In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.

Example Input: Exhibit 10.5

Reseller Agreement

This Agreement is made and entered into by and between 695014 B.C. Ltd. dba Galaxy Telecom, having a principal office at 200 - 375 Water Street, Vancouver, British Columbia V6B 5C6 Canada (Galaxy) and Galaxy Telnet SRL, having a principal office at Aleea Malinului, Nr. 11, Bl. D, Scara C, Apt. 43, Constanta, Judetul Constanta, Romania (Telnet) as of the 1s t day of June, 2004.

WHEREAS: Galaxy is a wholesale provider of Voice over Internet Protocol (VoIP) telephony and related services and products. Telnet is a provider of VoIP telephony and related services and products to Subscribers, as defined hereafter. Galaxy wishes to provide to Telnet and Telnet wishes to acquire from Galaxy VOIP related services and products from time to time for the purpose of providing them to Telnet's existing and future clients. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties covenant and agree with each other as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this agreement unless the context otherwise requires: Agreement means this agreement; Confidential Information means all information which one of the Parties will have access to or come into possession of which is confidential and proprietary to the other Party and which is either declared to be confidential or which the receiving Party should know, acting reasonably, is confidential or proprietary in nature and includes, but is not limited to, the terms and pricing for the Products and Services, all information contained on or accessible through the Partner Portal, as defined hereafter, any information disclosed by any third party which the third party is obligated to treat as confidential or proprietary to one of the Parties hereto, trade secrets, know-how, processes, standards, product specifications, marketing plans and techniques, cost and financial pricing figures, all client or customer information (including without limitation their names, financial information, address or telephone number), all systems software applications, all software/systems source and object code, data, documentation, program files, flow charts, and all operational procedures. Effective Date means the date first written above; Force Majeure shall include but not be limited to an Act of God, strike, lockout, labour dispute, act of a public enemy, war whether declared or undeclared, blockade, revolution, riot, insurrection, civil commotion, lightning, fire storms, flood, or other natural calamities, explosion, governmental restraint or restrictions, laws, regulations, orders, proclamations of any governmental entities, judgement or orders of any court of law, embargoes, unavailability of equipment and any other cause (other than a shortage or unavailability of funds) which is not reasonably within the control of the Party whose performance under this Agreement is affected by the cause; Partner Portal means Galaxy's web-based VoIP subscriber, management and business administration system; Party means either Galaxy or Telnet as is appropriate in context and Parties means both or either of Galaxy and Telnet as is appropriate in context; Product means one of and Products means some or all of the VoIP related devices offered for sale by Galaxy; Service means one of and Services means some or all of the VoIP services as listed in Schedule A attached hereto; Subscriber means a client of Telnet who is a consumer of the Products or Services as provided by Galaxy and sold by Telnet. 1.2 Currency All references to currency, unless otherwise specified, are to lawful money of the United States. 1.3 Headings The division of this Agreement into articles, sections, and/or subsections and the provision of headings for all or any of them are for convenience of reference only and shall not affect the interpretation of this Agreement. 1.4 Schedules The following schedules are attached to and form part of this Agreement: Schedule A Services and Products and Pricing Schedule B Tier 1 Subscriber Support





Schedule C Subscriber Contract Clauses Whenever any provision of any schedule to this Agreement conflicts with any provision in the body of this Agreement, the provision in the body of this Agreement shall prevail. References herein to a schedule shall mean a schedule of this Agreement. Reference in any schedule of this Agreement to an agreement shall mean this Agreement. 1.5 Usage In this Agreement, unless there is something in the subject matter or context inconsistent therewith: words importing the singular shall include the plural and vice versa; and words importing gender shall include masculine, feminine and neuter genders. 1.6 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, excluding its conflict-of-laws rules. The parties expressly disclaim the application of the United Nations' Uniform Convention for the Sale of Goods convention, to this Agreement.

2. RELATIONSHIP OF THE PARTIES 2.1 Non-Exclusive Reseller Subject to the terms and conditions of this Agreement, Galaxy hereby appoints Telnet as a non-exclusive authorized reseller of the Products and Services and Telnet hereby accepts the appointment. 2.2 Not a Partnership This Agreement does not and shall not be construed to create a partnership, joint venture, agency or any other business relationship which would authorize either Party to act on behalf of the other or to have any authority to create any liability or obligations on behalf of or in the name of the other. Each of the Parties is and will remain completely independent of the other. Telnet may indicate to the public that it is an authorized seller of Galaxy Services and it may advertise Products and Services under Galaxy trademarks, logos, and symbols as provided for in this Agreement, but under no circumstances shall it represent itself to be an associate, franchisee, representative, servant or agent of Galaxy.

3. TELNET OBLIGATIONS 3.1 Marketing and Sales Telnet shall be responsible for promoting, marketing and selling those Products and Services it offers for sale or distribution and it shall use its reasonable best efforts to do so; Telnet may market and sell the Services as being Telnet services or as Galaxy services being provided by Telnet. 3.2 Business Expenses Telnet shall be responsible for all expenses it incurs from its business activities associated with the marketing, promotion, sale and support of the Products and Services, including, but not limited to, those expenses related to the installation and activation of Products and Services. 3.3 Pricing Structure & Levels Telnet shall, in its sole discretion, set the prices it charges for the Products and Services it sells or distributes and the manner, if any, in which it bundles or combines them. 3.4 Qualified Sales and Marketing Representatives Telnet covenants that all of its employees, agents and representatives who promote, market and sell the Products and Services will be fully qualified in and knowledgeable of the Products and Services. 3.5 Terms of Service Telnet shall include those terms set out in Schedule C as a term in each Subscriber agreement for Services. 3.6 Subscriber Support Telnet shall maintain a first line of response, known within the telephony industry as a Tier 1 Subscriber help-desk and support function, as further defined in Schedule B, as is required to maintain Subscriber satisfaction at or above industry standards. 3.7 Government Authorizations Telnet shall obtain and maintain in good standing all licenses, permits and other governmental approvals and authorizations required in connection with implementation of this Agreement and the sale of Products and Services, including without limitation, business licenses, import licenses and foreign exchange permits. Telnet shall keep Galaxy apprised of any change in the status of the licenses, permits and approvals and authorizations as are referred to in subsection 3.7(a) which may materially affect the implementation of this Agreement. 3.8 Notification of Infringement Telnet shall notify Galaxy immediately of any actual, suspected or alleged infringement of Galaxy trademarks, or copyrights that it





becomes aware of.

4. TELNET RECORDS 4.1 Maintain Records Telnet shall maintain complete and, to the best of its ability, accurate records on the Partner Portal (the Records) of all Subscribers, including: (a) Name, location, contact information and date of activation; (b) Products purchased, including model and serial number and date of activation; (c) Services subscribed; including date of activation; and All service calls relating to Products or Services, showing Subscriber information, date and nature of call, Telnet response, service work performed and such other information as Galaxy may reasonably request. 4.2 Ownership and Privacy of Records Galaxy shall own the Records, but it shall use the information contained therein only as allowed by the terms and conditions and intent of this Agreement. Galaxy shall treat the Records as Confidential Information and it shall not provide to or allow access by any third party except as required or allowed by this Agreement. 4.3 911 Call Response Service Galaxy shall have the right to disclose Records to any third party providing emergency call response service to Subscribers as are required by such third party in order to provide the service.

5. GALAXY RESPONSIBILITIES Services and Products Subject to the terms and conditions of this Agreement, Galaxy shall provide the Products and Services to Telnet. 5.2 Network Galaxy shall establish a Telnet account within the Partner Portal and, subject to the terms and conditions of this Agreement, it shall provide Telnet with access thereto. 5.3 Materials Galaxy shall provide Telnet with access to electronic copies of sales and technical materials, user manuals, installation manuals and brochures and catalogues relating to the Products and Services which Galaxy has electronic versions of and which it, in its absolute discretion, is of the opinion are relevant. 5.4 Supporting Information Galaxy shall make available to Telnet such technical and commercial information which Galaxy has or which comes into Galaxy's possession and which, in Galaxy's opinion, may be of assistance to Telnet in selling and supporting the Products and Services. 5.5 Tier 2 Support  Galaxy shall provide Tier 2 technical support to Telnet which would include assistance with any technical issues related to the Services and Products that could not be resolved by Telnet's Tier 1 Subscriber support personnel.

6. PRODUCTS 6.1 Approved Products Galaxy shall, at its sole discretion, determine the technical specifications and the brand and model of those devices which it will support in providing the Services and chooses to offer as Products; Telnet shall purchase from Galaxy all devices or Products used or to be used by it to enable the provisioning of the Services pursuant to this Agreement and Galaxy shall be required to support only those devices actually purchased from Galaxy by Telnet; Notwithstanding section 6.1(b), Telnet may request from Galaxy that it enable and support devices other than Products acquired by Telnet from Galaxy, and Galaxy shall not unreasonably refuse such request; and Galaxy shall have the right, at its sole discretion, to change the Products by discontinuing or adding new devices to the Products offered and by changing manufacturers, brands, models or technical or software specifications of any of them. 6.2 Pricing Prices for Products shall be as quoted at the time of order by Telnet and are subject to change at any time; Prices quoted shall be for the Products only and shall not include applicable taxes and shipping, insurance, expedition, import/export, brokerage and other fees, which shall be in addition to the quoted Product prices. 6.3 Ordering All Telnet orders of Products are subject to acceptance by Galaxy (upon acceptance, the Order). Galaxy shall have the right to not accept an order of Products from Telnet, in whole or in part, if Telnet is in breach of any term or condition of this Agreement;





Unless specifically agreed otherwise and stated in writing, the terms of this Agreement shall supersede the terms of any Order; 6.4 Payment Telnet shall pay (the Product Payment ) for an Order, using a payment method acceptable to Galaxy, prior to shipment of the Order by Galaxy; If Telnet falls into arrears on its account for Services, Galaxy shall have the right to apply any Product Payment, in whole or in part, to Telnet's account for Services and any Product Payment so transferred shall be deemed to be a payment for Services, not Products, and Galaxy shall have no further obligation to deliver the Products which such funds were originally payment for. 6.5 Delivery Galaxy shall, subject to availability, use all reasonable effort to deliver the Order within a reasonable time from the date of the Order; Galaxy shall have the right to suspend or stop delivery of an Order, in whole or in part, if Telnet is in breach of any of the terms and conditions of this Agreement, and, if Galaxy elects to stop delivery pursuant to this section, it shall deem such Order to be an inventory return subject to section 6.7. 6.6 Order Substitution Subject to obtaining Telnet's approval for any price changes, Galaxy shall have the right to deliver a different Product of equal or greater technical capability in place of the Order. 6.7 Inventory Returns Galaxy may, at its sole discretion, accept the return, in whole or in part, of an Order and, if it elects to do so, Telnet shall pay a restocking fee of 25% of the original purchase price of the returned Product or Products. 6.8 Warranty Unless specifically stated otherwise, Galaxy makes no warranty or guarantee, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, with regard to the Products. All warranties with regard to the Products shall be those of the original equipment manufacturer only.

