In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.

Example Input: [LOGO]

                                    EXHIBIT C

                                    AIRSOPURE                                FRANCHISE AGREEMENT

THIS AGREEMENT is entered into on this ____ day of ___________, 2000, by and between Airsopure International Group, Inc., a Nevada corporation whose principal place of business is located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (hereinafter AIRSOPURE or by reference we, us, our), and You:                                    ,     ------------------------------------ whose address is:

- ----------------------------------------

- ---------------------------------------- (hereinafter You or by reference Franchisee, or Your). Either Party or both Parties respectively may be referred to as Party or Parties.

                                    RECITALS

A. AIRSOPURE and its affiliate design, manufacture and distribute indoor air cleaning systems under the name and mark AIRSOPURE (the Products).

B. AIRSOPURE has developed a system for the establishment, development and operation of sales centers (AIRSOPURE Center(s) or Center(s)) for the sale and servicing of AIRSOPURE's exclusive line of Products using the service mark AIRSOPURE and other trademarks, service marks (including but not limited to, The Essence of Clean Air), logos and identifying features designated from time to time by AIRSOPURE (the Licensed Marks) and using AIRSOPURE's distinctive methods for establishing and operating AIRSOPURE Centers.

C. You desire to establish an AIRSOPURE Center to be located in the following geographic area:

- ----------------------------------------

- ----------------------------------------

(the Exclusive Territory), and AIRSOPURE desires to grant You the right to operate an AIRSOPURE Center at such location under the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual rights, covenants and obligations set forth herein, the Parties agree as follows:

1.  GRANT OF FRANCHISE

1.01. AIRSOPURE grants to You, and You accept from AIRSOPURE, the right and license to operate an AIRSOPURE Center (or the Franchise) for the sale or lease of AIRSOPURE's exclusive line of Products or at a location in the Exclusive Territory to be approved in writing by AIRSOPURE and listed in attached Exhibit A (the Exclusive Territory and Center Location), to purchase Products from AIRSOPURE or its affiliates for resale at the Center to customers in the Exclusive Territory, and to use the Licensed Marks only in connection with the operation of the Franchise in accordance with the terms and conditions of this Agreement. AIRSOPURE grants the Franchise to You hereunder in reliance upon Your agreement to at all times operate and manage the Franchise faithfully, honestly and diligently in strict conformance with AIRSOPURE's operating procedures and specifications, as set forth herein and as otherwise from time to time communicated to You, using Your best efforts to promote and enhance the performance and operation of the Franchise.

1.02. AIRSOPURE hereby grants to You the exclusive right to solicit customers for the Products by direct mail advertising, or other approved means, but not including the World Wide Web (Internet) nor by printed catalogues, in

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the Exclusive Territory described above and in Exhibit A. Other AIRSOPURE franchisees will not be permitted to solicit customers for Products by advertising in Your Exclusive Territory. Likewise, You may not target or solicit customers for Products by advertising in other Franchisees respective Exclusive Territories. Exclusive Territories will not overlap into other Exclusive Territories. You shall not purposely solicit sales and service to customers located outside Your Exclusive Territory, provided such activity in not within an assigned Exclusive Territory. You have been granted an exclusive trade area by this Agreement.

2.  TERM AND RENEWAL

2.01. The term of this Agreement shall be for 10 years commencing on the date of execution of this Agreement by AIRSOPURE.

2.02. At the expiration of the term or any renewal term hereof, You may, at its option, renew the Franchise granted hereunder for 2 additional terms of 10 years each on the following terms and conditions:





A. You shall give AIRSOPURE notice in writing of Your election to renew this Agreement at least 3 months prior to the expiration of the then-current term.

B. You shall not be in default of any provision of this Agreement or amendment hereto, including without limitation all payment obligations to AIRSOPURE and its affiliates.

C. As a condition of renewal of the Franchise, You agree to execute AIRSOPURE's then-current form of franchise agreement and to comply fully with all terms and conditions thereof, and to pay AIRSOPURE the then-current renewal fee, which is presently $1,000.00. You understand that AIRSOPURE may revise its franchise agreement for any renewal term, at AIRSOPURE's sole discretion, including without limitation to increase the royalty fees or other fees payable by You or to require other obligations of franchisees.

D. You shall meet AIRSOPURE's then-current qualifications and training requirements.

E. You shall execute a general release in a form prescribed by AIRSOPURE releasing AIRSOPURE and its affiliates, directors, officers, employees and agents from all known and unknown claims and liabilities to the extent permitted by state and federal law.

F. You may be required, at AIRSOPURE's sole discretion, to upgrade or remodel Your AIRSOPURE Center to conform to AIRSOPURE's then-current specifications and standards as specified in AIRSOPURE's Operating Manual of otherwise in writing, provided such upgrade or remodel is reasonable in terms of cost and implementation schedule.

3.  FEES

3.01. In consideration of the Franchise rights and license granted herein, You agree to pay to AIRSOPURE the following fees:

A. You shall pay to AIRSOPURE an initial franchise fee of $25,000.00 upon execution of this Agreement. You agree that the initial franchise fee represents payment for the initial grant of the Franchise rights and license granted herein, shall be fully earned upon execution of this Agreement, and the said fee will not be refunded under any circumstances unless otherwise specifically set forth herein. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise. If we cannot agree on a Center location, within 4 months, we may a) extend your search time, b) exchange your territory, or c) terminate your Franchise and refund up to 70% of your Franchise Fee, at our sole discretion. There are no refunds under any other circumstances.

B. You shall pay to AIRSOPURE a continuing non-refundable royalty fee on a monthly basis of

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5% of Your total monthly gross sales, as defined below. This fee is due by the 7th of the month for the preceding month.

C. You shall account to AIRSOPURE for Your continuing non-refundable local advertising fee of 2% of Your total monthly gross sales, which You must spend on the promotion of Your Center. This accounting is due by the 7th of the month for the preceding month.

D. You shall pay to AIRSOPURE a continuing non-refundable Advertising Fund fee of 2% of Your total monthly gross sales, beginning January 1, 2001, or later at our sole option, as described in Section 10 hereof. This fee will be due by the 7th of the month for the preceding month.

E. Gross sales as used in this Section 3.01 shall mean the amount of gross revenues received by You from all sources, including without limitation sales of Products, services or other merchandise of every kind or nature from, at or in connection with the operation of the AIRSOPURE Center granted herein, excluding state, federal or local sales taxes collected from customers and paid to the appropriate taxing authority.

F. Fees payable under Paragraphs 3.01.B and 3.01.D above shall be due and payable monthly by the seventh day of each month, based on Your gross sales of the previous month. Delinquent fees shall bear interest at a rate of the lower of: (i) one and one-half percent (1.5%) per month, or (ii) the maximum rate permitted by applicable law.

4.  DUTIES OF AIRSOPURE

4.01. Prior to the opening of the Franchise, AIRSOPURE shall:

A. Following receipt in writing from You of a request for approval of at least 3 possible locations as the Authorized Location for the Franchise, AIRSOPURE will promptly evaluate such locations and notify You in writing of its approval or rejection of such location(s) within 7 working days.

B. Provide You with AIRSOPURE's specifications and requirements or other assistance deemed necessary by AIRSOPURE to assist You in opening the Center.

C. Provide an initial training program for 2 people to be designated by You as described in AIRSOPURE's Operations Manual.

D. Provide one copy, on loan to You, of AIRSOPURE's Operations Manual as described in Section 8 hereof for use solely in connection with operation of the





AIRSOPURE Center granted hereunder.

E. Sell to You an opening order of Products for resale or lease at the Franchise as described in Paragraph 6.01 below.

4.02. Following the opening of the Franchise, AIRSOPURE shall:

A. Provide daily consultation by telephone as reasonably requested by You during the first two weeks of operation of the AIRSOPURE Center Franchise.

B. Provide continuing general advisory assistance as deemed necessary by AIRSOPURE regarding the operation and advertising of the Franchise.

C. Provide updates, revisions and amendments to the AIRSOPURE Operating Manual and system as AIRSOPURE may from time to time deem necessary or desirable.

D. Fill Your orders for Products for resale at the Franchise in accordance with Section 6 below.

E. Provide training programs or seminars as AIRSOPURE may, from time to time in its sole discretion, deem appropriate. AIRSOPURE's training programs for franchisees is described in AIRSOPURE's Operations Manual, and is subject to change at any time in AIRSOPURE's sole

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discretion.

F. AIRSOPURE may, from time to time at its sole discretion, provide test customers or store visits by AIRSOPURE representatives to evaluate Your methods of operation and compliance with AIRSOPURE's standards and specifications.

5.  YOUR DUTIES

5.01.  You shall: A. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise, and attend (or if You are a corporation, Your majority shareholder will attend or Your Operating Principal or manager and one other employee) and successfully complete to AIRSOPURE's reasonable satisfaction AIRSOPURE's initial training program within 90 DAYS following execution of this Agreement.

B. Obtain all federal, state and local business licenses, permits, certifications and bonds required for lawful operation of the Franchise and certify in writing to AIRSOPURE prior to opening that all such requirements have been obtained.

C. Attend (with Your manager) and complete to AIRSOPURE's reasonable satisfaction such continuing training or educational programs as AIRSOPURE may from time to time require in writing. AIRSOPURE will not charge You for the training programs, but You shall be responsible for the costs of meals, lodging, travel and all other expenses incurred by You or Your employees in attending such programs.

D. Actively promote AIRSOPURE's Products and services and exert Your best efforts to fully develop and maximize the market for AIRSOPURE's Products and services in Your Exclusive Territory.

E. Devote Your full time (or if You are a corporation, designate a manager) to oversee the management and operation of the Center.

F. Purchase and maintain and adequate supply for use in connection with the operation of the Franchise Business various copyrighted materials and forms which are the proprietary property of AIRSOPURE and which are an integral part of AIRSOPURE's system franchised hereunder. Other supplies and equipment necessary for operation of the Center may be purchased from third Party suppliers who meet AIRSOPURE's standards and specifications and have been approved in writing by AIRSOPURE in accordance with the procedures set forth in AIRSOPURE's Operating Manual, which may be amended from time to time by AIRSOPURE at its sole discretion.

G. Purchase Products from AIRSOPURE for resale to customers in the Exclusive Territory in accordance with Section 6 below.

H. Comply with all federal, state and local health and safety laws, rules and standards applicable to operation of the Franchise. You will forward copies of all notices of non-compliance by the Franchise with any law, rule, regulation or ordinance to AIRSOPURE within three days from receipt thereof accompanied by a summary of action You will take to comply.

I. Maintain adequate working capital to operate the Franchise in accordance with the AIRSOPURE Operations Manual, as such may be amended by AIRSOPURE from time to time.

J. Operate the Franchise in strict conformance with AIRSOPURE's policies, procedures, standards and specifications as may be prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing, including without limitation all changes specified by AIRSOPURE to its system or Products. .

K. Display AIRSOPURE's Licensed Marks or logos on all marketing materials and at Your AIRSOPURE Center. AIRSOPURE reserves the

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right to alter or change its Licensed Marks, logos or trade dress at any time, and You agree to use such Licensed Marks, logos or trade dress as specified from time to time by AIRSOPURE promptly upon receipt of notice in writing from AIRSOPURE.

L. Maintain and supply to third Parties upon request information to be supplied by AIRSOPURE regarding the availability of franchises.

M. Provide AIRSOPURE and its representatives with unlimited access to FRANCHISEE'S offices or its AIRSOPURE Center (personal residence excluded), including Your books, computer system (for sales and products only, unless we are auditing You) and records of the Franchise, during normal business hours for purposes of conducting inspections to fully examine and evaluate Your methods of doing business, including interviews with Your employees and customers.

N. You acknowledge and agree that such inspections and evaluations are necessary for AIRSOPURE to insure the maintenance of its quality standards, and You agree to fully cooperate with any reasonable request by AIRSOPURE in connection with such inspections and evaluations.

O. Diligently and immediately take such steps as are deemed reasonably necessary by AIRSOPURE to correct any deficiencies detected by AIRSOPURE in Your adherence to AIRSOPURE's operating policies, procedures, standards and specifications.

P. In the event You are a corporation, comply with the following:

1. You will provide in Your Articles of Incorporation that Your sole corporate purpose is the operation of the Franchise.

2. Every certificate for shares of stock in the corporation will include the following legend printed thereon if sole purpose of the corporation is to own and operate franchised business:

THE TRANSFER, PLEDGE OR ASSIGNMENT OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND RESTRICTIONS CONTAINED IN A FRANCHISE AGREEMENT BETWEEN THE HOLDER OF THESE SHARES AND AIRSOPURE FRANCHISE GROUP, INC.

3. You agree to comply with the restrictions on transfer of ownership of the corporation set forth in Section 12.02 below.

4. You will provide AIRSOPURE, prior to the opening of the Franchise, with copies of Your Articles of Incorporation, Bylaws and other governing documents, including all amendments thereto, and a copy of the resolutions by Your Board of Directors authorizing execution of this Agreement, certified by the Secretary of the corporation.

5. You will provide AIRSOPURE with a current list of shareholders and will update such list from time to time as the list changes.

6. Each shareholder of the corporation (if sole corporate purpose is the franchise), will execute a personal guarantee of Your performance under this Agreement and all amounts owed by You to AIRSOPURE in the form of attached Exhibit B.

Q. The Parties recognize the importance of fully developing the market for Products in the Exclusive Territory, and a substantial part of the consideration for and inducement to AIRSOPURE to enter into this Agreement is Your agreement to devote Your best efforts to market, sell and support Products to customers located in Your Exclusive Territory. You agree to concentrate Your marketing efforts to customers located in Your Territory, and You agree not to advertise the Products using media or publications whose primary coverage area is outside Your Exclusive Territory.

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R. You may relocate Your Center at Your sole expense, within Your Exclusive Territory, provided You give us written notification at least 30 days prior to relocation stating the reasons for such a move.

6.  PURCHASE AND SALE OF PRODUCTS

6.01. You will purchase from AIRSOPURE and AIRSOPURE will sell to You for resale or lease at the Center to customers in the Exclusive Territory an opening order of Products having an aggregate cost to You of from $5,000.00 to $10,000.00, by mutual agreement, based on market conditions. Such purchase must be consummated in its entirety before You open Your Center, unless AIRSOPURE agrees in writing to extend such time period.

6.02. After the opening order contemplated by the preceding Paragraph, You will from time to time place orders for Products with AIRSOPURE on the following basis:

A. All orders for Products shall be accompanied by payment, unless at AIRSOPURE's sole discretion, other payment terms are permitted.

B. All orders will be shipped freight collect unless freight is paid in advance by You.

C. You will pay the prices then prevailing at the time AIRSOPURE receives each order. Such prices are subject to change at any time by AIRSOPURE.

