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.

Q: EXHIBIT 4                                 AFFILIATE AGREEMENT                               -------------------

Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida  32216

Attention:  Patrick C. Kelly             David A. Smith

Gentlemen:

     The undersigned is a shareholder of Gulf South Medical Supply, Inc. (GSMS), a corporation organized and existing under the laws of the State of Delaware, and will become a shareholder of Physician Sales & Service, Inc. (PSS), a corporation organized and existing under the laws of the State of Florida, pursuant to the transactions described in the Agreement and Plan of Merger, dated as of December 14, 1997 (the Agreement), by and among PSS, PSS Merger Corp. (Merger Corp.) and GSMS.  Under the terms of the Agreement, Merger Corp. will be merged into and with GSMS (the Merger), and the shares of the $.01 par value common stock of GSMS (GSMS Common Stock) will be converted into and exchanged for shares of the $.01 par value common stock of PSS (PSS Common Stock).  This Affiliate Agreement represents an agreement between the undersigned and PSS regarding certain rights and obligations of the undersigned in connection with the shares of PSS to be received by the undersigned as a result of the Merger.

     In consideration of the Merger and the mutual covenants contained herein, the undersigned and PSS hereby agree as follows:

     1.  Affiliate Status.  The undersigned understands and agrees that as to          ----------------                                                     GSMS he is an affiliate under Rule 145(c) as defined in Rule 405 of the Rules and Regulations of the Securities and Exchange Commission (SEC) under the Securities Act of 1933, as amended (1933 Act), and the undersigned anticipates that he will be such an affiliate at the time of the Merger.

     2.  Initial Restriction on Disposition.  The undersigned agrees that he          ----------------------------------                                  will not sell, transfer, or otherwise dispose of his interests in, or reduce his risk relative to, any of the shares of PSS Common Stock into which his shares of GSMS Common Stock are converted upon consummation of the Merger until such time as PSS notifies the undersigned that the requirements of SEC Accounting Series Release Nos. 130 and 135 (ASR 130 and 135) have been met. The undersigned understands that ASR 130 and 135 relate to publication of financial results of post-Merger combined operations of PSS and GSMS. PSS agrees that it will publish such results as promptly as practicable following the Merger in the sole discretion of PSS, but in any event within 45 days after the end of the first fiscal quarter of PSS containing the required period of post-Merger combined operations and that it will notify the undersigned promptly following such publication.

     3.  Covenants and Warranties of Undersigned.  The undersigned represents,          ---------------------------------------                               warrants and agrees that:

     (a) The PSS Common Stock received by the undersigned as a result of the    Merger will be taken for his own account and not for others, directly or    indirectly, in whole or in part.

     (b) PSS has informed the undersigned that any distribution by the    undersigned of PSS Common Stock has not been registered under the 1933 Act    and that shares of PSS Common Stock received pursuant to the Merger can only    be sold by the undersigned (1) following registration under the 1933 Act, or    (2) in conformity with the volume and other requirements of Rule 145(d)    promulgated by the SEC as the same now exist or may hereafter be amended, or    (3) to the extent some other exemption from registration under the 1933 Act    might be available.  The undersigned understands that PSS is under no                         ------------------------------------------------    obligation to file a registration statement with the SEC covering the    ---------------------------------------------------------------------    disposition of the undersigned's shares of PSS Common    -----------------------------------------------------

     Stock or to take any other action necessary to make compliance with an    ----------------------------------------------------------------------    exemption from such registration available.    ------------------------------------------

     (c) During the 30 days immediately preceding the Effective Time of the    Merger, the undersigned has not sold, transfered, or otherwise disposed of    his interests in, or reduced his risk relative to, any of the shares of GSMS    Common Stock beneficially owned by the undersigned as of the record date for    determination of shareholders entitled to vote at the Shareholders' Meeting    of GSMS held to approve the Merger.

     (d) The undersigned is aware that PSS intends to treat the Merger as a tax-    free reorganization under Section 368 of the Internal Revenue Code (Code)





   for federal income tax purposes.  The undersigned agrees to treat the    transaction in the same manner as PSS for federal income tax purposes.  The    undersigned acknowledges that Section 1.368-1(b) of the Income Tax    Regulations requires continuity of interest in order for the Merger to be    treated as tax-free under Section 368 of the Code. This requirement is    satisfied if, taking into account those GSMS shareholders who receive cash in    exchange for their stock, who receive cash in lieu of fractional shares, or    who dissent from the Merger, there is no plan or intention on the part of the    GSMS shareholders to sell or otherwise dispose of the PSS Common Stock to be    received in the Merger that will reduce such shareholders' ownership to a    number of shares having, in the aggregate, a value at the time of the Merger    of less than 50% of the total fair market value of the GSMS Common Stock    outstanding immediately prior to the Merger. The undersigned has no    prearrangement, plan or intention to sell or otherwise dispose of an amount    of his PSS Common Stock to be received in the Merger which would cause the    foregoing requirement not to be satisfied.

     4.  Restrictions on Transfer.  The undersigned understands and agrees that          ------------------------                                               stop transfer instructions with respect to the shares of PSS Common Stock received by the undersigned pursuant to the Merger will be given to PSS's transfer agent and that there will be placed on the certificates for such shares, or shares issued in substitution thereof, a legend stating in substance:

   The shares represented by this certificate were issued pursuant to a    business combination which is accounted for as a pooling of interests and    may not be sold, nor may the owner thereof reduce his risks relative thereto    in any way, until such time as PSS, Inc. (PSS) has published the financial    results covering at least 30 days of combined operations after the effective    date of the merger through which the business combination was effected.  In    addition, the shares represented by this certificate may not be sold,    transferred or otherwise disposed of except or unless (1) covered by an    effective registration statement under the Securities Act of 1933, as    amended, (2) in accordance with (i) Rule 145(d) (in the case of shares issued    to an individual who is not an affiliate of PSS) or (ii) Rule 144 (in the                            ---                                                  case of shares issued to an individual who is an affiliate of PSS) of the    Rules and Regulations of such Act, or (3) in accordance with a legal opinion    satisfactory to counsel for PSS that such sale or transfer is otherwise    exempt from the registration requirements of such Act.

Such legend will also be placed on any certificate representing PSS securities issued subsequent to the original issuance of the PSS Common Stock pursuant to the Merger as a result of any transfer of such shares or any stock dividend, stock split, or other recapitalization as long as the PSS Common Stock issued to the undersigned pursuant to the Merger has not been transferred in such manner to justify the removal of the legend therefrom.  Upon the request of the undersigned, PSS shall cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable after the requirements of ASR 130 and 135 have been met.  In addition, if the provisions of Rules 144 and 145 are amended to eliminate restrictions applicable to the PSS Common Stock received by the undersigned pursuant to the Merger, or at the expiration of the restrictive period set forth in Rule 145(d), PSS, upon the request of the undersigned, will cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to the restrictions set forth in Rules 144 and 145(d) upon receipt by PSS of an opinion of its counsel to the effect that such legend may be removed.

                                     - 2 -

       5.  Understanding of Restrictions on Dispositions.  The undersigned has          ---------------------------------------------                       carefully read the Agreement and this Affiliate Agreement and discussed their requirements and impact upon his ability to sell, transfer, or otherwise dispose of the shares of PSS Common Stock received by the undersigned, to the extent he believes necessary, with his counsel or counsel for GSMS.

     6.  Filing of Reports by PSS.  PSS agrees, for a period of three years          ------------------------                                           after the effective date of the Merger, to file on a timely basis all reports required to be filed by it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, so that the public information provisions of Rule 145(d) promulgated by the SEC as the same are presently in effect will be available to the undersigned in the event the undersigned desires to transfer any shares of PSS Common Stock issued to the undersigned pursuant to the Merger.

     7.  Transfer Under Rule 145(d).  If the undersigned desires to sell or          --------------------------                                         otherwise transfer the shares of PSS Common Stock received by him in connection with the Merger at any time during the restrictive period set forth in Rule 145(d), the undersigned will provide the necessary representation letter to the transfer agent for PSS Common Stock together with such additional information as the transfer agent may reasonably request.  If PSS's counsel concludes that such proposed sale or transfer complies with the requirements of Rule 145(d), PSS shall cause such counsel to provide such opinions as may be necessary to PSS's Transfer Agent so that the undersigned may complete the proposed sale or transfer.

     8.  Acknowledgments.  The undersigned recognizes and agrees that the          ---------------                                                  foregoing provisions also apply to all shares of the capital stock of GSMS and PSS that are deemed to be beneficially owned by the undersigned pursuant to applicable federal securities laws, which the undersigned agrees may include,





without limitation, shares owned or held in the name of (i) the undersigned's spouse, (ii) any relative of the undersigned or of the undersigned's spouse who has the same home as the undersigned, (iii) any trust or estate in which the undersigned, the undersigned's spouse, and any such relative collectively own at least a 10% beneficial interest or of which any of the foregoing serves as trustee, executor, or in any similar capacity, and (iv) any corporation or other organization in which the undersigned, the undersigned's spouse and any such relative collectively own at least 10% of any class of equity securities or of the equity interest.  The undersigned further recognizes that, in the event that the undersigned is a director or officer of PSS or becomes a director or officer of PSS upon consummation of the Merger, among other things, any sale of PSS Common Stock by the undersigned within a period of less than six months following the effective time of the Merger may subject the undersigned to liability pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended.

     9.  Miscellaneous.  This Affiliate Agreement is the complete agreement          -------------                                                      between PSS and the undersigned concerning the subject matter hereof.  Any notice required to be sent to any party hereunder shall be sent by registered or certified mail, return receipt requested, using the addresses set forth herein or such other address as shall be furnished in writing by the parties.  This Affiliate Agreement shall be governed by the laws of the State of Delaware.

                                     - 3 -

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ William W. McInnes                                ___________________________                               Signature

                              William W. McInnes                                  ___________________________                               Print Name                                                              116 30th Avenue S                               ____________________________                                 Nashville, TN 37212                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Edward Shulman                                ___________________________                               Signature

                              Edward Shulman                                 ___________________________                               Print Name                                                              5909 Dalecross CT                               ____________________________                                 Glen Allen, VA 23060                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]





                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Donna C.E. Williamson                               ___________________________                               Signature

                              Donna C.E. Williamson                               ___________________________                               Print Name                                                                                             ____________________________                                                                ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               - 4 -

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ David L. Bogetz                               ___________________________                               Signature

                              David L. Bogetz                                 ___________________________                               Print Name                                                                                             ____________________________                                                                ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:





                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Melvin L. Hecktman                                ___________________________                               Signature

                              Melvin L. Hecktman                               ___________________________                               Print Name                                                              530 Waters Edge Ct                               ____________________________                                 Northbrook, IL 60062                               ____________________________                               Address

                              [add below the signatures of all registered owners                               of shares deemed beneficially owned by the                               affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Thomas G. Hixon                               ___________________________                               Signature

                              Thomas G. Hixon                                 ___________________________                               Print Name                                                              165 Butler Drive                               ____________________________                                 Ridgeland, MS 39154                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________





                              Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Steve Richardson                                ___________________________                               Signature

                              Steve Richardson                                ___________________________                               Print Name                                                              194 Sunsan Road                               ____________________________                                 Madison, MS 39116                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Guy W. Edwards                                ___________________________                               Signature

                              Guy W. Edwards                                  ___________________________                               Print Name                                                              567 Arbor Drive                               ____________________________                                 Madison, MS 39110                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:





                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Stanton Keith Pritchard                                ___________________________                               Signature

                              Stanton Keith Pritchard                               ___________________________                               Print Name                                                              #3 Abbey Nord                               ____________________________                                 Jackson, MS 39216                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:

AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4-

       This Affiliate Agreement is executed as of the 14th day of December, 1997.

                              Very truly yours,

                              /s/ Louie Vaughan                               ___________________________                               Signature

                              Louie Vaughan                                  ___________________________                               Print Name                                                              318 Woodrun Drive                               ____________________________                                 Ridgeland, MS 39157                               ____________________________                               Address

                              [add below the signatures of all registered                                owners of shares deemed beneficially owned                               by the affiliate]

                              ___________________________                               Name:

                              ___________________________                               Name:

                              ___________________________                               Name:





AGREED TO AND ACCEPTED as of December 14, 1997

PHYSICIAN SALES & SERVICE, INC.

     /s/ David A. Smith BY:_________________________

                               -4- 
Question: Highlight the parts (if any) of this contract related to Governing Law that should be reviewed by a lawyer. Details: Which state/country's law governs the interpretation of the contract?

A: This Affiliate Agreement shall be governed by the laws of the State of Delaware.
****
Q: Exhibit 10.18

MASTER SUPPLY AGREEMENT

MASTER SUPPLY AGREEMENT (the Agreement) dated November 1, 2019 (the Effective Date) between REYNOLDS CONSUMER PRODUCTS LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 (Seller), and PACTIV LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 (Buyer). Seller and Buyer are referred to individually at times as a Party and collectively at times as the Parties.

