Exhibit 10.1
 
CONTRACT MANUFACTURING AGREEMENT
 
The undersigned,

Medtech Products Inc., a company organized and existing under the laws of the
State of Delaware, USA, having its principal place of business at 90 North
Broadway, Irvington, New York 10533, together with any affiliate thereof,
hereinafter called “Medtech”;
 
And
 
PHARMASPRAY B.V., a company organised and existing under the laws of the
Netherlands, having its domicile at Demeterlaan 30 (9641 ML) Veendam,
hereinafter called “Pharmaspray”.
 
Sometimes hereinafter jointly referred to as the “Parties” or separately as the
“Party”.
 
WHEREAS:

A.  
Medtech, having acquired all of the capital stock of Wartner USA B.V., is the
owner of all Intellectual Property Rights relating to the Product (as defined in
Clause 1) for the USA and Canada and is to be considered the Specification
Holder of the Product;

B.  
Pharmaspray is an aerosol manufacturer filling aerosol cans with cosmetic and
medical products;

C.  
The Products sold by Medtech are subject to ISO-13485 Standard and GMP 820
standard;

D.  
Pharmaspray operates in accordance with ISO-9001:2000 Standard;

E.  
The Parties wish to (co)operate in accordance with ISO-13485 Standard,
ISO-9001:2000 Standard, the Quality Manual (as defined in Clause 1) and the
instructions of Medtech as specified in the Schedule(s) which form part of this
Agreement;

F.  
The Parties now wish to formalize this Agreement as a “Turn-Key Agreement” in
which they will include all their agreements with respect to the Procurement
Services, Production Services, Packaging Services, Logistic Services and other
services provided by Pharmaspray to Medtech; and

G.  
This Agreement supersedes, amends and replaces an agreement between Pharmaspray
B.V. and Wartner U.S.A. B.V. dated December 18, 2003 including any and all
schedules and annexes thereto, and the amended and restated Logistics Agreement
between the same parties dated March 2, 2006.

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NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:

1.  
Definitions

1.1.  
The term “Acceptance of the Materials” shall mean the point in time at which the
Materials (as defined hereafter) are physically handed over to or become under
the control and care of Pharmaspray in order to manufacture and package the
Products.

1.2.  
The term “Agreement” shall mean this document including the Quality Manual and
all (further) Schedules and annexes hereto and thereto, each as amended from
time to time by the Parties upon mutual written agreement.

1.3.  
The term “Commencement Date” shall mean September 21, 2006.

1.4.  
The term "Delivery of the Products" shall mean the point in time at which the
Products (as defined hereafter) are delivered to Medtech or the designated agent
or distributor of Medtech. Unless otherwise specified in writing, Delivery of
Products shall occur ex works (EXW, incoterms 2000) in Veendam.

1.5.  
The Term “Force Majeure” shall mean those circumstances which are unforeseeable
and beyond the reasonable control of each of the Parties and which prevent the
total or partial carrying out of any obligation by a party under this Agreement,
such as acts or regulations or decrees of any government (de facto or de jure),
natural phenomena, such as earthquakes and floods, fires, riots, shipwrecks,
freight embargoes or other circumstances whether similar or dissimilar to those
enumerated above.

1.6.  
The term “Intellectual Property Rights” shall mean any and all intellectual
property rights, good will, know-how and other intangibles relating to the
Product and its packaging including (but not limited to) national and
international patents, trade name(s) and trademark(s).

1.7.  
 The term “Logistic Services” shall mean all services provided by Pharmaspray as
from the beginning of the manufacture of the Product until the physical delivery
of the Product to Medtech, Medtech's distributors, agents or other destinations,
including the storage and the arranging of transport.

1.8.  
The term "Machine" shall mean only the shrink-wrap module acquired by
Pharmaspray on or about January 24th, 2007 for the packaging of the Product, as
specified in Schedule 3. This Machine is specially equipped for USA packaging
with a turn, stack, collate and foil-wrap module and headers for top & bottom
quality seals.