D. All merchandise will be shipped to You at the Center for resale to customers





in the Exclusive Territory. You will sell Products only to end-user customers and not for resale. You will not sell or lease Products at any location other than within Your Exclusive Territory, engage in mail order sales of Products or supply Products to others for resale or lease at any other location.

E. All orders for Products are subject to availability. In the event any Product is in short supply, AIRSOPURE shall have the right to allocate such Product on an equitable basis.

F. You will not modify the Products, and You will not offer or carry any products or services other than AIRSOPURE's Products and services specified by AIRSOPURE without written approval from AIRSOPURE.

G. Notwithstanding nationally advertised prices by AIRSOPURE, You may resell Products purchased under this Agreement at prices set by You. However, AIRSOPURE retains the right, to the extent permitted by law, to refuse to fill Your orders for Products if You fail to honor AIRSOPURE's suggested prices for the same Products sold by other franchise owners in Your region.

7.  LICENSED MARKS

7.01. AIRSOPURE represents with respect to the Licensed Marks that:

A. AIRSOPURE is the owner of all right, title and interest in and to the Licensed Marks or has the right and license to use and grant a license to You to use the said Licensed Marks.

B. AIRSOPURE will take all steps reasonably necessary to preserve and protect the ownership and validity in and to the Licensed Marks.

7.02. With respect to Your licensed use of the Licensed Marks pursuant to this Agreement, You agree that:

A. You shall use only the Licensed Marks designated by AIRSOPURE and shall use them only in the manner authorized and permitted by AIRSOPURE.

B. You shall use the Licensed Marks only for the operation of the Franchise at the Authorized Location.

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C. During the term of this Agreement, You shall identify Yourself as the owner of the Franchise in conjunction with any use of the Licensed Marks, including, but not limited to, on invoices, order forms, receipts, business cards, contracts and at such conspicuous locations on the Center's premises or in the field as AIRSOPURE may specify. The identification shall be in a form which specifies Your name, followed by the term Independent Franchise Owner or such other identification as shall be approved by AIRSOPURE.

D. You shall not use the Licensed Marks to incur any obligation or indebtedness on behalf of AIRSOPURE, and You shall not represent that Your Center is owned, operated by or affiliated with AIRSOPURE other than as a franchisee.

E. You shall not use the Licensed Marks as part of Your corporate or other legal name, without the prior written consent of AIRSOPURE.

F. You shall file an assumed name registration, and shall execute any documents deemed necessary by AIRSOPURE to obtain protection for the Licensed Marks or to maintain their continued validity and enforceability.

7.03. You expressly understand and acknowledge that:

A. As between the Parties hereto, AIRSOPURE, by its trademark License Agreement with Airsopure, Inc. is the licensor of all right, title and interest in and to the Licensed Marks and the goodwill associated with and symbolized by them.

B. You shall not directly or indirectly contest the validity of the ownership of the Licensed Marks.

C. Your use of the Licensed Marks pursuant to this Agreement does not give You any ownership interest or other interest in or to the Licensed Marks.

D. Any and all goodwill arising from Your use of the Licensed Marks in the Franchise under AIRSOPURE's system shall inure solely and exclusively to the benefit of AIRSOPURE, and upon expiration or termination of this Agreement and the Franchise herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with Your use of the Licensed Marks.

E. The right and license to use the Licensed Marks granted hereunder to You is nonexclusive, and AIRSOPURE may use and grant franchises to others to use the Licensed Marks in any manner except as expressly provided otherwise herein.

F. AIRSOPURE reserves the right to substitute different Licensed Marks for use in identifying the System and the businesses operating thereunder, and You agree to comply with AIRSOPURE's requirements relating thereto.

7.04. You shall promptly notify AIRSOPURE of any unauthorized use of the Licensed Marks or marks confusingly similar thereto, any challenge to the validity of the Licensed Marks, or any challenge to AIRSOPURE's ownership of, or Your right to use, the Licensed Marks. You acknowledge that AIRSOPURE has the sole right to direct and control any administrative proceeding or litigation involving the Licensed Marks, including any settlement thereof. AIRSOPURE has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Licensed Marks.





7.05. Provided You have used the Licensed Marks in accordance with this Franchise Agreement and AIRSOPURE's Operations Manual, AIRSOPURE will defend You at AIRSOPURE's expense against any third Party claim, suit or demand involving the Licensed Marks and arising out of Your use thereof. In the event that You have not used the Licensed Marks in accordance with this Agreement, AIRSOPURE shall defend You, at Your expense, against such third Party claims, suits or demands.

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7.06. In the event of any litigation or administrative proceeding relating to the Licensed Marks, You shall execute any and all documents and do all acts as may, in the opinion of AIRSOPURE, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal Party to any legal action. Except to the extent that such litigation is the result of Your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, AIRSOPURE agrees to reimburse You for its out-of-pocket costs in performing such acts, except that You shall bear the salary costs of its employees, and AIRSOPURE shall bear the cost of any judgment or settlement.

8.  OPERATIONS MANUAL

8.01. AIRSOPURE shall provide You with one copy of AIRSOPURE's Operations Manual covering the proper operating and marketing techniques and the standards and specifications for operation of the Franchise. You agree to fully comply with the Operations Manual in its entirety as an essential aspect of Your obligations under this Agreement. Failure to so comply shall be treated as a breach of this Agreement.

8.02. You shall at all times treat the Operations Manual, all supplements and revisions thereto, any other operations manual, brochure or memorandum created for or approved for use in the operation of the Franchise and the information contained therein as the confidential and proprietary information of AIRSOPURE, and shall use all reasonable efforts to maintain the confidentiality of such information. You shall not at any time, without AIRSOPURE's prior written consent, copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, nor otherwise make the same available to any unauthorized person. You may disclose such information and materials only to such of Your employees or agents, or others who must have access to it in connection with their employment or the performance of this Agreement, in which event You shall obtain the agreement of such persons and entities to maintain the confidentiality thereof. The Operations Manual shall remain at all times the sole property of AIRSOPURE.

8.03. AIRSOPURE may from time to time revise the contents of the Operations Manual, and You expressly agree to comply with each new or changed standard, specification or procedure set forth therein. You shall at all times ensure that Your copy of the Operations Manual is kept current and up to date. In the event of any dispute as to the content of the Operations Manual, the terms of the master copy of the Operations Manual maintained by AIRSOPURE at AIRSOPURE's home office shall be controlling.

9.  ACCOUNTING AND RECORDS

9.01. During the term of this Agreement, You shall maintain and preserve, for at least five years from the date of their preparation, full, complete, and accurate, books, records and accounts in the form and manner prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing.

9.02. You shall, at Your expense, submit to AIRSOPURE, by the 7th day of each month, a monthly statement on forms prescribed by AIRSOPURE accurately reflecting gross sales of the Franchise for the preceding calendar month. Each statement shall accompany Your monthly royalty and advertising fund fee payments and shall be signed by You attesting that it is true and correct.

9.03. You shall, at Your expense, submit to AIRSOPURE an annual financial statement for the Franchise, which includes an income statement prepared in accordance with generally accepted accounting principals, within 90 days of the end of each fiscal year during the term hereof. Each statement shall be signed by You attesting that it is true and correct.

9.04. You shall submit to AIRSOPURE for review and auditing such other forms, reports,

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records, information and data, as AIRSOPURE may reasonably request in writing.

9.05. AIRSOPURE or its designated agents shall have the right at all reasonable times to examine and copy, at its expense, all books, records, receipts and tax returns of Yours related to the Franchise and, at its option, to have an independent audit made, and thereupon be allowed to search Your computer accounting files. If an inspection or audit should reveal that payments have been understated in any report to AIRSOPURE, then You shall immediately pay to AIRSOPURE the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the prime rate being charged by Bank of America on the date the payment was due plus 2%, or the maximum rate permitted by law, whichever is less. If an inspection discloses an underpayment to AIRSOPURE of 2% or more of the total amount that should have been paid to AIRSOPURE, You shall, in addition to repayment of such understated amount with interest, reimburse AIRSOPURE for any and all costs and expenses incurred in connection with the inspection or audit (including, without limitation,





reasonable accounting and attorneys' fees). The foregoing remedies shall be in addition to any other remedies AIRSOPURE may have, including without limitation, the remedies for default.

10.  MARKETING AND ADVERTISING

10.01. You shall submit to AIRSOPURE for review prior to use samples of all advertising and promotional materials that have not been previously approved by AIRSOPURE. AIRSOPURE shall notify You of its approval or disapproval within 7 days or less from the date of receipt by AIRSOPURE of such materials. Failure by You to obtain the prior approval in writing of AIRSOPURE for all advertising and promotional materials shall be a violation of this Agreement.

10.02. AIRSOPURE has established an advertising fund (the Fund) to build recognition of the Products and the Licensed Marks and to promote AIRSOPURE's Products and the Franchise. You shall participate in the Fund, in addition to Your obligation to conduct local advertising of the Franchise, on the basis described in Paragraph 3.01.D above.

10.03. AIRSOPURE will administer the Fund as follows:

A. The Fund shall be maintained in a separate bank account. Upon request by You, AIRSOPURE will provide an annual accounting of amounts spent from the Fund, including a reasonable allocation to cover AIRSOPURE's overhead expenses for administration and management of the Fund.

B. AIRSOPURE may allocate amounts held in the Fund at its discretion as AIRSOPURE deems appropriate. You are not guaranteed that any particular amount or percentage of the Fund will be spent in Your local market.

C. AIRSOPURE shall have the right to terminate the Fund at any time. However, the Fund will not be terminated until all moneys in the Fund have been expended for the purposes stated in Paragraph 10.02 above.

D. AIRSOPURE may from time to time amend its policies or establish new policies and procedures for administration of the Fund.

10.04. In addition to its monthly contribution to the Fund, You shall spend an amount equal to at least 2% of Your total monthly gross sales (as defined in Paragraph 3.01.C above) on local advertising in Your Exclusive Territory. You shall submit to AIRSOPURE a monthly report to accompany Your advertising fund fee and royalty fee payments accounting for and evidencing Your local advertising expenditures. Your local advertising shall comply with the procedures specified in Paragraph 10.01 above.

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11.  INSURANCE

11.01. You shall procure and maintain in full force and effect during the term of this Agreement, at Your expense, insurance policies written by an insurance company satisfactory to AIRSOPURE in accordance with standards and specifications set forth in the Operations Manual or otherwise by AIRSOPURE in writing. Such policies shall name AIRSOPURE as an additional insured and shall include, at a minimum:

A. Comprehensive general liability insurance in the amount of $1,000,000.00.

B. Comprehensive automobile liability insurance, including collision, comprehensive, medical and liability to satisfy state law requirements.

C. Additional coverage's and higher policy limits may be required from time to time by AIRSOPURE.

11.02. At least 7 days prior to the opening of the Center and on each policy renewal date thereafter, You shall submit to AIRSOPURE copies of all policies and policy amendments. The evidence of insurance shall include a statement by the insurer that the policy or policies will not be canceled or materially altered without at least 30 days prior written notice to AIRSOPURE.

11.03. Your obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by AIRSOPURE, nor shall Your performance of that obligation relieve You of liability under the indemnity provisions set forth in Section 17 of this Agreement.

11.04. Should You, for any reason, fail to procure or maintain the insurance required by this Agreement, AIRSOPURE shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to You, which charges, together with a reasonable fee for AIRSOPURE's expenses in so acting, shall be payable by You immediately upon notice. AIRSOPURE is not a licensed insurance agent or agency.

12.  TRANSFER OF INTEREST

12.01.   Transfer by AIRSOPURE

A. AIRSOPURE shall have the right to transfer or assign all or any part of its rights or obligations in this Agreement to any person or legal entity. AIRSOPURE may sell or assign any of its assets, including without limitation the Licensed Marks, the system or Products, to any person or legal entity without liability or obligation to You.

B. Nothing in this Agreement or otherwise shall obligate AIRSOPURE to remain in





the indoor air purification business in the event AIRSOPURE should exercise its right to assign this Agreement or its assets which are the subject of this Agreement to a third Party.

12.02.   Transfer by You A. You agree that the rights and duties set forth in this Agreement are personal to You, and that AIRSOPURE has entered into this Agreement and granted the Franchise rights and license hereunder in reliance on Your business skill, financial capacity, and character. Accordingly, You shall not sell, assign, transfer, convey, give away, mortgage or otherwise encumber any direct or indirect interest in the Franchise without the prior written consent of AIRSOPURE.

B. Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of AIRSOPURE shall be null and void and shall constitute a material breach of this Agreement.

C. AIRSOPURE shall not unreasonably withhold its consent to a transfer of any interest in Your Franchise or in this Agreement if the following conditions have been met:

1. All of Your accrued monetary and other

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obligations to AIRSOPURE and its subsidiaries, affiliates and suppliers shall have been satisfied;

2. You shall not be in default of any provisions of this Agreement or any other agreement between You and AIRSOPURE or its affiliates or suppliers;

3. You shall have executed a general release, in a form satisfactory to AIRSOPURE, of any and all claims against AIRSOPURE and its officers, directors, shareholders and employees.

4. You shall remain liable for all obligations to AIRSOPURE in connection with the Franchise prior to the effective date of the transfer;

5. The transferee shall enter into a written assignment in a form satisfactory to AIRSOPURE assuming and agreeing to discharge all of Your obligations under this Agreement;

6. The transferee shall demonstrate to AIRSOPURE's satisfaction that the transferee meets AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise;

7. The transferee shall execute for a term ending on the expiration date of this Agreement the standard form franchise agreement then being offered to new franchisees and such other ancillary agreements and documents as AIRSOPURE may then require for the Franchise, which may include changes in required fee payments or other terms;

8. The transferee shall agree to upgrade the Franchise to conform to the then current standards and specifications for AIRSOPURE franchises;

9. Transferee and its employees shall complete such training programs as AIRSOPURE may reasonably require, at the transferee's expense;

10. You shall pay AIRSOPURE a transfer fee of $1000.00 to cover AIRSOPURE's administrative expenses in connection with the transfer.

