Sales Representation, Product Distribution And Service Agreement

Exhibit 10.26


SALES REPRESENTATION, PRODUCT DISTRIBUTION AND SERVICE AGREEMENT


This AGREEMENT is made and entered into this 7th day of January, 1999, by and between P.K LTD., a Korean corporation organized and existing under the laws of the Republic of South Korea with its principal place of business located at 493-3 Sung Sung-Dong, Cheon-An, Choong-Nam, Korea (hereinafter referred to as "Agent") and CFM TECHNOLOGIES, INC., a Pennsylvania corporation, with its principal place of business located at 1336 Enterprise Drive, West Chester, Pennsylvania, 19380 (hereinafter referred to as "Company").


NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:


1. APPOINTMENT OF AGENT. Company hereby appoints Agent as its exclusive agent
for the sale of certain items fully described in Exhibit "A" attached
hereto (hereinafter referred to as "Products") in the countries and
locations listed in Exhibit "B" attached hereto (hereinafter referred to as
"Territory").


Agent is authorized by the above appointment to sell the Products only to
manufacturers located in Territory for use in manufacturing facilities
located in Territory, and Agent shall refer to Company all inquiries made
from prospective customers which do not fall under the scope of this
Agreement. All inquiries or orders received by Company for Products from
any party in the Territory shall be referred to Agent.


Exhibit A may be changed in writing by CFM following thirty (30) days of
notice for the addition of items and ninety (90) days of notice for the
withdrawal of items.


It is understood by the parties that Agent shall be acting as an
independent sales agent for Company's products, and Agent shall be solely
responsible for all expenses connected with the operation of its business.
Agent shall have no authority to contract in the name of or bind Company in
any manner whatsoever. Agent shall defend and hold Company harmless from
all claims arising out of Agent's conduct. All transactions or activities
in connection with this Agreement will comply with the letter and the
spirit of all applicable laws as well as ethical business standards. Care
must be taken to avoid disseminating inaccurate or misleading technical or
business information.


2. TERM OF AGREEMENT. This Agreement shall continue in effect for a period of
one (1) year from the date of its execution and shall automatically renew
year after year, unless terminated Pursuant to Paragraph 11 hereof.


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3. RESPONSIBILITIES


3.1 COMPANY'S RESPONSIBILITIES.


a) Company shall make every reasonable effort to manufacture
quantities of Products sufficient to meet the requirements of
end-user customers represented or sold to by Agent.


b) All inquiries or orders received by the Company for spare parts
from any party in the Territory shall be forwarded to Agent.


c) Company shall forward the price list for spare parts described in
Exhibit "C" to Agent annually.


d) Within thirty (30) days of the date of this agreement, PKL and
the Company will determine a target initial list of spare parts
to be stocked in Korea and purchased by PKL. The Company agrees
to sell such parts to PKL on a one-time basis at the Company's
purchase cost in order to assist PKL to establish tjis initial
target stock. Thereafter, the Company will sell spare parts to
PKL at prices as specified in Exhibit C herein. Any parts
presently held on consignment by PKL which are not on the initial
list will be returned to the Company within sixty (60) days of
the date of this agreement. Both parties agree that the Company
will not maintain any consignment spare parts stock in Korea in
the future.


3.2 AGENT'S RESPONSIBILITIES. Agent agrees to:


a) Use its best efforts to promote the sale and use of the Products
and to solicit and secure orders for the Products within
Territory and further to serve the best interests of Company in
any and all matters in accordance with this Agreement, and;


b) Maintain an inventory of spare parts (the "Base Spares
Inventory"), as described in Exhibit "C" attached, needed to
operate and maintain Products installed at its customers sites.
The Base Spares Inventory will change from time to time as the
installed-base of Products within the Territory changes and shall
be determined from reasonable recommendations made by Company as
to specific items and quantifies, and;


c) Purchase from Company spare parts as necessary to maintain the
Base Spares Inventory and such other spare parts as Agent may
require to maintain Products no longer under warranty. Such spare
parts shall be purchased from Company at 85% of the then current
U.S. list prices (freight, customs, VAT and other taxes to be
paid by Agent) for such spare parts. Agent further agrees to sell
such spare parts to customers/end users in Territory for an
amount not to exceed 130% of such U.S. list prices, and;


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d) Provide and maintain reports of spare parts usage and on-hand
balances and provide the same to Company on request, at
reasonable intervals and;


e) Refrain from the manufacture of sale of any product which shall
directly or indirectly compete with Products during the duration
of this Agreement and for a period of three (3) years following
the termination of this Agreement for any reason, and;


f) Prepare a sales forecast each quarter providing projections of
end-user sales of Products by item, by end-user customer name, by
quarter, for six (6) fiscal quarters of the Company, including
the quarter in which the forecast is prepared. These forecasts
shall be received by the Company before the 15th day of the
second month of each fiscal quarter (Example: a forecast for the
fourth quarter of 1999 shall be received by CFM by September
15,1999 covering the fourth quarter of fiscal 1999, all four
quarters of fiscal 2000 and the first quarter of fiscal 2001,
ending January 31, 2001).


4. CONFIDENTIALITY. Agent acknowledges that this Agreement creates a
relationship of trust and confidence between Agent and Company. Agent
acknowledges that propriety data and propriety information are embodied in
the Products, and in data, information, and material supplied by Company to
Agent or acquired by Agent in the course of performance of this Agreement.
Agent acknowledges that all such propriety data and propriety information,
including such data and informati ...