7. SERVICES 7.1 Available Services Listed in Schedule A is a list of the Services which are available to Telnet as of the Effective Date. 7.2 Change to Services Galaxy reserves the right to, at its sole discretion, to add, delete or change any of the Services from time to time. 7.3 Provision of Service Upon Telnet's activation of a Subscriber account, Galaxy shall, subject to the terms and conditions of this Agreement, provide the requested Services to Subscriber on behalf of Telnet; Subject to section 13.2, if Telnet is in breach of any of the terms and conditions of this Agreement, Galaxy shall have the right to suspend or terminate delivery of the Services, in whole or in part, to Telnet and the Subscribers. 7.4 Communication of Termination Galaxy may, at its sole and absolute discretion, provide long distance termination through one or more termination partners. Galaxy shall have the right, at its sole discretion, to reroute the communication traffic originating from Telnet or Subscribers between Galaxy's different termination partners. 7.5 411 and 911 Service Galaxy shall arrange with third parties for the provision of: 411 directory assistance service; and 911 emergency call response service, which services will be provided through Galaxy as part of the Services. 7.6 Prices The prices charged by Galaxy to Telnet for each of the Services (the Service Prices) shall be as listed in Schedule A; Galaxy shall have the right, but not the obligation, to: during the term of this Agreement, adjust any of the Service Prices by an amount that is proportionate with any changes to Galaxy's direct third party costs in providing the related Services; at the time of any renewal of this Agreement, adjust the Service Prices as it, in its absolute discretion, determines provided it has given written notice to Telnet of such price changes a minimum of 60 days in advance of the renewal. Prices for long distance termination shall be as posted on the Partner Portal and Telnet understands and agrees that, other than for those destinations noted in Schedule A as being fixed in price for the term of this Agreement, such prices are variable and subject





to change without notice. 7.7 Billing For Services Galaxy shall invoice Telnet once per month for the Services delivered, termination fees, 411 directory assistance and 911 emergency call service fees and any other fees or billings chargeable to Telnet; Galaxy shall deliver each invoice to Telnet's account in the Partner Portal; and Telnet shall give notice to Galaxy of all errors and inaccuracies in an invoice within 15 days of receipt by Telnet of the invoice at issue. Thereafter, Telnet will be deemed to have agreed with the accuracy of the invoice. 7.8 Payment of Services Invoice Telnet hereby covenants to pay all invoices rendered to its account by Galaxy within 15 days of the date of invoice; Interest shall accrue on overdue accounts at the rate of 1.5% per month calculated and payable from the date of invoice until the date of payment in full of the overdue amount. 7.9 Warranty Galaxy does not guarantee the integrity of data transmitted using the Products and Services or that the Products and Services will operate uninterrupted or error-free, including, without limitation, the degradation of voice transmission quality and the failure of an incoming or outgoing call, including emergency calls (911 or equivalent), to be connected or completed.

8. LIMITATION OF REMEDIES AND LIABILITY 8.1 Telnet's Exclusive Remedies  Telnet's sole and exclusive remedies concerning Galaxy's performance or non-performance in any matter related to this Agreement or the provisioning of the Services or Products are limited to those expressly stated in this Agreement. 8.2 Limitation of Galaxy Liability Galaxy shall have no liability to Telnet, whether in contract, tort (including negligence), strict liability or otherwise, for any special, indirect or consequential damages or for lost profits, in any matter related to this Agreement, including but not limited to any delay or failure by Galaxy to furnish, deliver or provide Products or Services; Galaxy's liability in any matter related to Product shall be limited to the purchase price paid by Telnet for the Product with respect to which such liability relates; Galaxy's liability in any matter related to Services shall be limited to the fee paid by Telnet for the Service with respect to which the liability relates in the month or months in which the event giving rise to the liability occurred. 8.3 Liability Upon Termination of Agreement Neither Party shall be liable to the other for any damages or compensation in connection with termination of this Agreement including, without limitation, for loss of profits, loss of investment or expenditures made in reliance on this Agreement or loss of goodwill. 8.4 Force Majeure  Neither party will be liable to the other for any delay or failure to perform if that delay or failure results from a cause beyond its reasonable control. 8.5 Telnet's Indemnity  Telnet agrees to indemnify Galaxy (and any business entity controlled by it, controlling it or under common control with it) and save them harmless from any claim made against any of them, directly or indirectly, by a Subscriber or resulting from: (i) any promise or commitment that Telnet may have made purportedly on Galaxy's behalf in violation of this Agreement; or (ii) from any breach by Telnet or Telnet's employees with respect to Telnet's obligations under this Agreement. 8.6 Limitation of Privacy  The Products and Services utilize, in whole or in part, the public Internet and third party networks to transmit voice and other communications. Galaxy shall not be liable to Telnet for any loss or damages caused by or related to a lack of privacy which may be experienced as a result of use of the Products and Services.

9. USE OF NAME, LOGOS, TRADEMARKS AND LICENSED MATERIALS 9.1 News Releases Neither Party will use the name of the other in any news release, public announcement, advertisement or other form of publicity, without the prior written consent of the other Party. 9.2 Ownership and Use of Galaxy Trade Marks Telnet acknowledges Galaxy's exclusive ownership of the Galaxy name and logo as well as certain other trademarks and trade names which Galaxy uses in connection with the Products and Services (the Trademarked Material) and agrees that Telnet will not acquire any interest in any of the Trademarked Material by virtue of this Agreement or anything done pursuant to it; While this Agreement is in effect, Telnet may indicate to the public its status of being an authorized seller of the Galaxy Products





and Services; Except with the prior written consent of Galaxy, Telnet will not adopt or use any of the Trademarked Material, in whole or in part, or any confusingly similar word or symbol, as part of Telnet's name or, to the extent Telnet has knowledge of such use and the power to prevent such use, allow others to use the Trademarked Material; Nothing in this Agreement contains any transfer or license to Telnet of any Trademarked Material or other proprietary rights. 9.3 Review and Approval of Uses  Galaxy shall have the right to review any use by Telnet of the Trademarked Material and to approve or disapprove, in its absolute discretion, Telnet's use of it and if Galaxy disapproves of Telnet's use of Trademarked Material, Telnet shall not use the Trademarked Material for such use. Telnet shall, at Galaxy's request, provide to Galaxy a copy of anything which Telnet is using or may use and which contains the Trademarked Material; Telnet must adhere to Galaxy's standards of use in respect to any of the Trademarked Material. Among other things, Telnet will be required to indicate explicitly Galaxy's ownership of the name or mark. 9.4 No Removal of Logos, Trademarks & Notices Unless Telnet first obtains express written consent from Galaxy, Telnet will not remove or alter any patent numbers, trade names, trademarks, copyright or other proprietary notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to or included with any Product or portion thereof, whether on packaging, media, presentations or otherwise, or any related materials provided to Telnet by Galaxy.

10. TERM AND TERMINATION 10.1 Term of the Agreement The initial term of this Agreement will be for two (2) year(s) commencing on the Effective Date. Thereafter, this agreement will renew automatically from year to year unless cancelled in writing by either Party giving the other written notice of such cancellation a minimum of 60 days before the end of the then current term. 10.2 Termination for Default Subject to section 13.2, either Party may terminate this Agreement, effective immediately, if the other commits a material breach of it, commits any material fraudulent act in performing any of its obligations or makes any material misrepresentation to the other or commits an act of malfeasance or misfeasance in the performance of its or his duties or is unable or unwilling to perform its obligations and duties under this Agreement which circumstances will include, but not be limited to: If a receiver, trustee in bankruptcy or similar officer is appointed to take charge of any of its assets; or If it files for relief under any applicable bankruptcy laws. 10.3 Obligations Upon Termination Upon expiration or termination of this Agreement: (a) Telnet shall immediately: stop representing itself as a seller of the Products and Services and marketing and selling the Products and Services; discontinue using the Trademarked Materials; and return to Galaxy all Galaxy sales and technical materials and other Galaxy literature; Galaxy shall deliver pending Orders per the terms of such Orders; and all amounts due from each party to the other shall become immediately due and payable. 10.4 Inventory Returns Upon termination of this Agreement, Galaxy may, at its sole discretion accept inventory returns of Products. If Galaxy accepts inventory returns, Telnet shall pay a restocking fee of twenty-five percent (25%) of the original billing amount for the returned inventory. 10.5 Subscribers If this Agreement is terminated pursuant to section 10.2, Galaxy shall have the right to contact Subscribers directly and solicit such Subscribers to become subscribers of Galaxy, an affiliate thereof or of another client of Galaxy's.

11. CONFIDENTIALITY 11.1 Confidential Information Each of the Parties acknowledges that in the course of their relationship pursuant to this Agreement, each (the Receiving Party) will have access to or come into possession of Confidential Information of the other Party (the Disclosing Party) and that the disclosure of such Confidential Information to third parties or to the general public would be detrimental to the best interests and business of the Disclosing Party.





11.2 Exceptions to Confidential Information Notwithstanding the definition of Confidential Information and the provisions of section 11.1, Confidential Information does not include information or data, which the Receiving Party can prove, on a balance of probabilities, is or was: publicly known at the time of disclosure; already known by the Receiving Party at the time it receives the information; provided to the Receiving Party by a third party that is not under obligation to keep such information confidential; or independently developed by the Receiving Party without use of any Confidential Information of the Disclosing Party. 11.3 Limitations on Use The Receiving Party will not, during the term of this Agreement or at any time thereafter: disclose any Confidential Information to any person; use or exploit, directly or indirectly, the Confidential Information for any purpose other than the proper purposes of the Disclosing Party; or disclose for any purpose, other than those of the Disclosing Party, the private affairs of the Disclosing Party or any other information which the Receiving Party may acquire during the term of the Agreement with respect to the business and affairs of the Disclosing Party, whether acquired in the course of carrying out the Agreement or incidentally. 11.4 Required Disclosure Notwithstanding the foregoing, the Receiving Party will be entitled to disclose Confidential Information if required by law provided that the Receiving Party will promptly notify the Disclosing Party, consult with the Disclosing Party and cooperate with the Disclosing Party in any attempt to enjoin, to resist or narrow such disclosure or to obtain an order or other assurance that such information will be accorded confidential treatment. 11.5 Survival of Confidentiality All covenants of confidentiality herein shall survive the term of this agreement by three (3) additional years counting from the date of termination of this Agreement.

12. EXCLUSION FROM TERRITORIES 12.1 Right to Exclude Subject to section 12.2 Galaxy reserves the right to grant to any other person an exclusive territory (the Territory) for the marketing, sales and distribution of the Services and, from that date which is 30 days after the date upon which Galaxy delivers notice in writing to Telnet of such grant of exclusivity over a Territory (the Exclusion Date), Telnet shall not sell, distribute or market the Services within the Territory. However, Telnet shall be entitled to continue to sell the Services to any Subscriber resident within the Territory who became a Subscriber prior to the Exclusion Date. 12.2 Territories From Which Telnet May Not Be Excluded During the term of this Agreement, Telnet may not be excluded pursuant to section 12.1, from the following areas: (a) Romania.