1.9.  
The term “Materials” shall mean all semi fabrics, ingredients, spare parts, and
packaging material necessary to assemble the Product.

1.10.  
The term “Packaging Services” shall mean the packaging of the Product(s) (as
defined hereafter) by Pharmaspray according to the Quality Manual (as defined
hereafter) and other specific instructions of Medtech.

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1.11.  
The term “Procurement Services” shall mean the various acts of identifying,
qualifying, ordering and obtaining via Purchase Orders or other means those
Materials necessary or appropriate to the production of Products until such
Materials are physically delivered to Pharmaspray. In performing Procurement
Services, Pharmaspray shall act for its own account and not as agent for
Medtech.

1.12.  
The term “Product” shall mean a consumer product composed and/or manufactured on
behalf of Medtech bearing the Wartner® or other trademarks owned by Medtech and
used for the cryogenic treatment of warts, skin tags or other lesions in humans,
according to Medtech’s specifications as described in Schedule 1.

1.13.  
The term “Production Services” shall mean the manufacture of the Product,
including production, assembly, filling and labelling of the aerosol cans by
Pharmaspray as instructed by Medtech in accordance with the terms of this
Agreement and the Quality Manual.

1.14.  
The term “Purchase Order” shall mean a written instruction to provide the
Procurement Services, Production Services, Packaging Services and Logistics
Services, which instruction is prepared by Medtech and directed to Pharmaspray
and includes specific instruction as to the delivery of the Product.

1.15.  
The term “Quality Manual” shall mean the Quality Agreement attached hereto as
Schedule 5, as it may be subsequently amended, revised or replaced upon mutual
written agreement.

1.16.  
The term “Schedule” shall mean any schedule to this Agreement, including any
amendment thereto.

1.17.  
 The term “Storage Location” shall mean the warehouse located at Demeterlaan 30
and Cereslaan 9 (9641 ML) Veendam unless otherwise agreed by the Parties in
writing.

1.18.  
The term “Supplier” shall mean suppliers designated or appointed by Pharmaspray,
subject to approval by Medtech, as described – non limitative – in Schedule 2.

1.19.  
The term “Turn-Key Agreement” shall mean an understanding between the Parties
acknowledging the assumption of all responsibility by Pharmaspray for
all  Procurement Services, Production Services, Packaging Services, Logistics
Services and other services necessary or appropriate to the fulfilment of
Purchase Orders for the Product except as otherwise provided in this Agreement.

 
In as far as applicable in the context of the Agreement, terms defined in the
singular shall include the plural and vice versa.

2.  
Procurement, Production, Packaging and Logistic Services

2.1.  
On the terms and conditions of the Agreement, Medtech hereby appoints
Pharmaspray and Pharmaspray hereby accepts such appointment to provide the
Procurement Services, Production Services, Packaging Services and the Logistic

 

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  Services during the term of the Agreement in a manner befitting a careful
contractor, excepting only as provided herein.    
2.2.  
Without limiting the (general) obligations of the contracting Parties under this
Agreement, the Parties shall provide mutual assistance and shall co-operate with
each other and with third parties in order to ensure that the quality of the
Procurement, Production, Packaging and Logistics Services are maintained and
that the Parties' expectations in entering into this Agreement are fulfilled; in
particular, Pharmaspray represents that it has such resources necessary to
fulfil its obligations and that it shall be pro-active in resolving any
problems. Medtech shall promptly inform Pharmaspray of all changes in its
Wartner® business which may impact on the performance of the Production Services
under this Agreement.

2.3.  
Pharmaspray shall provide the Procurement services, Production Services,
Packaging Services and Logistics Services in accordance with the applicable ISO
standards, the Quality Manual and Schedules, any (other) specific instructions
of Medtech and any further mandatory national and international specifications,
as applicable from time to time.

