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: 1                                                                   EXHIBIT 10.4

                           SPONSORSHIP AGREEMENT                               ---------------------

               This Sponsorship Agreement is made between National Processing Company (NPC) and National City Bank of Kentucky (NCB) effective June 30, 1996 (Effective Date).

                                WITNESSETH:

               WHEREAS, NCB is a member in good standing of Visa U.S.A., Inc. (Visa) and a member in good standing of MasterCard International, Incorporated (MasterCard); and

               WHEREAS, NPC, pursuant to its arrangements with NCB, a member of Visa and MasterCard, provides data processing, settlement and authorization services for merchants who participate in the Visa and MasterCard bankcard programs (such activities being referred to as Merchant Bankcard Business); and

               WHEREAS, NPC and NCB have concluded that it is in their mutual best interests for NPC to continue to act as an agent of NCB for purposes of providing data processing, settlement and authorization services for merchants with respect to their Visa and MasterCard transactions and in connection with such agency arrangement, for NPC to continue to use NCB for certain banking relationships; and

               WHEREAS, the parties desire to formalize the terms and conditions on which NPC will act as agent of NCB, and NPC will perform certain functions, for purposes of conducting Merchant Bankcard Business;

             NOW, THEREFORE, in consideration of the premises, the representations, acknowledgments, and mutual agreements set out in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, NPC and NCB represent, acknowledge and agree as follows:

     ARTICLE I - MERCHANT PROCESSING, SETTLEMENT AND AUTHORIZATION SERVICES         ----------------------------------------------------------------------

               1.1 APPOINTMENT AS AGENT. NCB appoints NPC, and NPC agrees to serve, as NCB's sole agent (i) to provide authorization, processing and settlement services with respect to Visa and MasterCard transactions (Merchant Processing Services) to merchants who desire to receive Merchant Processing Services from NCB or NPC (Merchants) and (ii) to enter into contracts with merchants (Merchant Contracts) for the provision of Merchant Processing Services as agent of NCB; provided, however, that nothing herein shall limit NPC's right to provide, as agent for other members of Visa and MasterCard, Merchant Processing Services to merchants who desire to receive such services from NCB or others. NCB agrees that NPC may use NCB's name and its BIN, ICA and any other Visa and MasterCard identification numbers to the extent necessary or appropriate to perform the Merchant Processing Services.

               1.2 PERFORMANCE BY NPC. NPC shall have full responsibility for the proper performance of the Merchant Processing Services under each Merchant Contract except for the obligations and responsibilities which NCB assumes hereunder. Without limiting the foregoing, NPC shall provide authorization services to the Merchants, perform data capture services with respect to all credit card transactions by the Merchants, submit such data to the applicable Interchange, process retrievals and chargebacks, and direct the settlement of such transactions. In providing Merchant Processing Services, NPC agrees to comply with: (i) all Visa and MasterCard Bylaws, Manuals, Operating Regulations and other written materials as they may from time to time be amended which bind or apply to NCB as a member of Visa and MasterCard with respect to Merchant Processing Services or to NPC as a third party processor with respect to Merchant Processing Services (Rules), (ii) all agreements between Merchants and NCB with respect to Merchant Processing Services, and (iii) all applicable laws and regulations, whether state or federal. NPC agrees to enter into any agreements with Visa and MasterCard necessary to perform this Agreement

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in accordance with its terms, subject to the rights of NPC to terminate this Agreement pursuant to Section 6.2. Without in any way limiting the foregoing, NPC agrees as follows: (a) any material containing any of the Visa Card Program Marks used by it in performing this Agreement will prominently identify NCB by name and city adjacent to such marks and, in identifying NPC, will specify that NPC is acting as agent or representative of NCB; (b) any solicitation material used by NPC shall clearly disclose that NPC is acting as agent or representative of NCB; and (c) NPC acknowledges that it does not have authority to permit the use of Visa Card Program Marks by any of its own agents. NPC and NCB agree that the foregoing clauses shall be deemed modified from time to time to reflect any changes in Visa's requirements applicable to NPC's use of Visa Card Program Marks and solicitation material or to the terms required herein.