BACKGROUND

A. Seller sells various types of products used in the consumer and food service markets.

B. Buyer sells various types of products, including certain products of the type made by Seller, to its customers.

C. The Parties are entering into this Agreement to establish the terms and conditions under which Seller may agree to sell specific products to Buyer, and Buyer may agree to purchase specific products from Seller for later resale by Buyer to its business customers.

AGREEMENT

1. Term. The Term of this Agreement will commence on the Effective Date and will end on the earlier of: (a) the first anniversary of the expiration date of the last Purchase Schedule (as defined in this next Section); (b) a termination date elected by a Party in a written notice delivered to the other Party any time after the expiration of the last Purchase Schedule; or (c) a termination date elected by a Party in a written notice delivered to the other Party as provided in Subsection 11(d) of this Agreement. The rights and obligations of the Parties under this Agreement will survive the expiration or earlier termination of this Agreement with respect to any (i) products purchased and sold under this Agreement during the Term and products sold after the Term for orders accepted during the Term; (ii) Confidential Information (as defined in Section 10 of this Agreement) disclosed or received by a Party during the Term; (iii) breach of this Agreement by a Party; (iv) any other statement, decision, act or omission of a Party concerning or related to this Agreement; (v) any Dispute (as defined in Section 11 of this Agreement) between the Parties concerning or related to this Agreement; (vi) products and other materials manufactured or maintained by Seller in inventory for sale to Buyer that Buyer is obligated to purchase under a Purchase Schedule; and (vii) any provision that expressly states that it will survive the expiration or earlier termination of this Agreement.

2. Scope. This Agreement will apply to all products sold by Seller to Buyer, and all products purchased by Buyer from Seller, during the Term unless the Parties expressly agree that this Agreement will not apply to a particular type of transaction in a separate written document signed by an officer of each Party. This Agreement will not require Seller to sell any type or quantity of a product to Buyer, nor will this Agreement required Buyer to purchase any type or quantity of a product from Seller, except as expressly provided by the Parties in a Purchase Schedule. The phrase Purchase Schedule will mean a written supplement to this Agreement signed by an officer of each Party which references this Agreement and which identities, among other terms and conditions, the specific types and quantities of products that will be purchased and sold by the Parties on terms and conditions in the schedule, the specifications for the identified products, the duration of the commitment period during which the Parties will be obligated to purchase and sell the identified products on the terms and conditions in the schedule, the prices of the identified products, any mechanisms for adjusting the prices of the identified products over the commitment period, and the facilities at which the identified products will be manufactured, stored and delivered by Seller. The Parties may add terms and conditions to, and amend the terms and conditions of, this Agreement in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and modifying this Agreement will only apply the specific products identified in that Purchase Schedule for its duration.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





3. Standard Operating Procedures. Over approximately the past eight years, the Parties have been supplying select Products to one another for use in the operation of their respective businesses within the United States of America, Canada and Mexico. The Parties developed and been following certain standard operating procedures in connecting with, among other topics, forecasting, production planning, ordering, delivering and resolving claims on the Products supplied to one another (the Current SOPs). The Parties will be updating their respective business systems over the next six months, and the updates to these business systems will require the Parties to modify the Current SOPs. Once the Parties have completed the updates to the business systems and agreed on the necessary modifications to the Current SOPs, the Parties will sign a written amendment to this Agreement appending the updated standard operating procedures (the Updated SOPs). Until the Parties have signed a written amendment appending the Updated SOPs, the parties will continue to follow the Current SOPs. The Parties will comply with the applicable SOPs in connection with the purchase and sale of products identified in a Purchase Schedule. The Parties may add terms and conditions to, and amend the terms and conditions of, the SOP in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and modifying the SOP will only apply the specific products identified in that Purchase Schedule for its duration.

4. Order and Priority of Interpretation. In the event of any conflict, inconsistency or ambiguity between two or more provisions in this Agreement, including the provisions in its Exhibits and Purchase Schedules, the provisions in the documents will govern, supersede and control over one another in the following order of priority: (1st) a Purchase Schedule with regards to the purchase and sale of the specific products identified in that Purchase Schedule for its duration; (2nd) the SOP; (3rd) any Exhibit to this Agreement but only with regards to specific subject matter of the Exhibit; and (4t h) the main body of this Agreement prior to the signature page.

5. General Representations, Warranties and Covenants. A Party represents, warrant and covenants on the Effective Date and at all times during the Term that: a. The Party is formed, registered, licensed and operating its business in compliance with the laws of the United States of America, its states and territories, and any districts, municipalities and other political subdivisions of the foregoing (Applicable Laws). b. The Party is operating its business in compliance with a commercially reasonable code of ethics adopted by such Party. c. The Party may enter into and perform its obligations under this Agreement without being in conflict with, or in breach of, any other agreement of the Party. d. The Party is solvent, is capable of paying its debts as and when they become due and is paying its debts as and when due. e. The Party is not the subject of a criminal investigation nor a defendant in any criminal indictment, petition, complaint or proceeding that carries a potential sentence involving incarceration in excess of one year for any director or executive officer of the Party involved in the alleged criminal misconduct or a fine in excess of $100,000 USD.

A Party will promptly notify the other Party of any change in circumstance during the Term in which the Party is no longer in compliance with the foregoing general representations, warranties and covenants. An incident of actual, alleged or suspected non-compliance by a Party with a warranty under this Section being investigated, contested or corrected in good faith by the Party and which, regardless of outcome, will have no material adverse effect on the Party or its performance under this Agreement or on the other Party, will not be considered a breach of this clause. An incident of actual, alleged or suspected non-compliance by a Party of this Section or any other Section of this Agreement will be grounds for the other Party to demand adequate assurances of performance as provided by Section 2-609 of the Illinois Uniform Commercial Code. A Party will have ten (10) days to provide adequate assurances of performance to the other Party in a form acceptable to the other Party in its good faith discretion.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





6. Specific Product Warranties. Seller represents and warrants to Buyer that each product sold under this Agreement will at the time of delivery to Buyer: a. Be in new, undamaged and unadulterated condition free of any defects in design, materials and manufacture. Seller is not making any representation or warranty under this clause with regards to the design of a product to the extent the design constitutes, incorporates or otherwise embodies intellectual property that Buyer has represented and warranted to Seller is owned by Buyer and which Buyer has licensed to Seller to manufacture the product for Buyer. b. Have been manufactured and stored by Seller at a plant (and, if applicable under a Purchase Schedule, a warehouse) of Seller approved in the applicable Purchase Schedule prior to its delivery to Buyer. c. Has been manufactured, packaged, labelled, sold and delivered by Seller, and may be sold by Buyer in interstate commerce, in compliance with Applicable Laws, including without limitation with food safety regulations issued by the United States Food and Drug Administration that are applicable to the product. Seller will not be in breach of this warranty because an Applicable Law prohibits, restricts or imposes a charge on a product in a district, municipality or other political subdivision of the United States of America or its states or territories. d. Comply with the written specifications for the product identified in the applicable Purchase Schedule. e. Be fit for the purpose of packaging, selling or use in consuming food subject to qualifications and instructions on the use of the product in the written specifications for the product identified in the applicable Purchase Schedule. f. Be conveyed by Seller to Buyer with good and marketable title free and clear of all liens, encumbrances and claims arising by, through or under Seller. g. Not infringe on any patent, trademark, copyright, trade secret or other the intellectual property of any third-party registered or otherwise recognized and enforceable under Applicable Law. Seller is not making any representation or warranty under this clause with regards to the design of a product to the extent the design constitutes, incorporates or otherwise embodies intellectual property that Buyer has represented and warranted to Seller is owned by Buyer and which Buyer has licensed to Seller to manufacture the product for Buyer. h. Comply with any additional representations and warranties of Seller regarding the product in the applicable Purchase Schedule.

If a Buyer receives a product that fails to conform to these representations and warranties, the sole remedies of Buyer for the breach of warranty will be to: (1) reject and return the non-conforming product to Seller for a refund or credit, or a replacement conforming product, in the manner and time period provided in the SOP; (2) obtain reimbursement from Seller for actual, reasonable, substantiated out-of-pocket expenses incurred by Buyer in the recovery, return or disposal of a non-conforming product that is the subject of a mandatory product recall required under Applicable Laws or a voluntary withdrawal declared by Seller or approved by Seller (such approval not to be unreasonably withheld, conditioned or delayed); and (3) obtain indemnification from Seller for any Indemnified Claim arising from or related to the non-conforming product as provided in Section 7.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





7. Indemnification. a. A claim that a Party (referred to at times in this Section as an Indemnifying Party) is required to defend and indemnify the other Party (referred to at times in this Section as an Indemnified Party) under this Agreement is referred to at times in this Section as an Indemnified Claim. Defense and indemnification under this Section will include, without limitation, (1) paying or reimbursing the actual, reasonable, substantiated out-of-pocket expenses incurred in connection with the investigation, defense and settlement of any civil, criminal or administrative action, suit, arbitration, mediation, hearing, audit, investigation or other proceeding threatened or commenced against an Indemnified Party on an Indemnified Claim (e.g., fees and expenses of attorneys, accountants, auditors, investigators, consulting experts, testifying experts and other consultants; fees and expenses of an arbitrator or mediator; filing fees and costs imposed by any court, administrative agency or other tribunal; etc.), and (2) satisfying any judgment, award, order, lien, levy, fine, penalty or other sanction imposed against an Indemnified Party on an Indemnified Claim. b. Seller will defend and indemnify Buyer against: (1) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged breach of this Agreement by Seller, including, without limitation, any product supplied by Seller which fails to conform to the representations and warranties in this Agreement; (2) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged negligence or other legally culpable misconduct of Seller in the design, manufacture, storage, sale or delivery of any product sold by Seller under this Agreement or in the performance of other obligation of Seller under this Agreement; (3) any third-party claim for actual or alleged infringement of a product sold by Seller under this Agreement or its design, manufacture, storage, packaging, sale or delivery by Seller under this Agreement or in the performance of any other obligation of Seller under this Agreement (except to the extent that the infringement is based on intellectual property that that Buyer has represented and warranted to Seller that Buyer owns and that Buyer has licensed to Seller and that Seller has used in compliance with the license terms in supplying the product); (4) the threat or imposition of any fine, penalty or other sanction by a governmental authority on Buyer to the extent caused by any actual or alleged violation by Seller of Applicable Law; or (5) any other matter that Seller has agreed to defend and indemnify Buyer against under a Purchase Schedule. c. Buyer will defend and indemnify Seller against: (1) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged breach of this Agreement by Buyer; (2) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged negligence or other legally culpable misconduct of Buyer in the purchase, storage, repackaging, resale or delivery of any product purchased from Seller under this Agreement or in the performance of other obligation of Buyer under this Agreement; (3) any third-party claim for actual or alleged infringement of a product sold by Seller under this Agreement or its design, manufacture, storage, sale or delivery by Seller under this Agreement or in the performance of any other obligation of Seller under this Agreement to the extent based on intellectual property that that Buyer has represented and warranted to Seller that Buyer owns and that Buyer has licensed to Seller and that Seller has used in compliance with the license term in supplying the product; (4) the threat or imposition of any fine, penalty or other sanction by governmental authority on Seller to the extent caused by any actual or alleged violation by Buyer of Applicable Law; or (5) any other matter that Buyer has agreed to defend and indemnify Seller against under a Purchase Schedule. d. As a condition of receiving defense and indemnification under this Section for an Indemnified Claim, the Indemnified Party must: (1) notify and tender the defense of an Indemnified Claim to the Indemnifying Party promptly after the Indemnified Party learns of the Indemnified Claim; and

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





(2) provide information and cooperation reasonably requested by the Indemnifying Party in the investigation, defense, settlement and satisfaction of the Indemnified Claim. An Indemnifying Party will reimburse the Indemnified Party of any reasonable, actual, substantiated out-of-pocket expense incurred in providing the requested information or cooperation. e. If the Indemnifying Party accepts the tender of defense of an Indemnified Claim, with or without reservation, the Indemnifying Party will: (1) promptly notify the Indemnified Party of the acceptance of the tender of defense of the Indemnified Claim. (2) control the investigation, defense, settlement and satisfaction of the Indemnified Claim, including, without limitation, the selection of licensed, qualified and reputable attorneys and expert witnesses and all decisions over settlement and litigation strategy. The Indemnifying Party must act in good faith in exercising control over the investigation, defense, settlement and satisfaction of the Indemnified Claim. (3) Provide information reasonably requested by the Indemnified Party regarding the investigation, defense, settlement and satisfaction of the Indemnified Claim f. An Indemnifying Party, acting in good faith, may settle an Indemnified Claim for which it is responsible under this Agreement involving infringement on the intellectual property of a third-party by: (1) obtaining a license from the third-party allowing the required use of its intellectual property; (2) modifying a product, equipment or process in a manner which avoids infringing on the intellectual property of the third-party; or (3) voluntarily withdrawing the infringing product from the market and either refunding the amount paid by the Indemnified Party for the infringing product or replacing the infringing product with a non-infringing product. g. The Parties may disagree on whether a claim is an Indemnified Claim under this Agreement, which Party should be considered the Indemnifying Party and Indemnified Party for an Indemnified Claim or whether each Party is partially liable for an Indemnified Claim and how liability for such an Indemnified Claim should be allocated between them. In these and other circumstances in which an actual or potential conflict of interest exists or arises between the Parties with regards to an alleged or agreed upon Indemnified Claim that would preclude their joint representation by a single defense counsel, the Parties will endeavor in good faith to attempt to resolve the conflict. If the Parties are able to resolve the actual or potential conflict of interest, the Parties will memorialize the agreed upon resolution in a written joint defense agreement signed by officers of each Party and their joint defense counsel. If the Parties are unable to resolve the actual or potential conflict of interest, each Party may independently and separately investigate, defend, settle and satisfy the claim subject to their right to pursue payment or reimbursement for costs incurred in doing so from the other Party as provided in this Agreement.