2.4.  
Medtech will provide Pharmaspray every month with a twelve month rolling sales
forecast for the Products. The forecast for the three month period immediately
following the issuance of the forecast shall be converted into Purchase Orders
from Medtech to Pharmaspray, which Purchase Orders shall be deemed binding.

2.5.  
If Pharmaspray incurs costs directly based upon Medtech’s forecast for the next
three months, and Medtech does not issue a Purchase Order related to those costs
within six months after the applicable month, Pharmaspray may charge such costs
to Medtech.

2.6.  
Pharmaspray will source the Materials mentioned in Schedule 2 from Suppliers
approved by Medtech. Pharmaspray will manage a minimum amount of safety stock,
with the minimum amount to be determined by the Parties.  To the extent any
safety stock agreed by the Parties and maintained by Pharmaspray becomes
obsolete due solely to the actions of Medtech, Medtech shall be obligated to
reimburse Pharmaspray for its actual cost to purchase such safety stock.

2.7.  
Pharmaspray is responsible for the delivery of the Materials required for the
manufacture or production of the Product to Pharmaspray's
premises.  Notwithstanding the foregoing, the parties recognize and agree that
the procurement of the existing caps as set forth on Schedule 6 from Keltec
Dispensing Systems, B.V. is a matter which is and will be the subject of a
separate negotiation and multi-party agreement, which may or may not conform to
the terms of this Agreement.

2.8.  
Subject to clause 7.3 and 7.5 and the provisions of Section 9, Pharmaspray is
responsible for the compliance of the Materials with the applicable ISO
standards and any further national and international specifications applicable
from time to time at the moment of Acceptance of the Materials. Pharmaspray
shall check such compliance, in as far as visually observable, at the Acceptance
of the Materials.

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2.9.  
Pharmaspray shall deliver the Products related to a specific written order of
Medtech to the distributors or agents of Medtech within four (4) weeks upon such
order, provided that Pharmaspray has received the sales forecast the specific
order is based upon, in due time.

2.10.  
Medtech is allowed to conduct regularly scheduled quality audits of both the
production process and the Product at Pharmaspray’s premises at any reasonable
time after receipt of written notice from Medtech of its intent in advance.
Pharmaspray may require its representative to be present and that such visit is
under the condition that the internal rules of Pharmaspray or the Storage
Location are being complied with. Medtech will be responsible for all associated
costs of such quality audits. Medtech shall have the right to reject Products
that do not meet the Product Specifications set forth in Schedule 1, the Quality
Manual or other specific instructions of Medtech. Reasonable efforts will be
made to salvage usable portions of any batch should a sampling of Products not
be in compliance with the Product Specifications set forth in Schedule 1, the
Quality Manual or other specific instructions of Medtech.

2.11.  
Pharmaspray shall provide Medtech with updates on its business operations as
specified in the Quality Manual.

2.12.  
Pharmaspray shall keep an adequate administration of deliveries to Medtech’s
distributors or agents. Pharmaspray shall provide copies of all shipping
documents to Medtech in case of re-calls, whatever the cause for such re-calls
may be.

2.13.  
Each Party shall, upon execution of this Agreement, appoint one of its employees
to be a relationship manager responsible for liaison between the Parties.  The
relationship managers shall conference not less than quarterly and meet in
person not less than annually to coordinate the production activities, handle
purchase orders, track assembly progress and any packaging work, movement of
Product, deliveries, sales status and the current status of the business
relationship and manage issues that have arisen.

 
2.14.  
Conveyance and delivery of the Products shall occur ex works (EXW) in Veendam,
unless otherwise agreed between the Parties in writing.

 
2.15.  
Medtech is and shall at all times remain the owner of the Intellectual Property
Rights to the Product in the United States, Canada and certain other countries
where it has Intellectual Property Rights. No license of whatever nature in
relation to any Intellectual Property Rights is granted by Medtech to
Pharmaspray.  Pharmaspray shall have the obligation to obtain and maintain all
governmental licenses, permits or approvals necessary to manufacture the Product
at its facility in Veendam.