13. MISCELLANEOUS 13.1 No Waiver The failure by either Party to enforce or take advantage of any of the provisions of this Agreement shall not constitute nor be construed as a waiver of such provisions or of the right subsequently to enforce or take advantage of each and every such provision. 13.2 Default If either of the Parties should be in default (the Defaulting Party) of any obligation or requirement under this Agreement, the Party affected may give written notice to the Defaulting Party specifying the default and will give the Defaulting Party a grace period of 30 days (the Grace Period) to cure such default or to take such reasonable steps to cure without undue delay such default prior to seeking any remedy it may have on account of such default. The Defaulting Party shall lose no rights under this Agreement if it cures the stated default within the Grace Period. 13.3 Disputes Galaxy and Telnet will attempt to settle any claim or controversy relating to this Agreement through consultation and negotiation in good faith and a spirit of mutual cooperation. If those attempts fail, then a mutually acceptable mediator, chosen by Galaxy and Telnet within forty-five (45) days after written notice from one of the parties to the other, demanding mediation, will mediate the dispute. Neither party may unreasonably withhold consent to the selection of a mediator. Galaxy and Telnet will share the costs of the mediation equally and each shall bear its own costs. Any dispute which the parties cannot resolve between themselves through negotiation or mediation within ninety (90) days after the date of the initial demand for mediation may then be submitted to the courts for final resolution. Nothing in this paragraph will prevent either party from resorting to judicial proceedings if:





good faith efforts to resolve the dispute under these procedures have been unsuccessful; or interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others. 13.4 Notices Any formal notice between the Parties hereto will be in writing and will be either personally delivered or sent by facsimile or by registered mail to the appropriate party or parties at the address noted for that party on the first page of this Agreement, or such other address as may be designated by a party in a written notice sent to the other parties in accordance with this paragraph. Any notice or other communication will be effective seven calendar days from the day that it was sent, or if given by personal delivery or facsimile, the day following its receipt. 13.5 Assignment Neither party may assign this Agreement without the prior written consent of the other. However, Telnet agrees that Galaxy may assign this entire Agreement to an affiliate or sell, transfer or assign any account receivable under it to a financing institution to enforce the Galaxy's rights to receive payment from Telnet. This Agreement will be binding upon any authorized assignee or successor of Telnet or Galaxy. 13.6 Compliance with Law Each of the Parties agrees to comply with all applicable laws, rules and regulations of the jurisdictions in which it operates and to do nothing to cause the other to violate the law, rules and regulations of those jurisdictions. If this Agreement or the performance hereof, is determined to be contrary of the laws, rules or regulations of the Territory or of Canada, this Agreement will automatically terminate subject the terms of Termination outlined in this Agreement.

14. GENERAL 14.1 Entire Agreement  This Agreement and all documents contemplated by or delivered under or in connection with this Agreement constitute the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersede all prior agreements, negotiations, discussions, undertakings, representations, warranties and understandings, whether written or oral, express or implied, statutory or otherwise.  14.2 Amendment No amendment, supplement, restatement or termination of any provision of this Agreement is binding upon the Parties hereto unless it is in writing and signed by an authorized representative of each Party to this Agreement at the time of the amendment, supplement, restatement or termination.  14.3 Severability If any provision or any portion of any provision of this Agreement shall be held unlawful or unenforceable, the balance of such provision and all other provisions hereof shall nonetheless in all respects remain binding and effective and shall be construed in full force and effect to the extent lawfully permissible. 14.4 Time of Essence Time is of the essence in the performance of the terms and conditions of this Agreement. 14.5 Enurement This Agreement enures to the benefit of and binds the Parties and their respective heirs, executors, administrators, successors and permitted assigns. 14.6 Counterpart Signature and Facsimile Delivery This Agreement may be executed in two or more counterparts and may be delivered by facsimile, each of which will be deemed to be an original and all of which will constitute one agreement, effective as of the reference date given above.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above:

695014 B.C. LTD.   GALAXY TELNET SRL

Per: Peter Wiggans   Per: Michael Stunden

  Authorized Signatory     Authorized Signatory

  Peter Wiggans     Michael Stunden

  (Print name)     (Print name)

Title: Chief Operating Officer   Title: Chief Financial Officer







SCHEDULE A





SCHEDULE A PARTNER PRICING Galaxy Telnet

Table 1

  Business Partner Pricing

VoIP Services One-Time Fee Monthly Service Fee

VoIP Connectivity (per port charge)

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail

$9.95 $5.95

VoIP Connectivity - Commpanion Galaxy Telecom Brand

With i-box subscription

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call go to voicemail, Redial, Mute

$19.95 $1.95

VoIP Connectivity - i-box Commpanion Galaxy Telecom Brand

Stand alone subscription

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call go to voicemail, Redial, Mute

$19.95 $5.95

VoIP to VoIP Termination included included

VoIP to PSTN Termination (Long distance) included See Current Published Rates

Basic Voicemail Service included included

i-box CommCenter - Enhanced Voicemail

Includes: Web interface, call forwarding, do not disturb, speed dial, call logs, email message notify management, time zone control, profile management, greeting management and password control

included $2.00

Services

Partner Portal included included

Partner Portal Back-Office (API) included included

Special Accounts

Demonstration Accounts See note 3 free free





Employee only Accounts See note 3 free $1.95

Promotion Accounts

TBD Special Special

Phone Numbers

Direct Inward Dial (DID) - Canada $250 one time fee per order

see note 1

$3.00

Direct Inward Dial (DID) - USA $250 one time fee per order

see note 1

$2.50

Toll Free Dial (1-8XX) - Canada/USA $2.50 $2.50 plus usage ($.05 avg.)

Use existing phone number see note 2 $10.00 $3.00

Bundles & Calling Zones

Monthly 250 North America minute bundle n/a $2.95

Monthly 500 North America minute bundle n/a $5.95

Monthly 750 North America minute bundle n/a $8.95

Monthly 1000 North America minute bundle n/a $11.95

Local Calling Zone

On-net locations only

Includes: 750 minutes inbound and outbound local calls. Requires DID. Subscriber must reside in Local Calling area.

included $6.95

Virtual Calling Zone

On-net locations only

Includes: 750 minutes inbound calls from virtual calling area. Requires DID Applies to North America-based subscribers only.

See note 4

included $6.95

Custom Calling Zone

Off-net locations

Custom Quote Custom Quote

Note 1 Not available in all areas, see Table 3, 25 DID number block minimum Note 2 Not available in all areas see Table 3 Note 3 Quantity to be agreed between parties, Long distance charges apply Note 4 Unlimited calling FROM Virtual Calling Zone only. Long distance charges apply when calling to VCZ.









Table 2 i-box Commpanion Telecom Branded Version

Licenses i-box CommPanion Additional 500 Licenses $7,000 $14.00 ea 1,350 Licenses $14,000 $10.50 ea 2,500 Licenses $21,000 $8.40 ea 3,650 Licenses $28,000 $7.70 ea 5,000 Licenses $35,000 $7.00 ea 6,700 Licenses $42,000 $6.30 ea 8,750 Licenses $49,000 $5.60 ea 11,500 Licenses $56,000 $4.90 ea 15,000 Licenses $63,000 $4.20 ea 20,000 Licenses $70,000 $3.50 ea

Note 1 Co-Branding one time charge $1,350.00





Table 3 Galaxy Telecom On-net locations

Canada Province City Alberta Calgary Edmonton British Columbia Vancouver Victoria Kelowna Whistler Abbotsford Manitoba Winnipeg Nova Scotia Halifax Ontario Toronto Ottawa Hamilton Windsor Kitchener London Guelph Kingston Oshawa St. Catherines Waterloo Hespeler Quebec Montreal Quebec City Saskatchewan Regina

USA State City Alabama Birmingham Arizona Phoenix California Los Angeles San Diego San Francisco Colorado Denver Florida Gainesville Miami Orlando Tampa Georgia Atlanta Illinois Chicago Indiana Indianapolis Maryland Baltimore Michigan Detroit Minnesota Minneapolis Missouri Kansas City St Louis New York New York City North Carolina Charlotte Fayetteville Greensboro Raleigh Ohio Cincinnati Cleveland Dayton





Oregon Portland Pennsylvania Philadelphia Tennessee Nashville Texas Dallas Austin Houston San Antonio Utah Salt lake City Virginia Culpepper Washington Seattle Washington DC Washington DC





SCHEDULE B TIER 1 SUBSCRIBER SUPPORT

Under this Agreement the Telnet is required to maintain Tier 1 Subscriber Support (the Subscriber Support) functioning as initial response for any direct Subscriber inquiries. Galaxy will provide Tier 2 technical support for technical inquiries from qualified resellers only. The Criteria for the Subscriber Support are as follows: Subscriber Satisfaction Telnet will use its best efforts to ensure that Subscribers achieve the highest levels of satisfaction with the Services delivered by Telnet. Telnet shall notify Galaxy immediately of any complaints by Subscribers, whether they involve sales, Service, Performance or other issues. Galaxy shall use Subscriber satisfaction surveys, field Service reports, and random audits, as it deems necessary to determine if the appropriate levels of Subscriber satisfaction are achieved. If Galaxy determines that an inappropriate level of Subscriber dissatisfaction exists, Galaxy and Telnet shall put in place an action plan as approved by Galaxy to continually improve and maintain Subscriber satisfaction levels. Staff Subscriber Support shall be staffed by fully qualified and trained personnel as per the following criteria: 1. Training Telnet shall maintain technically qualified Service personnel and use its best efforts to service Telnet subscribers in the Territory. 2. Technical Team (a) Language Capabilities Telnet shall employ at least one lead Service engineer who is fluent in English who will be responsible for communicating with Galaxy's technical staff and who can accurately translate all technical documentation from English. Service Staff Upon execution of this Agreement and annually thereafter, Telnet shall furnish Galaxy with a list of its Service management and other technical staff qualified to support Galaxy Services. (c) Help Desk Telnet shall ensure that the personnel staffing the Subscriber help desk, as set out in section 3.6, shall have a sufficient working knowledge of: networking in a TCP/IP WAN/LAN environment; configuring and maintaining network equipment; relevant operating systems (Macintosh, Windows, Linux); and both written and spoken English,. to be able to provide effective help to Subscribers, communicate and work with Galaxy's Tier 2 help desk to address those Subscriber issues which Telnet's help desk are unable to resolve and to communicate and work with Galaxy with regard to technical issues.

SCHEDULE C





SCHEDULE C SUBSCRIBER CONTRACT CLAUSES

Telnet shall include as a term of any agreement between itself and a Subscriber with respect to any of the Services, the relevant clauses of the following: General

The Subscriber will not use the Service for any purpose that is unlawful, abusive, intrusive on another's privacy, harassing, libellous, defamatory, threatening or hateful, or in any other way that would violate any applicable governmental law.

Telnet offers the Service internationally. While the Service may be used to make and receive international calls, we do not represent that the use of the Service is legally appropriate in locations outside of Canada and the United States. If the Subscriber chooses to use the Service from or to a location outside of Canada and the United States, the Subscriber is responsible for compliance with any and all governing foreign and local laws.

The Subscriber may not reverse engineer, distribute, publish, display, modify or in any way exploit the configuration parameters Telnet provides as a means to access the Service.

The Subscriber acknowledges that any devices and embedded software or firmware (Products) furnished by Telnet are exclusively for use with Telnet's Service.

Residential Use of Service

If you have subscribed to Residential Services, the Service is provided to you as a residential user, for your personal, residential, non-business and non-professional use.  This means that you are not using the service for any commercial or governmental activities, profit-making or non-profit, including but not limited to business, sales, telecommuting, telemarketing, autodialing, continuous or extensive call forwarding, fax broadcast, fax blasting or any other activity that would be inconsistent with normal residential usage patterns. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities.

The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that Service is activated for the subscriber. Full monthly terms will renew automatically unless Telnet is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the full term of the then current billing period and any unbilled charges.

Small Business Use of Service

If you have subscribed to Small Business Services, the Service is provided to you as a small business user. You agree not to use the Service for auto-dialling, continuous or extensive call forwarding, telemarketing or fax broadcasting. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities.

The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that subscriber requests activation of the Service. Full monthly terms will renew automatically unless the Telnet and Galaxy is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the then current full monthly term and any unbilled charges

Short Form Emergency Services, E911 and 911

The Service presently does not support 911, E911 or any other type of emergency Services; that calls to 9-1-1 cannot be connected; and that alternative arrangements need to be made to contact emergency Services in situations where emergency numbers would have to be dialled.

