SOLEDISTRIBUTION AGREEMENT

2.1

The Distributor shall fund, at its own expense, the manufacturing of a prototype of the Products (the "Prototype") and of the Products themselves.

2.2

The Distributor shall sell the Products within the Territory under its own name and behalf and at its exclusive risk, hazard and liability.

2.3

The Distributor undertakes to promote the sale of the Products in the Territory in the most effective way and in co-operation with TOD.  In this context, the Distributor undertakes to safeguard all interests of TOD with the ordinary businessman’s diligence.

2.4

The Distributor represents and warrants to dispose and undertakes to maintain the financial means, as well as the adequate organisation in terms of structures, staff and facilities so as to ensure the most effective manufacturing, promotion, distribution and sale of the Products within the Territory.

3.1

The Distributor undertakes to sell the following quantities of the Products (each, a "Minimum Quantity"):

Within the first nine months as of the commencement date of this Agreement (the "First Period"), the Distributor shall not be obligated to sell any Products.

Within the 12-month period after the First Period (the "Second Period"), the Distributor shall be obligated to sell 15 million Products (the "Second Period Quantity"). For the purpose of calculating the Second Period Quantity, any and all Products that have been sold by the Distributor within the First Period shall be considered to have been sold within the Second Period.

Within the 12-month period after the Second Period (the "Third Period"), the Distributor shall be obligated to sell 20 million Products (the "Third Period Quantity").

The Third Period Quantity shall be increased by 15% with respect to each 12-month period after the Third Period and the Distributor shall be obligated to sell such quantities accordingly, i.e., the minimum sales obligations during the first 12-month period after the Third Period is 23 million Products and during the second 12-month period after the Third Period is 26.45 million Products.

4.1

In consideration for the rights detailed in Art. 1, the Distributor shall pay TOD an amount of US$0.07 per Product for each Product which has been sold by the Distributor and for which consideration was actually received by the Distributor (the "Consideration").

4.2

The Consideration shall be paid by the Distributor to TOD on a monthly basis.

4.3

Until the 10th day of each calendar month, the Distributor shall provide TOD with a monthly report setting forth the quantity of the Products sold by it during the immediately preceding month and the aggregate quantity sold by it during the relevant period for which it is obligated to a Minimum Quantity.  The Distributor shall promptly provide all necessary information required by TOD for verification of the reports, the Consideration to which it is entitled and the attainment of the Distributor with its Minimum Quantity obligations.  If requested by TOD, the Distributor shall provide TOD with access to all its books and records for purposes of ensuring the Distributor's full compliance with its obligations hereunder.

6.1

For the purpose of this Agreement, "Intellectual Property Rights" shall mean all intellectual property rights, including without limitation copyrights, patents, patent applications, and registrations and applications for registration thereof, computer software, programs, data and documentation, technology, trade secrets and confidential business information, whether patentable or non-patentable and whether or not reduced to practice, know-how, designs, prototypes, enhancements, improvements, works-in-progress, research and development information, and other proprietary rights relating to any of the foregoing (including without limitation remedies against infringements thereof and rights of protection of an interest therein under the laws of all jurisdictions).

6.2

TOD shall continue to be the sole owner of any and all its existing Intellectual Property Rights owned by it prior to the date hereof. The Distributor shall have no Intellectual Property Rights whatsoever in the Products.

6.3

TOD has applied for a patent protection in Israel in November 2007 and also applied for international patent protection with respect to the Products (PCT stage) in October 2008 and is obligated utilize its best efforts to complete the PCT stage.

6.4

If requested by the Distributor, TOD shall complete the applicable patent registration procedures in countries in which the Distributor obtained binding distribution agreements with third parties for reasonable quantities.

9.1

The Distributor undertakes to immediately upon becoming aware of such circumstances, inform TOD of any act of unfair competition or of any breach of intellectual, industrial or commercial property rights by third parties, including (but not limited to) as far as infringements of the trade mark or other Intellectual Property Rights.  Furthermore, the Distributor undertakes to assist TOD in all actions aimed at protecting such rights, at TOD’s expense.

9.2

The Distributor undertakes neither to market nor to manufacture products equal or similar to those covered by the Agreement for the entire duration of the same.  Furthermore, the Distributor undertakes not to act either in the Territory or outside the same, either directly or indirectly as an agent, distributor, retailer or licensee in the interest of third parties manufacturing or marketing products in competition with the Products.  This obligation also applies to companies in which the Distributor holds an outstanding position without necessarily being a partner therein.

12.3

Upon termination of this Agreement, the Distributor shall return to TOD any and all information, including all records, products and samples received from TOD, and any copies thereof, as well as any notes, memoranda or other writings or documentation, whether in its possession or under its control, and shall erase all electronic records thereof, an shall so confirm to TOD in writing.