 
3.  
Packaging

3.1.  
Pharmaspray will package the Product according to the Quality Manual and other
specific instructions of Medtech.

3.2.  
Pharmaspray has acquired the Machine as described in clause 1.8 above, directly
from Alloga. The acquirement costs were and will be borne by Pharmaspray.

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4.  
Transport

4.1.  
Medtech is responsible for transport of delivered Products from the premises of
Pharmaspray at Veendam to her distributors, agents or (other) final
destinations. The Parties agree that Pharmaspray shall organize this transport
under the authority of and on expense of Medtech, thus acting as representative
of Medtech.

4.2.  
Medtech shall designate the carrier(s)/transporter(s) to be involved in
transportation of delivered Products. Pharmaspray, as representative of Medtech,
will contract these carriers/transporters; Medtech being the contractant of the
carrier/transporter.

4.3.  
All costs of transport taking place after delivery, charged to Pharmaspray, will
be charged on to Medtech. Pharmaspray will provide Medtech with copies of the
transport invoices the on-charging is based upon.

4.4.  
After delivery (ex works) of the Products has taken place, Pharmaspray is
neither responsible nor liable for the acts and omissions of
carriers/transporters that are contracted by Pharmaspray on behalf of Medtech.

  Loading, stowage and discharging    
4.5.  
The obligation of (un)loading, stowage and discharging the Materials and/or the
Products and the liability for any damage to and/or loss of the Materials and/or
Products caused by (un)loading, stowage and/or discharging the Materials and/or
the Products rests with Pharmaspray, until delivery of the Products to Medtech
defined in clause 2.14.

4.6.  
Any stipulation, condition, reservation or exemption as to responsibility and/or
liability of Pharmaspray for loss of and/or damage to the Materials and/or the
Products, occurring during loading on, stowing, and subsequently to the
discharging from the means of carriage in which the Materials and/or the
Products are (to be) carried (before delivery to Medtech), shall be null and
void unless with prior written consent of Medtech.

4.7.  
Pharmaspray shall at all times load, stow and discharge the Materials and the
Products in accordance with the applicable provisions of the Quality Manual and
the specific instructions of Medtech.

5.  
Independent and other Subcontractors of Pharmaspray

5.1.  
Pharmaspray is entitled to contract and instruct (independent) subcontractors
and/or auxiliary persons for the manufacturing, packaging, and storage of the
Product, subject to the reasonable written consent of Medtech and subject to
reasonable assurance that all confidential and proprietary information of
Medtech will be safeguarded.

5.2.  
Pharmaspray shall be responsible and liable for the acts and omissions of its
employees, servants, (independent) subcontractors, agents, suppliers and  other

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persons whose services it uses for the performance of its obligations under this
Agreement, as if such acts and omissions were its own, cases of Force Majeure
excepted.

   
6.  
Rates, Charges and Payment Terms

6.1.  
All rates, costs and expenses with respect to the production and packaging and
storage services shall be charged and invoiced by Pharmaspray to Medtech on a
weekly basis and in conformity with the provisions set down in Schedule 4
regarding the rates and charges. The prices set out on Schedule 4 shall be fixed
prices for the term of this Agreement; provided, however, Pharmaspray shall be
entitled to pass on to Medtech in the first quarter of each calendar year, by
mutual written agreement, any significant net increase in prices charged by
third parties in connection with Pharmaspray's services provided (including any
increase in prices for raw materials).  In the event of a demonstrable
price-increase of one or more Materials exceeding 5%, Pharmaspray shall also
during the calendar year be entitled to pass on to Medtech this price-increase
in consultation with Medtech.

6.2.  
Invoices shall be issued and expressed in Euros and payment shall be made in
Euros to a Dutch bank account of Pharmaspray. If, at the request of Pharmaspray,
any costs, duties and the like involved with payment shall be paid by Medtech in
another currency and/or a foreign bank account, the costs for such payment shall
be borne by Pharmaspray.