Theft

The Subscriber is responsible for cancelling the Service if Subscriber believes that the associated Products have been lost or stolen, or if the Subscriber becomes aware that the Service provided is being used or misused without Subscribers consent. Subscriber is liable for all charges accruing to Subscribers account for the Service until Subscriber cancels the Service. Service Termination The Provider reserves the right to terminate the Service at any time with or without notice and for any reason. The subscriber agrees that the provider shall not be liable to the subscriber or to any third party for any modification, suspension or discontinuance of the Service. Privacy Personal data and certain other information submitted by the subscriber is subject to our Privacy Policy. Voice over IP





communications are transmitted over public networks including the Internet. The subscriber acknowledges that the provider is not liable for any loss of privacy arising out of use of the Service. 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Example Output: Telnet acknowledges Galaxy's exclusive ownership of the Galaxy name and logo as well as certain other trademarks and trade names which Galaxy uses in connection with the Products and Services (the "Trademarked Material") and agrees that Telnet will not acquire any interest in any of the Trademarked Material by virtue of this Agreement or anything done pursuant to it;

Example Input: Exhibit 99.1   DISTRIBUTOR AGREEMENT   THIS AGREEMENT, dated as of October 24, 2005 is between JOHNSON MATTHEY CATALOG COMPANY, INC., a Delaware corporation, d/b/a ALFA AESAR (hereinafter referred to as ALFA AESAR), having a mailing address of 30 Bond Street, Ward Hill, MA 01835-8099 and Nanophase Technologies Corporation, a Delaware corporation (NTC), having its principal offices at 1319 Marquette Drive, Romeoville, IL 60446.   Whereas NTC is in the business of manufacturing and selling nanoparticles and nanoparticle dispersions (collectively nanomaterials) and wishes to expand the availability and marketing of nanomaterials for research purposes, and   Whereas ALFA AESAR is in the business of efficiently packaging, marketing, selling and distributing research materials, and   NTC desires to appoint and name ALFA AESAR, and ALFA AESAR desires to be appointed and named, exclusive distributor of the Products (as defined below) on a worldwide basis in research quantities for research purposes.   NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, each intending to be legally bound hereby, agree as follows:   1. Definitions:   1.1 Product or Products mean those nanomaterials, coated nanomaterials and dispersions of nanomaterials listed in Schedule A, as amended from time to time by mutual written agreement signed by the parties.     1.2 Product Price means the price for Products listed in Schedule A sold by NTC to ALFA AESAR.   1.3 Research Quantities means, in the case of nanomaterials and coated nanomaterials, quantities purchased and distributed in individual orders of 54 kilograms or less, and, in the case of dispersions of nanomaterials, quantities purchased and distributed in individual orders of 60 kilograms or less.   1.4 Commercial Quantities means in the case of nanomaterials and coated nanomaterials, quantities purchased and distributed in individual orders greater than 54 kilograms, and, in the case of dispersions of nanomaterials, quantities purchased and distributed in individual orders greater than 60 kilograms.   1.5 Custom Services is any program or product offered by NTC other than the manufacture of Products as listed in Schedule A.   1.6 Territory is all areas in which ALFA AESAR markets, sells or distributes chemicals or other materials through its various sales channels, including but not limited to its present and future catalog distribution networks, Internet web sites, and other distribution channels.   1





1.7 Trademark means all common law, registered and unregistered state, federal and foreign trade names, trademarks, and service marks, including without limitation any logos and slogans.   1.8 Net Sales means the cost charged to a customer for goods and services less the costs for shipping, handling, taxes, duties and credits.   2. Appointment; Reservation of Rights; Referrals.   2.1 NTC hereby grants to ALFA AESAR, and its subsidiaries and affiliates, the exclusive right to market, sell and distribute Research Quantities of the Products within the Territory, ALFA AESAR hereby accepts such right and agrees to use its reasonable efforts to promote the marketing, sale and distribution of Research Quantities of the Products throughout the Territory in accordance with the terms and conditions of this Agreement using normal and standard practices. ALFA AESAR shall have the right, in its sole discretion, to sell Products outside of the Territory. ALFA AESAR agrees that, so long as NTC provides ALFA AESAR with Products for ALFA AESAR' S marketing, sale and distribution of Research Quantities of the Products within the Territory, ALFA AESAR shall purchase all its requirements of the Products (including nanomaterials with physical or chemical properties substantially the same as the Products) exclusively from NTC during the term of this Agreement, ALFA AESAR shall:   i) buy the Products in quantities listed in Schedule A and repackage into the research sample quantities as it deems reasonable and appropriate for distribution and sale on a worldwide basis at such resale prices it shall determine from time to time, provided that any such repackaging shall comply with applicable safety laws and regulations;   ii) attempt to keep reasonably sufficient stocks of the Products to meet customer orders and to store such stocks in such conditions as NTC may recommend from time to time to prevent deterioration or damage.   2.2 NTC reserves for itself the right (i) to sell Commercial Quantities of the Products in individual order quantities of single commercial packages or greater, subject to Section 6; and (ii) to provide samples of the Products in any quantity, free of charge, to its commercial partners or potential partners.   3. Pricing, Exclusions and Purchase Orders.   3.1 Subject to Section 2.2, NTC shall sell Products to ALFA AESAR, at the Product Price as amended from time to time pursuant to this Section 3.1. NTC agrees that the Product Prices, benefits and allowances offered to ALFA AESAR shall not be less favorable than those offered on Products provided to agents, distributors or marketed directly by NTC to any customers, other than the Product Prices existing as of the date of this Agreement with NTC's commercial partners. Subject to the preceding sentence, NTC may increase the Product Price set forth in Schedule A at the end of the first full calendar year of this Agreement and from year to year thereafter, by providing ALFA AESAR with 90 days prior written notice of the changes to the   2





Product Prices. Any such increase in the Product Price shall not be effective for any unshipped portion of an order previously placed by ALFA AESAR prior to the end of the calendar year in which such notice is provided. NTC may decrease the Product Price at any time by providing ALFA AESAR with 30 days prior written notice.   3.2 NTC's prices do not include sales, use, excise, or similar taxes. The amount of any valid present or future sales, use, excise, or other similar tax that is attributable to ALFA AESAR shall be paid by ALFA AESAR; or in lieu thereof, ALFA AESAR shall provide NTC with a tax exemption certificate acceptable to the taxing authorities. Product Prices do not include any transportation or shipping expenses. NTC shall ship Products at ALFA AESAR's expense FOB/FCA (Incoterms 2000) NTC's facilities.   3.3 Subject to Section 2.2, NTC agrees to sell to ALFA AESAR such quantities of Products ordered by ALFA AESAR by written purchase orders. Purchase orders for Products shall be initiated by facsimile transmission, electronic mail or other written communication and shall be binding upon the parties upon acceptance by NTC. NTC shall be deemed to have accepted a purchase order unless NTC provides written notice of rejection to ALFA AESAR within three (3) days of NTC's receipt of such order, not including weekends and nationally recognized holidays.   4. Payment and Delivery.   4.1 Subject to Section 2.2, NTC shall use all reasonable commercial efforts to fill orders placed by ALFA AESAR with all reasonable promptness provided, however, that NTC shall have no obligation to furnish any Products hereunder which have been discontinued. In the event any order is not filled within thirty (30) days of receipt by NTC, ALFA AESAR has the right, but not the obligation, to seek alternative sourcing from a third- party without liability to NTC.   4.2 NTC shall ship Products FOB/FCA its facilities and will arrange delivery of the Products to ALFA AESAR using a nationally recognized carrier. Title to the Products, and the risk of loss or damage to the Products, each will pass to ALFA AESAR upon shipment from NTC's dock in compliance with United States D.O.T. requirements and all applicable laws and regulations.   4.3 NTC shall invoice ALFA AESAR for payment of Products delivered to ALFA AESAR on a Net 30 day basis. Excepting any amounts disputed in good faith, balances unpaid after such period will be subject to a finance charge of 1% per month or may be offset against any balances owed by NTC to ALFA AESAR. The parties agree to work in good faith to resolve any disputed invoice. In the event such efforts do not resolve the dispute within sixty (60) days, either party may initiate Arbitration proceedings pursuant to Section 16.   5. Returns; Discontinued Products.   5.1 Return Rights. Subject to the protocol described below, ALFA AESAR shall have the right to return at NTC's expense, and for full credit of ALFA AESAR's cost, any Products (i.) for which a legitimate and credible allegation is made that the use of such Products infringes on any patent, trademark, trade secret, copyright, right of privacy or publicity, or any other tangible or   3





intangible proprietary or intellectual property right; (b) that are not manufactured, packaged, or labeled in accordance with specifications or industry standards; (c) that are shipped in error or in non-conformance with ALFA AESAR's purchase order; or (d) that are damaged or defective. In the event that ALFA AESAR believes that it is entitled to return any Products delivered under this Agreement, the parties will adhere to the following protocol: (w) ALFA AESAR will contact NTC's Quality Director and then forward to the Quality Director, via a carrier selected by and at NTC's expense, a sample of the Product that ALFA AESAR believes is non-conforming; (x) upon receipt of the sample, NTC will test it and then notify ALFA AESAR of the test results; (y) where the test results confirm that the sample is non-conforming, NTC will provide ALFA AESAR with NTC's Return Authorization Number (RAN); and (z) any returned non-conforming Product must be in its original container, with original labels in act, and all paperwork concerning the returned Product must include NTC's RAN.   5.2 NTC may discontinue offering any Product for any reason by providing six (6) months advance written notice to ALFA AESAR, provided however, NTC shall continue supplying ALFA AESAR with such discontinued Product until the expiration of such six (6) month notice period. Notwithstanding the foregoing, NTC may discontinue any Product immediately upon written notice to ALFA AESAR if such discontinuation is due to any actual or alleged Product defect which may actually or allegedly cause damage to person, property rights or property, With respect to ALFA AESAR's existing inventory of discontinued Product, ALFA AESAR may, its sole discretion, return such Product at any time to NTC for full credit or refund.   6. ALFA AESAR Referrals.   6.1 The following shall be deemed referral sales for which NTC shall pay a commission in accordance with Section 6.2.     a. ALFA AESAR shall refer to NTC the following sales requests either directly or by navigation on ALFA AESAR's Web site:   i) any sales for single Product orders in excess of Research Quantities; or   ii) any sales inquiries for Custom Services.   6.2 NTC shall pay ALFA AESAR a commission for all sales under Section 6.1 as follows. The terms of this Section 6.2 shall survive any expiration or termination of this Agreement.



a) For all referrals under Section 6.1, except where NTC has evidence that it referral the customer (including its affiliates) to ALFA AESAR to purchase a prior sample of the Product in question, or where NTC has made sales to the customer (including its affiliates) referred to NTC by ALFA AESAR within a period of twelve (12) months before ALFA AESAR's referral under Section 6.1, NTC shall pay ALFA AESAR a commission at the rate of [***] on the Net Sales made to each such customer so referred to NTC under Section 6.1. NTC shall pay ALFA AESAR on a monthly basis for all such commissions for a period of three (3) years from the date of such referred customer's first order of Products or Custom Services from NTC.