               1.3 MERCHANT CONTRACTS. NPC, as agent of NCB, shall be responsible for establishing the terms and conditions of the Merchant Contracts, including all changes thereunder, subject to Section 1.7 below. Without in any way limiting the authority granted in Section 1.1, NCB hereby authorizes NPC to use NCB's name to the extent necessary or appropriate in accordance with the terms of this Agreement to enter into and to renew Merchant Contracts, to modify Merchant Contracts to the extent necessary to assign them to NCB, to perform the Merchant Contracts and to take other necessary or appropriate actions with respect to the Merchant Contracts, all in accordance with requirements of Visa and MasterCard. As between NPC and NCB, NPC shall be responsible for all credit, fraud and other risks associated with each Merchant Contract.

               1.4 AUTHORIZATION SERVICES. NPC, or its designated third parties, shall provide the Merchants with telephonic or electronic authorization for all Visa and MasterCard transactions exceeding any floor amount specified pursuant to such Merchant's contract.

               1.5 PROCESSING AND SUBMISSION TO INTERCHANGE. NPC shall process all data received by it reflecting the Visa and MasterCard sales transactions and any related return credits by the Merchants and shall submit to the applicable Visa or MasterCard interchange networks (Interchange) Settlement Files reflecting such transactions and directing the applicable Interchange to pay the net amount due to an account established by NCB for the purpose of receiving all settlement amounts paid by Visa and MasterCard with respect to the transactions processed by NPC pursuant to this Agreement and effecting appropriate payments to the Merchants and NPC in accordance with this Agreement (the NCB Account).

               1.6 ACCOUNT SETTLEMENT.

               (a) PAYMENT INSTRUCTIONS. NPC shall prepare and transmit to          NCB, in a mutually acceptable format, instructions specifying the          payments to be made from the NCB Account to the Merchants and to NPC          pursuant to this Agreement (the Payment Instructions). Payment          Instructions shall be delivered to NCB in accordance with the schedule          and procedures established from time to time by the parties.

               (b) PAYMENT. In accordance with the Payment Instructions, NCB          shall pay the Merchants on a timely basis the net settlement amounts          due to them and shall credit NPC's account at NCB for the fees due to          NPC hereunder. Such payments to Merchants shall be effected through          mutually acceptable procedures which are consistent with the payment          procedures established pursuant to the Merchant Contracts. NPC shall          perform on NCB's behalf all of the administrative and bookkeeping          functions necessary to effect payment in such manner.

               1.7 DUE DILIGENCE BY NCB; NPC'S STANDARDS.

               (a) DUE DILIGENCE PRIOR TO EXECUTION OF AGREEMENT. Senior          management officials of NPC have met with senior management officials          of NCB and have discussed with the NCB officials the credit and          financial review procedures and standards used by NPC in deciding          whether to accept or retain Merchants as customers for Merchant          Processing Services, as well as NPC's experience with respect to any          losses resulting from financial failures or fraud by its merchant          customers. Schedule A attached hereto outlines the credit and financial          review procedures and standards currently used by NPC. NPC represents

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      to NCB, and has provided NCB's senior management with financial          information showing, that for 1994 and 1995 combined, the losses          incurred by NPC as a result of financial failures or fraud by its          merchant customers have averaged less than .60% of NPC's net revenues          from Merchant Processing Services.