12.03.   Right of First Refusal

In the event You desire to sell the AIRSOPURE Center and Franchise rights and license granted herein, or any part of Your stock interest in a corporation that has been granted such rights, and receives a bona fide acceptable offer in writing, You agree to notify AIRSOPURE in writing of the terms and conditions of such offer. AIRSOPURE shall have the option, within 15 days after receipt of such written notice, to notify You that AIRSOPURE elects to purchase the rights and license granted herein or stock ownership on the same terms and conditions as the bona fide written offer. You agree to sell to AIRSOPURE on the same terms and conditions as the bona fide offer and to comply with all applicable laws relating to bulk transfers of assets. If AIRSOPURE fails to notify You of its election to exercise its right of first refusal granted herein within the thirty day period, then You may sell the franchise rights and license or the stock for the amount of the bona fide offer, subject to AIRSOPURE's rights under Section 12.02 above. Any material change in the terms or conditions of any offer prior to closing shall constitute a new offer subject to AIRSOPURE's right of first refusal described herein. If You fail to consummate the transaction within 30 days from the earlier of: (a) receipt of notice from AIRSOPURE that it elects not to exercise its right of first refusal, or (b) expiration of the 15 day period referred to herein, then You must resubmit the proposed transaction to AIRSOPURE, and AIRSOPURE shall have a new 15 day review period and right of first refusal.

12.04.   Transfer Upon Death or Mental Incapacity Upon Your death or mental incapacity, or a person owning all or controlling interest in Your Franchise, AIRSOPURE shall consent to the transfer of such interest to Your spouse or heirs provided, in AIRSOPURE's sole determination, such person(s) meet AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise. If the said transfer

                                       11





shall not be approved by AIRSOPURE, Your executor, administrator or personal representative shall transfer Your interest to a third Party approved by AIRSOPURE within 6 months after Your death or the determination of Your mental incapacity. If Your interest is not disposed of within 6 months after such death or mental incapacity, AIRSOPURE may terminate this Agreement.

12.05.   Operation of Franchise by AIRSOPURE In order to prevent any interruption in the business that would cause harm to the Franchise or AIRSOPURE, You authorize AIRSOPURE, at its option but not its obligation, in the event that You are absent or incapacitated by reason of illness, death or otherwise and are not, in AIRSOPURE's sole judgment, able to operate the Franchise for any extended period of time, to operate and manage the Franchise for so long as AIRSOPURE deems necessary, without waiving any of AIRSOPURE's other rights and remedies under this Agreement. All monies from the operation of the Franchise during such period of operation by AIRSOPURE shall be kept in a separate account, and the expenses of AIRSOPURE during such period for operating the Franchise, including reasonable compensation of AIRSOPURE and its employees or representatives, shall be charged to such account. You agree to save harmless and fully indemnify AIRSOPURE and its employees and representatives for and against all claims, losses or actions in connection with the operation and management of the Franchise hereunder.

12.06.   Non-Waiver of Claims AIRSOPURE's consent to a transfer of any interest in the Franchise granted herein shall not constitute a waiver of any claims it may have against You, nor shall it be deemed a waiver of AIRSOPURE's right to demand exact compliance with any of the terms of this Agreement by the transferee.

13.  CONFIDENTIAL INFORMATION

13.01 You shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person or entity any confidential information, knowledge, or know-how concerning AIRSOPURE's system, the Products or the operation of the Franchise, including without limitation the Operations Manual. You shall divulge such confidential information only to such of Your employees or agents as must have access to it in order to operate the Franchise. Any and all information, trade secrets, knowledge, know-how, or other data concerning AIRSOPURE's system, the Products or which AIRSOPURE designates as confidential shall be deemed confidential for purposes of this Agreement, except information which You can demonstrate came to Your attention prior to disclosure thereof by AIRSOPURE, or which, at or after the time of disclosure by AIRSOPURE to You, had become or later becomes a part of the public domain, through publication or communication by others. You agree to use such proprietary information of AIRSOPURE only for operation of the Franchise Business.

13.02. You acknowledge that the provisions of this Section 13 are and have been a primary inducement to AIRSOPURE to enter into this Agreement, and that any failure to comply with the requirements of Section 13.01 will cause AIRSOPURE irreparable injury without an adequate remedy at law; and You agree to pay all court costs and reasonable attorneys' fees incurred by AIRSOPURE in obtaining specific performance of, or an injunction against any violation of, the requirements of Section 13.01.

14.  DEFAULT AND TERMINATION

14.01. AIRSOPURE may, at its option, terminate this Agreement and all rights granted hereunder, without affording You any opportunity to cure the defaults, effective immediately upon receipt of notice by You, upon the occurrence of any of the following:

A. You become insolvent or makes a general assignment for the benefit of creditors; or if a

                                       12

petition in bankruptcy is filed by You or such a petition is filed against and consented to by You; or if You are adjudicated a bankrupt; or if You are unable to pay commercial debts as they become due.

B. You (or a principal shareholder if the Franchisee is a corporation) is convicted of a felony or any other crime or offense that is reasonably likely, in the sole opinion of AIRSOPURE, to adversely affect the goodwill or reputation of AIRSOPURE or the Licensed Marks.

C. A judgment or consent decree is entered against You (or a principal shareholder if the Franchisee is a corporation) in a case involving allegations of fraud, racketeering, unfair or deceptive trade practices or similar allegations which, in AIRSOPURE's judgment, are likely to adversely affect AIRSOPURE, its Products, the Licensed Marks or the goodwill associated therewith.

D. You or any partner or shareholder in You transfers any rights or obligations under this Agreement or any interest in You or in the Franchise to any third Party without AIRSOPURE's prior written consent.

E. You intentionally disclose the contents of the Operations Manual or&bbsp;other trade secrets or confidential information provided to You by AIRSOPURE to any unauthorized person or fails to exercise reasonable care to prevent such disclosure.

F. You maintain false books or records of the Franchise or knowingly make any material false statements or omission to AIRSOPURE in connection with Your





application for the franchise granted herein or in connection with any reports submitted to AIRSOPURE, including without limitation the understatement of gross sales by more than 2%.

G. You fail to commence business within 4 months following the execution of this Agreement.

H. You (and Your manager) fail to attend any scheduled training program which AIRSOPURE has indicated is mandatory.

I. You operate the Franchise in such a manner which causes a threat or danger to public health or safety.

J. You receive 3 or more notices of default of this Agreement from AIRSOPURE for violations under Section 14.02 hereof.

14.02. Except for violations of this Agreement listed in Section 13.01 above, or violations specifically provided for elsewhere in this Agreement, You shall have 30 days from receipt from AIRSOPURE of a written Notice of Termination (citing the reason(s) therefor) within which to remedy any default listed in this Section 13.02, or any other violation of this Agreement.

A. You fail to pay promptly any monies owing to AIRSOPURE or its subsidiaries or affiliates when due, or to submit the financial information or reports required by AIRSOPURE under this Agreement.

B. You fail to meet or comply with any standards, specifications or procedures prescribed by AIRSOPURE in this Agreement, the Operations Manual or otherwise specified in writing from time to time by AIRSOPURE.

C. You are convicted, plead guilty or enter into a consent agreement for violation of any federal, state or local law, ordinance, rule or regulation that is reasonably likely, in the sole opinion of AIRSOPURE, to materially and unfavorably affect the Franchise or AIRSOPURE, the Licensed Marks or the goodwill associated therewith.

D. You misuse or make any unauthorized use of the Proprietary Marks or otherwise impairs the

                                       13

goodwill associated therewith or AIRSOPURE's rights therein.

E. You abandon the Franchise or fail to operate the Center during normal business hours without the consent in writing of AIRSOPURE.

F. You fail to submit advertising or promotional materials to AIRSOPURE for approval in writing prior to use.

14.03. No right or remedy of AIRSOPURE conferred herein shall be exclusive of any other right or remedy provided herein, at law or in equity, unless specifically provided otherwise in this Agreement or any amendment hereto.

14.04. In the event this Agreement is terminated by AIRSOPURE for violation of this Agreement by You, AIRSOPURE shall have the right, at its option, to purchase Your interest in the tangible assets of the Franchise at their fair market value.

15. OBLIGATIONS UPON TERMINATION

15.01. Upon termination or expiration of this Agreement, this Agreement and all rights granted hereunder to You shall immediately terminate, and:

A. You shall immediately cease to operate the Franchise and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of AIRSOPURE.

B. You shall immediately and permanently cease to use, by advertising or in any other manner whatsoever, the Licensed Marks of AIRSOPURE, any other identifying characteristics or trade dress of the system, and all confidential methods, procedures and techniques associated with the Franchise.

C. You shall take such action as may be necessary to cancel any assumed name or equivalent registrations or listings in telephone or other directories which contain the names or Licensed Marks of AIRSOPURE, and You shall furnish AIRSOPURE with evidence satisfactory to AIRSOPURE of compliance with this obligation within 30 days after termination or expiration of this Agreement.

D. You shall promptly pay all sums owing to AIRSOPURE and its subsidiaries and affiliates, including all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE as a result of the default.

E. You shall pay to AIRSOPURE all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement.

F. You shall immediately turn over to AIRSOPURE the Operations Manual, records, files, instructions, software, correspondence, and all other materials provided by AIRSOPURE related to the operation of the Franchise, and all copies thereof (all of which are acknowledged to be AIRSOPURE's property), and shall retain no copy or record of any of the foregoing, except only Your copy of this Agreement and any correspondence between the Parties, and any other documents which You reasonably need for compliance with any applicable provision of law.





G. AIRSOPURE shall have the right, but not the duty, to be exercised by notice of intent to do so within 30 days after termination or expiration, to purchase any or all signs, advertising materials, supplies and inventory and any other items bearing AIRSOPURE's Licensed Marks, at Your cost or at fair market value, whichever is less. If the Parties cannot agree on the fair market value of such items, the Parties will select and share the expense of an independent appraiser to determine fair market value. With respect to any purchase by AIRSOPURE as provided herein, AIRSOPURE shall have the right to set off against the purchase price all amounts due from

                                       14

You under this Agreement.

16. COVENANTS

16.01. You covenant and agree (or if Your Franchise is a corporation Your controlling shareholder agrees) to supervise and devote Your best efforts to manage and operate the Franchise.

16.02. You acknowledge that, pursuant to this Agreement, You will receive valuable specialized training and confidential and proprietary information of AIRSOPURE, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of AIRSOPURE and its system. You covenant and agree that during the term of this Agreement, and subject to the post-termination provisions contained herein, You shall not, except as otherwise approved in writing by AIRSOPURE, either directly or indirectly:

A. Divert or attempt to divert any business or customer of the Franchise to any competitor, or competing business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to AIRSOPURE or the goodwill associated with the Licensed Marks and Products.

B. Employ or seek to employ any person who is at that time employed by AIRSOPURE or by another AIRSOPURE franchisee or induce such person to leave his or her employment.

C. Own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise.

16.03. You covenant and agree that You (or any shareholder if Your Franchise is a corporation) shall not, for a period of two years following termination of this Agreement for any reason, either directly or indirectly own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise within a radius of 25 miles of Your Exclusive Territory. In the event a court of competent jurisdiction should hold this covenant to be unreasonable or overly broad, the Parties agree to reduce the scope of such covenant to the maximum restriction permitted by law, and You agree to be bound by such less restrictive terms of this covenant. If requested by AIRSOPURE, You agree to obtain and provide to AIRSOPURE executed covenants containing terms equivalent to those contained herein from any employee of Yours who has received training from AIRSOPURE, and, if Your Franchise is a corporation, from any director or shareholder of Your corporation.

16.04. AIRSOPURE covenants and agrees that the restrictions set forth above in Paragraphs 16.02.C and 16.03 shall not apply to ownership by You of less than a 5% beneficial interest in the outstanding equity securities of any publicly traded corporation, provided that You are not an employee, consultant or director of such corporation.

16.05. You covenant and agree that its violation of any covenant contained herein would result in serious, immediate and irreparable injury to AIRSOPURE for which no adequate remedy at law will be available, and You consent, in addition to other remedies which may be available to AIRSOPURE, to the entry without opposition of an injunction prohibiting any conduct by You in violation of any covenant set forth herein.

17. INDEMNIFICATION

17.01. You agree to defend, indemnify and hold AIRSOPURE and its affiliates, directors, officers, employees and agents harmless from all claims, losses, lawsuits and expenses arising from or relating to the Franchise and Your operation thereof, except for: (i) any claims of infringement

                                       15

from third Parties due to Your use of the Licensed Marks, provided that You have used the said Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.

17.02. AIRSOPURE agrees to defend, indemnify and hold You harmless from all claims, losses, lawsuits and expenses arising from or relating to: (i) any claims of infringement from third Parties due to Your use of the Licensed Marks, provided that You have used the Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.





18. GENERAL PROVISIONS

18.01. No failure of a Party to exercise any power reserved to it by this Agreement or to insist upon strict compliance by the other Party with any obligation or condition hereunder shall constitute a waiver of such Party's rights unless such waiver is in writing. Any waiver by either Party shall not constitute a waiver thereafter to demand exact compliance with any of the terms herein. Waiver by a Party of any particular default by the other Party shall not affect or impair such Party's rights with respect to any subsequent default of the same, similar or different nature; nor shall any delay, forbearance or omission of a Party to exercise any power or right arising out of any breach or default by the other Party of any of the terms, provisions, or covenants thereof, affect or impair such Party's right to exercise the same.

18.02. Unforeseen Events

Delays in the performance of any duties hereunder which are not the fault of and are beyond the ability of the Party to control, including without limitation fires, floods, natural disasters, acts of God, labor disputes, riots or other similar events, shall not constitute a default in the Party's performance of this Agreement, and the Parties agree to extend the time of performance for a reasonable period of time to allow for such delays.

18.03. The relationship between the Parties is that of independent contractors. No partnership, joint venture, employment or relationship of principal and agent is intended, and You may not commit or bind AIRSOPURE to any obligation whatsoever.

18.04. Any and all notices required or permitted under this Agreement shall be in writing and shall be delivered by any means which will provide evidence of the date received, to the respective Parties at the following addresses unless and until a different address has been designated by written notice to the other Party:

Notices to AIRSOPURE: Airsopure International Group, Inc. 15400 Knoll Trail, Suite 200 Dallas, Texas 75248 Attn: John Potter, President

Notices to You:

- --------------------------------

- --------------------------------

- --------------------------------

Any notice shall be deemed to have been given at the date and time it is received.

18.05. This Agreement and the documents referred to herein constitute the entire Agreement between AIRSOPURE and You concerning the subject matter hereof, and supersede all prior agreements, oral or written. No amendment, change or variance from this Agreement shall be binding on either Party unless executed by both Parties in writing.

18.06. Except as expressly provided to the contrary herein, each provision of this Agreement shall be considered severable; and if, for any reason, any provision herein is determined to be invalid under any law or by a court having valid jurisdiction, such shall not impair the operation of, or have any other effect upon, such other

                                       16

provisions of this Agreement, and the latter shall continue to be given full force and effect and bind the Parties hereto, and the invalid provision shall be deemed not to be a part of this Agreement.

18.07. This Agreement takes effect upon its acceptance and execution by AIRSOPURE in the State of Texas, and shall be interpreted and construed under the laws of the State of Texas.