*** CONFIDENTIAL TREATMENT REQUESTED—This confidential portion has been omitted from this document and filed separately with the Commission.   4





6.3 NTC shall maintain adequate records of its invoices and accounting records reflecting all such sales in accordance with standard accounting principles. Within twelve (12) months after the date this Agreement has been terminated by the parties, ALFA AESAR may engage an independent certified public accounting firm reasonably acceptable to NTC to audit the NTC invoices and accounting records pertaining to those customers identified as referrals under Section 6.1 at NTC's offices during normal business hours by providing thirty (30) days advance notice of such audit for the purpose of determining the accuracy of the commissions paid or payable to ALFA AESAR hereunder. NTC shall promptly pay ALFA AESAR for any deficiencies between the commission earned and the commission paid to ALFA AESAR.   7. Trademarks.    7.1 Each party hereby covenants and agrees that the Trademarks, copyrights and other proprietary rights of the other party are and shall remain the sole and exclusive property of that party and neither party shall hold itself out as having any ownership rights with respect to or, except as specifically granted hereunder, in any other rights therein. Any and all goodwill associated with any such rights shall inure directly and exclusively to the benefit of the owner thereof.   7.2 ALFA AESAR hereby grants to NTC a limited non-exclusive license to use the ALFA AESAR Trademarks in the form provided by ALFA AESAR during the Term of this Agreement in accordance with the terms set forth herein. Such license is granted solely in connection with NTC's rights and obligations under this Agreement and, in particular, for the purpose of licensing NTC to use the ALFA AESAR Trademark on the NTC web site as expressly contemplated herein for referral of customers of Research Quantities to ALFA AESAR and is a link/navigational button to the ALFA AESAR Site. All such uses will be subject to ALFA AESAR's approval as to the manner and/or form of use. NTC will not be allowed to use or reproduce the ALFA AESAR Trademark for any other purpose, including the general promotion of the NTC Site, without the prior written approval of ALFA AESAR.   7.3 NTC hereby grants ALFA AESAR a limited non-exclusive license to use, exhibit, excerpt, reproduce, publish, publicly perform and transmit via the Internet and otherwise use the NTC Trademarks in substantially the form as NTC may provide to ALFA AESAR from time to time during the Term of this Agreement in accordance with the terms set forth herein. Such license is granted solely in connection with ALFA AESAR's rights and obligations under this Agreement and, in particular, for the purpose of licensing ALFA AESAR to use the NTC Trademarks in ALFA AESAR's marketing, sales and distribution materials relative to the Products, including without limitation on the ALFA AESAR's Web site as a link/navigational button to the NTC Web site as posted by NTC. All such uses shall be subject to NTC's prior written approval as to manner and/or form of use.   7.4 Except as provided for in this Agreement, each party understands that the Web site links contemplated above to the other party's site may not be used in any manner to provide viewers access to the other party's Site via any caching, framing, layering or other techniques that cause   5





intermediate copying of the other party's Site (or elements thereof) or display of the other party's site or portions thereof in any manner unintended by the owner of the Site.   7.5 Upon termination of this Agreement, ALFA AESAR may continue to advertise and promote the Products, using the NTC's Trademarks and NTC content until ALFA AESAR's inventory depletion.   8. Training; Product Material.    8.1 NTC will provide training to ALFA AESAR's personnel on ALFA AESAR's premises as reasonably necessary, but no less than once annually, at mutually agreed upon times and dates to provide ALFA AESAR's sales and service personnel with adequate knowledge with respect to the Products.   8.2 NTC will provide to ALFA AESAR marketing and technical support for products as reasonably necessary and requested by ALFA AESAR, including providing Product materials which shall include, without limitation, Product specifications, images, and other textual, graphical and/or multimedia content regarding the Products for use in preparing advertising and promotional material. Subject to any limitations which NTC communicates to ALFA AESAR in writing, NTC hereby grants ALFA AESAR a license to use, exhibit, excerpt, reformat, modify, reproduce, publish, publicly perform and transmit via the Internet and otherwise use such NTC content for the purpose of marketing, advertising and promoting the Products, provided that ALFA AESAR obtains NTC's prior written approval for NTC content to be included in such literature.   9. Representations; Limited Warranty; Remedies.    9.1 NTC represents and warrants that i) the execution and delivery of this Agreement has been authorized by all requisite corporate action, ii) subject to Section 2.2, it in under no contractual or other obligation or restriction that is inconsistent with its execution or performance of this Agreement, iii) subject to Section 2.2, NTC will not enter into any agreement, either written or oral, that would conflict with NTC's responsibilities under this Agreement, iv) the Products do not infringe the intellectual property rights of any third party and NTC is not aware of any infringement claims relating to the Products, v) it will comply with all applicable laws, rules, regulations of any US or foreign laws, rules, or regulations in the manufacture and supply of Product, and vi) Products sold hereunder will be in compliance with the current Product description set forth in Schedule A, as amended from time to time by agreement of the parties. NTC shall further grant to ALFA AESAR the same warranty, as set forth in NTC's General Terms and Conditions of Sale for its products set forth in Schedule B. The foregoing warranties shall apply only to, and is intended for the benefit of, ALFA AESAR's customers.   9.2. Subject to the protocol in Section 5.1, ALFA AESAR may return to NTC any Product that is defective or that fails to comply with the purchase order provided by ALFA AESAR. NTC shall return to ALFA AESAR as promptly as possible, a working replacement or, in the event such replacement is not possible or at ALFA AESAR's election, it shall credit ALFA AESAR's account for the invoiced price and shipping charges of the defective Product. The   6





correction of such defective Product shall be at no cost to ALFA AESAR. The cost of shipping the replacement Product back to ALFA AESAR shall be paid by NTC. THE CORRECTION OF SUCH DEFECT BY REPAIR OR CREDITING ALFA AESAR'S ACCOUNT FOR THE COST OF THE PRODUCT IN THE MANNER SET FORTH ABOVE SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY OF DISTRIBUTOR WITH RESPECT TO ANY WARRANTY GIVEN HEREIN RELATING TO ANY PRODUCT SOLD OR DELIVERED HEREUNDER.   9.3 ALFA AESAR represents and warrants that i) the execution and delivery of this Agreement has been authorized by all requisite corporate action, ii) it is under no contractual or other obligation or restriction that is inconsistent with its execution or performance of this Agreement, iii) ALFA AESAR will not enter into any agreement, either written or oral, that would conflict with ALFA AESAR's responsibilities under this Agreement, iv) it will comply with applicable safety laws and regulations for the repackaging and storage of Products, and v) excepting such warranties provided by NTC herein, it will make no warranties or other representations of any kind about the merchantability or fitness for any particular purpose of any Products, whether used alone or in connection with any other substance.   10. Indemnification.    10.1 NTC shall protect, defend, indemnify and hold ALFA AESAR, its directors, officers, employees, and agents harmless from any and all claims, actions, causes of action, liabilities, losses, damages, costs or expenses, including reasonable attorneys' fees, which directly or indirectly arise out of or relate to i) NTC's breach of warranties in Section 9.1, or ii) NTC's gross negligence or willful misconduct arising out of its manufacture, sale or transfer of the Products to ALFA AESAR, excepting indemnification for which ALFA AESAR is obligated under 10.3.   10.2 ALFA AESAR agrees to give NTC (i) prompt written notice of any claims made for which NTC might be liable under the foregoing indemnification, and (ii) the opportunity to defend, negotiate, and settle such claims. ALFA AESAR shall provide NTC with all information in its possession, all authority, and all assistance reasonably necessary to enable the indemnifying party to carry on the defense of such suit; provided, however, that each party shall have the right, at its own expense, to retain its own counsel to defend itself in such suit.   10.3 ALFA AESAR shall protect, defend, indemnify and hold NTC, its directors, officers, employees, and agents harmless from any and all claims, actions, causes of action, liabilities, losses, damages, costs or expenses, including reasonable attorneys' fees, which directly or indirectly arise out of or relate to i) ALFA AESAR's breach of warranties in Section 9.3, (iii) ALFA AESAR's gross negligence or willful misconduct arising out of its sale or transfer of the Products to ALFA AESAR's customers, excepting indemnification for which NTC is obligated under 10.1.   10.4 NTC agrees to give ALFA AESAR (i) prompt written notice of any claims made for which ALFA AESAR might be liable under the foregoing indemnification, and (ii) the opportunity to defend, negotiate and settle such claims. NTC shall provide ALFA AESAR with all information in its possession, all authority, and all assistance reasonably necessary to enable the indemnifying party to carry on the defense of such suit; provided, however, that each party shall have the right, at its own expense, to retain its own counsel to defend itself in such suit.   7





11. Relationship and Conduct of Business.    11.1 ALFA AESAR shall use its reasonable efforts and devote such time as may be reasonably necessary to sell and promote the sale of Products within the Territory.   11.2 ALFA AESAR agrees not to manufacture, buy, sell, distribute, deal in or be the agent for any products with the specifications of any of the Products, excluding any preexisting ALFA AESAR products.   12. No Joint Venture.    12.1 This Agreement does not in any way create the relationship of franchisor and franchisee, joint venture, partnership, employment or principal and agent between ALFA AESAR and NTC. Neither party, nor any person acting on behalf of a party, is or shall be considered an employee of the other party for any reason whatsoever, and does not and shall not have any rights to, or participate in, any pension or welfare plans, or any other benefits which now or hereafter maintains for or provides to its employees. Neither party, or any person acting on behalf of a party, is or shall be deemed to be the legal representative or agent of the other party for any purpose whatsoever, and is not authorized to transact business, incur obligations, express or implied, or otherwise act in any manner, in the name or on behalf of the other party, or to make any promise, warranty or representation with respect to Products (except as provided herein by NTC or as NTC otherwise expressly approves as to its Products) or any other matter in the name of or on behalf of the other party.   13. Term.    13.1 The initial term of this Agreement shall be for a period of five (5) years from the date first set forth above and shall thereafter automatically renew for additional two (2) year terms unless a party provides the other party with notice of non-renewal no less than 6 months prior to the expiration of the initial term or any renewal term unless earlier terminated as follows:   13.1.1 In the event of material breach, the non-breaching party shall give the breaching party sixty (60) days written notice of such breach. If substantial efforts to cure the breach are not taken within the sixty (60) day notice period, the non-breaching party may, at its sole discretion, terminate the agreement.   13.1.2 In the event a party becomes insolvent or if a party is declared bankrupt or makes an assignment for the benefit of creditors or in the event a receiver is appointed or any proceeding is demanded by, for or against a party under any provision of any bankruptcy law which is not withdrawn within sixty (60) days, the other party to this Agreement shall have the sole right to immediately terminate; or   13.1.3 By either party for any reason by providing six (6) months prior written notice expressly terminating this Agreement. Such notice may be by facsimile transmission or other written communication.   8





