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PRE-SALE AND REVENUE PARTICIPATION AGREEMENT

Company: EFLOTCH, Company No. 517345955
Product: A smart repellent system based AI designed to deter birds and other animals from selected areas.

1. Background and Purpose
1.1 EFLOTCH is developing and marketing a smart AI-based repellent system intended to keep birds and other animals away from areas that need to remain clear of animals.
1.2 The expected public selling price of the product is NIS 1,100 plus VAT per unit.
1.3 The Buyer wishes to participate in an early pre-sale program. Under this program, the Buyer pays in advance for specific product units at a discounted price, and the Company will use reasonable commercial efforts to develop, manufacture, test, and sell those units to end customers at the public selling price.

2. Pre-Sale Purchase
2.1 The Buyer may purchase a minimum of 5 units per block. The price of each block is NIS 4,400 plus VAT, meaning NIS 880 plus VAT per unit.
2.2 The Buyer may purchase more than one block, subject to the Company's approval and actual receipt of payment.
2.3 Each product unit included in the program will be identified by a serial number. The Buyer's economic rights will apply only to the specific units allocated to the Buyer.
2.4 This payment is not a loan to the Company and is not an investment in shares. The Buyer receives no shares, voting rights, management rights or ownership rights in the Company.

3. Minimum Participation Condition
3.1 The program will start only if the Company receives signed commitments for at least 50 blocks, representing at least 250 product units in total.
3.2 If this minimum commitment is not reached within 2 (two) months, the Company may cancel the program and return to the Buyer the amount actually paid, without interest or additional compensation.

4. Use of Funds
4.1 The Company will use the pre-sale funds mainly for the development of the product, buy parts, assemble products, test products, prepare marketing materials, sell the products, and perform any other reasonable activity needed to advance the product and its sale.
4.2 The Company will keep an internal record of the blocks, serial numbers, buyers, and end-customer sales relating to the program.

5. Sale to End Customers and Payment to the Buyer
5.1 The Company will use reasonable commercial efforts to develop, manufacture, assemble, test and sell the product units to end customers within 12 months from the program start date.
5.2 The Company does not guarantee that all or any of the units will be sold at the planned period.
5.3 When the Company sells a unit allocated to the Buyer and receives full payment from the end customer, the Company will pay the Buyer NIS 1,100 plus VAT for that unit, subject to applicable tax documentation.
5.4 If a unit is sold at the expected public price, the Buyer's expected gross profit is NIS 220 per unit, before any taxes, fees or charges that may apply to the Buyer.
5.5 Payments to Buyers will be made according to the order in which the blocks were purchased: the first Buyer of the first block will be paid first, followed by later Buyers, according to the serial numbers and purchase order.
5.6 Payment to the Buyer will be made within 7 business days after the Company receives full payment from the end customer for the relevant unit.

6. Units Not Sold Within One Year
6.1 If, after 12 months from the program start date, some or all of the Buyer's units have not been sold, the Company will provide the Buyer with a written update stating how many units were produced, sold and remain unsold, and what sales efforts were made.
6.2 The parties may then agree in writing on one of the following options: (a) Extending the sales period; (b) Refund the Buyer for unsold units; (c) Continuing sales under updated commercial terms, or any other agreed solution.
6.3 Unless otherwise agreed in writing, the Company will continue to use reasonable efforts to sell the remaining units.

7. Responsibility, Risk and Product Warranty
7.1 The Company is responsible for acting in good faith and using reasonable efforts to develop, manufacture, purchase parts, assemble, test and market the product.
7.2 The Buyer understands that this is a commercial transaction involving risk, including the risk that units may not be sold or may be sold later than expected.
7.3 The Company will be responsible to the end customer for product quality, product functionality and product warranty. The Buyer will not be responsible to end customers for the product, unless the Buyer acted fraudulently or in breach of this Agreement.
7.4 The Company will not be liable for delays caused by events outside its reasonable control, including shortage of parts, import delays, war, epidemic, strike, regulatory change or other force majeure events.

8. Transfer, Discounts, Taxes and Reporting
8.1 The Buyer may not transfer rights under this Agreement to any third party without the Company's prior written approval.
8.2.1 If a specific unit is sold for less than NIS 1,100 plus VAT, the Company will cover the difference at its own expense.
8.2.2 If a specific unit is sold for more than NIS 1,100 plus VAT, the Company will not pay the buyer more than NIS 1,100 plus VAT.
8.3 All amounts are stated before VAT unless expressly stated otherwise. Each party is responsible for its own taxes. Payments will be made against a tax invoice or other legally required document.
8.4 The Company will provide the Buyer with a short status update once every month, or upon a reasonable request by the Buyer.

9. Termination
9.1 The Company may cancel this Agreement if the Buyer does not pay the required amount on time.
9.2 Before the program starts, the Buyer may cancel participation and receive a refund of the amount paid, without interest or additional compensation.
9.3 After the program starts and funds have been used for parts, development, production or related activity, cancellation will require the Company's prior written approval.

10. Governing Law and General Terms
10.1 This Agreement is governed by the laws of the State of Israel.
10.2 Any dispute will first be discussed directly and in good faith. If no solution is reached within 30 days, the competent courts in the district of Tel Aviv will have jurisdiction.
10.3 This Agreement contains the full understanding between the parties regarding its subject matter. Any change must be made in writing and signed by both parties.

Signed for EFLOTCH: Efi Ehrman, Founder & CEO  ·  Company No. 517345955  ·  Governed by the laws of the State of Israel  ·  Subject to Heter Iska.