6.3.  
Any objections to the invoice Medtech has received from Pharmaspray shall be
made by Medtech in writing within sixty (60) days from the invoice date. If no
objections are made within 60 days from the invoice date, the invoice shall be
binding on both Parties.

6.4.  
Medtech shall pay the invoiced amounts within sixty (60) days counting from the
invoice date. Medtech shall only be allowed to pay at a later date with prior
written consent of Pharmaspray.  If Medtech pays the invoice within eight (8)
days of the invoice date, Medtech shall be entitled to receive a credit equal to
3% of the total amount of the invoice, except of the costs of transport
organized on behalf of Medtech as mentioned in clause 4.3.

6.5.  
Any payment to be made by either Party under this Agreement shall be made in
full without set-off, restriction, condition or deduction for or on account in
any counterclaim.

6.6.  
Any and all outstanding payments of Medtech due to Pharmaspray shall become
immediately payable (opeisbaar) if Medtech is declared bankrupt or in moratorium
of payments, discontinues its business or if its business is liquidated.

6.7.  
If Medtech does not pay the amount due within the agreed time, Medtech shall be
legally held to be in default and shall be liable to pay interest equal to the
Dutch statutory interest rate plus 4% over the entire invoice amount, commencing
on the due date of the invoice, until the actual date of payment. Medtech is
liable to pay any and all judicial and/or extra-judicial costs for debt
collection by Pharmaspray.

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6.8.  
To the extent that Product produced and delivered by Pharmaspray are for sale
and use in the United States, Canada or anywhere else outside The Netherlands,
no VAT tax shall be included in the invoice.

6.9.  
The Parties agree that the prices, rates and charges appearing in Schedule 4
have been established for purposes of this Agreement with mutual implicit
assumptions in cost of goods sold (“COGS”) and exchange rates between the U.S.
dollar and the Euro. To the extent that fluctuations in exchange rates occur
such that there is a variance of more than 10% in any twelve month period in the
effective exchange rate, the Parties agree to meet and to negotiate in good
faith to achieve an equitable and commercially viable accommodation. Increases
in COGS not primarily related to exchange rates shall be subject to annual
review, and to the extent reasonably applicable shall be modulated by published
cost-of-living indexes.

7.  
Warranties

7.1.  
Subject to clause 7.3 and 7.5, Pharmaspray represents and warrants that the
performance of the Production Services shall be in compliance with the Product
Specifications set forth in Schedule 1, the Quality Manual and any other
provisions of this Agreement, cases of Force Majeure excepted.

7.2.  
Subject to clauses 7.3 and 7.5, Pharmaspray represents and warrants that she,
after delivery of the Machine as mentioned in clause 3.2 to Pharmaspray, shall
assemble the Products in complete and correct state and in compliance with the
Product Specifications set forth in schedule 1, the Quality Manual and any other
provisions of this Agreement, cases of Force Majeure excepted.

7.3.  
The representation and warranty mentioned in clause 7.1 and 7.2 do not apply to
defects in the Product caused by defects in Materials delivered to Pharmaspray
by  Suppliers if the Materials are accompanied by a certificate of analysis
conforming with the Specifications and all approval procedures and criteria
required by the Quality Manual are met. The representation and warranty does not
apply to texts/artwork edited or provided by Medtech.

7.4.  
The Parties represent and warrant that, during this Agreement and after
termination and completion of this Agreement, except as may be required by
judicial process or the regulatory requirements of governmental authority having
jurisdiction over the Parties and/or Products, they shall keep confidential any
information whatsoever regarding the Materials, the Products, the contents of
this Agreement, and the Quality Manual and Schedules and not provide any third
party with such confidential information unless with prior written consent of
the other Party.