18.08. The Parties agree that any action brought by either Party against the other in any court, whether federal or state, shall be brought within the State of Texas in the judicial district in which AIRSOPURE has its principal place of business and do hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision.

18.09. If either Party is required to resort to legal process to enforce any provision of this Agreement, the prevailing Party will recover all costs, including reasonable attorneys fees, incurred in such legal proceeding.

18.10. You represent to AIRSOPURE that You have conducted an independent investigation of the business franchised hereunder and recognizes that the business venture contemplated by this Agreement involves business risks, and that its success will be largely dependent upon Your ability as an independent business person. AIRSOPURE expressly disclaims the making of, and You acknowledge that You have not received, any representation or guarantee, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement.

18.11. You acknowledge that You received a completed copy of this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, at least 5





business days prior to the date on which this Agreement was executed. You further acknowledge that You have received the Offering Circular, as required by the Federal Trade Commission, at least 10 business days prior to the date on which this Agreement was executed.

18.12. This Agreement contains various headings, but it is agreed that such headings are for convenience only and shall not affect the meaning of the provisions of this Agreement.

18.13. You acknowledge that You have read and understood this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, and that AIRSOPURE has accorded You ample time and opportunity to consult with advisors of Your own choosing about the potential benefits and risks of entering into this Agreement.

19. APPLICABLE LAW AND MEDIATION

A. THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT. THE MEDIATION SHALL BE CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF DISPUTES IN THE AIR PURIFICATION SERVICE BUSINESS, AGREED UPON BY THE PARTIES AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER EACH PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY CLAIM CONTROVERSY OR DISPUTE (NOT TO EXCEED 15 DAYS), THROUGH THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE THE RULES GOVERNING MEDIATION, AT AIRSOPURE CORPORATE HEADQUARTERS IN DALLAS, TEXAS. THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE 90 DAYS

                                       17

AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN EITHER PARTY MAY SUBMIT SUCH CLAIM, CONTROVERSY OR DISPUTE TO A COURT IN ACCORDANCE WITH SECTION 19.B. BELOW NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY BRING AN ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE RELIEF, OR (3) INVOLVING THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION 19.B. BELOW, WITHOUT SUBMITTING SUCH ACTION TO MEDIATION.

B. WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED THROUGH MEDIATION, YOU HEREBY IRREVOCABLY SUBMIT YOURSELF TO THE NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. YOU HEREBY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON YOU IN ANY EACH PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. VENUE FOR ANY SUCH LEGAL PROCEEDING SHALL BE DALLAS COUNTY, TEXAS; PROVIDED, HOWEVER WITH RESPECT TO ANY ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION OF; OR OFFER RELIEF RELATING TO, REAL PROPERTY, AIRSOPURE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION. YOU HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION FOR TITLE PURPOSE OF CARRYING OUT THIS PROVISION. WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW RULES).

C. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM SET FORTH IN SECTION 19.B. ABOVE PROVIDE EACH OF THE PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS AGREEMENT, EACH OF YOU AND AIRSOPURE FURTHER ACKNOWLEDGE THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT.

D. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT OCCURRED IN DALLAS, TEXAS AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN OBLIGATIONS OF YOU ARISING UNDER THIS AGREEMENT SHALL OCCUR IN DALLAS, TEXAS.

IN WITNESS WHEREOF, the Parties hereto have duly executed, sealed, and delivered this Agreement on the day and year first above written.

AIRSOPURE:

By:    ---------------------------------

Title:       ------------------------------

YOU:

By:    ---------------------------------

Title:       ------------------------------

                                       18

                                    EXHIBIT F





                               PERSONAL GUARANTEE

For value received, and in consideration of the execution by Airsopure International Group, Inc. (Airsopure) of a Franchise Agreement with

- ---------------------------------------- (Franchisee), The undersigned

- ---------------------------------------- (Guarantor) hereby unconditionally guarantees to Airsopure all indebtedness, obligations and liabilities, direct or indirect, matured or immatured, primary or secondary, certain or contingent, of Franchisee to Airsopure, now or hereafter owing or incurred. This Guarantee is an absolute, unconditional, unlimited and continuing guarantee of the full and punctual payment by Franchisee of the foregoing indebtedness, obligations and liabilities and not of their collectibility only. Upon any default by Franchisee in such full and punctual payment, the liabilities and obligations of the Guarantor hereunder shall, at Airsopure's option, become forthwith due and payable without demand or notice of any nature, all of which are expressly waived by the Guarantor.

Airsopure may deal with Franchisee in such manner as Airsopure in its sole discretion deems fit, and Guarantor gives to Airsopure full authority, in its sole discretion, to do any or all of the following things: a) extend credit, make loans and afford other financial accommodations to Franchisee at such times, in such amounts and on such terms as Airsopure may approve; b) vary the terms and grant extensions or renewals of any present or future indebtedness of Franchisee to Airsopure; c) grant time, waivers and other indulgences in respect thereto; d) vary, exchange, release or discharge, wholly or partially, or delay in or abstain from perfecting and enforcing any security or guaranty or other means of obtaining payment; e) accept partial payments from Franchisee; f) release or discharge, wholly or partially, any endorser or guarantor; g) compromise or make any settlement or other arrangement with Franchisee.

Guarantor waives notice of acceptance hereof or of any action taken or omitted by Airsopure in reliance hereon and any requirement that Airsopure be diligent or prompt in making demands hereunder, giving notice of any default by Franchisee or asserting any other right hereunder.

No provision of this Guaranty can be changed, waived, discharged or terminated except by an instrument in writing signed by Airsopure and Guarantor, and no such waiver shall extend to, affect or impair any other right of Airsopure hereunder.

This Unlimited Guarantee shall inure to the benefit of Airsopure and its successors and assigns, and shall be binding on the Guarantor and the Guarantor's successors, heirs and assigns.

EXECUTED on this ____ day of ____________, 2000.

- ---------------------------------------- GUARANTOR

- ---------------------------------------- WITNESS

                                   EXHIBIT G

                            CONFIDENTIALITY AGREEMENT

This Confidentiality and Noncompetition Agreement (the Agreement) is made and entered into effective the _____day of ________________, 2000 by and between Airsopure International Group, Inc., a Nevada corporation, located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (the Company) and

- ----------------------------------------------- who resides at

- -----------------------------------------------

- -----------------------------------------------

- -----------------------------------------------

- ----------------------------------------------- (the Associate).

                                    RECITALS

A. Company sells franchises for the operation of air purification system business which operate under the name and service mark Airsopure (the Franchises);

B. Company has developed a business method for operating Franchises utilizing certain Information, plans, methods, data, processes, marketing systems, techniques, operating procedures, trademarks, designs, information and know how of Company (the Confidential Information), and such Confidential Information may be further developed from time to time by Company:

C. Company has established substantial goodwill and an excellent reputation with respect to the quality of services available, which goodwill and reputation have been and will continue to be of Major benefit to Company;





D. Associate is or will become involved with Company, or a franchise of Company, in the capacity of an officer, partner, director or as beneficial owner of an Airsopure Franchise or an employee of a Franchise, and will become privileged to certain Confidential Information; and

E. Associate and Company have reached an understanding with regard to nondisclosure by Associate of Confidential Information and Noncompetition by Associate with Company

NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Associate and Company, intending legally to be bound, hereby agree as follows:

1. CONFIDENTIAL INFORMATION. Associate and Company acknowledge that the business plan and methods used in connection with the operation of the Franchise which utilize Company's Confidential Information, are confidential, unique, constitute the exclusive property of Company and are trade secrets of Company. Associate acknowledges that any disclosure of the Confidential Information would be wrong and would cause irreparable injury and harm to Company. Associate further acknowledges that Company has expended a great amount of effort and money in obtaining and developing the Confidential Information, the Company has taken numerous precautions to guard the secrecy of the Confidential Information and that it would be very costly for competitors to acquire or duplicate the Confidential Information.

2. OPERATIONS MANUAL AS TRADE SECRET It is understood that Confidential Information, constituting trade secret, as used in this Agreement is deemed to include, without initiation, any and all information contained in the Franchise Operations Manual, which may be provided AS one or more separate manuals, or written instructional guides, as the same are changed or supplemented from time to time, and any information of whatever nature which gives to Company an opportunity to obtain an advantage over its competitors who do not have access to, know or use such lists, written materials or information.

3. CONFIDENTIAL INFORMATION. Associate shall not at any time, publish, disclose, divulge or in any manner communicate to any person, firm' corporation, association. partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any Person, firm, corporation or other entity, other than the use of Company, any of the Confidential Information of Company or its Affiliates.

4. NO INTERFERENCE WITH BUSINESS. During the term of this Agreement, neither Associate nor any member of his or her immediate finally shall divert or attempt to divert: I) any business related to, or any customer or prospective customer of; the Franchise by direct inducement or otherwise, or 2) the employment of Company or another franchisee licensed by Company,

                                       1

to any Competitive Business by any direct inducement or otherwise.

5. REMEDIES. Associate hereby acknowledges and agrees that in the event of any violations of this Agreement, Company shall be authorized and entitled, without posting a bond to obtain from any court of competent jurisdiction, preliminary and permanent injunctive relief as well as an equitable accounting of all profits or benefits arising out of any such violation, which rights and remedies shall be cumulative and in addition to any rights or remedies to which Company may be entitled.

6. EFFECT OF WAVIER. The waiver by Associate or company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof

7. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of Associate and Company and their respective heirs, executors, representatives successors and assigns.

8. ENTIRE AGREEMENT. This instrument contains the entire agreement of Associate and Company relating to the matters set forth here It may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change modification, extension or discharge is sought.

9. GOVERNING LAW. This instrument shall be governed by and construed under the laws of the State of Texas.

10. JURISDICTION AND VENUE. In the event of a breach or threatened breach by Associate of this Agreement, Associate hereby irrevocably submits to the jurisdiction of the State District Court in Dallas County, Texas and the Federal District Court for the Northern District of Texas, and irrevocably agrees that venue for any action or proceeding shall be in Dallas County, Texas. Notwithstanding the foregoing, in the event that the laws of the state where, Associate resides require that the jurisdiction or venue be elsewhere, then such other states laws shall control. but only to the extent that such other state's laws so require.

11. SEVERABILITV. Should anyone or more of the provisions hereof be determined to be illegal or unenforceable, all other provisions hereof shall be given separately therefrom and shall not be affected thereby.

12. COST OF ENFORCEMENT. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party in such





litigation as determined by the court in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorney's fees incurred therein by such arty or parties (including without Initiation such as costs, expenses and fees on any appeals), plus, if applicable, interest at the highest rate allowable by law, accruing from the date of the breach of this Agreement. If such successful party shall recover judgement in any such action or proceeding, such costs, expenses. attorney's fees and interest shall be included as part of such judgment.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date first above written.

FOR AIRSOPURE (COMPANY):

- --------------------------------------------

FOR FRANCHISEE OF AIRSOPURE:

- --------------------------------------------

ASSOCIATE OF FRANCHISEE:

- --------------------------------------------

ASSOCIATE'S WORK CAPACITY:

- --------------------------------------------

                                       2
Example Output: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

Example Input: [FORM]

ONLINE HOSTING AGREEMENT

This Online Hosting Agreement (this Agreement) is being entered into effective as of the 1st day of June, 1999 and is entered into by and between Diplomat Direct Marketing Corporation, a Delaware corporation (Diplomat), and Tadeo E-Commerce Corp., a Delaware corporation (Tadeo).

R E C I T A L S

A. Historically, Diplomat has been engaged directly in, among other things, the business of offering consumers the opportunity to place apparel orders directly with Diplomat through its toll free telephone number and its web site (the Direct Access Business).

B. Recently, Tadeo was formed and Tadeo and Diplomat have entered into a Web Design and Consulting Agreement of even date herewith (the Web Agreement) pursuant to which Tadeo has agreed to assist Diplomat in developing the technology, and providing other services necessary, to further Diplomat's Direct Access Business, including the hosting and maintenance of Diplomat's web site (the Web Site).

C. In connection with Diplomat's operation of its Direct Access Business, Diplomat desires to obtain various online hosting services (Services) from Tadeo, and Tadeo desires to provide such Services to Diplomat.

THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

Section 1.     SERVICES.

Tadeo shall provide, directly or through a third party vendor reasonably satisfactory to Diplomat, the Online Hosting Services described on EXHIBIT A hereto, at the cost specified and on the other terms and conditions as set forth on EXHIBIT A.

Section 2.     COMPENSATION.

Diplomat will pay to Tadeo when due a fee for each of the Services equal to the amount described in EXHIBIT A hereto relating to each such Service; PROVIDED, that in the event Diplomat terminates this Agreement in accordance with Section 3 hereof, the fee for the provision of each

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terminated Service shall cease to accrue on and after the effective date of such termination. In the event that Diplomat terminates this Agreement other than in accordance with Section 3, Diplomat shall be obligated to pay for the Services in accordance with the fee schedule contained on EXHIBIT A throughout the balance of the Period (as hereinafter defined) as though Tadeo continued to provide the terminated Services through the balance of the Period. Late payments shall accrue interest at a rate equal to fifteen (15%) percent per annum.

Section 3.     TERM.

(a) The term of this Agreement shall begin on the date hereof (the Effective Date) and shall continue for a period of 12 months thereafter (the Period) in full force and effect until it is terminated in accordance with this Section 3.

(b) Diplomat or Tadeo, if such party is not in default of the terms of this Agreement, may extend the term of this Agreement for an additional one year (Additional Period), provided the extending party gives the other party at least sixty (60) days advance written notice before the end of the Period. If either party elects to extend the Agreement for the Additional Period, all other terms and conditions of this Agreement shall continue during the Additional Period.

(c) Tadeo shall have the right (but not the obligation) to terminate this Agreement and the rights granted to Diplomat hereunder if:

(i) Diplomat is in material breach of any of its obligations hereunder, which breach is not cured within five days of receipt of written notice from Tadeo of such breach;

(ii) The Web Agreement is terminated by any of Tadeo, Diplomat, or any other party thereto [in the event the rights and obligations of any party(ies) to such Web Agreement have been duly assigned to a third party(ies) under the terms thereof] in accordance with the terms of the Web Agreement, but not if the Web Agreement is terminated by Tadeo or its assignee(s) other than in accordance with the terms of the Web Agreement;

(iii) Diplomat is the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing, or becomes the subject of any involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing;





(iv) Diplomat involuntarily dissolves or is dissolved;

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(v) Diplomat is judicially adjudicated insolvent or generally is unable to pay its debts as they mature or makes an assignment for the benefit of its creditors; or

(vi) Upon Tadeo giving Diplomat at least sixty (60) days advance written notice of termination of this Agreement.

