it shall not during the subsistence of this Agreement without the written consent of thc Company be interested in or concerned either directly or indirectly in the purchase, sale, manufacture or introduction into the Territory of any goods which compete with or perform the same function as any of the Company’s Products.

(6)

Subject to the provisions of Clause 3 (7) hereof during the term of the Agreement and at its own expense to advertise the Company’s Products throughout the Territory to such an extent and in such a manner as is reasonably satisfactory to the Company.

(7)

Not to produce, exhibit, circulate or permit any servant or agent to produce, exhibit or circulate any literature or advertising material other than that supplied to it under Clause 4(4) thereof, without the prior written approval of the Company.

(8)

To carry out after-sales service and follow-up sufficient for return purposes, for any of the Company’s Products to a standard of the workmanship reasonably acceptable to the Company and to provide itself at its own expense with such proper equipment and facilities as shall, in the Company’s reasonable opinion, be adequate for this purpose.

(9)

To maintain such stocks of the Company’s Products, including, as appropriate and as may be reasonably necessary to enable the Distributor to comply with its obligations hereunder.

(10)

To employ such qualified, trained sales and technical personnel as shall be necessary to provide for the proper sales, service, and follow-up of the Company’s Products.

(11)

To pay for the Company’s Products in such a manner as the Company may from time to time prescribe and at the applicable prices specified in the Company’s price list currently in effect upon receipt of the Distributor’s order, less the discount mentioned in the first schedule herein or as otherwise agreed in writing between the Company and the Distributor and to pay all charges involved in transferring payments in full and not to have the amount due to the company exceeding the limit as established from time to time by the Company.

(12)

Not without the consent in writing of the Company to use or permit the use of any of the Company’s Patents, Trade Marks or Trade Names either during the term of this Agreement or any continuance thereof, or at any time thereafter, except for the purpose of selling the Company’s Products under this Agreement. The Distributor must ensure that each reference to and use of the Trade Marks or Trade Names by the Distributor is in a manner approved by Company and, where appropriate, is accompanied by an acknowledgment, in a form approved by Company, that the same is a registered trade mark of Company.

(13)

Not to effect or permit the removal of, or any alteration or addition to any of the Patent numbers or serial numbers affixed to any of the Company’s Products without prior written consent of the Company.

(14)

Not to use any of the Company’s Trade Marks or Trade Names or any word or words closely resembling them or any of them as part of any corporate name and not to use the Trade Marks or Trade Names in any way which might prejudice the validity of Company’s goodwill in them.

(15)

To keep confidential and safeguard with special care all confidential technical information, know-how, data and specifications relating to the Company’s Products or their manufacture supplied to it by the Company and not to use or disclose the same to any third party without the prior written consent of the Company except to the extent necessary to enable its employees to carry out their duties; and to take all necessary steps to ensure that its employees become bound not to use or disclose the same except as aforesaid.

(16)

Not to modify, alter or add to any of the Company’s Products without prior written consent of the Company and to disclose to the Company full details of any such modifications, alterations or additions carried out on receipt of such approval.

(17)

At Company’s expense, the Distributor will take all steps which Company reasonably requires to assist in maintaining the validity and enforceability of the Company’s exclusive rights to the use of the Patents, Trade Marks or Trade Names during the term of this Agreement. The Distributor must not do, omit or permit the doing or omission of, anything which might invalidate or be inconsistent with the Company’s rights in the Patents, Trade Marks or Trade Names.

(18)

The Distributor must promptly and fully inform Company if the Distributor becomes aware of: (a) any actual, threatened or suspected infringement of the Company’s rights in the Patents, Trade Marks or Trade Names; and (b) any claim that the sale of the Company’s Product infringes any rights of any Other person.

(1)

Subject to the provision of Clause 5 (3) hereof, not during the term of the Agreement, or any continuance thereof, to appoint any other person as distributor of the Company’s Products within the Territory nor to authorize any person to sell the Company’s Products within the Territory.

(2)

Subject to the provisions of Clause 3(12) to 3(18) hereof, to permit the Distributor to use the Patents, Trade Marks and Trade Names for the purpose of selling the Company’s Products in accordance with the terms of this Agreement.

(3)

Subject to the provisions of Clause 6 (6) hereof, to sell the Company’s Products to the Distributor at the Company’s prices from time to time current for sales to its distributors, specified in the Company’s price list(s) current at the date of delivery less the discount.

Advertising Materials and Catalogues

(4)

To supply the Distributor with the instruction books, catalogues, circulars and other promotional and advertising material in such quantities as the Company deems necessary and to the extent that the same are reasonably available.