7.5.  
The Parties agree that the existing design of the Product, and specifically the
existing cap provided by Keltec which is set forth in Schedule 6, are the
responsibility of Medtech as specification holder. The responsibility of
Pharmaspray is to insure that production of the Product including the existing
Keltec cap is in all respects in

 

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conformance with specifications and applicable regulatory requirements. The
warranties of Pharmaspray shall be viewed in all respects as limited by this
Section 7.5.

  

8.          Insurance    
8.1  
Both Parties shall on request provide the other Party with periodic evidence of
satisfactory product liability insurance coverage for the Products.

9.
Liability

9.1.
Pharmaspray shall be liable for any and all damages and costs suffered by
Medtech as a consequence of Pharmaspray’s non-performance (“tekortkoming in de
nakoming”) of its obligations under the Agreement, including but not limited to
the warranties granted by Pharmaspray pursuant to clause 7.1 and 7.2 of this
Agreement, cases of Force Majeure excepted.

9.2.
Except as set forth in Section 7.5, Pharmaspray shall be responsible for damage,
defects, non-delivery or late delivery caused by Materials from Suppliers.
Notwithstanding the foregoing, Pharmaspray is not liable for damage, defects,
non-delivery or late delivery caused by the design of the Product, the
formula(s), the package or instructions, prescribed by Medtech and/or
shortcomings caused by Medtech.

9.3.
As to arranging for transport of Products on behalf of Medtech after delivery ex
works has taken place, Pharmaspray is only liable for her own acts and
omissions; Pharmaspray is not to be considered the insurance carrier or shipper.

9.4.
The Parties agree that Pharmaspray’s liability is in any case limited to the
greater of (1) the invoiced value of the Products for that specific order; or
(2) the maximum amount Pharmaspray’s insurance company will compensate for in
that particular case provided that Pharmaspray has arranged and maintained for
sufficient insurance coverage or could reasonably expected to arrange for, and
maintain a certain level of insurance coverage, considering the standard
practice in the industry, in accordance with this Agreement.

9.5.
Only Medtech shall be responsible and liable for the content of artwork,
consumer instructions and label copy. Pharmaspray is not responsible or liable
for the content of consumer instructions, artwork and label copies and any
(other) texts on the Products, including the Product package. Pharmaspray shall
only be responsible for assuring that only artwork provided by or approved by
Medtech is accurately utilized.

9.6.
Medtech shall be liable for any and all material damages and costs suffered by
Pharmaspray as a consequence of a defect (or defects) in Materials delivered by
Medtech or defect(s) in texts/artwork edited or provided by Medtech.

9.7.
Neither of the Parties shall be liable in case of Force Majeure.

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9.8.
Claims of either party against the other expire in accordance with the
provisions of the Dutch Civil Code. Shorter expiration dates are not valid,
unless with prior written consent of the other Party.

 

10. Indemnifications    
10.1.
Subject to the provisions of Sections 7.3, 7.5 and 9, Pharmaspray will hold
harmless and indemnify Medtech from and in regard to any and all claims by third
parties in connection to the performance by Pharmaspray of the production and
packaging services such as, but not limited to, claims originating from
defectiveness of the Products and/or the Materials required for the Products and
the production process, cases of Force Majeure excepted.

10.2.
Medtech will hold harmless and indemnify Pharmaspray from and in regard to any
and all claims by third parties other than Suppliers, originating from

 
1.
defects in the texts/artwork edited, approved or provided by Medtech, or

 
2.
the design of the Product, formula(s), component parts packaging or instructions
provided, prescribed or designed by Medtech or Medtech's predecessors in
interest.

 

11. Exclusivity    
11.1.
During the term of this Agreement, Pharmaspray shall not provide any services
whatsoever to third parties in relation to aerosol products similar to or in any
way competing with the Product in the United States, Canada and Mexico.

11.2.
During the term of this Agreement, Medtech shall purchase the Product only and
exclusively from Pharmaspray.

 

12.  Duration and Termination    
12.1.
This Agreement shall become effective for an initial period of three years,
starting from the Commencement Date. This Agreement may be renewed for
additional three year periods upon the mutual written consent of the Parties no
later than six months prior to the then applicable expiration date.