(d) Diplomat shall have the right (but not the obligation) to terminate this Agreement and the rights granted to Tadeo hereunder if:

(i) Tadeo is in material breach of any of its obligations hereunder, which breach is not cured within five days of receipt of written notice from Diplomat of such breach;

(ii) The Web Agreement is terminated by any of Tadeo, Diplomat, or any other party thereto [in the event the rights and obligations of any party(ies) to such Web Agreement have been duly assigned to a third party(ies) under the terms thereof] in accordance with the terms of the Web Agreement, but not if the Web Agreement is terminated by Diplomat or its assignee(s) other than in accordance with the terms of the Web Agreement;

(iii) Tadeo is the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing, or becomes the subject of any involuntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing.

(iv) Tadeo involuntarily dissolves or is dissolved;

(v) Tadeo is judicially adjudicated insolvent or generally is unable to pay its debts as they mature or makes an assignment for the benefit of its creditors; or

(vi) Upon Diplomat giving Tadeo at least sixty (60) days advance written notice of termination of this Agreement.

(e) Tadeo will have the right (but not the obligation) to terminate this Agreement and the rights granted to Diplomat hereunder, upon 60 days written notice to Diplomat, following the acquisition of all or substantially all of the assets of Diplomat by any Permitted Assignee (as defined in Section 9(a) of this Agreement), or the acquisition of the beneficial ownership of at least 20% (the Threshold) of the voting power represented by the voting securities of Diplomat, any successor thereto or any Permitted Assignee by any person or

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group within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act), or any successor provision to either of the foregoing, including any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision thereof (a group) other than The Rubin Family Irrevocable Stock Trust U/A dated April 30, 1997, organized under the laws of the State of New York (the Trust), Robert M. Rubin (Rubin), or any affiliate of Rubin or the Trust. For purposes of this Agreement, (i) the term beneficial ownership shall have the meaning set forth in Rule 13d-3 of the Exchange Act or any successor provisions thereof, (ii) the term voting securities' means the common Stock, par value $.0001 per share, of Diplomat and any other securities issued by Diplomat having the power to vote generally in the election of directors of Diplomat and (iii) the term affiliate means a person or entity directly or indirectly controlled by, controlling or under common control with another person. For purposes of this Section 3, an acquisition shall not include (A) the acquisition by a person of voting securities of Diplomat pursuant to an involuntary disposition through foreclosure or similar event, or (B) the acquisition by a person of voting securities of Diplomat pursuant to a dividend intended to be on a tax-free basis (a Tax-Free Spin-Off) under the Internal Revenue Code of 1986, as amended from time to time, but shall include a subsequent acquisition of voting securities pursuant to a disposition by the person that acquired the voting securities in such involuntary disposition or such Tax-Free Spin-Off. In the event any person acquires beneficial ownership of voting power in excess of the Threshold as a result of a transaction described in the immediately preceding sentence, the Threshold with respect to such person shall be adjusted to an amount equal to the percentage of beneficial ownership held by such person immediately following such transaction.

(f) A party may exercise its right to terminate pursuant to this Section 3 by sending appropriate written notice to the other party. No exercise by a party of its rights under this Section will limit its remedies by reason of the other party's default, the party's rights to exercise any other rights under this Section 3, or any of that party's other rights.

Section 4.     RECORDS AND ACCOUNTS.





Tadeo will maintain accurate books, records and accounts of all transactions relating to the Services performed by it pursuant to this Agreement. Diplomat may, at its own expense, examine and copy those books and records as provided in this Section 4. Such books, records and accounts will be maintained in a manner that allows Diplomat to separate these matters from those relating to Tadeo's other operations. Such books, records and accounts will reflect such information as would normally be examined by an independent accountant in performing an audit pursuant to United States generally accepted auditing standards for the purpose of certifying financial statements, and to permit verification thereof by governmental agencies. Diplomat may make examinations pursuant hereto during Tadeo's usual business hours, and at the place in the continental United States where Tadeo regularly keeps these books and records. Diplomat will be required to notify Tadeo at least five business days before the date of planned examination. If Diplomat's examination is not completed within one month from commencement, Tadeo at any time may require Diplomat to terminate such examination on

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seven days' notice to Diplomat; PROVIDED that Tadeo has cooperated with Diplomat in the examination of such books and records.

Section 5.     NO RESTRICTIONS.

Nothing in this Agreement shall limit or restrict the right of any of Diplomat's directors, officers or employees or any of Tadeo's directors, officers or employees to engage directly or indirectly in the same or similar business activities or lines of business as Diplomat or, respectively, or limit or restrict the right of Diplomat or Tadeo as the case may be, to engage in any other business or to render or obtain, as the case may be, services of any kind to or from, as the case may be , any corporation, firm, individual, trust or association.

Section 6.     INDEPENDENT CONTRACTORS.

Tadeo and Diplomat are independent contractors. There is no relationship of partnership, joint venture, employment, franchise or agency between Tadeo and Diplomat. Neither Tadeo nor Diplomat shall have the power to bind the other or incur obligations on the other's behalf without the other's prior written consent. When Tadeo's employees act under the terms of this Agreement, they shall be deemed at all times to be under the supervision and responsibility of Tadeo and no person employed by Tadeo and acting under the terms of this Agreement shall be deemed to be acting as agent or employee of Diplomat or any customer of Diplomat for any purpose whatsoever.

Section 7.     CONFIDENTIALITY.

Tadeo and Diplomat each agree to hold in strict confidence, and to use reasonable efforts to cause each of their employees and representatives to hold in strict confidence, all confidential information concerning Tadeo or Diplomat, as the case may be, furnished to or obtained by the other party, in the course of performing the obligations provided for under this Agreement except to the extent that (a) such information has been in the public domain through no fault of Tadeo or Diplomat, as the case may be, (b) disclosure or release is compelled by judicial or administrative process, or (c) in the opinion of counsel to Tadeo or Diplomat, as the as may be, disclosure or release is necessary pursuant to requirements of law or the requirements of any governmental entity including, without limitation, disclosure requirements under the securities laws of the United States or similar laws of other jurisdictions applicable to Tadeo or Diplomat, as the case may be.

Section 8.     PROPRIETARY RIGHTS OF TADEO.

All materials, including but not limited to any computer software (in object code and source code form), data or information developed or provided by Tadeo, or its suppliers under this Agreement, and any know-how, methodologies, equipment, or processes used by Tadeo to provide the Services to Diplomat, including, without limitation, all copy-rights, trademarks,

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patents, trade secrets, and any other proprietary rights inherent therein and appurtenant thereto (collectively, Host Materials) shall remain the sole and exclusive property of Tadeo or its suppliers. To the extent, if any, that ownership of the Hose Materials does not automatically vest in Tadeo by virtue of this Agreement or otherwise, Diplomat hereby transfers and assigns to Tadeo all rights, title and interest which Diplomat may have in and to the Host Materials. Diplomat acknowledges and agrees that Tadeo is in the business of designing and hosting Web sites, and that Tadeo shall have the right to provide to third parties services which are the same or similar to the Tadeo Services, and to use or otherwise exploit any Host Materials in providing such services.

Section 9.     DISPUTE RESOLUTION.

(a) In the event that any party to this Agreement has any claim, right or cause of action against any other party to this Agreement, which the parties shall be unable to settle by agreement between themselves, such claim, right or cause of action, to the extent that the relief sought by such party is for monetary damages or awards, shall be determined by arbitration in accordance with the Rules of the American Arbitration Association (AAA),





through the adjudication by a single arbitrator, in New York, New York, with the decision of such arbitrator to be final and binding upon all parties. The fees, costs and expenses of such arbitration, as submitted by the AAA, shall be borne equally by both Tadeo and Diplomat; PROVIDED, that each of Tadeo and Diplomat shall pay the fees, costs and expenses of its own counsel, accountants and other representatives in connection with such arbitration. The parameters of the AAA proceedings undertaken in accordance with this Section 8 shall be prescribed such that a decision shall be rendered within sixty (60) days following the initial written reference of the related dispute to AAA arbitration.

(b) Notwithstanding any other provisions of this Section 8, in the event that a party against whom any claim, right or cause of action is asserted commences, or has commenced against it, bankruptcy, insolvency or similar proceedings, the party or parties asserting such claim, right or cause of action shall have no obligations under this Section 8 and may assert such claim, right or cause of action in the manner and forum it deems appropriate, subject to applicable laws. No determination or decision by the arbitrators pursuant to this Section 8 shall limit or restrict the ability of any party hereto to obtain or seek in any appropriate forum, any relief or remedy that is not a monetary award or money damages.

Section 10.    MISCELLANEOUS.

(a) Neither party any assign this Agreement, or their respective rights and obligations hereunder, in whole or in part, without the other party's prior written consent; PROVIDED, HOWEVER, that Tadeo shall be entitled to assign all of its rights and obligations hereunder to any subsidiary or affiliated entity without the consent of Diplomat. Any attempt to assign this Agreement without such consent (if required) shall be void and of no effect AB INITIO. Notwithstanding the immediately preceding sentence, either party may assign this Agreement or all, but not less than all, of its rights and obligations hereunder to any entity that acquires it by

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purchase of stock or by merger or otherwise, or by obtaining all or substantially all of its assets (a Permitted Assignee); PROVIDED, that any such Permitted Assignee thereafter succeeds to all of the rights and is subject to all of the obligations of the assignor under this Agreement; and PROVIDED, HOWEVER, that the provisions of this Section 9(a) shall in no way modify the provisions of Section 3(d).

(b) This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. Each party shall comply in all respects with all laws and regulations applicable to its activities under this Agreement.

(c) Notwithstanding the provisions of Section 8, each party hereto irrevocably submits to the exclusive jurisdiction of (a) the courts of the State of New York, New York County, or (b) the Untied States District Court for the southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby or thereby. Each of Diplomat and Tadeo agrees to commence any such action, suit or proceeding either in the Untied States District Court for the Southern District of New York, or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the courts of the State of New York County. Each of Diplomat and Tadeo further agrees that service of any process, summons, notice or documents by U.S. registered mail to such party's respective address set forth below shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 9(c). Each of Diplomat and Tadeo irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby and thereby in (i) the courts of the State of New York County, or (ii) the United States District Court for the Southern District of New York, and hereby and thereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(d) If any provisions of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

(e) All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand, by facsimile (with confirmation back), or sent, postage prepaid, by registered, certified or express mail or nationally recognized overnight courier service and shall be deemed given when so delivered by hand, by facsimile (with confirmation back), or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service), as follows:

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(i)      if to Tadeo:





Tadeo E-Commerce Corp.                                     5 Hanover Square                                     New York, New York 10004                                     Attention: Damon Testaverde, President

(ii)     if to Diplomat:

Diplomat Direct Marketing Corporation                                     414 Alfred Avenue                                     Teaneck, New Jersey 07666                                     Attention: Warren H. Golden, President

(f) The provisions of Sections 7, 8 and 9 hereof shall survive any termination of this Agreement.

(g) No failure to either party to exercise or enforce any of its rights under this Agreement shall act as a waiver of such right.

(h) This Agreement, along with the Exhibit hereto, contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or convenants relating to such subject matter expect as specifically set forth herein.

(i) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to each of the other parties.

(j) This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

(k) This Agreement is for the sole benefit of the parties hereto and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto any legal or equitable rights hereunder.

(l) The headings contained in this Agreement or in any Exhibit hereto are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement. When a reference is made in this Agreement to a Section or an Exhibit, such reference shall be to a Section of, or an Exhibit to, this Agreement unless otherwise indicated.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of June 30, 1999.

     TADEO E-COMMERCE CORP.

     By:  /s/ Damon Testaverde                                                Damon Testaverde                                                President

     DIPLOMAT DIRECT MARKETING CORP.

     By   /s/ Warren H. Golden                                                Warren H. Golden                                                President

EXHIBIT A

ONLINE HOSTING SERVICES

If requested by Diplomat, Tadeo will provide, by itself or through its subsidiaries or affiliates, the Services described below:

(a) Scope and Description of Services. Tadeo will provide Diplomat with all online hosting services currently provided to Diplomat through third party contracts, including, without limitations, the development and maintenance for Diplomat's operating divisions and/or operating subsidiaries of Commerce Web Subsites (as defined below) within the www.______ web site on the Internet based on online Enrollment and Information Forms, completed by Diplomat, submitted in conformance with Tadeo's instructions. Notwithstanding anything herein to the contrary, Tadeo and Diplomat will confer, from time to time, with respect to the placement of the link to this information and the manner in which this link appears on the subject web site; PROVIDED, that if mutual agreement is not reached on such placement, the reasonable determination with respect thereto made by Tadeo shall be final and binding on both parties. If a consumer places an order directly on a Tadeo-operated Commerce Web Subsite for a Diplomat Direct Access Business product, Tadeo agrees to transmit such order to Diplomat's Direct Access Business network and Diplomat will convert that order to a message and direct the order for internally processed fulfillment, with Diplomat receiving 100% of the order's value subject to any processing charges (subject





to the terms of the Web Agreement). For the purposes of this Agreement, the terms Commerce Web Subsite means a web site through which a consumer can place an order for Diplomat products.

(b) Price. For the services described above, Diplomat will pay Tadeo a monthly fee of $____________ for each Commerce Web Subsite hosted by Tadeo in accordance with the Fee Schedule annexed as EXHIBIT A-1.

(c) Payment and Accounting. Tadeo will invoice Diplomat within 15 days of the end of each month for Services rendered in such month. Diplomat will pay such invoice within 30 days of receipt.

EXHIBIT A-1

[Omitted]
Example Output: Highlight the parts (if any) of this contract related to Audit Rights that should be reviewed by a lawyer. Details: Does a party have the right to  audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?