               (b) CONTINUING DUE DILIGENCE: NPC'S RISK STANDARDS. NPC shall          keep NCB's senior management advised of any material changes in the          credit and financial review procedures and standards and of any          material exceptions to such procedures and standards which may from          time to time be made with respect to particular Merchants. NPC shall          not make any such changes or exceptions until its management committee          has approved such changes or exceptions after carefully evaluating the          relative advantages and disadvantages expected to result from such          changes or exceptions. NPC also shall continue to advise senior          management officials of NCB on a timely basis with respect to any          substantial loss (meaning any loss of $1,000,000 or more with respect          to a single Merchant or $3,000,000 or more in the aggregate in any          twelve month period) incurred by NPC as a result of any financial          failures or fraud by its merchant customers. If NCB's senior management          officials reasonably determine from time to time that any changes are          needed in NPC's credit and financial review procedures and standards or          in the implementation thereof in order to avoid any significant          increase in NPC's losses from financial failures or fraud by its          merchant customers, then NCB shall so notify NPC in writing, and NPC          and NCB shall mutually agree upon, and NPC shall implement appropriate          changes.

               (c) DUE DILIGENCE BY NCB FOR NPC PRICING STANDARDS. Senior          management officials of NPC have met with senior management officials          of NCB and have discussed with the NCB officials the pricing procedures          and standards used for Merchants as customers for Merchant Processing          Services. NPC shall keep NCB's senior management advised of any





      material changes in its pricing procedures and standards and of any          material exceptions to such procedures and standards which may from          time to time be made with respect to particular Merchants. NPC shall          not make any such changes or exceptions until its management committee          has approved such changes or exceptions after carefully evaluating the          relative advantages and disadvantages expected to result from such          changes or exceptions. If NCB's senior management officials reasonably          determine from time to time that any changes are needed in NPC's          pricing procedures and standards or in the implementation thereof, then          NCB shall so notify NPC in writing, and NPC and NCB shall mutually          agree upon, and NPC shall implement appropriate changes.

                 ARTICLE II - AUTHORITY OF JOINT OFFICERS                     ----------------------------------------

               2.1 JOINT OFFICERS. In order to enhance NPC's effectiveness as an agent of NCB, the parties agree and acknowledge that it is desirable for one or more officers of NPC to serve also as an officer of NCB (the Joint Officers) so that such persons shall have clear authority to represent NCB on matters relating to Merchant Processing Services. Accordingly, the Board of Directors of NCB shall elect the NPC officers named in Schedule B as Contracting Officers of NCB only with respect to matters pertaining to Merchant Processing Services. From time to time during the term of this Agreement, the Board of Directors of NCB may elect other officers of NPC as officers of NCB in addition to or in lieu of the Joint Officers. The authority of each Joint Officer to act as an officer of NCB shall terminate immediately upon termination of this Agreement or the termination or suspension of employment of that person by NPC for whatever reason or the removal of that person by the Board of Directors of NCB as an officer of NCB.

               2.2 AUTHORITY TO REPRESENT NCB. Each Joint Officer or its designated representative shall have authority to be the designated recipient of all letters, correspondence and other material from Visa and MasterCard to NCB as a member which relate to Merchant Processing Services, to attend as NCB's representative those meetings for members of Visa and MasterCard which relate to Merchant Processing Services, to maintain on behalf of NCB copies of all Merchant Contracts to which NCB is a party, to act generally as the NCB representative with respect to Merchant Processing Services in discussions, meetings and otherwise between NCB as a member and Visa or MasterCard, and to take such other actions on behalf of NCB That may be required by applicable Visa or MasterCard rules to be performed by a member and that are necessary or appropriate in order to perform this Agreement and effect the parties' intent with respect to this Agreement. NPC shall keep NCB, or such other person

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as may be designated by NCB, advised of all material, non-routine actions taken on behalf of NCB by any of the Joint Officers and shall consult in advance with NCB or such other designated person with respect to any material, non-routine actions to be taken by any of the Joint Officers on behalf of NCB.

               2.3 COMPENSATION. Except to the extent NCB and NPC otherwise agree, all compensation of the Joint Officers shall be paid by NPC, and NCB shall have no obligation to compensate any of the Joint Officers.