13.2 Termination of this Agreement shall not affect the rights or obligations of the parties accrued as of the date of termination. The provisions of Sections 6, 9, 10, 15 will survive termination of the Agreement.   13.3 Upon termination of this Agreement for any reason, ALFA AESAR may i) return its current inventory of Products for reimbursement by NTC or ii) keep its current inventory of Products and continue to sell such Products pursuant to the terms hereof until depletion of inventory. Upon termination of this Agreement, NTC shall promptly refund to ALFA AESAR all outstanding credits accrued on ALFA AESAR's account.   14. Insurance. Each party agrees to maintain and provide the other with evidence of insurance coverage for comprehensive general liability in an amount no less than $2,000,000.00 U.S. dollars.   15. Confidentiality. The parties agree as follows; Confidential Information shall mean trade secret, technical, commercial, or financial information and all other nonpublic proprietary or confidential information. Each party receiving Confidential Information from the other party agrees to maintain in confidence and not divulge such Confidential Information, in whole or in part, to any third party, including subsidiaries or affiliates, licensees or clients anywhere, and not make use of such Confidential Information other than in relation to its performance under this Agreement. This obligation shall not apply to: (i) Confidential Information which at the time of disclosure by the disclosing party is in the public domain; or (ii) Confidential Information which, after disclosure by the disclosing party, becomes part of the public domain by publication or otherwise, other than by an unauthorized act or omission by the receiving party; (iii) Confidential Information which receiving party can show by contemporary written records was in its possession at the time of the disclosure and which was not acquired, directly or indirectly from disclosing party; or (iv) Confidential Information which receiving party rightfully receives from a third party and which was not acquired, directly or indirectly, from the disclosing party; (v) information which is developed independently without reference to the Confidential Information of the other party; or (v) Confidential Information which, if disclosed in written or other tangible form, is not marked Confidential, or if disclosed orally is not summarized in a writing identifying the Confidential Information and submitted to the receiving party within thirty (30) days of the oral disclosure; or (vi) Confidential Information which is compelled by law to be disclosed by the receiving party, provided that the receiving party shall use its best efforts to give the disclosing party ten (10) days prior written notice of any such compelled disclosure. Each party agrees that it shall restrict its disclosures of the disclosing party's Confidential Information within its own organization to those persons having a need to know it for the purposes of performance under this Agreement and that such persons shall be advised of the obligations of confidentiality set forth herein and shall be obligated in like fashion. Upon request on termination or expiration of this Agreement, the receiving party shall promptly return to the disclosing party all Confidential Information and shall retain no copies except that one copy may be retained for purposes of determining such receiving party's compliance with the terms of this paragraph.   16. Disputes and Arbitration. The parties shall first seek to resolve any dispute by negotiations between their senior executives. When a party believes there is a dispute under this Agreement, that party will give the other party written notice of the dispute. Failing settlement of the dispute within 60 days of notice, either party may initiate binding arbitration proceeding; by   9





written notice to the other party, provided however, no dispute arising from any actual or threatened breach of any provisions in Sections 10 or 15 of this Agreement shall be subject to Arbitration. However, any other claims or disputes arising hereunder, including the construction or application of this Agreement, shall be settled by arbitration before a single arbitrator in accordance with the Rules for Commercial Arbitration of the American Arbitration Association (AAA) then in force. The place of arbitration shall be the location of the party hereto against whom the claim is made. If the parties cannot agree on an arbitrator within 10 days after demand by either of them, then the arbitrator shall be selected pursuant to the AAA's Commercial Arbitration rules. The decision of the arbitrator shall be final and binding upon the parties and may be submitted to any court of competent jurisdiction for entry of a judgment thereon in accord with the Federal Arbitration Act or the Uniform Arbitration Act. The expense of the arbitration shall be shared equally by both parties. Each party shall bear its own other costs, i.e. fees and costs of its own lawyers and witnesses.   17. Notices. Any notice required or permitted to be given hereunder shall be deemed to have been duly given if delivered by hand, overnight courier delivery or mailed, certified and registered mail, with postage prepaid to the addresses first set forth above or at such other addresses as either party may designate in writing to the other, and if to ALFA AESAR with a copy to Johnson Matthey, 435 Devon Park, Suite 600. Wayne PA 19087, Attention: Vice President & General Counsel. This section is not intended to govern the day-to-day business communications necessary between the parties in performing their duties, in due course, under the terms of this Agreement.   18. Severability. The provisions of this agreement shall be severable, and if any provision of this Agreement is held to be invalid or unenforceable, it shall be construed to have the broadest interpretation which would render it valid and enforceable. Invalidity or unenforceability of one provision shall not affect any other provision of this Agreement.   19. Entire Agreement. This Agreement contains the entire agreement with respect to the subject matter hereof, and there are no other agreements or understandings, express or implied, written or oral, as to the subject matter hereof. This Agreement may not be amended or altered except by a written instrument signed by both parties, expressly stating that it is intended as an amendment hereto. No purchase order or other written order or acknowledgment issued by either party shall serve to vary the terms and conditions of this Agreement, or otherwise alter the obligations of the parties provided herein.   20. Waiver. The waiver by either party of any breach or failure to enforce any of the terms and conditions of this Agreement at any time shall not in any way affect, limit or waive either party's rights thereafter to enforce and compel strict compliance with every term and condition of this Agreement.   21. Counterparts. This Agreement may be executed in one or more counterpart copies, each of which shall be deemed an original and all of which shall together be deemed to constitute one agreement.   22. Governing Law. This Agreement shall be governed by and interpreted under and in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws.   10





23. Public Announcements. Upon execution and at any time during the term of this Agreement, the parties shall cooperate in preparing a joint press release announcing this Agreement and the availability of NTC Products in Research Quantities through ALFA AESAR, provided that no such joint press release shall be issued without both parties' prior approval.   24. Headings. The headings in this Agreement are for convenience only and do not in any way limit or amplify the terms or conditions of this Agreement.   IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.   NANOPHASE TECHNOLOGIES CORPORATION       JOHNSON MATTHEY CATALOG COMPANY, INC.

By:     /s/ W. Ian Roberts       By:    /s/ Barry Singelais     W. Ian Roberts           Barry Singelais     V.P. U.S. & International Sales           General Manager

Dated: October 14, 2005       Dated: October 24, 2005   11





Schedule A   List of Products to be offered by ALFA AESAR.   Quantities and NTC pricing to ALFA AESAR are included.   All prices are USD, FOB Romeoville IL, net 30.   Product Specification  Nanopowders:   Name



Product Code



Quantity



Price/kg

NanoTek® Aluminum Oxide   0115   [***]  $[***] NanoDur™ Aluminum Oxide   0119   [***]  $[***] NanoTek® Antimony Tin Oxide   2400   [***]  $[***] NanoArc® Bismuth Oxide   EXP 0250   [***]  $[***] NanoArc® Copper Oxide   EXP 0502   [***]  $[***] NanoTek® Indium Tin Oxide   0600   [***]  $[***] NanoArc® Cosmetic Iron Oxide   EXP 0807   [***]  $[***] NanoArc® Magnetic Iron Oxide   EXP 0806   [***]  $[***] NanoTek® Tin Oxide   1400   [***]  $[***] NanoGard® Zinc Oxide   1700   [***]  $[***] NanoTek® Zinc Oxide   1701   [***]  $[***] NanoTek® Zinc Oxide C1   1716   [***]  $[***] NanoTek® Zinc Oxide C2   EXP 1726   [***]  $[***]

Nanoparticle dispersions:             Name



Product Code



Quantity



Price/kg

NanoDur™ X1121W, 50wt%   EXP 0187   [***]  $[***] NanoDur™ X1130PMA, 50wt%   EXP 0151   [***]  $[***] NanoShield® ZN-2000, 50wt%   EXP 1754   [***]  $[***] NanoShield® ZN-3010, 50wt%   EXP 1769   [***]  $[***] NanoTek® Z1102PMA, 50wt%   EXP 1707   [***]  $[***] NanoTek® AL-6081, 23wt%   EXP 0180   [***]  $[***] NanoTek® AL-6051, 23 wt%   EXP 0142   [***]  $[***] NanoTek® CE-6042, 18wt%   0311   [***]  $[***] NanoTek® CE-6080, 20wt%   0315   [***]  $[***] NanoTek® CE-6082, 18wt%   0314   [***]  $[***] NanoTek® CE-6086, 18wt%   EXP 0333   [***]  $[***]

*** CONFIDENTIAL TREATMENT REQUESTED—This confidential portion has been omitted from this document and filed separately with the Commission.   12





Schedule B NANOPHASE TECHNOLOGIES CORPORATION STANDARD TERMS AND CONDITIONS    1. General Terms: As used in these Terms and Conditions, the terms (a) Seller shall mean Nanophase Technologies Corporation and (b) Buyer shall mean the party ordering shipment of Seller's products under the Order. These Terms and Conditions, including the provisions on the face hereof, constitute the exclusive contract between the parties for the products provided by Seller (Order or Agreement). Seller will be deemed to have accepted this Order when Seller returns an acknowledged copy of this Order, or, at Seller's option, when Seller begins substantial performance under this Order. Buyer accepts this Order by acknowledging a copy of this Order, by confirming this Order by its purchase order, purchase requisition or confirmation, or by accepting for shipment the products hereunder. Notwithstanding the manner in which Buyer accepts, Buyer's acceptance is limited exclusively to the acceptance of Seller's terms and conditions set forth in this Order only. Seller hereby rejects any proposal by Buyer for additional or different terms in connection with the products or services provided. Buyer may acknowledge this Order by purchase order, but any and all terms, conditions and provisions contained in said purchase order, acknowledgment form or other communications with respect to the transaction contemplated by this Order, or subsequent to the date hereof, are agreed to be superfluous and without any force and effect. This Order, which includes all terms and conditions hereof, is intended to be the exclusive and final statement of the terms and understandings relative to the subject matter hereof, merging herein and superseding all negotiations and prior written or oral agreements between the parties as to the subject matter of the purchase of the products hereunder. There are no promises, representations or understandings made in connection with this Order or contemporaneous with the execution hereof, except as set forth herein.   2. Prices and Taxes: All prices are set forth on the face of this Order. Seller is entitled to defer shipment of products in the event all amounts due it under this or any other Agreement are not paid in full. All payments shall be made to Seller at its offices. The failure to make prompt payment shall be a material breach of this Agreement. The price of the products specified in this Order does not include federal taxes, state or local sales taxes, value added taxes, use taxes or occupational taxes. Unless prohibited by law, Buyer is responsible for and shall pay all applicable sales, use, occupational, excise, value added or other similar taxes applicable to the manufacture, sale, price, shipment or use of the products provided by Seller.   3. Delivery and Risk of Loss: All sales are FOB Seller's premises in Burr Ridge or Romeoville, Illinois. Seller shall have no liability or responsibility for the late or non-shipment of products hereunder. Title to, risk of loss, destruction of or damage to the products shall be Seller's until delivery of the products to a carrier at the Seller's premises in Burr Ridge, Illinois. Thereafter, Buyer shall be fully responsible for and assume all ownership, risk of loss, destruction of or damage to the products. Loss or damage to the products after title and risk of loss have passed to Seller will not release or excuse Buyer from its obligations under this Order to Seller, including the obligation to make full payment.   4. Short Shipments/Damage Claims: Seller will endeavor to ship all Orders complete or as complete as reasonably possible. Seller will, however, ship incomplete orders upon written authorization by Buyer. In that event, Seller shall have no liability for short, incomplete or delayed orders. All damage claims shall be made within fourteen (14) days of delivery and shall be in writing.   5. Rejection and Revocation of Acceptance: Any rejection or revocation of acceptance by Buyer (a) must be made within thirty (30) days of the products being made available for shipment to Buyer, (b) any attempted rejection or revocation of acceptance made thereafter shall be null and void, and (c) any rejection or revocation of acceptance shall comply with Seller's return protocol.