8. Insurance. During the Term of this Agreement, each Party will maintain the following minimum types and amounts of insurance coverage during the Term of this Agreement: a. Commercial General Liability Insurance. Occurrence based coverage with a combined single limit of at least $10,000,000 per occurrence and in the aggregate for premises and operations; products and completed operations; contractual liability coverage for indemnities of a Party contained within this Agreement; broad form property damage (including completed operations); explosion, collapse and underground hazards; and personal injury. Requires additional insured endorsement and waiver of subrogation endorsement.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





b. Automobile Liability Insurance. Occurrence based coverage with a combined single limit of at least $10,000,000 per occurrence and in the aggregate for owned, non-owned, and hired automotive equipment of the Party. Requires additional insured endorsement and waiver of subrogation endorsement. c. Workers' Compensation Liability Insurance. Occurrence based coverage providing benefits in the minimal amount required by Applicable Law for workplace and work related injuries and illnesses to the employees of a Party, including, without limitation, Workers Compensation Acts of applicable U.S. States, the U.S. Longshoremen's and Harbor Workers Compensation Act and the U.S. Jones Act. Requires alternate employer endorsement and waiver of subrogation endorsement. d. Employers' Liability Insurance. Occurrence based coverage with a limit of at least $10,000,000 per occurrence or any greater limits set by Applicable Law workplace and work related injuries and illnesses to the employees of a Party. Requires waiver of alternate employer endorsement. e. Property Insurance. Coverage providing all risk property insurance at the replacement value of the machinery, equipment, fixtures, tools, materials and other property of the Party. All risk coverage will include, by way of example and not limitation, loss or damage resulting from earthquakes, floods, wind, fire or other natural or weather-related phenomenon. Requires waiver of subrogation endorsement.

All insurers of a Party on such policies must have at all times an A.M. Best financial rating of at least A-Minus VII. An insuring Party may satisfy the required minimum amounts of insurance through a primary policy and one or more excess policies. All insurance of an insuring Party must be primary and non-contributory with respect to any insurance that the other Party may maintain, but only with respect to the negligence or other legal liability of the insuring Party.

An insuring Party must deliver the following written evidence of the required insurance coverage to the other Party (Attention: Risk Management), or its designated insurance monitoring service, within ten (10) of written request and at least thirty (30) days in advance of the expiration of a then current policy term (if a declaration or endorsement is not available from an insurer at the time requested or required, an insuring Party will provide them as soon as the declaration or endorsement is available from the insurer): i. Certificate of insurance confirming that the required insurance coverage and minimal limits are met for the extended, renewed or replacement policy term. ii. Declaration pages of insurance policy (or a copy of the binder until the declaration pages are available) confirming that the required insurance coverage and minimal limits are met for the extended, renewed or replacement policy term. iii. Copies of additional insured endorsements required for applicable policies in the name and for the benefit of: [NAME OF OTHER PARTY], its parent, subsidiaries and affiliates; any lessors of the foregoing and any mortgagees, deed of trust beneficiaries and secured creditors of such lessors; and any successors and assignees of all of the foregoing. iv. Copies of alternate employer endorsements and waiver of subrogation endorsements required for applicable policies in the name and for the benefit of: [NAME OF OTHER PARTY], its parent, subsidiaries and affiliates; any lessors of the foregoing and any mortgagees, deed of trust beneficiaries and secured creditors of such lessors; and any successors and assignees of all of the foregoing.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





A Party may maintain any level of deductible on required insurance coverage allowed by Applicable Law. A Party may also self-insure any of the required insurance coverage, in whole or in part, if allowed by Applicable Law during any period that the Party maintains a tangible net worth in excess of $100 million USD and maintains a professionally managed and adequately reserved for and funded self-insurance program.

9. Limitations on Liability. a. Disclaimer of Representations and Warranties. Each Party: (1) disclaims all representations and warranties regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, including, without limitation, the implied warranty of merchantability and the implied warranty of fitness for a particular purpose, other than those express representations and warranties of the Party in this Agreement; (2) acknowledges that the Party has not relied on, and will not rely on, any representations and warranties of the other Party regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, other than those express representations and warranties of the other Party in this Agreement; and (3) waives any claim that the Party may have based, in whole or in part, on any representations and warranties of the other Party regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, other than those express representations and warranties of the other Party in this Agreement. Notwithstanding the foregoing, Buyer is entitled to rely on (i) the descriptive information in transaction documents issued by either Party in the ordinary course of business during the Term identifying the ordered Products (e.g., the type and quantity of ordered products and scheduled date and location for delivery) and (ii) FDA guaranty letters and other similar written assurances in Seller's standard forms certifying that a product complies with Applicable Laws issued by Seller to Buyers and other U.S. customers in the ordinance course of business during the Term. b. Exclusion of Indirect Damages; Waiver of Claim for Insured Damage or Loss. A Party that breaches this Agreement will only be liable to the other Party for direct damages arising from the breach. Each Party waives any right to recover consequential, incidental, indirect, exemplary, punitive or any other types of indirect damages from the other Party for a breach of this Agreement. Notwithstanding the preceding sentences, this Subsection will not limit the liability of a Party for any amount or type of damages for: (1) the defense and indemnification of an Indemnified Claim on which the Party is the Indemnifying Party; (2) infringement by the Party on the intellectual property of the other Party; (3) the unauthorized disclosure or use by the Party of the Confidential Information of the other Party; (4) payment or reimbursement of any amount expressly required to be paid or reimbursed by the Party under a provision of this Agreement; or (5) the intentional misconduct of the Party in violation of Applicable Laws. c. Force Majeure. A Party will not be considered in breach of this Agreement or liable to the other Party for any interruption or delay in performance under this Agreement to the extent caused by an event outside of the ability of the performing Party to foresee and avoid with the exercise of commercially reasonable efforts (such an event is referred to at times as an event of Force Majeure). Examples of events of Force Majeure include, without limitation: natural disasters; war; acts of terrorism; government action; accident; strikes, slowdowns and other labor disputes; shortages in or inability to obtain material, equipment, transportation or labor; any breach, negligence, criminal misconduct or other act or omission of any third-party; fire or other insured or uninsured casualty. A Party whose performance is interrupted or delayed by an event of Force Majeure will be excused from the interruption or delay in performance during the event of Force Majeure and for a commercially reasonable period of additional time after the event of Force Majeure that the Party needs to recover from the event of Force Majeure and restore performance. Notwithstanding the foregoing, a Party will only be excused for an interruption or delay in performance under this Subsection for an event of Force Majeure only if the Party (1) promptly notifies the other Party of the event of Force Majeure and provides information reasonably requested by the other Party regarding the event of Force Majeure, the efforts undertaken by the

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





Party to foresee and avoid interruption or delay in its performance before the occurrence of the event, to mitigate interruption or delay in performance during the event, and to recover from and restore performance following the event; and (2) the Party exercises commercially reasonable efforts to mitigate, recover from and restore performance following the event of Force Majeure. During, and while recovering from and restoring performance following, an event of Force Majeure, Seller will act in good faith in allocating its available manufacturing capacity to supply products to Buyer under this Agreement and any products to other customers of Seller. If an event of Force Majeure interrupts or delays Seller from supplying a product to Buyer under this Agreement in the quantities and timetable required by Buyer, Buyer may cancel any unfilled orders for the product with Seller and procure the required quantities of the product from one or more other sources until Seller has recovered from and restored its ability to perform following the event of Force Majeure. If the interruption or delay in the supply of a product to Buyer under this Agreement caused by an event of Force Majeure has exceeded, or is reasonably likely to exceed, thirty (30) days, Buyer may enter into longer term supply agreements or make other arrangements to procure the required quantities of the product from one or more other sources for a duration and on terms acceptable to Buyer in its good faith discretion. In such a circumstance, Buyer will not have to resume purchasing the product from Seller under this Agreement until Seller has recovered from and restored its ability to perform following the event of Force Majeure and the longer term agreements or other arrangements have expired or Buyer is able to end them without liability. This Subsection will not excuse nor extend a deadline by which a Party must pay an amount owed under this Agreement or Applicable Law or by which a Party must exercise any right or remedy under this Agreement or Applicable Law.

10. Confidential Information and Other Intellectual Property. a. The Parties anticipate exchanging Confidential Information (as defined in in the next Subsection) over the Term of this Agreement for the purpose of negotiating and entering into Purchase Schedules and amendments to this Agreement, transacting business with one in accordance with this Agreement and exercising their rights and performing their obligations under this Agreement (collectively referred to as the Authorized Purpose). b. The phrase Confidential Information means information meeting all of the following criteria: 1) The information is a trade secret or other non-public, proprietary information owned by a Party or its direct and indirect subsidiaries under Applicable Law (this Party is referred to at times in this Section as the Disclosing Party); and 2) The other Party (referred to at times in this Section as the Receiving Party) requests such information from the Disclosing Party for the Authorized Purpose during the Term (i.e., neither Party wants unsolicited Confidential Information from the other Party); and 3) The Disclosing Party discloses such requested information to the Receiving Party during the Term either labelled as Confidential or words of similar intent, or describes the disclosed information in reasonable detail in a written notice to the Receiving Party delivered, either at the time of disclosure or within five (5) days of disclosure. If a Disclosing Party neglects to label or deliver timely written notice to the Receiving Party identifying the disclosed information as confidential in nature, the disclosed information will only be treated as Confidential Information under this Agreement if the Disclosing Party is able to demonstrate by clear and convincing evidence that the Receiving Party knew that the disclosed information was a trade secret or other non-public, proprietary information of the Disclosing Party at the time of disclosure.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





The criteria in Clause (2) and Clause (3) will not apply to Confidential Information of a Disclosing Party observed or heard by a Receiving Party in a plant, warehouse, facility or system of the Disclosing Party. The existence and terms of this Agreement, and the existence, nature and extent of the business relationship between the Parties, will be considered the Confidential Information of each Party. c. The phrase Confidential Information also means the Know-How of a Disclosing Party and its direct and indirect subsidiaries that a Receiving Party and its direct and indirect subsidiaries learned of, acquired or otherwise used prior to the Effective Date. The phrase Know-How means trade secret and other confidential, proprietary information of a Party or its Affiliate concerning the manufacture, storage, packaging, marketing, sale and delivery of its products. Examples of Know-How may be in the form of drawings, equipment specifications, formulae, formulations, guidelines, manuals, methods, plans, policies, procedures, processes, properties and applications of raw materials and products, tools, dies and molds. A Receiving Party and its direct and indirect subsidiaries may continue to use the Know- How of the Disclosing Party and its direct and indirect subsidiaries in the possession of the Receiving Party and its direct and indirect subsidiaries as of the Effective Date for the Authorized Purpose and in connection with the operation of the business of the Receiving Party and its direct and indirect subsidiaries. Nothing in this Subsection or any other provisions of this Agreement will obligate a Party to disclose or license the use of its Know-How of any kind and in any form arising, discovered, acquired or developed after the Effective Date to the other Party. d. The phrase Confidential Information does not include, and there will not be any duties of confidentiality or other restrictions under this Agreement for, the following types of information: (1) Information which is or becomes available as part of the public domain through any means other than as a result of a breach of this Agreement by the Receiving Party; or (2) Information, other than Know-How received prior the Effective Date, which is known to the Receiving Party before the disclosure of the same information by the Disclosing Party; or (3) Information which is or becomes available to the Receiving Party from a third-party who is not under any duty to preserve the confidentiality of such information; or (4) Information which is furnished by the Disclosing Party to a third-party without imposing any duty on the third-party to preserve the confidentiality of such information; or (5) Information which is independently developed by the Receiving Party without the use of or reliance on any trade secret or other non-public, proprietary information provided by the Disclosing Party as Confidential Information under this Agreement or under any prior agreement between the Parties; or (6) Information that ceases to be a trade secret or other non-public, proprietary information of the Disclosing Party under applicable law through any means other than those enumerated above that does not involve nor result from a breach of this Agreement by the Receiving Party. e. A Party may request and disclose Confidential Information in any form or medium. Confidential Information may include, without limitation, information concerning the assets, liabilities, financing, financial statements, ownership, goods, services, customers, suppliers, marketing, manufacturing, equipment, software, technology, supply chain, business strategies, plans, models, policies, methods, processes, formulae, specifications, drawings, schematics, software and technical know-how of a Disclosing Party. A Receiving Party will take all commercially reasonable actions required to safeguard the Confidential Information of a Disclosing Party in the possession of such Receiving Party against the unauthorized disclosure or use of the Confidential Information by other persons. A Receiving Party will promptly notify the Disclosing Party if the Receiving Party learns of any unauthorized disclosure or use of the Confidential Information of the Disclosing Party by any