Example Input: Exhibit 4.17 EXECUTION COPY SUPPLY AGREEMENT FERRER INTERNACIONAL, S.A. AND CUTANEA LIFE SCIENCES, INC. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





SUPPLY AGREEMENT This Supply Agreement (the Agreement) is made as of this ____ day of March, 2018 (the Effective Date), by and between Cutanea Life Sciences, Inc., a corporation duly organized and existing under the laws of the State of Delaware with its principal place of business at 1500 Liberty Ridge Drive, Suite 3000, Wayne, PA 19087 hereinafter referred to as CUTANEA), and Ferrer Internacional, S.A., a Spanish corporation with its principal place of business at Av. Diagonal, 549, 5t h floor, 08029 Barcelona (Spain) (hereinafter indistinctly referred to as Ferrer and/or Supplier). CUTANEA and Ferrer taken together hereinafter are referred to as PARTIES. WITNESSETH: WHEREAS, CUTANEA is engaged in the distribution, promotion and sale of certain pharmaceutical, OTC and medical device products and in particular desires that Ferrer manufacture (directly and/or through a third party) and supply CUTANEA with the Products (as defined below); and WHEREAS, Ferrer and Medimetriks Pharmaceuticals, Inc. (hereinafter Medimetriks) entered into a License and Supply Agreement dated March 10, 2014, as amended, (hereinafter referred as LSA) pursuant to which among other things, Ferrer granted Medimetriks exclusive commercialization and distribution rights to the Product (as defined in the LSA) throughout the Territory (as defined in the LSA); and WHEREAS, with Ferrer's consent, CUTANEA has acquired and assumed the rights, duties and obligations of Medimetriks under the LSA; and WHEREAS, Ferrer desires to manufacture (directly and/or through a third party) and supply CUTANEA with such Products; NOW, THEREFORE, in consideration of the mutual covenants hereinafter expressed, the Parties, intending to be legally bound hereby, agree as follows: 1. DEFINITIONS 1.1 Act Act means the Federal Food, Drug and Cosmetic Act, as amended, and regulations promulgated hereunder. 1.2 Business Day Business Day means any day other than a Saturday, Sunday or other day on which banks in Philadelphia, Pennsylvania and/ or Barcelona, Spain are permitted or required to close by any applicable law. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





1.3 Confidential Information Confidential Information means, other than information described in Section 9.1.2, all business and technical information, including third party information, in whatever form or manner presented, which is: (a) disclosed by or on behalf of a party (the Disclosing Party) to the other party (the Receiving Party) or learned or observed by the Receiving Party before or during the term of this Agreement; and (b) disclosed during any discussions and proceedings relating to any of the foregoing information, whether disclosed in oral, electronic, visual, written or any other form. Confidential Information shall include all information of the Disclosing Party that the Disclosing Party would consider confidential or proprietary under the circumstances. The fact that the Disclosing Party may have marked or identified as confidential or proprietary any specific information shall be indicative that such Disclosing Party believes such information to be confidential or proprietary, but the failure to so mark information shall not determine that such information is or is not considered confidential information by such Disclosing Party. 1.4 FDA FDA means the United States Food and Drug Administration, or any successor entity thereto. 1.5 Forecasted Needs Forecasted Needs means CUTANEA's estimate of Products (including in trade/sample form) to be ordered from Supplier for the upcoming rolling [***] period. 1.6 Governmental or Regulatory Authority Governmental or Regulatory Authority means governments, regulatory authorities, governmental departments, agencies, agents, commissions, bureaus, officials, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities (a) having or purporting to have jurisdiction on behalf of any nation, territory or state or any other geographic or political subdivision of any of them, or (b) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power. 1.7 Manufacture Manufacture means all the activities relating to production of the Products including packaging and shipment preparation, quality control and release of Products. All the references contained in this Agreement regarding manufacturing activities shall be deemed rendered by Supplier, even if performed by its designee (whether in the form of a subcontractor, agent or otherwise). In consequence, all Manufacturing activities with respect to the Products to be Manufactured hereunder by Supplier shall be carried out by Supplier (or its designee) at the notified facility and utilizing equipment in the manner set forth in the Specifications, except to the extent that Supplier receives CUTANEA's advance written permission to alter the location or specified usage of the equipment that may be required under the Specifications or the NDA, as applicable. 3 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





1.8 Product(s) Product(s) means product(s) as listed from time to time in Schedule A Manufactured by the Supplier (directly or through a third person) to meet the Specifications (as hereinafter defined); except as otherwise set forth on Schedule A, the Product will be ready for re-sale by CUTANEA to its customers in finished, final packaged form bearing CUTANEA's labels, it being understood that, after generic competition of the Product enters the market in the United States of America including Puerto Rico and the U.S. Virgin Islands, CUTANEA will be permitted to place orders for Product under a generic label. The term Generic shall be interpreted as defined under Section 1.17 of the LSA. 1.9 Specifications Specifications means, with respect to the Products, the critical quality standards that include test attributes, analytical procedures, and appropriate acceptance criteria and Manufacturing procedures for which such Product should conform to be considered acceptable for its intended use and conform to quality standards approved by Governmental and Regulatory Authorities and as provided in the NDA for the Products, and required for the Manufacture and supply of such Product(s). 1.10 Supply Price Supply Price means the price to be charged to CUTANEA from time to time by Supplier for Products Manufactured and supplied hereunder, as set forth in Schedule A. 2. PRODUCT MANUFACTURE AND SUPPLY 2.1 Manufacture and Purchase. Subject to the terms and conditions of this Agreement, Supplier agrees that it will, on a non-exclusive basis (but exclusive for supply of the Product in the United States of America including Puerto Rico and the U.S. Virgin Islands), Manufacture (directly or through a designee) for and provide and supply to CUTANEA, and CUTANEA agrees that it will purchase exclusively from Supplier, all of its requirements of the Products as follows: Supplier shall supply Products in accordance with the Specifications and in sufficient quantity to meet CUTANEA's Forecasted Needs for the length of this Agreement. All deviations from the Specifications must be approved by CUTANEA, in writing, prior to Supplier Manufacturing the Product. 2.2 Raw Materials and Components. As between Supplier and CUTANEA, Supplier shall be responsible for the supply of all raw materials and components necessary for the Manufacture of Products at no additional cost to CUTANEA. Supplier (or its designee) shall order the initial components for each Product as soon as CUTANEA provides Supplier (or its designee) with the relevant artwork for the Product. 4 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





2.3 Quality Tests and Checks. In order to assure the conformity of the Products to the Specifications, the Supplier shall deliver or cause to be delivered to CUTANEA, at the time of shipment, a certificate of analysis and compliance or other batch documentation upon reasonable request (such as, deviations, investigations, batch records) with respect to each batch of Product supplied hereunder in the form required by the Quality Agreement. 2.4 Forecasting and Other Obligations. 2.4.1 As soon as practicable following execution of this Agreement, but in any event within ten (10) Business Days, CUTANEA agrees to provide Supplier with a best estimate, non-binding (except for the first six months) forecast of its Forecasted Needs for Products (including in trade/sample form) for the upcoming rolling 18-month period (the Forecast). Thereafter, CUTANEA will update this rolling [***] Forecast quarterly. 2.4.2 With regards to the FDA Fees, CUTANEA shall maintain the NDA for the Products and pay, from time to time, all required FDA filing and related Product fees. 2.4.3 CUTANEA shall notify Supplier within one Business Day, after it receives any materially adverse contact or communication from any Governmental or Regulatory Authority that relates to any Product. Supplier shall notify CUTANEA as soon as reasonably possible after it receives any materially adverse contact or communication from any Governmental or Regulatory Authority that relates to any Product and may reasonably be expected to affect patient safety. For matters that would not reasonably be expected to affect patient safety, Supplier shall notify CUTANEA of such communications in its discretion. 2.4.4 CUTANEA shall provide Supplier with copies of all communications received from or sent to any Governmental or Regulatory Authority with respect to any Product within three business days after receipt or sending of the communication, as the case may be (subject to confidentiality and privilege restrictions, if any). CUTANEA shall consult with Supplier regarding the response to any inquiry or observation from a Governmental or Regulatory Authority relating to a Product. CUTANEA shall consider all reasonable requests and comments by Supplier with respect to all contacts and communications with a Governmental or Regulatory Authority. 2.5 Purchase Orders. 2.5.1 CUTANEA agrees to purchase from Supplier all Products Manufactured for CUTANEA in accordance with valid CUTANEA Purchase Orders pursuant to the terms of this Agreement and provided that such Products meet the Specifications approved by CUTANEA. 5 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





2.5.2 During the term of this Agreement, CUTANEA will order Product(s) by issuing firm Purchase Orders not less than [***] business days before the requested delivery date(s) of such Product(s), and Supplier shall provide approval of the Purchase Order by the Supplier within five (5) business days following the Purchase Order reception, such approval signifying Supplier's commitment to deliver such Product(s) on the requested deliver date(s), it being understood that Supplier must accept a Purchase Order for delivery of Product not less than [***] business days before the requested delivery date when included in the first [***] of the Forecasted Needs. Each purchase order shall set forth the Product for which the purchase order is being issued, the quantity being ordered (in trade/sample form), the Supply Price for the Product(s) being ordered and the requested delivery date for the Product being ordered, and the locations to which such quantities shall be delivered. 2.5.3 Within ten (10) Business Days following this Agreement becoming effective and thereafter on or before the last day of each calendar quarter, CUTANEA shall provide Supplier with specific data as to its Forecasted Needs for such Product (including in trade/sample form) for the following rolling [***]. Supplier will use commercially reasonable efforts to deliver Product to CUTANEA with minimum expiry dating remaining of [***]% of the approved shelf-life. 2.5.4 CUTANEA's purchase orders shall designate the desired quantities of Products, delivery dates and destinations. Supplier shall fill and ship all orders of Products in accordance with CUTANEA's reasonable written instructions. CUTANEA'S purchase order may specify up to three (3) shipping destinations per batch of Product but will be in full pallet quantities. Additional destinations can be accommodated only upon CUTANEA payment of a shipping preparation fee to be negotiated by Supplier and CUTANEA. 2.6 Acceptance / Rejection of Products. 2.6.1 All Products shall be submitted to inspection and evaluation by or on behalf of CUTANEA to determine whether or not said Products meet the Specifications. CUTANEA will provide in good faith written acceptance of a batch of Product or written notification of any deficiencies within two (2) Business Days after receipt of the Certificate of Analysis for the Product batch. Written acceptance of a batch of the applicable Product is required as a condition to the delivery of Product to Cutanea's designated shipping agent in accordance with Section 3. If for any reason Supplier does not receive any such notification within such two (2) Business Day period, Supplier will promptly notify CUTANEA of such fact and CUTANEA will as soon as practicable and, in any event within another two (2) Business Days thereafter provide such written notice to Supplier and be responsible for any storage or similar charges that Supplier may incur for not delivering such Product. The lack of reception of such written acceptance within the second two (2) Business Day period shall be deemed as the batch is accepted. If, once the Product is delivered, CUTANEA determines that there is any deficiency with respect to any Product, CUTANEA will notify Ferrer of such claim within fifteen (15) Business Days of delivery of the Products. Each such notice of rejection to Supplier shall specify in reasonable detail the ways in which the Product batch failed to meet Specifications. CUTANEA shall grant to Supplier (or its designee) the right to inspect or test said Product batch and dispute CUTANEA rejection according to the provisions provided in this Section 2.6. In the event that Supplier disagrees with CUTANEA's defective Product claim, the issue shall be submitted to a mutually agreed upon independent third party laboratory, whose decision shall be final and binding upon the Parties. The costs arising from the laboratory's intervention and the costs of the replaced Products (including return and destruction costs of the defective Products) shall be borne by the Party whose results were mistaken. As to any such Product batch which is determined to fail the Specifications (Rejected Product), CUTANEA shall have no obligation to pay for such Rejected Product and Supplier shall replace such Rejected Product as soon as possible and no later than ninety (90) days thereafter. 6 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





2.6.2 In the event of a conflict between the test results of Supplier and the test results of CUTANEA with respect to any shipment of Product batch, within thirty (30) days following receipt by Supplier of CUTANEA's notice of rejection, sample of such Product batch shall be submitted by Supplier (and/or its nominee) to an independent laboratory designated by Supplier (and/or its nominee) and reasonably acceptable to CUTANEA, which shall perform an assessment and whose findings shall be conclusive. The cost of the assessment shall be borne by (i) CUTANEA if the findings indicate the Product met all Specifications or (ii) Supplier (or its nominee) if the findings indicate the Product failed to meet any Specifications. 2.7 Supply Price. The initial Supply Price for each Product (commercial trade and sample units) to be paid by CUTANEA to Supplier are listed in Schedule A. These Supply Prices are for finished forms of the Products [***] (except as otherwise set forth herein). 2.8 Quality Agreement. The Parties shall enter into a Quality Agreement for the Products. If there is any conflict between this Agreement and the Quality Agreement solely with respect to quality assurance matters, the Quality Agreement will prevail, and with respect to all other matters, this Agreement will prevail. 2.9 Pharmacovigilance Agreement. The Parties shall enter into a pharmacovigilance agreement with respect to the Products (the Pharmacovigilance Agreement). If there is any conflict between this Agreement and the Pharmacovigilance Agreement solely with respect to adverse events and patient safety, the Pharmacovigilance Agreement will prevail, and with respect to all other matters, this Agreement will prevail. 7 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





2.10 Failure to Supply. 2.10.1 Supplier will promptly notify CUTANEA in writing in the event that Supplier is unable or anticipates that it will be unable to supply compliant Products in accordance with the requirements of this Agreement (each a Failure to Supply). Supplier undertakes to implement appropriate methods to ensure consistency of supply of the Product for the Territory throughout the Term of the Agreement, including but not limited to using its commercially reasonable efforts to qualify an alternative site owned or operated by Supplier or its Affiliates to Manufacture the Product and obtain approval thereof from the FDA and, if necessary the possible qualification of alternate sources of supply by Supplier. CUTANEA shall be entitled to propose to Supplier such alternate sources of supply if Supplier has not taken any steps to qualify such alternate supplier before the Failure to Supply, and Supplier shall evaluate in good faith the proposal from CUTANEA. Should the Parties agree to such qualification as a remedy to a Failure to Supply, then Supplier will grant any necessary licenses and conducting technology transfer as reasonably necessary to enable such alternate supplier to Manufacture the Product during Supplier's Failure to Supply. 2.10.2 If Supplier fails to supply all or part of any shipment of Products ordered by CUTANEA on the delivery date specified on the applicable purchase order for such shipment, in addition to any other remedies the CUTANEA may have, CUTANEA at its sole discretion, may require Supplier to supply the undelivered Products at a future date agreed upon by CUTANEA and Supplier, but nonetheless such Products shall count toward any binding purchase obligation of CUTANEA, whether as part of the Forecast or otherwise. 3. SHIPMENT AND RISK OF LOSS Supplier shall ship the Products ordered by CUTANEA hereunder [***]. Title to, and risk of loss for, Product, shall transfer from Supplier to CUTANEA upon [***]. [***]. 4. TERM AND TERMINATION 4.1 Term. This Agreement comes into force as of the Effective Date and shall remain valid during the term of the LSA. In consequence, if the LSA to be signed by the Parties is terminated for any reason whatsoever, the present Agreement will automatically terminate and be extinguished. 4.2 Termination. This Agreement may be terminated at any time upon the occurrence of any of the following events: 4.2.1 The failure of either party to comply with its obligations herein, which failure is not remedied within forty-five (45) calendar days after receipt by the breaching party of written notice of such default. 8 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