 
12.2.
Each of the Parties has the right to terminate this Agreement with immediate
effect by giving written notice if any of the following events shall occur:

 
a.
the other party breaches any of the terms of this Agreement and fails to remedy
such breach within thirty (30) days after written notice requiring to do so,
unless such breach or failure does not justify this with its consequences in
view of its minor importance;

 
b.
the other party files a petition for moratorium of payments with the competent
court or is granted a moratorium of payments;

 
c.
the other party files a petition for bankruptcy with the competent court or is

 

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    declared bankrupt; or  
d.
the board of directors of the other party resolves to dissolve or liquidate its
company.

12.3.
In case of termination of the Agreement pursuant to Clause 12.2, the terminating
Party is entitled to receive full compensation for any and all direct damage
suffered by it as a result of the termination and/or, in the case of the event
stated under Clause 12.2 sub a., any damage suffered as a result of such breach.

12.4.
In deviation of Clause 12.1, Medtech may terminate this Agreement with immediate
effect by giving written notice, without any compensation or damages whatsoever
to Pharmaspray, if Pharmaspray becomes owned or controlled by or associates with
or merges with a producer who provides production services to competitors of the
Product.

 

13. Completion after termination    
13.1.
Upon termination of the Agreement, Medtech is obliged to take delivery of the
Materials and (semi) Products still in the possession and/or under the control
of Pharmaspray on the expiration date of the Agreement or, in case of
termination with immediate effect, within 2 weeks upon such termination, after
payment of all outstanding amounts to Pharmaspray. Pharmaspray and Medtech shall
mutually agree as to the allocation of costs incurred for raw materials, labels
and packaging; provided, that, in the event Medtech terminates this Agreement
for any reason other than as set forth in Sections 12.2 and 12.4 hereof, Medtech
shall be obligated to purchase from Pharmaspray, at Pharmaspray’s actual cost,
any safety stock agreed between Medtech and Pharmaspray; and provided further,
that, notwithstanding the foregoing, any breaching Party shall be fully
responsible for such costs (including, without limitation, safety stock
maintained by Pharmaspray).  Medtech shall have the right, but not the
obligation, to purchase any finished Products being held in Pharmaspray’s
inventory for which no Purchase Orders have been submitted.

13.2.
If Medtech terminates this Agreement within 5 years of the original date of
acquisition of the Machine, Medtech shall, at the sole discretion of
Pharmaspray, acquire the Machine from Pharmaspray for an amount equal to the
following percentages of Pharmaspray's acquisition cost of the Machine:

 

   During year 1:  75%    During year 2: 60%    During year 3: 40%    During
year 4: 25%    During year 5: 10%

  

 
The acquisition cost of the machine is stipulated and agreed to be € 111.335,20.
The original date of acquisition of the Machine for purposes of this Agreement
is January 24, 2007. Should the machine be utilized by Pharmaspray for purposes
other than the manufacture of the Product hereunder, the acquisition cost to
Medtech shall be

 
 

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  reduced proportionately to the additional use.

14. No Rescission    
14.1
The Parties herewith expressly waive the right to rescind the Agreement pursuant
to Article 265 of Book 6, Dutch Civil Code.

 

15. Miscellaneous    
15.1.
Changes in the Quality Manual. Subject to the written consent of Pharmaspray
which shall not be unreasonably withheld, delayed or conditioned, Medtech
reserves the right to amend or adapt the Quality Manual and Schedules to changes
in the aforementioned regulation and legislation and / or to the introduction of
new regulations and / or legislation regarding the quality requirements of the
Product from time to time.

15.2.
Successors and Assignments. This Agreement is binding on and for the benefit of
both Parties and their successors and permitted assignees. Neither Party may
assign (its rights under) this Agreement without the prior written consent of
the other party. Pharmaspray shall have no rights in the Materials and / or
Products of Medtech and may not and shall not attempt to assign any interests,
either real or presumed, to the Materials and /or (Semi) Products of Medtech.