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





person. A Receiving Party will cooperate in good faith with the Disclosing Party to prevent any unauthorized disclosure or use of the Confidential Information of the Disclosing Party by any person. f. A Receiving Party will not disclose nor use the Confidential Information of a Disclosing Party except as follows: (1) A Receiving Party may disclose Confidential Information of a Disclosing Party on a need to know basis to the Representatives of the Receiving Party who require such information for the Authorized Purpose and in order for the Receiving Party and its Affiliates to comply with Applicable Laws, accounting standards and securities exchange requirements. Before making such a disclosure, the Receiving Party will advise the Representatives of the confidential nature of the information being shared and ensure that duties and restrictions are, or have been, imposed on the Representatives receiving the Confidential Information similar to those imposed on the Receiving Party under this Agreement. A Receiving Party will be liable for any breach of this Agreement by its Representatives. An Affiliate of a Party means a legal entity that owns and controls, or is owned and controlled by, or is under common ownership and control with, a Party (other than the other Party or any of its direct and indirect subsidiaries), with ownership and control of a legal entity being determined by the ownership of the majority voting interest in the legal entity. A Representative means the Affiliates of a Party and the directors, officers, managers, employees, accountants, attorneys, auditors and other agents and consultants of a Party and its Affiliates. (2) A Receiving Party may disclose Confidential Information of a Disclosing Party to a court, governmental entity or any other person in order for the Receiving Party and its Affiliates to comply with Applicable Laws, accounting standards and securities exchange requirements. If legally permissible and reasonably possible, a Receiving Party will notify the Disclosing Party prior to disclosing its Confidential Information pursuant to this Section and cooperate in good faith with any lawful efforts by the Disclosing Party to avoid or limit the disclosure of its Confidential Information. A Receiving Party will not be obligated to incur any liability, expense or risk in extending such cooperation to a Disclosing Party. Based on legal advice of its attorney, a Receiving Party may disclose the Confidential Information of the Disclosing Party by any deadline established under an Applicable Law, accounting standard and securities exchange requirement. (3) A Receiving Party may disclose and use the Confidential Information of a Disclosing Party to enforce or interpret this Agreement or any other agreement with the Disclosing Party in any arbitration, court or other legal proceeding. A Receiving Party may disclose and use this Confidential Information of a Disclosing Party to defend the Receiving Party or its Affiliates or their respective Representatives in any arbitration, court or other legal proceeding. In either circumstance, the Receiving Party will ensure that a protective order, agreement or other mechanism is in place to preserve the confidentiality of the Confidential Information. (4) A Receiving Party and its Representatives may disclose and use the Confidential Information for any other purpose consented to by a Disclosing Party in a written notice signed by an officer of the Disclosing Party delivered to the Receiving Party. g. In disclosing its Confidential Information to a Receiving Party, a Disclosing Party represents, warrants and covenants to the Receiving Party that: (1) The Disclosing Party owns and has the right to disclose and authorize the use of Confidential Information as provided in this Agreement.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





(2) The Receiving Party and its Representatives may use the Confidential Information of the Disclosing Party for the Authorized Purpose and other limited purposes provided in this Agreement. (3) The Disclosing Party will indemnify, defend and hold harmless the Receiving Party and its Representatives against any claim of a third-party that the disclosure and use of the Confidential Information of the Disclosing Party as provided in this Agreement infringes on a patent, trademark, copyright, trade secret or other intellectual property of the third-party registered in or otherwise recognized and enforceable under Applicable Laws.

Except for the limited representations and warranties in this Section, a Disclosing Party disclaims all other representations and warranties of any kind related to its Confidential Information, whether express, implied or arising by operation of law, including the disclaimer, without limitation, of any representation and warranties concerning merchantability, fitness for a particular purpose, truth, accuracy or completeness. h. The rights and obligations of the Parties under this Section with regards to disclosed Confidential Information will continue: (1) Until the earlier of (i) sixty (60) months from the date of disclosure to a Receiving Party or (ii) the date such information ceases to be considered Confidential Information under this Agreement, for Confidential Information that is not a trade secret of a Disclosing Party under Applicable Law; and (2) Until Confidential Information that is a trade secret of a Disclosing Party under Applicable Law ceases to be a trade secret of the Disclosing Party under Applicable Law. i. A Receiving Party will return or destroy all forms of Confidential Information of the Disclosing Party in the custody of the Receiving Party and its Representatives within ten (10) days of receipt of a written request from the Disclosing Party and after the expiration or earlier termination of this Agreement. This will include, without limitation, all copies, records, documents and other information representing, comprising, containing, referencing or created based on Confidential Information of the Disclosing Party. Notwithstanding the foregoing, a Receiving Party and its Representatives may retain copies of Confidential Information of the Disclosing Party which (x) the Receiving Party and its Representatives are required to retain to comply with Applicable Laws, accounting standards and security exchange requirements (but only for the duration and in the manner so required for this limited purpose); or (y) have been archived in electronic form by the Receiving Party and its Representatives and which would be unduly burdensome for the Receiving Party and its Representatives to have to search for and delete the Confidential Information of the Disclosing Party. j. Except for the limited right to disclose and use Confidential Information of a Disclosing Party for the Authorized Purpose and other purposes provided in the this Section and except for any license of intellectual property granted by a Disclosing Party to the Receiving Party in a Purchase Schedule, this Agreement does not grant a Receiving Party or its Representatives any right, title, interest or ownership in the Confidential Information of the Disclosing Party nor in any patent, trademark, copyright or other intellectual property of the Disclosing Party. As between the Parties during the Term, to be effective, the grant of any right, title, interest and ownership in and to any Confidential Information of Party or in an patents, trademarks, copyrights and other intellectual property of the Party must be in writing and signed by the chief executive officers of the Parties. During the Term, a Party will not develop intellectual property for, on behalf of, or in collaboration with, the other Party unless the Parties have entered into a Purchase Schedule or other separate written agreement signed by an officer of each Party.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





11. Dispute Resolution. a. Negotiation. If a Party believes that the other Party has breached this Agreement or if there is a dispute between the Parties over the interpretation of this Agreement (a Dispute), the Parties will endeavor to resolve the Dispute through good faith negotiation for a period of thirty (30) days after a Party notifies the other Party of the Dispute and before either Party requests mediation or files litigation to resolve the Dispute. b. Mediation. If the Parties have been unable to resolve a Dispute through good faith negotiation as provided in the prior Subsection, a Party may request that the Parties attempt to resolve the Dispute through mediation by notifying the other Party with a copy to JAMS. The Parties will attempt to select a mutually acceptable JAMS mediator within ten (10) days of the notice requesting mediation. The mediation will be held in Lake County or Cook County, Illinois within thirty (30) days of the notice requesting mediation before a JAMS mediator and in compliance with JAMS mediation guidelines. Each party will bear its own costs in preparing for and participating in the mediation and one-half of the fees and expenses charged by JAMS for conducting the mediation. c. Litigation. If the Parties have been unable to resolve a Dispute through mediation as provided in the prior Subsection, a Party may file litigation against the other Party in a court of competent jurisdiction in the United States of America. With respect to litigation involving only the Parties or their Affiliates, the Parties irrevocably consent to the exclusive personal jurisdiction and venue of the U.S. federal and Illinois state courts of competent subject matter jurisdiction located in Lake County, Illinois or Cook County, Illinois and their respective higher courts of appeal for the limited purpose of resolving a Dispute, and the Parties waive, to the fullest extent permitted by law, any defense of inconvenient forum. The Parties waive any right to trial by jury as to any Disputes resolved through litigation. Notwithstanding the foregoing, a Party may file litigation to resolve a Dispute without undergoing either negotiation or mediation as provided in the prior Subsections for any Dispute involving: (i) infringement on intellectual property; (ii) the unauthorized use or disclosure of Confidential Information; or (iii) a request for a temporary restraining order, a preliminary or permanent injunction or any other type of equitable relief. d. Remedies. Except as expressly limited in the preceding Subsections and the other provisions in this Agreement, a Party may immediately exercise any rights and remedies available to the Party under Applicable Law upon a breach of this Agreement by the other Party. A Party will not suspend performance under or terminate this Agreement or any accepted purchase order for a product being purchased and sold under this Agreement unless: (1) the other Party is in material breach of this Agreement and has either refused to cure the material breach or has failed to cure the material breach within thirty (30) day of its receipt of written notice of the failure; and (2) the Parties have been unable to resolve the Dispute related to the material breach through negotiation or mediation, or the breaching Party has refused or failed to attempt to resolve the Dispute through negotiation or mediation, as provided in this Section. Notwithstanding the foregoing, a Party may suspend performance or terminate this Agreement or any accepted purchase order for a product being purchase and sold under this Agreement immediately on written notice to the other Party, and without providing the other Party an opportunity to cure the material breach or attempting to resolve a Dispute over the material breach by negotiation or mediation as provided in this Section, for a material breach by the other Party involving substantial harm to the reputation, goodwill and business of the non-breaching Party that cannot reasonably be avoided or fully redressed by providing the other Party an opportunity to cure the material breach. e. Late Fees and Collection Costs. If Buyer fails to pay Seller an amount owed under this Agreement by the invoice due date, then Buyer will owe Seller: (i) the delinquent amount; and (ii) a late payment fee equal to two percent (2%) of the delinquent amount for each full or partial calendar month past the invoice due date that the delinquent amount remains unpaid. In addition, if Seller has to file

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





litigation to collect the amount owed and Seller prevails in the litigation, Buyer will reimburse Seller for actual, reasonable, substantiated out-of-pocket expenses incurred by Seller in collecting the delinquent amount and accrued late payment fees on the delinquent amount. Under no circumstance will the late payment fee payable to Seller exceed the amount that a creditor may lawfully impose on a debtor on a delinquent amount under Applicable Law.

12. Miscellaneous. a. Entire Agreement. This Agreement, including its appended Exhibits and Purchase Schedules entered into during the Term, constitutes the entire agreement between the Parties with respect to the sale of products by Seller to Buyer and the purchase of products by Buyer from Seller. This Agreement supersedes all prior and simultaneous representations, discussions, negotiations, letters, proposals, agreements and understandings, whether written or oral, with respect to this subject matter. This Agreement will not be binding on either Party unless and until signed by the chief executive officers of each Party. No handwritten or other addition, deletion or other modification to the printed portions of this Agreement will be binding upon either Party to this Agreement. b. Amendments. A Party may not amend nor supplement the terms and conditions in this Agreement through the inclusion of additional or different terms and conditions in any quotation, purchase order, invoice, bill of lading, letter, email or other document or communication. This Section does not prevent the reliance on the descriptive information in transaction documents identifying the ordered Products (e.g., the type and quantity of ordered products and scheduled date and location for delivery). No amendment of this Agreement will be valid or effective unless made in writing and signed and exchanged by the chief executive officers of the Parties. A Party may approve or reject a request for an amendment in its sole and absolute discretion. c. Waiver. The failure of either party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement or to take advantage of any of its rights shall not operate as a continuing waiver of such rights. No right or obligation under this Agreement will be considered to have been waived by a Party unless such waiver is in writing and is signed by an officer of the waiving Party and delivered to the other Party. No consent to or waiver of a breach by either Party will constitute a consent to, waiver of, or excuse for any other, different, or subsequent breach by such Party. d. Governing Law. This Agreement and all claims or causes of action arising out of or related to this Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the laws of the State of Illinois and the United States of America, without giving effect to its principles or rules of conflict of laws. The United Nations Convention on Contracts for the International Sale of Goods will not govern or otherwise be applicable to this Agreement. e. Severability. If any term of provision of this Agreement, or the application thereof shall be found invalid, void or unenforceable by any government or governmental organization having jurisdiction over the subject matter, the remaining provisions, and any application thereof, shall nevertheless continue in full force and effect. f. Assignment. This Agreement, its rights and obligations, is not assignable or transferable by either Party, in whole or in part, except with the prior written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, either Party may transfer and assign this Agreement to any of its affiliates or in connection with any merger, consolidation or sale of assets without the other Party's prior consent provided (a) that any such assignment will not result in the assigning Party being released or discharged from any liability under this Agreement, and (b) the purchaser/assignee will expressly assume all obligations of the assigning Party under this Agreement. The assigning Party will provide the other Party with written

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





notice of such assignment prior to or promptly following the effective date of such assignment. A change of control shall be deemed an assignment requiring consent hereunder provided that any transfer or assignment that results in Seller's and Buyer's current common parent, Reynolds Group Holdings Limited, ceasing to control either party shall not require consent of the other party. The restrictions in this Section will not preclude a Party for authorizing an Affiliate to purchase or sell a product on behalf of a Party under this Agreement. Subject to the foregoing, all of the terms, conditions and provisions of this Agreement shall be binding upon and shall inure to the benefit of the successors and assignees of the respective Parties. g. Third Party Beneficiaries. Except as otherwise provided in a Purchase Schedule, there are no intended third-party beneficiaries of this Agreement. h. Good Faith and Cooperation. Except where this Agreement states that a Party may expressly exercise a right or render a decision in its sole and absolute discretion, a Party will exercise its rights under this Agreement in its good faith business judgment. A Party will perform its obligations under this Agreement in a commercially reasonable manner consistent with industry practices and in compliance with Applicable Law. A Party will promptly take such actions, provide such information and sign such documents as the other Party may reasonably request to obtain the benefits and exercise the rights granted, and to perform the obligations imposed, under this Agreement. i. Notices. Any notice required or permitted to be provided by a Party under this Agreement will be made to the notice address of the receiving Party set forth below or to an alternate notice address later designated by the receiving Party in accordance with this Subsection. Notices will be effective upon actual receipt by the receiving Party. An emailed notice will be effective against a receiving Party only if the Receiving Party acknowledge receipt of the emailed notice in a return notice to the notifying Party. A receiving Party agrees to acknowledge receipt of an email notice in good faith promptly following receipt. A Party may change its address for notice by giving notice to the other party Pursuant to this Subsection.