4.2.2 Either party may terminate this Agreement immediately by giving the other party written notice thereof in the event such other party in the event of (a) a voluntary assignment by the other party for the benefit of creditors; (b) the institution of voluntary proceedings by the other party in bankruptcy, insolvency, moratorium or for a receivership, or for a winding-up or for the dissolution of the other party; or (c) the taking of any action by the other party under any statutory act for relief from creditors, to the extent permitted by applicable Law. 4.2.3 The LSA is terminated or expires for any reason. 4.3 Additional Rights and Remedies. Termination under this Section 4 shall be in addition to the other rights and remedies of the terminating party as specified herein. 4.4 Return of Materials. Upon the expiration or termination of this Agreement for any reason whatsoever, Confidential Information of either party delivered to the other pursuant to this Agreement, including all formulae for the Products, shall promptly be collected and returned in whatever form it may exist. Upon the effective date of expiration or termination of this Agreement for any reason whatsoever, Supplier shall deliver to CUTANEA all Products Manufactured hereunder under valid Purchase Orders and shall invoice CUTANEA for such Products. Subsequent to the expiration or termination of this Agreement, the Parties shall continue to be responsible for rejected Products in accordance with the terms of this Agreement. 4.5 Survival. Termination or expiration of this Agreement shall not relieve either party of obligations or liability for breaches of this Agreement incurred prior to or in connection with termination or expiration. Sections 4.3, 4.4, 5, 6, 8.4, 9, 10, and 12 hereof and this Section 4.5 shall survive the termination or cancellation of this Agreement for any reason along with Section 1 and any other section of this Agreement to the extent necessary to interpret the other surviving sections of this Agreement. 5. WARRANTIES 5.1 Conformity with Specifications. Supplier warrants that all Products sold pursuant to this Agreement will have been Manufactured in accordance with the Specifications for the release of the Product. 9 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





5.2 Compliance with the Act. Supplier shall bear sole responsibility for the validity of all test methods and appropriateness of all Specifications. In addition, Supplier shall bear sole responsibility for all regulatory approvals, filings, and registrations and adequacy of all validation, stability, and preservative efficacy studies including responsibility for adequacy of all validation, stability, and preservative effectiveness studies performed by Supplier on behalf of CUTANEA. Supplier warrants that it has obtained and shall maintain any and all necessary approvals, licenses and permits necessary to perform its obligations under this Agreement. CUTANEA warrants that it has obtained any and all necessary approvals from all applicable Governmental or Regulatory Authorities necessary to distribute all Products under this Agreement. 5.3 Conformity with FDA Regulations and cGMPs. Subject to CUTANEA's compliance with the provisions set forth in Section 5.2 and Section 5.4 hereof, Supplier warrants that all Products Manufactured, held for sale, sold and shipped pursuant to this Agreement shall have been Manufactured and shipped by Supplier in compliance with applicable FDA regulations and current Good Manufacturing Practices as that term is defined under the Act. 5.4 Compliance of Packaging and Labeling with Laws and Regulations. CUTANEA warrants that all labeling copy and other material developed or produced by CUTANEA for use in connection with the Products and artwork approved, designated or supplied by CUTANEA shall be in compliance with all applicable laws and governmental regulations. Compliance with all federal, state, and local laws and regulations concerning Specifications for packaging and labeling provided by CUTANEA shall be the sole responsibility of CUTANEA. Supplier warrants that all packaging and labeling services performed hereunder will be in accordance with CUTANEA's Specifications. CUTANEA hereby warrants to Supplier that, to CUTANEA's knowledge, all CUTANEA labeling and artwork related to the Product do not violate or infringe any patent, copyright or trademark laws, and agrees to indemnify Supplier, its employees, officers, directors and representatives for any claim, loss or damage including reasonable attorney's fees paid or incurred by any of them in connection therewith. 5.5 Access to Supplier's Facilities. 5.5.1 Access. Supplier shall use its commercially reasonable efforts to permit CUTANEA to have access to Supplier's (and its agents' and subcontractors') facilities upon reasonable notice, during normal business hours for any reasonable purpose, including compliance with current Good Manufacturing Practices and the Act. Such access shall in no way give CUTANEA the right to any of Supplier's confidential or proprietary information not related to this Agreement or used in the Manufacture of any Product. 10 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





5.5.2 Audit. Without limiting the generality of the foregoing, but subject to the Quality Agreement, Supplier shall use its commercially reasonable efforts to permit CUTANEA to conduct, once annually during the Term, one quality assurance and Manufacturing costs audit for any reasonable purpose, including access to those portions of Supplier's (and its agent's and subcontractor's) facilities where services are conducted under this Agreement, upon reasonable advance notice and at reasonable times during regular business hours (an Annual Audit). Supplier shall not charge CUTANEA for time and expenses incurred by Supplier (or its agents and subcontractors) in connection with an Annual Audit. For purposes of this subsection, CUTANEA shall ensure that its duly authorized agents and representatives involved in the audit have signed or are otherwise bound to maintain the confidentiality of Confidential Information learned as a result of the audit in accordance with Section 9 and CUTANEA shall be liable for any breach of such obligation by such agents or representatives. 5.6 Patent and Other Intellectual Property Rights. Supplier represents and warrants to CUTANEA that, as of the Effective Date, to the best of Supplier's knowledge, information and belief, Supplier is not infringing (and does not guarantee that under its knowledge is infringing) upon any Third Party patent or the intellectual property rights of any Third Party relating to the Products. In addition, Ferrer can make no representations or warranties regarding any possible future infringement of Supplier Patent by a Third Party nor guarantee that the Products do not infringe future patents and/or any intellectual property right of a Third Party. 5.7 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, SUPPLIER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY OUT OF THIS AGREEMENT. THIS LIMITATION OF LIABILITY WILL APPLY EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. 5.8 Debarment. 5.8.1 Each of the parties, to the best of its knowledge, hereby represents, warrants, certifies and covenants that it is not debarred under Section 306 of the Act or similar local law. In the event that a party becomes debarred, the debarred party agrees to notify the other party immediately if the same affects Supplier's ability to lawfully supply the Products or CUTANEA's ability to lawfully purchase the Products. 11 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





5.8.2 Each of the parties represents, warrants, certifies and covenants that to the best of its knowledge it has not and will not use in any capacity the services of any individual, corporation, partnership, or association which has been convicted or debarred under Section 306 of the Act or similar local law. In the event that a party becomes aware of or receives notice of the conviction or debarment of any individual, corporation, partnership, or association providing services to such party, which relates to the execution or performance of this Agreement, Supplier agrees to notify CUTANEA immediately. 6. PRODUCT RECALLS 6.1 Initiating and Effecting Recall. Supplier, as the NDA holder for the Product, shall make all decisions with respect to any complaint or adverse drug experience, or any recall, market withdrawal or any other corrective action related to any Product. Supplier shall be responsible for processing and submitting to the applicable authorities or agencies all reports of adverse drug experiences and Product complaints in accordance with applicable Acts. Supplier shall investigate all complaints associated with the Manufacture, safety or efficacy of the Product. CUTANEA shall notify Supplier in accordance with the terms of the Quality Agreement and the Pharmacovigilance Agreement of any complaints received by CUTANEA concerning any Products. 6.2 Implementation of Recall. Supplier shall implement recalls of Products from the market or other corrective actions related to the Product. CUTANEA shall assist Supplier, to the extent necessary or relevant, in implementing withdrawals or recalls of Products from the market or other corrective actions related to Products. Upon the receipt by either party of any direction to withdraw or recall any Product from the market from any Governmental or Regulatory Authority having jurisdiction, the receiving party shall notify the other party as soon as practicable in accordance with the terms of this Agreement and the Quality Agreement. With respect to notice to CUTANEA, it should be sent to [ ].com or via phone at [ ]. To the extent any seizure, withdrawal, recall (whether voluntary or involuntary), or corrective action with respect to any Product (collectively, Product Action) results from the adulteration or contamination (other than any naturally occurring contamination that can be traced back to the Manufacturing process) of Product while in the care and custody of CUTANEA, CUTANEA shall be responsible for the costs of the Product Action. Otherwise, Supplier shall be responsible for all of the costs of the Product Action. 12 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





7. FORCE MAJEURE The occurrence of an event which materially interferes with the ability of a party to perform its obligations or duties hereunder which is not within the reasonable control of the party affected (or in the case of Supplier, any current manufacturer of the Product) not due to the affected party's malfeasance, and which could not with the exercise of reasonable due diligence have been avoided (Force Majeure), including, but not limited to, fire, accident, labor difficulty, strike, riot, terrorism, civil commotion, act of God, delay or errors by shipping companies or change in Law, Governmental or Regulatory Authority action or inaction, shall not excuse such party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of Force Majeure. The party prevented from performing its obligations or duties because of Force Majeure shall promptly notify the other party hereto (the Other Party) of the occurrence and particulars of such Force Majeure and shall provide the Other Party, from time to time, with its best estimate of the duration of such Force Majeure and with notice of the termination thereof. The party so affected shall use its commercially reasonable efforts to avoid or remove such causes of nonperformance. Upon termination of Force Majeure, the performance of any suspended obligation or duty shall promptly recommence. Neither party shall be liable to the other party for any direct, indirect, consequential, incidental, special, punitive or exemplary damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of Force Majeure. 8. CHANGES 8.1 Changes by CUTANEA. Any changes to the Specifications requested by CUTANEA must be approved by Supplier (or its designee) in its reasonable discretion and shall be incorporated and all costs and expenses associated with such changes shall be borne by CUTANEA. 8.2 Changes by Supplier. Any changes to the Specifications requested by Supplier must be notified to CUTANEA in advance to its implementation, and shall be incorporated only after approval of Governmental or Regulatory Authorities. All costs and expenses associated with such changes shall be borne by Supplier. 8.3 Changes by Governmental or Regulatory Authorities. The costs and expenses of any changes to the Specifications requested by any Governmental or Regulatory Authority shall be borne by Supplier unless the change, in the opinion of the JSC (as that term is defined in the LSA), entails a benefit to CUTANEA, in which case the costs arising from the changes and its implementation shall be borne by CUTANEA. 8.4 Obsolete Inventory. Any CUTANEA-specific inventory including, but not limited to, raw materials, work-in-process, packaging and finished goods rendered obsolete as a result of Supplier's supplier minimum order quantities that exceed the binding quantities of Product of Forecasted Needs, formula, artwork or packaging changes not requested by CUTANEA or by changes required by any Governmental or Regulatory Authority shall be destroyed in accordance with all applicable laws and regulations and Supplier shall indemnify CUTANEA for any liability, costs or expenses, including attorney's fees and court costs, relating to Supplier's failure to dispose of such inventory in accordance with such laws and regulations. Supplier shall also provide CUTANEA with all manifests and other applicable evidence of proper destruction as may be requested by CUTANEA or required by applicable laws and regulations. Any other materials rendered obsolete that are not result of Supplier's supplier minimum order quantities that exceed the binding quantities of Product of Forecasted Needs, formula, artwork or packaging changes requested by CUTANEA shall be reimbursed to Supplier by CUTANEA. 13 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





9. CONFIDENTIAL INFORMATION: INTELLECTUAL PROPERTY RIGHTS 9.1 Confidential Information. 9.1.1 All Confidential Information furnished by the Disclosing Party during the term of this Agreement shall be kept confidential and not used by the Receiving Party, except for purposes authorized by this Agreement, and shall not be disclosed to any person or firm, unless previously authorized in writing to do so, during the term of this Agreement and for an indefinite period thereafter. The Receiving Party may, however, disclose the same to its responsible officers and employees who require said information in order to perform such party's obligations under this Agreement, provided that said officers and employees shall have assumed like obligations of confidentiality. 9.1.2 Any other provisions hereof to the contrary notwithstanding, it is expressly understood and agreed by the Parties hereto that the obligations of confidence and nonuse herein assumed shall not apply to any information which may be demonstrated by documented means of sufficient evidence that: (1) is at the time of disclosure or thereafter becomes a part of the public domain through no fault, omission or other act of the Receiving Party or any individual or entity receiving such information, directly or indirectly, from the Receiving Party; or (2) was otherwise in the Receiving Party's lawful possession with no obligation or duty to maintain the confidentiality thereof prior to disclosure as shown by its written record; or (3) is hereafter disclosed to the Receiving Party by a third party lawfully entitled to possession of such Confidential Information and under no obligation or duty of confidentiality; or (4) is released from a confidential status by Disclosing Party as evidence by an instrument or agreement duly executed by Disclosing Party; or (5) is required to be disclosed pursuant to regulatory or legal requirements, provided that the Receiving Party provides reasonable advance notice to the Disclosing Party and the Receiving Party reasonably cooperates with the Disclosing Party to obtain confidentiality protection of such information. 14 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





9.1.3 The Receiving Party agrees that money damages would not be a sufficient remedy for any breach of the confidentiality obligations hereunder and that, in addition to all other remedies, the Disclosing Party will be entitled to seek injunctive or other equitable relief as a remedy for any such breach by the Receiving Party without having to post a bond. The Receiving Party will notify the Disclosing Party in writing immediately upon the occurrence of any unauthorized release of Confidential Information or other breach of the confidentiality obligations hereunder of which it is or becomes aware. 9.2 Intellectual Property. Except as the Parties may otherwise expressly agree in writing, each party shall continue to own its existing patents, trademarks, copyrights, trade secrets and other intellectual property (Intellectual Property), without conferring any interests therein on the other party. Neither party shall acquire any right, title or interest in the other's Intellectual Property by virtue of this Agreement or otherwise, except to the extent expressly provided herein. 9.3 Publicity and SEC Filings. The Parties agree that, unless mutually agreed by the Parties in writing otherwise, no public announcement or press release regarding the execution of this Agreement shall be made. Notwithstanding anything to the contrary contained herein, each party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures required to be made to the SEC or any other Governmental or Regulatory Authority, including providing written notice to the other party and sufficient time to review and request confidential treatment of Confidential Information of either party included in any such disclosure. 10. INDEMNIFICATION 10.1 Indemnification by Supplier. Supplier shall indemnify, defend and hold CUTANEA harmless from any and all losses, damages, liabilities, costs, charges, expenses, including, without limitation, court fees and reasonable lawyers' fees and other legal expenses (collectively, Losses) to which CUTANEA may become subject as a result of any claim, complaint, suit, demand, action or other proceeding by any Third Party (collectively Claims), to the extent such Losses arise out of or in connection with: (i) the development, use, Manufacturing, storage, handling or distribution of the Products by Supplier or any of its Affiliates or contract suppliers of Products; (ii) the negligence or willful misconduct of Supplier or any of its Affiliates or contract suppliers of Products; or (iii) a breach or non-fulfilment by Supplier of its obligations according to this Agreement and/or any law in force; or (iv) a breach by Supplier of any warranty, representation, covenant or agreement made by it in this Agreement; except, in each case, to the extent such Losses result from (a) the negligence or willful misconduct of CUTANEA or (b) the breach by CUTANEA of any warranty, representation, covenant or agreement made by it in this Agreement and to the extent that such negligence, willful misconduct or breach it is stated by a final court decision. Notwithstanding the foregoing, Supplier shall have no obligation to indemnify CUTANEA for reasonable lawyers' fees and other legal expenses incurred by CUTANEA after Supplier has taken over the defense of such claim, Action or Proceeding in accordance with Section 10.3 unless and then only to the extent otherwise agreed to in advance in writing by Supplier. 15 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