6. Compliance with Governing Laws: Buyer warrants that its performance hereunder, including the use of the products hereunder, shall comply with all applicable state, federal and foreign law, regulations, environmental regulations, statutes or requirements, including, but not limited to, FDA approvals or any other approvals or certifications required by law   7. Assignment and Modification: The rights and obligations of the parties under this Agreement shall not be assignable unless consent to the assignment is in writing and signed by the parties. This Order shall not be modified, altered or amended in any respect except by a writing signed by the parties. Any variation, modification, or addition to the terms set forth in this Order shall be considered a material modification and shall not be considered part of this Agreement.   8. Limited Warranty and Disclaimer of All Other Warranties: EXCEPT FOR THE EXPRESS WARRANTY, IF ANY, THAT THE PRODUCTS COMPLY WITH THE SPECIFICATIONS IDENTIFIED IN WRITING ON THE FACE OF OR ACCOMPANYING THIS ORDER, SELLER MAKES NO EXPRESS OR IMPLIED WARRANTIES IN THIS ORDER OR OTHERWISE. TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER DISCLAIMS ALL WARRANTIES, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE. SELLER EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY TO BUYER FOR ANY CONSEQUENTIAL DAMAGES, DAMAGES FOR LOSS OF USE, LOSS OF PROFITS, INCOME, OR REVENUE, LOSS OF TIME OR INCONVENIENCE, LOSS OR DAMAGE TO ASSOCIATED EQUIPMENT, COST OF SUBSTITUTED OR REPLACEMENT EQUIPMENT, LOSS TO FACILITIES, LOSS OF CAPITAL, LOSS OF SERVICES OR ANY OTHER INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGE ARISING OUT OF THIS ORDER OR THE OPERATION, FUNCTION OR CHARACTERISTICS OF THE PRODUCTS PURCHASED HEREUNDER OR OTHERWISE PROVIDED BY SELLER. IN THE EVENT THAT PRODUCTS DO NOT SATISFY SPECIFICATIONS, THEY WILL BE REPLACED, AT SELLER'S OPTION, WITH PRODUCTS THAT DO SATISFY THE SPECIFICATIONS AT SELLER'S SOLE EXPENSE. SAID REPLACEMENT IS THE SOLE AND EXCLUSIVE REMEDY OF BUYER.   9. Limitation of Liability: To the fullest extent permitted by law, the parties waive and relinquish any claims, demands, causes of action or recoveries for punitive damages, exemplary damages, or statutory damages. Seller shall not be liable for indirect, special, incidental or consequential damages arising under this Agreement or otherwise with respect to the sale of the products, including any lost revenues or profits, consequential and/or incidental damages, business interruption or damage to business reputation, regardless of the theory upon which any claim may be based, including any statutory causes of action or claims. In no event will Seller's entire liability to Buyer, including any liability in the event the exclusive remedy set forth in this Agreement fails of its essential purpose, exceed the purchase price actually paid by Buyer for the products hereunder, or any defective portion thereof, whichever is the lesser amount.   10. Force Majeure: Seller shall have no liability or obligation to Buyer of any kind, including but not limited to any obligation to ship products, arising from any delay or failure to perform all or any part of this Order as a result of causes, conduct or occurrences beyond Seller's reasonable control, including, but not limited to, commercial impracticability, fire, flood, act of war, civil disorder or disobedience, act of public enemies, terrorist acts, terrorism generally affecting commerce, problems associated with transportation (including car or truck shortages), acts or failure to act of any state, federal or foreign governmental or regulatory authorities, labor disputes or strikes.   11. Relationship: The relationship between Seller and Buyer shall be that of independent contractors. Seller, its agents and employees, shall under no circumstances be deemed the employees, distributors, franchisees, agents or representatives of Buyer.





12. Default: The failure of Buyer to perform any obligations hereunder, including without limitation, the payment of the purchase price for products and all other amounts due hereunder, the failure to materially perform other agreements between Buyer and Seller, or Buyer's bankruptcy or insolvency, shall constitute a default under this Agreement and shall, in addition to any other remedies, afford Seller all of the remedies of a secured party under the Uniform Commercial Code of the State of Illinois. In the event of default, Seller may, in addition to pursuing any of the remedies provided by law, equity or as set forth in this Agreement, refuse to make available for shipment products under this or any other agreement relating to the products, and may also cancel this Order and any pending orders without liability to Buyer. It is expressly understood that Seller's remedies are cumulative to the fullest extent permitted by law.   13. Attorneys' Fees: In the event it becomes necessary for Seller to enforce the terms and conditions of this Order by litigation or otherwise, or to defend itself in any Controversy (as defined herein), litigation, claim, demand or cause of action arising out of or as a result of this Order or the products or services provided hereunder, and if Seller is the substantially prevailing party in said Controversy, litigation, claim, demand or cause of action, then Seller shall be entitled to recover, in addition to any other relief granted or damages assessed, its reasonable attorneys' fees, expert witness fees, costs, and all expenses of litigation.   14. Waiver: No claim or right arising out of a breach of this Order can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party.   15. Severability: If any term, covenant, warranty or condition of this Order, or the application thereof to any person or circumstance shall, to any extent, be held or deemed invalid or unenforceable, the remainder of this Order or the application of such term, covenant or provision, to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each remaining term, covenant or provision of this Order shall be deemed valid and enforced to the fullest extent permitted by law.   16. Indemnification: To the fullest extent permitted by law, Buyer shall defend, indemnify and hold Seller harmless from any and all claims, demands, subrogation claims by Buyer's insurers, causes of action, liabilities, fines, regulatory actions, seizures of product, losses, costs, expenses (including, but not limited to attorneys' fees, expert witness expenses and litigation expenses) (hereinafter Claim), arising from or in connection with any Claim asserted against Seller for any damage, injury, death, loss, property damage, environmental liability, or any other Claim, whether in tort, contract, or otherwise, relating to this Order, the business relationship between the parties or the goods provided hereunder. Notwithstanding the foregoing, Buyer has no indemnity obligation to Seller with respect to any Claims that result solely from the negligence of Seller and this indemnity provision does not purport to indemnify Seller solely for its own negligence, but rather for the negligence or conduct, whether sole or concurrent, of Buyer. Buyer, for itself and its insurers, expressly waives any and all limitations or liability caps, if any, on Buyer's contribution liability to Seller, and any and all statutory or common law lien rights or Claims against Seller arising from any applicable workers compensation or disability acts, which Buyer might or could assert against Seller or Seller's insurers in the event of the personal injury or death of Buyer's employees, representatives or servants. Without limiting the foregoing, Buyer, for itself and its insurers, also waives any liens, claims or other rights it may have as a result of being subrogated to any rights of its employees, representatives or servants.   17. Insurance: Buyer shall obtain comprehensive general liability coverage, including contractual liability coverage, naming Seller as an additional named insured, in amounts sufficient to fully protect Seller under this Agreement from loss, damage or casualty caused by Buyer or incurred by Seller under this Agreement.   18. Governing Law and Forum Selection: This agreement shall be governed by and subject to the internal laws (exclusive of the conflicts of law provisions) and decisions of the courts of the State of Illinois. The parties consent to the exclusive jurisdiction of the federal court in Chicago, Illinois or the state court located in DuPage County, Illinois with respect to all litigation, claims, causes of action, demands, Controversies (as defined





herein) or disputes among the parties. The only exception to this forum selection provision is a claim by Seller seeking the replevin of the products in the event the courts specified in this provision will not or cannot assert jurisdiction. All counterclaims, if any, in connection with the replevin claim, shall be subject to this forum selection provision. 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
Example Output: Each party agrees to maintain and provide the other with evidence of insurance coverage for comprehensive general liability in an amount no less than $2,000,000.00 U.S. dollars.

Example Input: Exhibit 10.1 CONSULTING AGREEMENT This CONSULTING AGREEMENT (Agreement) effective as of this 1st day of March 2020 is hereby entered into between Gunston Consulting, LLC (CONSULTANT), a Virginia limited liability company, and Medalist Diversified REIT, Inc. (REIT or the Company), a Maryland corporation, collectively the Parties. NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the Parties hereby agree as follows: 1. Consulting Services. REIT hereby retains CONSULTANT and CONSULTANT hereby accepts appointment to serve as an independent contractor to the Company. During the term of this Agreement, CONSULTANT shall consult with REIT and provide the services outlined in the attached Statement of Work in a timely and professional manner in accordance with industry standards. CONSULTANT further agrees that it will not assign the responsibilities set forth in the attached Statement of Work to any other CONSULTANT, subcontactor or other individual without the express written agreement of the Company's Chief Executive Officer. 2. No Control by the Company. The Parties agree that CONSULTANT shall use its own judgment as to the time, place, details, and means by which CONSULTANT will accomplish the results of CONSULTANT's services under this Agreement, that CONSULTANT is not required to work set hours of the day or week established by the Company or perform specific services in a sequence determined by the Company, and that nothing contained herein shall be construed to create the relationship of employer and employee between the Company or CONSULTANT; provided, however, that CONSULTANT is expected to provide the services contemplated by this Agreement in a timely and competent manner in order to meet the needs and expectations of the Company. 3. Independent Contractor. The Parties expressly intend and agree that CONSULTANT is acting as an independent contractor and not as an employee of REIT. Under no circumstances shall CONSULTANT look to REIT as its employer, or as a partner, agent, or principal. CONSULTANT has no right or authority to act as an agent of REIT or for or on behalf of the Company in any capacity whatsoever or to assume or create any obligation of any kind - express or implied - on behalf of REIT. 4. Compensation and Reimbursement. CONSULTANT shall be compensated and reimbursed for the services as set forth in the attached Statement of Work. Completeness of work product shall be determined by REIT in its sole discretion, and CONSULTANT agrees to make all revisions, additions, deletions or alterations as requested by the Company. No other fees and/or expenses will be paid to CONSULTANT, unless such fees and/or expenses have been approved in advance by the appropriate Company executive. CONSULTANT shall be solely responsible for any and all taxes, Social Security contributions or payments, disability insurance, unemployment taxes, and other payroll-type taxes applicable to such compensation.

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5. Confidentiality. 5.1 Acknowledgment of Proprietary Interest. REIT now owns and will hereafter develop, compile, and own certain Proprietary Information, including proprietary techniques, trade secrets, and confidential information, which have great value in its business. As used herein, the term Proprietary Information includes any and all of REIT's confidential or proprietary information, including without limitation, the existence of, and the terms of, this Agreement, any and all confidential information of REIT encompassed in any and all reports, designs, devices, diagrams, software codes, test results, processes, research products and product development, technical memoranda and correspondence, work in progress, plans, proposals, marketing and sales information and data, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products, or properties of REIT or REIT's tenants, suppliers, employees or contractors, which has not previously been released to the public at large by duly authorized representatives of REIT, whether or not such information would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, and any Work Product, as defined in Section 6 of this Agreement, developed or created by the CONSULTANT. CONSULTANT acknowledges and agrees that any and all Proprietary Information of REIT is the property of REIT. 5.2 Covenant Not to Divulge Proprietary Information. CONSULTANT acknowledges and agrees that REIT is entitled to prevent the disclosure of Proprietary Information of REIT. CONSULTANT agrees that at all times during or subsequent to the performance of the consulting services under this Agreement, CONSULTANT will keep confidential and will not divulge, communicate, or use Proprietary Information, except for CONSULTANT's own use during the Term of this Agreement to the extent necessary to perform the consulting services. CONSULTANT further agrees not to cause the transmission, removal or transport of tangible embodiments of, or electronic files containing, Proprietary Information from REIT's principal place of business, without prior approval of the Company. CONSULTANT shall disseminate Proprietary Information only to those employees of CONSULTANT with a special need to know such Proprietary Information. CONSULTANT warrants that such employees shall be informed of the proprietary nature of the Proprietary Information and shall be bound by this Agreement in the same manner that CONSULTANT is bound. 5.3 No Licenses. No rights or licenses in or to the Proprietary Information of REIT are granted to CONSULTANT by virtue of this Agreement. 6. Intellectual Property, Inventions and Patents. CONSULTANT acknowledges that CONSULTANT's rights in all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company's actual or anticipated business, research and development or existing or future products or services and which were or are conceived, developed, contributed to or made or reduced to practice by CONSULTANT (whether alone or jointly with others) while under contract with the Company, whether before or after the date of this Agreement (Work Product), belong to the Company. CONSULTANT shall promptly disclose such Work Product to the Chief Executive Officer of the Company and, at the Company's expense, perform all actions reasonably requested by the Chief Executive Officer of the Company (whether during or after the consultancy) to establish and confirm such ownership (including assignments, consents, powers of attorney and other instruments). CONSULTANT acknowledges that all copyrightable Work Product which is capable of being classified as works made for hire under the U.S. Copyright Act of 1976, as amended, shall be deemed works made for hire and that the Company shall be the author of, and own all rights therein. To the extent that any such copyrightable work is not a work made for hire, CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work. Furthermore, CONSULTANT agrees to sign any written instrument of transfer for any rights relating to the Work Product which may be required to effect or evidence the assignment of rights in the Work Product to the Company. The foregoing provisions of this Section 6 shall not apply to any invention that CONSULTANT developed entirely on CONSULTANT's own time without using the Company's equipment, supplies, facilities or trade secret information, except for those inventions that (i) relate to the Company's business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by CONSULTANT for the Company.