Address for notice to Buyer:

Pactiv LLC 1900 West Field Court Lake Forest, IL 60045 Attn: John McGrath, Chief Executive Officer Email: jmcgrath@pactiv.com

For any notice concerning default or termination, with a copy to:

Pactiv LLC 1900 West Field Court Lake Forest, IL 60045 Attn: Steven R. Karl, General Counsel Email: skarl@pactiv.com

Address for notices to Seller:

Reynolds Consumer Products LLC 1900 W. Field Court Lake Forest, IL 60045 Attention: Lance Mitchell, Chief Executive Officer Email: Lance.Mitchell@@ReynoldsBrands.com

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





For any notice concerning default or termination, with a copy to:

Reynolds Consumer Products LLC 1900 W. Field Court Lake Forest, IL 60045 Attention: David Watson, General Counsel Email: David.Watson@ReynoldsBrands.com j. Independent Contractors. The relationship of the Parties established by this Agreement is that of independent contractors, and nothing contained in this Agreement shall be construed to: (a) give either Party the power to direct and control the day-to-day activities of the other Party, (b) establish the Parties as partners, joint ventures, co-owners or otherwise as participants in a joint or common undertaking, or (c) allow a Party to bind the other Party in any manner or otherwise create or assume any obligation on behalf of the other Party for any purpose whatsoever. A Party will not be considered an agent of the other Party. k. Non-Exclusive Supply Relationship. Except as may be provided in a Purchase Schedule, the Agreement is not evidence of, nor does it create, any form of exclusive supply relationship between the Parties concerning the purchase and sale of products. Except as may be provided in a Purchase Schedule and for the types and quantities of products in an accepted purchase order, nothing in the Agreement obligates a Party to sell or purchase any specified volume, market share or other minimum level of products during the Term. l. Construction. Unless the context otherwise requires, the following rules of construction will be applied to in the interpretation of the Agreement: (1) Headings are for convenience only and do not affect interpretation; (2) Singular includes the plural and vice-versa; (3) Gender includes all genders; (4) If a word or phrase is defined, its other grammatical forms have a corresponding meaning; (5) The meaning of general words is not limited by specific examples introduced by includes, including or for example or similar expressions; (6) The word person includes an individual, corporation, company, trust, partnership, limited partnership, unincorporated body, joint venture, consortium or other legal entity; (7) A reference in any Purchase Schedule or Exhibit to an Article, Section, Subsection or Clause is a reference to an Article, Section, Subsection or Clause in that Purchase Schedule or Exhibit unless otherwise identified; (8) Reference to a Purchase Schedule or Exhibit is a reference to a Schedule, Exhibit described, appended or otherwise identified in this Agreement; (9) A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing; (10) A reference to a third-party is a reference to a person who is not a Party to this Agreement; (11) Where a period of time is specified for the performance of any act and dates from a given day or the day of an act or event, the period shall be exclusive of that date; and (12) the Parties agree that the Agreement is the product of negotiation between sophisticated parties and individuals, all of whom were or have been given the opportunity to be represented by counsel, and each of whom had an opportunity to participate in, and did participate in, negotiation of the terms hereof. Accordingly, the Parties acknowledge and agree that the Agreement is not a contract of adhesion and that ambiguities in the Agreement, if any, shall not be construed strictly or in favor of or against either Party, but rather shall be given a fair and reasonable construction. m. Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Acceptance of this Agreement may be made by e-mail, mail or other commercially reasonable means showing the signatures of the chief executive officers of the Parties.

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019





In witness whereof, Seller and Buyer have executed this Master Supply Agreement as of the Effective Date. REYNOLDS CONSUMER PRODUCTS LLC, as Seller

By: //s// Lance Mitchell Lance Mitchell Chief Executive Officer

PACTIV LLC, as Buyer

By: //s// John McGrath John McGrath Chief Executive Officer

Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 
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?

A: During the Term of this Agreement, each Party will maintain the following minimum types and amounts of insurance coverage during the Term of this Agreement:
****
Q: DISTRIBUTOR AGREEMENT

                                    by and between

                        PEREGRINE/BRIDGE TRANSFER CORPORATION

                                         and

                                  NEON SYSTEMS, INC.

                                  TABLE OF CONTENTS

                                                                            Article 1   Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .    1 Article 2   License Grant . . . . . . . . . . . . . . . . . . . . . . . . .    2 Article 3   Pricing and Payment . . . . . . . . . . . . . . . . . . . . . .    4 Article 4   Order, delivery and Acceptance. . . . . . . . . . . . . . . . .    4 Article 5   Representations and Warranties of Licensee. . . . . . . . . . .    5 Article 6   Representations and Warranties of Licensor. . . . . . . . . . .    6 Article 7   Covenants of Licensee . . . . . . . . . . . . . . . . . . . . .    6 Article 8   Covenants of Licensor . . . . . . . . . . . . . . . . . . . . .    9 Article 9   Indemnification . . . . . . . . . . . . . . . . . . . . . . . .   10 Article 10  Agreement Not to Compete, Confidentiality . . . . . . . . . . .   12 Article 11  Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13 Article 12  Limited Warranties. . . . . . . . . . . . . . . . . . . . . . .   14 Article 13  Liability . . . . . . . . . . . . . . . . . . . . . . . . . . .   15 Article 14  Term and Termination. . . . . . . . . . . . . . . . . . . . . .   16 Article 15  General . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

                                       EXHIBITS

          Exhibit A         List of Products           Exhibit B         The Territory           Exhibit C         Sublicense Agreement           Exhibit D         Agreement for Trial

                                      i

                                DISTRIBUTOR AGREEMENT

DISTRIBUTOR AGREEMENT (the Agreement) is made as of the 1st day of January, 1996 by and between Peregrine/Bridge Transfer Corporation, a Delaware corporation (the Licensor), and Neon Systems, Inc., a Delaware corporation (the Licensee).

WHEREAS, Licensor is engaged in the development, support and licensing of certain computer software products, including without limitation the computer software products fisted in EXHIBIT A to this Agreement; and

WHEREAS, Licensee desires to obtain from Licensor, and Licensor desires to grant to Licensee, the right to market and sublicense the Licensed Products (as defined herein) in accordance with the terms and conditions set forth in this Agreement;

NOW THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

                                      ARTICLE 1                                      DEFINITIONS

1.1  Customer means a person or entity that has acquired, or has indicated its      interest in acquiring from Licensee, or from a Redistributor if so      specified herein, a non-exclusive and nontransferable Sublicense to use one      (1) or more of the Licensed Products.

1.2  Documentation means all visually readable materials published or made      available by Licensor during the term of this Agreement for use by      Customers in connection with the Licensed Products.

1.3  Emergency Fix means a temporary correction of a problem in a Licensed      Product reported by Licensee to Licensor that may take the form of a      written instruction or magnetic or optical media.

1.4  Licensed Product means any copy, or part thereof, of object code of the      software products listed on EXHIBIT A attached to this Agreement, as well      as any Upgrades or other material distributed to Licensee by Licensor in      connection with such software products.





1.5  Master Copy means the initial object code copy of each Licensed Product      and of any subsequent Upgrades or other derivations distributed to Licensee      by Licensor under this Agreement.

                                       1

1.6  Redistributor means any individual or entity that is granted a license by      Licensee to copy and sublicense one or more Licensed Products to Customers.

1.7  Sublicense means the sublicense agreement to be entered into by      Customers, the form of which is attached hereto as EXHIBIT C, or such form      as otherwise may be approved by Licensor pursuant to this Agreement.

1.8  Sublicense Copy means an object code copy of the Licensed Product that      Licensee licenses from Licensor and inventories for sublicensing to      Redistributors and Customers.

1.9  Territory means that geographic area specified in EXHIBIT B attached to      this Agreement.

1.10 Upgrade means any revision, adaptation or new version of a Licensed      Product which enhances a Licensed Product and which is offered by Licensor      to registered users of that Licensed Product as an upgrade.

                                      ARTICLE 2                                     LICENSE GRANT

Section 2.1    USE OF MASTER COPY.  Licensor hereby grants to Licensee a non- exclusive, worldwide right to use and reproduce the Master Copy of each Licensed Product and the related Documentation during the term of this Agreement for testing, demonstration to Redistributors. and Customers, support and maintenance, if any, back-up and archive purposes.

Section 2.2    SUBLICENSING.  Licensor hereby grants to Licensee an exclusive in the Territory to (1) make Sublicense Copies and copies of the Documentation to meet the demand of Redistributors and Customers and (2) market and sublicense Sublicense Copies and copies of the Documentation, together with any copies of promotional and other materials which Licensor may produce or obtain from time to time to assist Licensee in marketing and sublicensing the Licensed Products during the term of this Agreement by any one or more of the following means:

     (a)  TO A REDISTRIBUTOR: To a Redistributor pursuant to a Redistributor           Agreement containing substantially the same terms and conditions as           are set forth in this Agreement (subject to Section 2.5) and a           Sublicense with each Customer of Redistributor in accordance with           subsection 2.2(b); or

     (b)  TO CUSTOMERS: Pursuant to a Sublicense signed by the Customer.

Section 2.3    AGREEMENTS FOR TRIAL.  Licensee may make available the Licensed Products or Documentation to any Redistributor or Customer who wishes to test the Licensed Products on a trial basis so long as such Redistributor or Customer has entered into an Agreement For Trial with Licensee in the form attached to this Agreement as EXHIBIT D.

                                   2

Section 2.4    MAINTENANCE AND SUPPORT AGREEMENTS.  Licensee may make available to Customers maintenance, support and upgrade services only under the terms contained in the Sublicense or other written maintenance and support agreement pertaining to such services.

Section 2.5    REVIEW OF ARRANGEMENTS.  Licensee shall not enter into any agreement referred to in this Article 2 with any Redistributor or Customer until each such agreement has been submitted to and approved by Licensor.  Within five (5) business days after its receipt of any such agreement, Licensor shall notify Licensee whether it approves or disapproves of the agreement and, if it disapproves of the agreement, Licensor shall provide written notice of the reasons therefor, including any changes that would require to approve of the agreement.  If Licensor fails to notify Licensee of its approval or disapproval of any such agreement within such period of time, the agreement shall be deemed to be approved by Licensor.

Section 2.6    TERMS OF AGREEMENTS.  Licensee shall ensure that the terms of any Redistributor Agreement and, to the extent a Sublicense must be modified to comply with applicable law, any Sublicense executed in connection with the Licensed Products do not:

     (a)  Diminish or limit any of the rights of Licensor in the Licensed           Products or Documentation;

     (b)  Diminish or limit the enforceability of the proprietary rights of           Licensor in and to the Licensed Products or Documentation;

     (c)  Convey any rights of ownership in the Licensed Products or           Documentation to any individual or entity other than Licensor, except           for the license rights granted in accordance with the terms of this           Agreement;

     (d)  Permit the use or duplication of the Licensed Products or





          Documentation, except as specifically provided in this Agreement or in           the Sublicense; or

     (e)  Permit disclosure of proprietary information regarding the Licensed           Products or Documentation.

Section 2.7    NATURE OF GRANT.  Licensee shall not have any rights of ownership or other proprietary rights in the Licensed Products or any Documentation by virtue of this Agreement, except for the license grants set forth herein.