15.3.
Entire Agreement. This Agreement represents the entire agreement of the Parties
with respect to its subject matter, and supersedes all prior proposals,
agreements, memoranda and / or understandings with respect to this Agreement or
its subject matter between Medtech and Wartner USA B.V. and Pharmaspray B.V. Any
future representation, agreement, understanding or waiver will only be binding
if in writing and signed by the Party sought to be bound.

15.4.
Schedules and Annexes. Each schedule, annex and / or the applicable provisions
of the Quality Manual will become part of and subject to this Agreement upon
signature and date by both Parties.

15.5.
Waivers. Either Party’s failure strictly to enforce any provision of this
Agreement will not be construed as a waiver of that provision or as excusing the
other Party from future performance.

15.6.
Notices. All notices required or permitted under this Agreement shall be in
writing unless otherwise indicated in this Agreement. The notifying Party shall
send the written notice to the address of the other Party as shown at the
beginning of this Agreement and/or any other address as agreed upon by the
receiving Party. Sent notices will only be effective upon actual receipt by the
other Party.

15.7.
Electronic Mail. The Parties agree that day-to-day communication can also be by
electronic mail (e-mail). Sent e-mail messages will only be effective upon
actual receipt by the other Party. Notwithstanding the preceding passages, any
message, notice and /or document relating to modification and/or which affects
the effect of this Agreement shall only have binding effect if in writing (not
being electronic mail and/or other electronic documents) and with written
consent of the Parties.

 

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15.8.
Confidentiality. Each Party shall, during this Agreement and after termination
and completion of this Agreement, keep confidential any information whatsoever
regarding the business of the other Party and not provide any third party with
such confidential information unless with prior written consent of the other
Party, except as may be reasonably required by judicial process or compliance
with applicable governmental and regulatory requirements.

15.9.
Mandatory Law. This Agreement shall only take effect to the extent that its
provisions are not contrary to any provision of mandatory (national and / or
international) law. Any provision of this Agreement being contrary to any
provision of mandatory law or otherwise being null and void does not effect the
validity of the other provisions of this Agreement.

15.10.
General Terms and Conditions. The applicability of any general terms and
conditions of the contracting Parties, other than those which are expressly and
with written consent of both Parties declared applicable to the relationship
between Medtech and Pharmaspray under this Agreement, is hereby expressly
excluded.

15.11.
Changes to the Agreement. Provisions that deviate from this Agreement can be
invoked by both Parties only if and to the extent that these provisions are
accepted by both Parties in writing.

15.12.
Severability. If any term or condition of this Agreement is null and void or
will become null and void during the course of this Agreement, the validity and
effectiveness of all other terms and conditions shall not be impaired thereby.
All terms and conditions of this Agreement are separable.

 

16. Applicable law and jurisdiction    
16.1.
This Agreement is exclusively governed and construed by Dutch law, as will all
disputes that may arise from this Agreement. All legal concepts to which
reference is made in this Agreement are Dutch legal concepts.

 
All disputes, arising in connection with the present Agreement or further
contracts and / or agreements resulting here from, which cannot be settled
amicably, shall be settled by the competent Court of Groningen, The Netherlands,
notwithstanding higher appeals.

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This agreement was signed with duplicate originals in Irvington, New York on
December 21, 2007.

 
 

  /s/ Peter J. Anderson   /s/ Jos Schott    
Medtech Products Inc.
  Pharmaspray B.V.     By:  Peter J. Anderson   By: Jos Schott     Treasurer  
Managing Director            

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Schedules

 

Schedule 1 Product Definitions and Specification Schedule 2 Suppliers and
Materials Schedule 3  Packaging Machine Specification Schedule 4  Prices, Rates
and Charges Schedule 5 Quality Manual Schedule 6 Existing Cap for the Product