10.2 Indemnification by CUTANEA. CUTANEA shall indemnify, defend and hold Supplier harmless from any and all Losses, to which Supplier may become subject as a result of any Claim to the extent such Losses arise out of or in connection with: (i) the development, use, storage, handling, distribution, marketing or selling of the Products by CUTANEA and its Affiliates; (ii) the negligence or willful misconduct of CUTANEA and its Affiliates; (iii) the breach or non-fulfilment by CUTANEA of its obligations according to this Agreement and/or any law in force; or (iv) a breach by CUTANEA of any warranty, representation, covenant or agreement made by it in this Agreement; except, in each case, to the extent such Losses result from: (a) the negligence or willful misconduct of Supplier (b) the breach by Supplier of any warranty, representation, covenant or agreement made by it in this Agreement and to the extent that such negligence, willful misconduct or breach it is stated by a final court decision. Notwithstanding the foregoing, CUTANEA shall have no obligation to indemnify Supplier for reasonable lawyers' fees and other legal expenses incurred by Supplier after CUTANEA has taken over the defense of such claim, Action or Proceeding in accordance with Section 10.3 unless and then only to the extent otherwise agreed to in advance in writing by CUTANEA. 10.3 Assertion of Claim. In the event that any claim is asserted against any party hereto, or any party hereto is made a party defendant in any action or proceeding, and such claim, action or proceeding (which shall mean any action, claim, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification, investigation or audit, hereinafter referred to as an Action or Proceeding) involves a matter which is subject to a claim for indemnification under this Section, then such party (an Indemnified Party) shall promptly give written notice to the other party or parties (the Indemnifying Party) of such claim, Action or Proceeding. If the Indemnifying Party agrees in writing to be bound by and to promptly pay the full amount of any final judgment from which no further appeal may be taken (or otherwise confirms its indemnification obligation responsibility to the satisfaction of the Indemnified Party) and if the Indemnified Party is reasonably assured of the Indemnifying Party's ability to satisfy such agreement, then such Indemnifying Party shall take over the defense of such claim, Action or Proceeding, except that, in such case, the Indemnified Party shall have the right to approve any attorney or counsel selected by the Indemnifying Party (which approval shall not be unreasonably delayed or withheld) and to join in the defense of said claim, Action or Proceeding at its own cost and expense. In no event shall the Indemnifying Party settle any such claim or potential claim, Action or Proceeding without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld. 16 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





10.4 Insurance. 10.4.1 Each of Supplier and CUTANEA shall maintain and keep in force at its sole cost and expense throughout the Term of this Agreement and for three years following the effective date of expiration or termination hereof (if such policies are on a claims made basis), Commercial General Liability Insurance from carriers having an A. M. Best rating of A, including Product Recall, Bodily Injury and Property Damage Insurance, with a combined single limit of not less than $[***] per occurrence and $[***] in the aggregate annually (this limit can be secured via a combination of primary and excess/umbrella policies). In addition, each of the Parties shall maintain and keep in force at its sole cost and expense throughout the Term of this Agreement and for three years following the effective date of expiration or termination hereof (if such policies are on a claims made basis), Product Liability Insurance from carriers having an A.M. Best rating of A with a combined single limit of not less than $[***] per occurrence and in the aggregate annually. 10.4.2 Each party agrees to provide the other party with a Certificate of Insurance evidencing such coverage, naming the other party as an additional insured. Each party agrees to give the other party written notice, promptly, of any material change in or cancellation of coverages or limits. In addition, if and for so long as Supplier utilizes any subcontractor(s) or agents to provide services hereunder, Supplier will use its commercially reasonable efforts to cause each such subcontractor to hold, at least, the minimum insurance coverages listed above. 11. REPRESENTATIONS AND WARRANTIES 11.1 REPRESENTATIONS BY SUPPLIER. Supplier makes the following representations and warranties and agrees to notify CUTANEA immediately upon any future breach of these representations and warranties: 11.1.1 Organization of Supplier. Supplier is a Spanish corporation, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. 11.1.2 Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action on the part of Supplier. This Agreement is and will remain a valid and binding obligation of Supplier, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors. 11.1.3 Absence of Other Contractual Restrictions. Supplier is under no contractual or other obligation or restriction that is inconsistent with Supplier's execution or performance of this Agreement. Supplier will not enter into any agreement, either written or oral, that would conflict with Supplier's responsibilities under this Agreement. 17 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





11.1.4 Qualifications of Supplier Personnel. Supplier has, and will engage, employees, subcontractors and/or consultants (Supplier Personnel) with the proper skill, training and experience to provide the services under this Agreement. Supplier will be solely responsible for paying Supplier Personnel and providing any employee or other benefits that they are owed. 11.1.5 Legal Compliance. Supplier will comply, in all material respects, with all laws, regulations and orders applicable to its operations. Supplier has and at all times during the term of this Agreement shall maintain all permits, licenses and similar authorizations required for it to perform its obligations under this Agreement. 11.2 Representations by CUTANEA. CUTANEA makes the following representations and warranties and agrees to notify Supplier immediately upon any future breach of these representations and warranties: 11.2.1 Organization of CUTANEA. CUTANEA is a Delaware corporation, duly organized, validly existing and in good standing under the laws of Delaware. 11.2.2 Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action on the part of CUTANEA. This Agreement is and will remain a valid and binding obligation of CUTANEA, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors. 11.2.3 Absence of Other Contractual Restrictions. CUTANEA is under no contractual or other obligation or restriction that is inconsistent with CUTANEA's execution or performance of this Agreement. CUTANEA will not enter into any agreement, either written or oral, that would conflict with CUTANEA's responsibilities under this Agreement. 11.2.4 Legal Compliance. CUTANEA will comply, in all material respects, with all laws, regulations and orders applicable to its operations. CUTANEA has and at all times during the term of this Agreement shall maintain all permits, licenses and similar authorizations required for it to perform its obligations under this Agreement. 18 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





11.3 Anti-Corruption Undertaking Both parties shall comply with, and will not cause any party and its Affiliates, associates, directors, officers, shareholders, employees, representatives, sublicensees or agents worldwide to be in violation with any applicable anti-corruption laws, rules and regulations including but not limited to the United States Foreign Corrupt Practices Act (the FCPA) or U.K. Bribery Act 2010. Without limiting the foregoing, neither party will, directly or indirectly, pay any money to, or offer or give anything of value to, any Government Official, in order to obtain or retain business or to secure any commercial or financial advantage for the other party or for itself or any of their respective Affiliates. Each of the parties undertakes not to bribe Government Officials or any private companies or individuals, bribes having the following definition: Offering, promising, or giving a financial or other advantage to another person where it is intended to bring about the improper performance of a relevant function or activity, or to reward such improper performance; acceptance of the advantage offered, promised or given in itself constitutes improper performance of a relevant function or activity. Improper Performance means a breach of expectations that a person will act in good faith, impartially, or in accordance with a position of trust. Both parties must also (1) make and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the company, (2) devise and maintain a system of internal accounting controls, and (3) at any time a party so requests in writing, but no more than once a year, grant to the other party commercially reasonable access to said books, records, systems and accounts to verify compliance. Such inspection shall be undertaken by an independent public accountant or accounting firm appointed by the requesting party and about whom the other party does not express a legitimate concern. For the avoidance of doubt, this restricted annual audit shall not apply to for-cause audits, which may be conducted at any time. 19 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





12. GENERAL PROVISIONS 12.1 Notices. Except for invoices, which shall be sent in accordance with Schedule A, all notices required or permitted under this Agreement must be written and sent to the address or facsimile number identified in this Agreement or a subsequent notice. All notices must be given (a) by personal delivery, with receipt acknowledged, (b) by facsimile followed by hard copy delivered by the methods under (c) or (d), (c) by prepaid certified or registered mail, return receipt requested, or (d) by prepaid recognized next business day delivery service. Notices will be effective upon receipt or at such later time as stated in the notice. Notices shall be sent: If to Supplier: Ferrer Internacional, S.A. Attention: Legal Department Av. Diagonal, 549, 5t h Floor 08029 Barcelona, Spain If to CUTANEA: Cutanea Life Sciences, Inc. Attention: President and CEO 1500 Liberty Ridge Drive Suite 3000 Wayne, PA 19087 With a copy (which shall constitute notice) to: Cutanea Life Sciences, Inc. Attention: General Counsel 1500 Liberty Ridge Drive Suite 3000 Wayne, PA 19087 Fax: +1 484.652.0223 12.2 Entire Agreement; Amendment. The Parties hereto acknowledge that this Agreement, including the Quality Agreement and the Pharmacovigilance Agreement and any exhibits, schedules or other attachments hereto sets forth the entire agreement and understanding of the Parties and supersede all prior written or oral agreements or understandings with respect to the subject matter hereof. In the event of any conflict between this Agreement and the LSA, this Agreement will control with respect to issues of quality assurance, patient safety, Supply Unit Price and changes to it, and other terms and conditions customarily associated with supply agreements for commercial pharmaceutical products. Notwithstanding the precedent, in the event of any conflict between Quality Agreement and/or Pharmacovigilance Agreement and this Agreement, Quality Agreement or Pharmacovigilance Agreement shall prevail with respect to terms and conditions customarily associated with Quality or Pharmacovigilance as respectively applicable. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by the party against whom enforcement is sought. No course of dealing or usage of trade shall be used to modify the terms and conditions herein. 20 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





12.3 Waiver. No waiver by either party of any default shall be effective unless in writing, nor shall any such waiver operate as a waiver of any other default or of the same default on a future occasion. 12.4 Assignment. This Agreement shall be assignable or transferable by either party hereto only with the consent in writing of the other party, such consent not to be unreasonably withheld. However, Supplier shall be free to assign this Agreement along with the LSA in favor of any third party, provided that the succeeding entity assumes all of the obligations under this Agreement and the LSA, and further provided that Supplier provides CUTANEA with prior written notice of such assignment. Any assignments, including but not limited to, sale, transfer, or license of brand or Products, shall not release the original party hereto from their duties and obligations under this Agreement. For the purposes of this Agreement, the terms subsidiaries and affiliates shall mean any entity controlling, controlled by, or under common control with, either of the Parties hereto. 12.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without reference to any principles of conflicts of law thereof. Any suit or proceeding arising in respect of this Agreement will be tried exclusively in the United States District Court of the Southern District of the State of New York or, if that court declines to accept or does not have jurisdiction over a particular matter, any other State Court in the State of New York or Federal court of the United States of America located in the State of New York, and both parties irrevocably and unconditionally agree to submit to the exclusive jurisdiction of, and to venue in, such courts (and agree not to commence any action, suit, or proceeding relating thereto except in such courts). Both parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit, or proceeding arising out of this Agreement in such court, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum. Both parties further agree that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth below shall be effective service of process for any action, suit or proceeding brought against the parties in any such court. BOTH PARTIES HEREBY IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING REGARDING THE SUBJECT MATTER OF THIS AGREEMENT. 21 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





12.6 Severability. In the event that any term or provision of this Agreement shall violate any applicable statute, ordinance, or rule of law in any jurisdiction in which it is used, or otherwise be unenforceable, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof. 12.7 Headings, Interpretation. The headings used in this Agreement are for convenience only and are not a part of this Agreement. 12.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same original. 12.9 Independent Contractor. In performing its services hereunder, Supplier shall act as an independent contractor. [Signature page follows.] 22 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above written. CUTANEA LIFE SCIENCES, INC. FERRER INTERNACIONAL, S.A. By: /s/ [***] By: /s/ [***] Its: [***] Its: [***] Date: Date: FERRER INTERNACIONAL, S.A. By: /s/ [***] Its: [***] Date: [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.





Schedule A Capitalized terms in this Exhibit A are defined in LSA. The initial purchase price for trade units of the Products shall be set at $[***] per [***] sample tube of the Product, $[***] per [***] trade unit of the Product, $[***] per [***] trade unit of the Product, and $[***] per [***] trade unit of the Product, FCA manufacturing site (the Supply Unit Price). Notwithstanding the foregoing, after December 31, 2018 and during the term of this Agreement, Ferrer may change its Supply Unit Price on any or all the Products from time to time, but no more than once annually, based on documented actual increases to Ferrer's direct manufacturing and labor (but specifically excluding overhead) costs (or those charged by its nominee), provided that Ferrer furnishes the Company with at least thirty (30) days prior written notice of any such change. The increase shall apply to any order received by Ferrer after the communication date of the increase. In the event that the new Supply Unit Price for the Products may make the business not feasible, the Parties, in good faith and through the Joint Steering Committee, agree to meet and negotiate in good faith an alternative solution. The purchase price for the Products shall be paid in US Dollars by the Company and such payment terms shall be [***] following the date that the Products are received and accepted (as per Article 4.4 of the LSA) by the Company, by wire transfer into an account designated by Ferrer. Invoices shall be generated upon shipment of Product from Supplier. Invoices should be sent by email to the following address: invoice@cutanea.com. Failure to send invoices to the email address provided herein may cause a delay in approval and payment. In the event that the Company does not fulfill such terms, Parties agree to discuss in good faith alternative payment conditions. In case there is not an agreement between the Parties after 30 days, Ferrer will accept an irrevocable and guaranteed letter of credit payable as term of payment. Additionally, Parties agree to share exchange EUR/ USD rate fluctuations covering the payment of royalties. More concretely, within the first 30 days after every calendar year, Ferrer will calculate the average annual EUR/USD rate based on the EUR/USD rates published in the Financial Times the last business day of every month. Such EUR/USD average rate will be compared with the rate applied in every invoice during the year. If, as a result of this reconciliation, there arises a difference above or under [***]%, Parties agree to share the resulting amount on an equitable basis (50%). Ferrer will report the reconciliation to the Company for its acceptance and, after 15 business days, issue an invoice which will be debited/credited in the next 30 days by wire transfer into the accounts designated by the Parties. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
Example Output:
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?