Section 2.8    TRADEMARKS AND COPYRIGHT.  Licensor hereby grants to Licensee a non-exclusive right to use the trademarks, service marks, trade names, copyrights, logos and designations (collectively, the Marks) relating to the Licensed Products or the Documentation during the term of this Agreement in the marketing by Licensee of the Licensed Products, provided that such Marks clearly indicate Licensor as the owner of the Marks whenever the Licensed Product or Documentation is first mentioned in any written material referencing the Licensed Product and the proper symbol is used in a superscript following the Marks.  Licensor promptly shall provide

                                      3

a list of all Marks held by Licensor that relate to the Licensed Products.   Upon reasonable written request by Licensor, Licensee shall provide Licensor  with samples of any use of the Marks of Licensor relating to the Licensed  Products, including any documentation and object code copies of the Licensed  Products that Licensee sublicenses to Redistributors and Customers.

                                      ARTICLE 3                                  PRICING AND PAYMENT

Section 3.1    FEES TO LICENSOR.

     (a)  Licensee shall pay to Licensor for each Licensed Product licensed to a           Redistributor or a Customer a licensee fee equal to 50% of all            revenues received (without deduction for value added tax, if any, but           excluding any revenues for maintenance and support or upgrade            services, which revenues are covered in paragraph (b) below) by            Licensee under the Redistributor Agreement or Sublicense applicable           to such Licensed Product.

     (b)  Licensee shall pay to Licensor for maintenance and support and upgrade           services provided under the applicable Sublicense or other written           maintenance and support agreement with or approved by Licensee for           each of the Licensed Products a fee equal to 50% of all revenues           received (without deduction for value added tax, if any) by Licensee           from a Redistributor or Customer relating to maintenance and support           services or services for Upgrades or upgrades of systems for such           Licensed Product.

Section 3.2    TERMS OF PAYMENT.  All fees due to Licensor under this Agreement shall be paid in U.S. Dollars.  Fees due to Licensor from invoices rendered by Licensee during the first year of the term hereof will be payable one hundred and twenty (120) days after the date of the Licensee's invoice to a Redistributor or Customer, as the case may be.  Fees due to Licensor from invoices rendered on or after the first day of the thirteenth (13th) month through and including the last day of the eighteenth (18th) month of the term hereof will be payable ninety (90) days after the date of such invoice.  Fees due to Licensor from invoices rendered thereafter will be payable sixty (60) days after the date of such invoice.  Any amount that is not paid when due will bear simple interest from the date such amount is due until the date payment is made at a rate equal to 10% per annum.

                                      ARTICLE 4                             ORDER, DELIVERY AND ACCEPTANCE

Section 4.1    ORDER AND DELIVERY.  Licensee shall deliver to Licensor product orders (or other documents of similar purpose and effect) in writing that are signed by an authorized representative of Licensee and that list the quantity, product name, number, version, license fee and

                                         4

proposed delivery date for such order.  Licensor shall ship Licensed Products  and Documentation in accordance with Licensee's product orders received and  accepted by Licensor.  Licensor shall ship Licensed Products and  Documentation F.O.B. Licensor's place of business.  Licensee shall be  responsible for all customs fees and other costs and expenses arising in  connection with the transactions contemplated by this Agreement, including  costs and expenses related to packing and shipping the Licensed Products and  Documentation and any freight and insurance charges, and Licensor may require  Licensee to pay for such costs and expenses in advance of shipment of any  Licensed Products or Documentation.  Licensor shall not be liable to Licensee  for delays in shipments due to causes beyond Licensor's reasonable control.   Licensor reserves the right to reject any product order, to cancel any  product orders placed by Licensee and accepted by Licensor and to refuse or  delay shipment thereof if Licensee fails to make any payments as provided in  this Agreement or otherwise continues to fail to comply with the terms and  conditions of this Agreement for thirty (30) days after delivery of written





notice of such failure.

Section 4.2    TIME FOR ACCEPTANCE.  Licensee shall accept or reject the Licensed Products or Documentation within a ten (10) day evaluation period after receipt of such Licensed Product and the related Documentation by Licensee.  If Licensee fails to give Licensor written notice of its rejection of such Licensed Products or Documentation within such ten (10) day evaluation period or Licensee ships such Licensed Products or Documentation to a Redistributor or Customer, then such Licensed Products and Documentation will be deemed to be accepted by Licensee.

Section 4.3    REJECTION.  If Licensee rejects any Licensed Product in accordance with Section 4.2 because such Licensed Product fails to conform to the Documentation relating to such Licensed Product, Licensee shall notify Licensor promptly in writing to that effect and return all copies of such Licensed Product to Licensor with a certification by an authorized representative of Licensee that all copies have been returned to Licensor or have been destroyed and Licensor shall refund to Licensee the amount paid by Licensee to Licensor for such Licensed Products.

                                      ARTICLE 5                       REPRESENTATIONS AND WARRANTIES OF LICENSEE

Section 5.1    AUTHORITY.  Licensee represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and that it is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required by applicable law, except where the failure to be so qualified would not have a material adverse effect on Licensee or the assets of Licensee.  Licensee represents and warrants that it has all requisite power and authority to execute this Agreement and to consummate the transactions contemplated hereby and that this Agreement has been duly executed and delivered by Licensee and constitutes a valid and binding obligation of Licensee enforceable in accordance with its terms.

                                          5

Section 5.2    ABILITY TO PERFORM.  Licensee represents and warrants that it has sufficient facilities, resources and personnel to adequately perform its obligations under this Agreement and that no existing arrangement, contractual or otherwise, will cause Licensee to breach the terms of this Agreement or prevent Licensee from fulfilling its obligations under this Agreement.

                                      ARTICLE 6                       REPRESENTATIONS AND WARRANTIES OF LICENSOR

Section 6.1    AUTHORITY.  Licensor represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and that it is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required by applicable law, except where the failure to be so qualified would not have a material adverse effect on Licensor or the assets of Licensor.  Licensor represents and warrants that it has all requisite power and authority to execute this Agreement and to consummate the transactions contemplated hereby and that this Agreement has been duly executed and delivered by Licensor and constitutes a valid and binding obligation of Licensor enforceable in accordance with its terms.

Section 6.2    TITLE TO LICENSED PRODUCTS.  Licensor represents and warrants that it possesses all right, title and interest in and to the Licensed Products and the Documentation and that the use of each of the Licensed Products and the Documentation by Licensee, a Redistributor or a Customer will not in any way constitute an infringement or other violation of any copyright, trade secret, trademark, patent or other intellectual property fights or any proprietary information or nondisclosure or other rights of any third party.  Licensor represents and warrants that no existing arrangement, contractual or otherwise, will cause Licensor to breach the terms of this Agreement or prevent Licensor from fulfilling its obligations under this Agreement.

                                      ARTICLE 7                                 COVENANTS OF LICENSEE

Section 7.1    DUTIES OF LICENSEE.  Licensee shall be solely responsible for the proper advertising, demonstration, shipment, export and collection of payment relating to the Licensed Products and Documentation in the Territory.  The duties of Licensee include without limitation the following:

     (a)  Advertising the Licensed Product in appropriate media, contacting and           developing Customers and prospective Redistributors by telephone and           otherwise, providing information concerning Licensed Products to           Customers and prospective Redistributors and advising such Customers           and prospective Redistributors on the selection and use of the           Licensed Products.

                                          6

     (b)  Complying with Licensee's warranty obligations as set forth in its





          agreements with Redistributors and Customers.

     (c)  Sending at Licensee's expense qualified and appropriate personnel of           Licensee to participate in training sessions, which shall be conducted           by Licensor from time to time without charge to Licensee for the           benefit of Licensee and Licensee's personnel.

     (d)  Obligating each Redistributor to keep complete and accurate records of           such Redistributor's Customers, leads to prospective Customers, the           number and type of Licensed Products licensed by such Redistributor           and such related operating and financial data as Licensor reasonably           may request from time to time for the sole purpose of monitoring the           Licensed Products.

Section 7.2    DOCUMENTATION.  Licensee shall represent accurately and completely the Licensed Products to Customers as to quality, function, purpose and compatibility in accordance with the Documentation whenever the Licensed Products are referenced, demonstrated or advertised.  Licensee shall obtain prior written approval from Licensor for all materials other than the Documentation to be used by Licensee in connection with trials, demonstrations and agreements relating to the Licensed Products, and such approval shall not be unreasonably withheld or delayed by Licensor.  Licensee shall give Licensor and any licensors of Licensor appropriate credit for the authorship of the Licensed Products and Documentation at any seminar, trade show or other presentation of the Licensed Products.

Section 7.3    EXPORTING AND SHIPMENT.  Licensee shall obtain prior written approval from Licensor and any required export licenses from the United States Department of Commerce, Office of Export Administration or other applicable domestic or foreign governmental agency before exporting any Licensed Product or Documentation from the United States.  Licensee agrees and covenants to comply fully with all applicable laws, rules and regulations, and to adopt such policies and procedures in connection with, the exporting of the Licensed Products and Documentation as may be required thereby.  Each party to this Agreement shall cooperate fully with the other party to this Agreement and any governmental authorities by giving consents or information or providing or executing such documents as reasonably may be required to comply fully with such laws, rules or regulations existing now or in the future.

Section 7.4    TAXES AND TARIFFS.

     (a)  Licensee shall pay any and all taxes (other than taxes on Licensor's           net income), tariffs, import and export duties or other fees imposed           or assessed in connection with the transactions contemplated by this           Agreement, including the delivery of Licensed Products and           Documentation to Licensee and the shipment of Licensed Products from           Licensee to a Redistributor or Customer.

                                     7

     (b)  in the event that Licensee is required by law to withhold any form of           tax, tariff or duty from any amount payable to Licensor under this           Agreement, then Licensee shall provide Licensor with copies of all           documentation required in connection with such withholdings and shall           provide to Licensor all assistance requested by Licensor in applying           for relief from such withholding obligations and in substantiating           corresponding tax, duty or tariff credits or deductions which may be           available to Licensor with respect to such withholding under           applicable law.

Section 7.5    BOOKS AND RECORDS.  Licensee shall keep proper records and books of account concerning the reproduction and sublicensing of the Licensed Products that are adequate to determine the amount of fees owed to Licensor and Licensee shall preserve such records and books in a safe place for a period of five (5) years following termination of this Agreement.

Section 7.6    MONTHLY REPORT.  On or prior to the fifteenth (15th) day of each calendar month Licensee shall deliver to Licensor a written report certified as true and correct by an authorized office of Licensee stating (a) each Agreement for Trial entered into by Licensee during the previous calendar month, together with the expected revenues, if any, to Licensee under each such agreement, (b) each Sublicense entered into by Licensee during the previous calendar month, together with the expected revenues to Licensee for each such Sublicense, (c) each Redistributor Agreement entered into by Licensee during the previous calendar month, together with the expected revenues to Licensee for each such agreement, and (d) a list of invoices, together with the dollar amounts thereof, sent by Licensee to each Redistributor and Customer during the previous calendar month.

Section 7.7    FINANCIAL STATEMENTS.  Licensee shall provide (but shall not be obligated to do so more frequently than twice annually) to Licensor financial statements, credit ratings or other evidence of Licensee's financial condition promptly upon written request of Licensor.

Section 7.8    REPLACEMENTS.  Licensee shall honor any proper refund or replacement requests received for the Licensed Products from Redistributors pursuant to the applicable Redistributor Agreement or from Customers pursuant to a Sublicense.  Upon receipt of any such properly returned Licensed Products, Licensor shall refund to Licensee the amount paid by Licensee to Licensor for such Licensed Products.  Licensee shall instruct Redistributors and Customers to direct all refund requests directly to Licensee rather than Licensor.

Section 7.9    MODIFICATIONS.  Licensee shall not make any modifications to or





derivations of the Licensed Products without the prior written consent of Licensor, except in the case of an Emergency Fix.  Licensee shall not reverse engineer or otherwise attempt to reproduce the source code of any Licensed Product.  In the event that Licensee makes any modification, alteration or enhancement to the Licensed Product or Documentation (including but not limited to an Emergency Fix), such modification, alteration or enhancement, including all intellectual property rights thereto, will be and remain the sole and exclusive property of Licensor.  Any suggestions or changes desired by Licensee to the Licensed Product or Documentation shall be made by

                                      8

Licensee in writing to Licensor and, if incorporated into the Licensed  Product or Documentation, shall be the property of Licensor.

Section 7.10   COPYRIGHT AND OTHER PROPRIETARY NOTICES.  Licensee shall ensure that the copyright, trademark and any other proprietary notices of Licensor or other legends contained in or on any copies of the Licensed Products or Documentation remain in or on the original Licensed Product or Documentation and any copies of such product or documentation reproduced by Licensee.  The existence of any copyright, trademark or other proprietary notices in or on the Licensed Product or Documentation shall not be construed as a publication of the Licensed Product or Documentation.

Section 7.11   NO ENCUMBRANCES.  Licensee shall not engage in the lease, transfer, rental or loan of the Licensed Products or Documentation and Licensee shall not allow the Licensed Products or Documentation to become encumbered by any means.