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7. Restrictive Covenants. 7.1 Solicitation of Employees. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not, for itself or any other person or entity: (a) solicit, induce, recruit or encourage any of the Company's employees, contractors, independent contractors or any person who provides services to the Company to terminate or reduce their employment or other relationship with the Company; (b) hire any individual who is (or was within the six (6) months immediately preceding such hiring, unless such employee was terminated from such employment by Company) an employee, exclusive contractor, or exclusive independent contractor of the Company; or (c) attempt to do any of the foregoing. 7.2 Solicitation of Customers. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) solicit, entice or induce any Customer for the purpose of providing, or provide, products or services that are competitive with the products or services provided by the Company, or (b) solicit, entice, or induce any Customer to terminate or reduce its business with (or refrain from increasing its business with) the Company. As used in this Section 7.2, Customer means any person or entity to which the Company provided products or services, including any tenants of the Company's properties, (or was invested in real estate owned by the Company), and with which CONSULTANT had contact on behalf of the Company, within the last twelve (12) months of its consultancy with the Company.

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7.3 Noncompetition. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) have any ownership interest in, or participate in the financing, operation, management or control of, any Competitor; or (b) engage in or perform services for any Competitor, if such services either (1) are the same as or similar to (individually or in the aggregate) the services CONSULTANT performed for the Company during its consultancy with the Company, or (2) are performed with respect to products or services of the Competitor that are competitive with the products or services provided by the Company with which CONSULTANT was involved during its consultancy with the Company or about which it received Proprietary Information during its consultancy with the Company. As used in this section, Competitor means: (i) any private or publicly traded real estate investment trust, fund or other investment vehicle or program whose principal place of business is in Virginia or any other state in which the Company owns real estate and whose business strategy is based on investing in, acquiring or developing flex/industrial, retail, multifamily and limited service hotel real estate, whether directly or indirectly through joint ventures, or (ii) any entity whose principal place of business is in Virginia or any other state in which the Company owns real estate and that advises (including any external advisor) such investment vehicles or programs. It is agreed that ownership of no more than 1% of the outstanding voting stock of a publicly traded corporation will not constitute a violation of Section 7.3. 7.4 Non-Disparagement. CONSULTANT acknowledges that any disparaging comments by him against the Company are likely to substantially depreciate the business reputation of the Company. CONSULTANT agrees to act in good faith so as to not harm the business reputation of the Company in any way. CONSULTANT further agrees that it will not directly or indirectly defame, disparage, or publicly criticize the services, business, integrity, veracity or reputation of the Company or its owners, officers, directors, or employees in any forum or through any medium of communication. Nothing in this Agreement will preclude CONSULTANT from supplying truthful information to any governmental authority or in response to any lawful subpoena or other legal process. 8. Termination. This Agreement shall terminate immediately upon the occurrence of any of the following events: (a) upon the death or bankruptcy of CONSULTANT; or (b) upon the close of business on the date the Company gives CONSULTANT written notice of Termination for Cause (as defined below); (c) ninety (90) days following the date the Company gives CONSULTANT written notice of termination for any or no reason; or (d) CONSULTANT may terminate this Agreement by giving ninety (90) days' written notice to REIT.

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For purposes of this Agreement, Termination for Cause shall mean termination of this Agreement by the Company as the result of: (i) any act of fraud, dishonesty or neglect of services by CONSULTANT in connection with the services to be provided under this Agreement or against any Company customer, vendor or affiliated company; or (ii) the breach or prospective breach of any provision of this Agreement by CONSULTANT. 8.1 Return of Materials at Termination. In the event of any termination of CONSULTANT's appointment, with or without cause, CONSULTANT shall promptly deliver to REIT any and all materials, property, documents, data, and all other information belonging to REIT or pertaining to Proprietary Information, whether prepared by REIT or CONSULTANT, in CONSULTANT's possession or control, and regardless of how stored or maintained, including all originals, copies, and compilations, and all information stored or maintained on computer, PDAs, electronic or other devices, tapes, discs, or any other form of technology. CONSULTANT shall not take any materials, property, documents, or other information, or any reproduction or excerpt thereof, belonging to REIT or pertaining to any Proprietary Information. 8.2 Obligations Surviving Termination. The obligations of Sections 3, 5, 6 and 7 shall survive any termination of this Agreement. 8.3 Change of Control. In the event of a 'Change of Control' of Company, then if CONSULTANT's services are terminated without cause at any time within a twelve (12) month period following such Change of Control, CONSULTANT shall receive a termination fee equal to twelve (12) months compensation hereunder at the then current monthly rate, including any stock compensation. A Change of Control shall be any purchase of equity in the Company by a party that results in the party acquiring (i) voting control of the Company or (ii) the authority to replace or appoint, a majority of the Board, or the CEO or COO or CFO of the Company. 9. General Provisions. 9.1 Entire Agreement. This Agreement constitutes the entire and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes any prior or contemporaneous agreements, representations, and understandings of the Parties regarding their consulting relationship. 9.2 Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 9.3 Representations and Warranties. CONSULTANT represents and warrants to Company that (a) CONSULTANT has full power and authority to enter into this Agreement including all rights necessary to make the foregoing assignments to Company; that in performing under the Agreement; (b) CONSULTANT will not violate the terms of any agreement with any third party; and (c) the Services and any work product thereof are the original work of CONSULTANT, and to CONSULTANT's knowledge (i) do not and (ii) will not (unless noted to Company otherwise by CONSULTANT) infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract, or any other publicity right, privacy right, or proprietary right of any third party. For clarity, while CONSULTANT may create original ideas that are Work Product herein, CONSULTANT cannot, and does not warrant that those ideas can be exploited by Company with out infringing the rights of other parties.

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9.4 Successors and Assigns. The rights and obligations of REIT under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of REIT. CONSULTANT shall not be entitled to assign any of CONSULTANT's rights or obligations under this Agreement. 9.5 Taxes, Fees and Benefits. Because this Agreement creates an independent contractor relationship, the parties understand that the Company has no obligation to withhold any state or federal income taxes, social security, or other taxes from payments to CONSULTANT, nor shall it make any workers' compensation or unemployment benefit payments, contributions or payroll tax payments on behalf of CONSULTANT. CONSULTANT agrees that it shall not be eligible for or entitled to participate in any PTO, benefit plans, retirement and insurance coverage provided by the Company or its subsidiary and affiliated entities to their respective employees. CONSULTANT also acknowledges and agrees that the Company will issue a Form 1099 for all compensation paid to CONSULTANT, and it is CONSULTANT's obligation to report and pay all federal, state and local income, payroll, self-employment and other taxes due for her on all compensation from the Company as may be required by law. CONSULTANT agrees to indemnify REIT for any claims, losses, costs, fees, liabilities, damages, or injuries suffered by REIT arising out of CONSULTANT's breach of this section. 9.6 Governing Law; Jurisdiction. This Agreement shall be interpreted, construed, governed, and enforced according to the laws of the Commonwealth of Virginia, without giving effect to its conflict of laws principles. The Parties hereby agree and consent that any and all causes of action arising under this Agreement shall only have jurisdiction and venue in the United States District Court for the Eastern District of Virginia and/or the Circuit Court for Chesterfield County. Each of the parties consents to the jurisdiction and venue of either court for the resolution of all causes of action arising under this Agreement upon proper service of process. 9.7 Indemnity. (a) Indemnity by the Company. The Company hereby agrees to indemnify and hold harmless Consultant against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Company may otherwise have, arising out of, related to or based upon (i) any violation of law, rule or regulation by the Company or the Company's agents, employees, representatives or affiliates or (ii) any third party action or claim against the Company in which Consultant is alleged to be additionally liable. In this regard CONSULTANT shall be an additional insured under Company's applicable insurance coverages. Company shall provide CONSULTANT evidence of all such coverage.

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(b) Indemnity by Consultant. Consultant hereby agrees to indemnify and hold harmless the Company and each person and affiliate associated with the Company against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Consultant may otherwise have, arising out of, related to or based upon: (i) Any breach by Consultant of any representation, warranty or covenant contained in or made pursuant to this Agreement; or (ii) Any violation of law, rule or regulation by Consultant or Consultant's agents, employees, representatives or affiliates. (c) Actions Relating to Indemnity. If any action or claim shall be brought or asserted against a party entitled to indemnification under this Agreement (the Indemnified Party) or any person controlling such party and in respect of which indemnity may be sought from the party obligated to indemnify the Indemnified Party pursuant to this Section 9.7 (the Indemnifying Party), the Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of legal counsel and the payment of all expenses related to the claim against the Indemnified Party or such other controlling party. If the Indemnifying Party fails to assume the defense of such claims, the Indemnified Party or any such controlling party shall have the right to employ a single legal counsel, reasonably acceptable to the Indemnifying Party, in any such action and participate in the defense thereof and to be indemnified for the reasonable legal fees and expenses of the Indemnified Party's own legal counsel. (d) This Section shall survive any termination of this Agreement for a period of three (3) years from the date of termination of this Agreement. Notwithstanding anything herein to the contrary, no Indemnifying Party will be responsible for any indemnification obligation for the gross negligence or willful misconduct of the Indemnified Party. 9.8 Modification. This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the Parties to this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the effective date set forth above. Gunston Consulting, LLC REIT: By: /s/ Brent Winn By: /s/ Thomas E. Messier NAME: Brent Winn NAME: Thomas E. Messier Its: Authorized Signatory Title: Chief Executive Officer

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STATEMENT OF WORK Nature of Services: CONSULTANT shall have the duties, authorities and responsibilities as are required by CONSULTANT's position commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as may reasonably be assigned to CONSULTANT as the Chief Executive Officer or the Board of Directors of the REIT (the Board of Directors or the Board) shall designate from time to time that are not inconsistent with CONSULTANT's position and that are consistent with the bylaws of the REIT and/or the limited partnership agreement of the REIT's operating partnership, Medalist Diversified Holdings, L.P., each as may be amended from time to time, including, but not limited to, managing the affairs of the Company. Term: twelve (12) months from the date of the Agreement which term shall automatically renew for an additional twelve (12) months on such date if the Agreement is not otherwise terminated according to Section 8 of the Agreement. Compensation: REIT agrees to pay CONSULTANT the following consulting fees, for services performed by CONSULTANT: 1. $200,000 annual fee payable in 12 equal monthly installments or 24 equal semi-monthly installments, at CONSULTANT's election. 2. Annual stock grants as awarded by the Compensation Committee of the Company's Board of Directors. 3. Except for limited authorized expenditures expressly agreed to and authorized by REIT, such as pre-approved, reasonable travel expenses, CONSULTANT shall be responsible for paying all expenses incurred by him/her in the performance of this Agreement. It is expressly understood that the Company will not wholly or partially reimburse non-authorized expenses. Moreover, invoices for approved expenses must be itemized and substantiated by appropriate receipts prior to payment.

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Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
Example Output:
In this regard CONSULTANT shall be an additional insured under Company's applicable insurance coverages