Section 7.12   NO INCONSISTENT WARRANTIES.  Licensee shall not, and shall obligate Redistributors not to, make or pass on to Customers any warranty or representation on behalf of Licensor inconsistent with or in addition to the limited warranty contained in the Sublicense.

Section 7.13   DISPUTES BETWEEN LICENSEE AND CUSTOMERS.  Licensee shall notify Licensor promptly concerning any threatened legal proceedings between Licensee on the one hand and a Redistributor or a Customer on the other hand and of any legal notices served on, or legal actions commenced against, Licensee regarding the Licensed Products or Documentation which might affect Licensor.  Licensee shall not institute proceedings or enter into a compromise with any third party with whom it is in dispute concerning the Licensed Products or Documentation without the prior written consent of a duly authorized officer of Licensor, which consent shall not be unreasonably withheld or delayed by Licensor.

Section 7.14   TRANSLATION.  Licensee shall not translate any portion of the Licensed Products, including any Documentation, into any other language without the prior written permission of Licensor.

Section 7.15   INTELLECTUAL PROPERTY REGISTRATION.  Without the prior written consent of Licensor, Licensee shall not register, apply for registration or in any other way attempt to obtain any intellectual property rights relating to any Licensed Product, any Documentation or any part thereof or take any action that materially and adversely affects such rights held by Licensor.

                                      ARTICLE 8                                 COVENANTS OF LICENSOR

Section 8.1    Licensor shall be solely responsible for delivering to Licensee a Master Copy of each Licensed Product and Documentation and for the maintenance and support of the

                                          9

Sublicense Copies and Documentation used by any Redistributors and Customers.  The duties of Licensor include the following:

     (a)  Delivering a Master Copy of each Licensed Product and Documentation,           including any Upgrades as they become available, to permit Licensee to           (1) make Sublicense Copies and copies of the Documentation to meet the           demand of Redistributors and Customers and (2) market and license           Sublicense Copies and copies of the Documentation, together with the           copies of promotional and other materials which Licensor may produce           from time to time in order to assist Licensee in marketing and           sublicensing the Licensed Products during the term of this Agreement.

     (b)  Employing a sufficient number of skilled technicians experienced in           the computing industry and familiar with the Licensed Products and           Documentation to provide adequate technical support and assistance to           all Redistributors and Customers.

     (c)  Providing competent instruction to Redistributors and Customers           regarding the use and installation of the Licensed Products.

     (d)  Providing information, including by means of telephone support, to           Redistributors and Customers as to the proper procedures and persons           to contact to enable the proper installation and operation of the           Licensed Products and providing responsive answers to questions and           problems regarding the use and operation of the Licensed Products.





     (e)  Providing technical assistance in supporting the Licensed Products and           correcting any errors in the Licensed Products on an ongoing basis.

     (f)  Delivering to Licensee sample copies of all Licensor's marketing and           licensing materials relating to the Licensed Products in use in the           United States of America for copying and distribution in the Territory           at Licensee's expense.

Section 8.2    REGISTRATION FOR TRADEMARKS AND COPYRIGHTS.  Licensor shall use its best efforts to register in its name all Marks relating to the Licensed Products in the Territory and Licensor shall bear all costs of such registration and the maintenance and enforcement of all such rights and shall notify Licensee from time to time of all successful and unsuccessful registrations.

                                      ARTICLE 9                                    INDEMNIFICATION

Section 9.1    INDEMNIFICATION OF LICENSOR.  Licensee hereby agrees to defend and indemnify Licensor and Licensor's officers, directors, employees, stockholders, agents and representatives

                                         10

against, and agrees to hold them harmless from, any loss, liability, claim,  damage or expense (including reasonable legal fees and expenses incurred  therein or in enforcing the indemnity), as incurred, for or on account of or  arising from or in connection with or otherwise with respect to any breach of  any representation, warranty or covenant of Licensee contained in this  Agreement or any document delivered in connection herewith.

Section 9.2    INDEMNIFICATION OF LICENSEE.  Licensor hereby agrees to defend and indemnify Licensee and Licensee's officers, directors, employees, stockholders, agents and representatives against, and agrees to hold them harmless from, any loss, liability, claim, damage or expense (including reasonable legal fees and expenses incurred therein or in enforcing the indemnity), as incurred, for or on account of or arising from or in connection with or otherwise with respect to any breach of any representation, warranty or covenant of Licensor contained in this Agreement or any document delivered in connection herewith.

Section 9.3    INDEMNIFICATION PROCEDURE.  Promptly after acquiring knowledge of any loss, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim against Licensor or Licensee, or as to which Licensor or Licensee may be liable, a party entitled hereunder to be indemnified shall give written notice thereof to the party obligated hereunder to provide indemnification.  The indemnifying party at its own expense promptly shall defend, contest or otherwise protect against any damage, loss, deficiency, liability, claim, encumbrance, penalty, cost, expense, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim made by a third party against which such indemnifying party has agreed to indemnify any indemnified party, and each indemnifying party shall receive from the indemnified party all necessary and reasonable cooperation in said defense, including without limitation the services of employees of the indemnified party who are familiar with the transactions out of which any such damage, loss, deficiency, liability, claim, encumbrance, penalty, cost, expense, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim may have arisen.  The indemnified party shall have the right to control the defense of any such third party proceeding unless it is relieved of its liability hereunder with respect to such defense by the indemnified party.  The indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed the defense of the action with counsel reasonably satisfactory to the indemnified party; provided that the fees and expenses of the indemnified party's counsel shall be at the expense of the indemnifying party if (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party or (ii) such indemnified party shall have been advised by counsel hat there is a conflict of interest or issue conflict involved in the representation by counsel employed by the indemnifying party in the defense of such action on behalf of the indemnified party or that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party (in which case the indemnifying party shall not have the fight to assume the defense of such action on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not be liable, in connection with any one such action or separate but substantially similar or related actions in the same Jurisdiction arising out of the same general allegations or circumstances, for the

                                       11

reasonable fees and expenses of more than one separate firm of attorneys for  the indemnified party, which firm shall be designated in writing by the  indemnified party).  The indemnifying party shall have the right, at its  option and unless so relieved, to compromise, at its own expense by its own  counsel, any such matter involving the asserted liability to a third party of  the indemnified party.  In the event that the indemnifying party shall  undertake to compromise any such asserted liability, the indemnifying party  shall notify the indemnified party promptly of its intention to do so.  In  the event that an indemnifying party after written notice from an indemnified





party fails to take timely action to defend any such damage, loss,  deficiency, liability, claimed encumbrance, penalty, cost, expense, action,  suit, investigation, proceeding, demand, assessment, audit, judgment or  claimed the indemnified party shall have the right to defend the same by  counsel of its own choosing but at the cost and expense of the indemnifying  party.  In the event that the indemnified party defends such an asserted  liability, it shall not compromise any such asserted liability without the  written consent of the indemnifying party, such consent not to be  unreasonably withheld or delayed.

Section 9.4    FURTHER REMEDIES FOR INFRINGEMENT.  If Licensee is prevented from its normal use of any Licensed Product or Documentation by injunction or court order arising from, relating to or in connection with any alleged or actual infringement on the intellectual property rights of a third party relating to any Licensed Product or Documentation, then Licensor at its option and in addition to the other remedies contained in this Agreement and at no expense, loss or damage to Licensee shall (a) replace such Licensed Product or Documentation free of any such infringement, (b) modify such Licensed Product or Documentation so that it is free of any such infringement or (c) procure for the benefit of Licensee, whether by license or other release of claim of infringement, the fight to make Sublicense Copies and copies of the Documentation to meet the demand of Redistributors and Customers and to market and sublicense Sublicense Copies and copies of the Documentation.

                                      ARTICLE 10                       AGREEMENT NOT TO COMPETE, CONFIDENTIALITY

Section 10.1   NONCOMPETITION.  Each of Licensor and Licensee understands and acknowledges that Licensor shall be entitled to protect and preserve the going concern value of Licensor's business to the extent permitted by law and that Licensor would not have entered into this Agreement absent the provisions of this Section 10.1 and, therefore, each of Licensor and Licensee agrees that during the term of this Agreement Licensee shall not engage in, represent in any way or be connected with directly or indirectly any business competing with the Licensed Products.

Section 10.2   CONFIDENTIAL INFORMATION.  Licensee understands and agrees that the Licensed Products and any related information marked Confidential constitute valuable intellectual property and trade secrets of Licensor and embody substantial creative efforts and confidential information, ideas and expressions belonging to Licensor.  Licensor understands and agrees that

                                      12

any reports supplied pursuant to this Agreement by Licensee to Licensor  relating to the Licensed Products contain proprietary information of  Licensee.  The Licensed Products and related information and such reports are  referred to collectively in this Agreement as the Confidential Information.  Each party to this Agreement shall observe at all times complete  confidentiality with regard to the Confidential Information of the other  party to this Agreement held by such party and shall not permit or authorize  access to or disclosure of any such Confidential Information to any other  person or entity other than such party's employees and consultants who have  executed confidentiality agreements with terms substantially similar to this  Agreement.  This Section 10.2 will not apply to any Confidential Information  that is required to be disclosed by applicable law or any Confidential  Information that becomes (a) public other than by virtue of a breach of this  Section 10.2 or (b) available to such party from another source (other than  any independent contractor engaged by such party to audit pursuant to this  Agreement the records of the other party hereto) that is not subject to a  confidentiality agreement with the other party hereto of which such party at  that time is aware.

Section 10.3   UNAUTHORIZED USE.  Each party to this Agreement shall notify the other party to this Agreement promptly in writing of the existence of any circumstances surrounding any unauthorized knowledge, possession or use of the Confidential Information by any person or entity other than the parties to this Agreement and each of their authorized employees and consultants.

Section 10.4   REMEDY.  Notwithstanding any other provision of this Agreement, each of the parties to this Agreement understands and agrees that the remedy of indemnity payments pursuant to this Agreement and other remedies at law would be inadequate in the case of any breach of the covenants contained in this Article 10 and each party to this Agreement agrees that the other party to this Agreement shall be entitled to equitable relief, including the remedy of specific performance, without posting of bond or other security, with respect to any breach or attempted breach of such covenants.

                                      ARTICLE 11                                         AUDITS

Section 11.1   AUDITS.  During the term of this Agreement and the five (5) year period immediately following termination of this Agreement, Licensor will have the right, at its own expense, to audit and examine Licensees records concerning either (a) the reproduction and sublicensing of the Licensed Products and the resulting fees due to Licensor or (b) compliance by Licensee with its obligations as to confidentiality under this Agreement.  During the term of this Agreement and the five (5) year period immediately following termination of this Agreement, Licensee will have the right, at its own expense, to audit and examine Licensor's records concerning compliance by Licensor with its obligations as to confidentiality under this Agreement.  Any such audit shall be





conducted during normal business hours, upon at least three business days prior written notification to the party to be audited stating the purpose of the audit

                                        13

and in such a manner so as to not unreasonably interfere with such party's business operations.  The auditing party shall keep any and all information derived from any audits confidential.  Such information is deemed to be Confidential Information within the meaning of Article 10.  In relation to such information, the parties to this Agreement are subject to the obligations and remedies set forth in Article 10.  The auditing party shall not use such information for any purpose other than the purpose of the audit as stated in such party's written notification for such audit.  If an audit of Licensee's records and books of account reveals that Licensee has underpaid the fees due under this Agreement to Licensor for the period under audit, Licensee shall pay to Licensor promptly the amount of the underpayment.  If the amount of underpayment for the period under audit exceeds five percent (5%) of the total amount owed during such period, Licensee shall reimburse Licensor for all costs and expenses incurred by Licensor in connection with performing the audit.

                                      ARTICLE 12                                   LIMITED WARRANTIES

Section 12.1   NO DEFECTS.  For twelve (12) months after delivery of the Master Copy of each Licensed Product to Licensee, Licensor warrants that the media in which the Licensed Products are stored shall be free from defects in materials and workmanship, assuming normal use.  Licensee may return any defective media to Licensor for replacement free of charge during such twelve (12) month period.

Section 12.2   PERFORMANCE.  For twelve (12) months after delivery of any Licensed Product to a Customer, whether Customer receives such Licensed Product from Licensee or a Redistributor, Licensor warrants that each Licensed Product will perform as described in the applicable Documentation.  If Licensee or any Redistributor or Customer discovers any errors or discrepancies in the Licensed Products from the Documentation during the twelve (12) month warranty period, Licensee shall notify Licensor promptly in writing of such error or discrepancy in sufficient detail to enable Licensor to recreate the error or discrepancy.  If the error or discrepancy is found by Licensee prior to the expiration of the ten (10) day evaluation period set forth in Section 4.2, such evaluation period shall be extended ten (10) days from the date of receipt by Licensee of the corrected Licensed Product from Licensor.

Section 12.3   DUTIES UNDER WARRANTY.  If Licensee or any Redistributor or Customer discovers any error in any Licensed Product or discrepancy in any Licensed Product from the Documentation that results in a material loss of performance in the Licensed Product within the twelve (12) month warranty period, then Licensor shall provide Licensee with the correction or method of resolving such error or discrepancy provided that Licensor shall not be responsible for any error or discrepancy caused by failure to use the Licensed Products as specified in the Documentation or any modifications made to any Licensed Product by or on behalf of a party other than Licensor.  If such error or discrepancy is not resolved within thirty (30) days after Licensee's

                                     14

written notice to Licensor, then Licensee as its sole remedy may (a) extend  the correction period to a date which is agreeable to Licensor and Licensee  or (b) return all copies of the Licensed Products to Licensor with a  certification by an authorized representative of Licensee that all copies  have been returned to Licensor or have been destroyed and that Licensee has  not retained any copies thereof and Licensor shall refund to Licensee the  amount paid by Licensee to Licensor for such Licensed Products.  Licensee  shall pay for all services rendered by Licensor in connection with the  Licensed Products or Documentation that are not covered or at that time are  no longer covered by the warranty described in this Agreement.

Section 12.4   EXCLUSIVE REMEDIES.  THE REMEDIES SPECIFIED ABOVE SHALL BE THE SOLE AND EXCLUSIVE REMEDIES OF LICENSEE REGARDING THE LICENSED PRODUCTS.  LICENSOR SPECIFICALLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS, RAPLIED OR STATUTORY, INCLUDING ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  LICENSOR SPECIFICALLY MAKES NO REPRESENTATIONS REGARDING THE SUITABILITY OF THE LICENSED PRODUCTS FOR THE REQUIREMENTS OF ANY REDISTRIBUTOR.  OR CUSTOMER CONCERNING CAPACITY, INTERCONNECTIVITY, EXPANDABILITY OR PERFORMANCE.

                                      ARTICLE 13                                       LIABILITY

Section 13.1   LIMIT OF LIABILITY.  Licensor's total liability to Licensee under any provision of this Agreement shall be limited to the amount actually paid by Licensee to Licensor for the Licensed Product giving rise to the liability.  The existence of claims or suits against more than one Licensed Product shall not enlarge or extend the limit.  The parties to this Agreement acknowledge that each of them relied upon the inclusion of this limitation in consideration of entering into this Agreement.  IN NO EVENT SHALL A PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT FOR ANY SPECIAL, INDIRECT,





INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE USE, OR INABILITY TO USE, THE LICENSED PRODUCTS OR ARISING OUT OF THIS AGREEMENT, INCLUDING BUT NOT LMTED TO LOSS OF PROFIT OR OTHER MONETARY LOSS, LOSS OR INTERRUPTION OF DATA OR CONTUTER TIME, ALTERATION OR ERRONEOUS TRANSNUSSION OF DATA OR PROGRAM ERRORS, EVEN IF SUCH PARTY IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

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                                      ARTICLE 14                                  TERM AND TERMINATION

Section 14.1   TERM.  This Agreement shall be effective until the earlier of (a) its termination in accordance with the provisions of this Article 14 or (b) the date that is two (2) years after the date of this Agreement; provided, however, that this Agreement will renew automatically for successive terms of one (1) year each unless a party to this Agreement delivers written notice of termination to the other party to this Agreement at least sixty (60) days prior to the end of the original or any renewal term or the parties to this Agreement do not agree in writing to the Quota Amount referred to in subsection 14.2(b)(1) for any one (1) year renewal term at least sixty (60) days prior to the commencement of such term.

Section 14.2    TERMINATION.

(a) Either party to this Agreement may terminate this Agreement:

    (1)   Immediately upon written notice if the other party to this Agreement           becomes insolvent, is the subject of a petition in bankruptcy that is           not resolved within thirty (30) days, admits in writing its inability            to pay its debts, makes an assignment for the benefit of creditors,            ceases doing business or attempts an unauthorized assignment of this            Agreement; or

    (2)   Immediately upon written notice if the other party to this Agreement           performance of any obligation under this Agreement, including failure            to promptly pay any amount due hereunder, and fails to cure such            default within thirty (30) days after delivery of written notice            specifying the default (with any termination as a result of Licensee's           failure to pay amounts due under this Agreement resulting in the            acceleration of Licensee's obligation to pay all sums due to Licensor            under this Agreement).

(b) Licensor may terminate this Agreement:

    (1)   Upon ninety (90) days prior written notice if Licensee does not enter            into Sublicenses and other agreements relating to the Licensed            Products with Redistributors and Customers that result in fees payable           to Licensor hereunder in an aggregate amount equal to or greater than            the Quota Amount for any year during the term hereof.  As used herein,           the term Quota Amount means $50,000 for each of the first and second           years of the original term of this Agreement and an amount agreed to            in writing by the parties hereto in respect of any subsequent one year           renewal term (provided that such amount equals or exceeds $50,000).             If Licensor fails to deliver notice of termination pursuant to this            subsection 14.2(b)(1) within six (6) months after the end of the term           to which such termination relates, Licensor will be deemed to have            waived such termination right in respect of such term (but not in            respect of subsequent terms); or

    (2)   Upon thirty (30) days prior written notice if Licensee enters into an           agreement or other arrangement relating to the merger of Licensee with           another entity, the acquisition of the majority of Licensee's issued            and outstanding capital stock or the acquisition of substantially all           of the assets of Licensee.

Section 14.3   DUTIES UPON TERMINATION.  Upon the termination or expiration of the term of this Agreement, the parties shall have the following rights and obligations:

     (a)  Within five (5) days of written demand by Licensor to Licensee,           Licensee shall return or destroy all copies of the Licensed Products           and any materials associated with the Licensed Products in Licensee's           possession or control, except that Licensee may retain sufficient           copies of the Master Copy of each Licensed Product in object code form           to enable Licensee to meet its maintenance and support obligations to           its Customers, if any.

     (b)  Licensee immediately shall cease any use, reproduction, sublicensing           or distribution of the Licensed Products or the Documentation.

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     (c)  Within five (5) days of Licensor's written request, Licensee shall           certify in a writing reasonably acceptable to Licensor that except as           set forth in this Agreement all copies of the Licensed Products and           related material have been delivered to Licensor, destroyed or           rendered unusable.

     (d)  Licensee shall not use any Licensed Product or Documentation as part           of any other product that Licensee may use, sublicense or distribute





          and Licensee shall cease any use of the Marks associated with the           Licensed Products or Documentation.

     (e)  All valid Redistributor Agreements and Sublicenses by and between           Licensee and any Redistributors and Customers will remain and continue           in full force and effect for the remainder of their respective terms,           and at Licensor's option Licensee shall assign to Licensor its rights           in such agreements with respect to the Licensed Products or           Documentation; provided that if Licensor fails to provide reasonable           support to any Redistributor or Customer, Licensee may support such           Redistributor or Customer without payment of fees to Licensor.

     (f)  Licensee promptly shall account for and pay to Licensor all amounts           due and owing pursuant to the terms of this Agreement and provide           Licensor with all outstanding reports due under this Agreement.

     (g)  Licensee immediately shall cease holding itself out as having any           connection with any Licensed Product or Licensor, unless Licensee at           that time has a connection with Licensor by reason other than this           Agreement.

     (h)  Licensee shall report to Licensor in reasonable detail the status of           all negotiations with prospective Redistributors and Customers or           leads to prospective Redistributors and Customers and all services           which Licensee is obligated to provide to any Redistributors or           Customers.

Section 14.4   RIGHTS NOT EXHAUSTIVE. The fights and remedies of Licensor included in this Article 14 shall not be exclusive and are in addition to any other rights and remedies provided by law or equity.

Section 14.5   SURVIVAL.  The provisions of Articles 9, 10 and 11, Section 7.5 and this Section 14.5 and all obligations of Licensee to pay any amounts to Licensor under this Agreement will survive the termination of this Agreement.

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                                      ARTICLE 15                                        GENERAL

Section 15.1   NATURE OF RELATIONSHIP.  The relationship existing between Licensee and Licensor is one of an independent contractor, and this Agreement shall not be construed as creating a partnership, joint venture, agency relationship or as granting a franchise under federal or any state law.  Each of Licensee and its officers, employees or other representatives shall not enter into or attempt to enter into any obligation on behalf of Licensor.  Licensee shall not make any representations to any Redistributors or Customers with respect to the Licensed Products and Documentation, including without limitation representations as to any warranty, covenant or other terms or conditions relating to licensing of the Licensed Products, unless such representations are made (a) in strict accordance with this Agreement or (b) with the prior written consent of Licensor.

Section 15.2   NOTICES.  All notices and other communications hereunder shall be in writing and shall be deemed delivered (i) when delivered if delivered personally or by overnight courier or telecopier with proof of delivery or (ii) three (3) days after such communication is deposited in the United States mail with postage prepaid, if delivered, if mailed by registered or certified mail (return receipt requested) to the parties to this Agreement at the following addresses (or at such other address for a party as shall be specified by like notice):

     (a)  if to Licensor, to

          Peregrine/Bridge Transfer Corporation            14141 Southwest Freeway, Suite 6200            Sugar Land, Texas 77478           Attn:     President

     and

     (b)  if to Licensee, to

          Neon Systems, Inc.           14141 Southwest Freeway, Suite 6200            Sugar Land, Texas 77478           Attn: President

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Section 15.3   INTERPRETATION.  When a reference is made in this Agreement to an Article, Section, subsection or Exhibit, such reference shall be to an Article, Section, subsection or Exhibit of this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words include, includes or including are





used in this Agreement, such term shall be deemed to be followed by the words without limitation. All accounting terms not defined in this Agreement shall have the meanings determined by generally accepted accounting principles.

Section 15.4   COUNTERPARTS  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties to this Agreement and delivered to the other parties to this Agreement, it being understood that all such parties need not sign the same counterpart.  For purposes hereof, delivery shall be deemed effective upon exchange of signed copies of this Agreement by facsimile, provided that originally signed counterparts of this Agreement are transmitted promptly to the other parties hereto.

Section 15.5   ENTIRE AGREEMENT, THIRD PARTY BENEFICIARIES. This Agreement (including the documents and instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof and (b) is not intended to confer upon any person (including any Redistributor or Customer) other than the parties hereto any rights or remedies hereunder, except as provided in Article 9.

Section 15.6   GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE SIATE OF TEXAS.

Section 15.7   ASSIGNMENT.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other party to this Agreement; provided, however, that Licensor may assign this Agreement to a subsidiary or entity controlling, controlled by or under common control with Licensor.   Subject to the preceding sentence, this Agreement will be binding upon,  inure to the benefit of and be to this Agreement and their respective  successors and permitted assigns.

Section 15.8   SEVERABILITY.  If any provision of this Agreement, or any portion of any provision hereof, shall be deemed invalid or unenforceable pursuant to a final determination of any court of competent jurisdiction or as a result of future legislative action, such determination or action shall be construed so as not to affect the validity or enforceability hereof and shall not affect the validity or effect of any other portion hereof

Section 15.9   AMENDMENT.  This Agreement may be amended only by a written instrument duly signed by each of the parties hereto.

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Section 15.10  WAIVER.  Any of the terms, covenants, representations, warranties or conditions of this Agreement may be waived only by a written instrument signed by the party to this Agreement waiving compliance.  No waiver by any party to this Agreement of any condition or breach of any term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term, covenant, representation or warranty set forth in this Agreement.

IN WITNESS WBEREOF, the parties hereto have executed this Agreement as of the date first above written.

                                   LICENSOR:                                    PEREGRINE/BRIDGE TRANSFER

                                   By: /s/ Charles E Noell                                       ----------------------------------                                    Name: Charles E Noell                                         --------------------------------                                    Title: General Partner                                          -------------------------------

                                   LICENSEE:

                                   NEON SYSTEMS, INC.

                                   By: /s/ F. Joseph Backer                                       ----------------------------------                                    Name: F. Joseph Backer                                         --------------------------------                                    Title: CEO                                          -------------------------------

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                                     EXHIBIT B                                    THE TERRITORY

                        The Territory included is worldwide. 
Question: Highlight the parts (if any) of this contract related to Warranty Duration that should be reviewed by a lawyer. Details: What is the duration of any  warranty against defects or errors in technology, products, or services  provided under the contract?

A:
For twelve (12) months after delivery of any Licensed Product to a Customer, whether Customer receives such Licensed Product from Licensee or a Redistributor, Licensor warrants that each Licensed Product will perform as described in the applicable Documentation.  If Licensee or any Redistributor or Customer discovers any errors or discrepancies in the Licensed Products from the Documentation during the twelve (12) month warranty period, Licensee shall notify Licensor promptly in writing of such error or discrepancy in sufficient detail to enable Licensor to recreate the error or discrepancy.  If the error or discrepancy is found by Licensee prior to the expiration of the ten (10) day evaluation period set forth in Section 4.2, such evaluation period shall be extended ten (10) days from the date of receipt by Licensee of the corrected Licensed Product from Licensor.
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