                      ARTICLE III - BANKING SERVICES                          ------------------------------

               3.1 MERCHANT PROCESSING - BANKING SERVICES. As soon as practicable after the Effective Date NPC shall enter into agreements or make other mutually acceptable arrangements with NCB pursuant to which NCB will provide those banking services which are necessary for NPC to provide the Merchant Processing Services and which the parties wish NCB to provide.

               3.2 AUTHORITY TO ESTABLISH BANK ACCOUNTS. Each Joint Officer shall have authority to establish at NCB or any other mutually acceptable financial institution any deposit accounts on behalf of NCB as may be necessary to provide some or all of the Merchant Processing Services contemplated by this Agreement for such periods as NCB and NPC agree. No provision of this Agreement authorizes or shall be construed to authorize any Joint Officer or NPC to incur any debt to NCB or any other financial institution, or to create any overdraft, which NCB is obligated directly or indirectly to repay.

               3.3 LOANS AND OVERDRAFTS. Nothing in this Agreement shall be deemed to create any obligation on the part of NCB to loan or advance to NPC any amounts in connection with Merchant Processing Services for any period of time.

                      ARTICLE IV - FEES AND EXPENSES                          ------------------------------

               4.1 CHARGES TO MERCHANTS. As between NPC and NCB, NPC shall receive all fees, discounts and other amounts payable by Merchants for Merchant Processing Services with respect to Merchant Contracts.

               4.2 EXPENSES. NPC shall bear all expenses of maintaining facilities and connections necessary to provide Merchant Processing Services except for the facilities and connection maintained by NCB for purposes of effecting payments pursuant to Section 1.6(b). In addition, NPC agrees to pay or reimburse NCB in full all interchange or issuer reimbursement fees on outgoing





merchant sales volume, as well as all fee assessments or charges imposed on NCB by Visa or MasterCard as a result of the Merchant Processing Services performed by NPC. Such fees shall be paid by NPC directly when due or shall be paid by NPC to NCB on the banking day immediately prior to the day on which NCB must pay such fees. All such fees, assessments and charges for which NCB seeks payment by NPC shall, upon request, be documented to NPC's reasonable satisfaction as being attributable to NPC's Merchant Processing Services.

                        ARTICLE V - INDEMNIFICATION                            ---------------------------

               5.1 INDEMNIFICATION. NPC agrees to indemnify, defend and save NCB, its directors, officers and employees harmless from all losses, claims, judgments, awards, penalties, expenses and other amounts of any nature arising out of:

               (a) NPC's failure to perform this Agreement in accordance with        its terms, including, but not limited to, the failure to pay expenses,        charges and other amounts in accordance with the provisions of this        Agreement,

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               (b) The negligent exercise of or the exceeding by any Joint          Officer of the authority granted pursuant to this Agreement to act as          an officer of NCB, or,

               (c) NCB's grant of authority to NPC pursuant to this          Agreement,

including, but not limited to, all court costs, investigation expenses and the reasonable fees and expenses of separate counsel for NCB selected by NCB, provided, however, that NCB shall not be entitled to indemnification as to amounts arising from the negligence or willful misconduct of NCB.

                   ARTICLE VI - COMPLIANCE MODIFICATIONS                       -------------------------------------

               6.1 COMPLIANCE MODIFICATIONS. In the event that:

               (a) the laws, rules and/or regulations or any official       interpretations thereof applicable to NCB as a National Bank or the Visa       or MasterCard rules and/or regulations or any official interpretations       thereof applicable to NCB and the matters covered by this Agreement are       modified such that

                      (i) any modifications in the relationship or               transactions contemplated hereby between NCB and NPC or in the               provisions of this Agreement are needed to comply with any such               laws, rules, regulations or official interpretations thereof, or

                      (ii) some or all of the activities contemplated by this               Agreement are prohibited, or

               (b) Visa or MasterCard requires, as a condition to performance        of this Agreement, that NPC enter into an agreement with Visa or        MasterCard that NPC considers unacceptable,

then at NPC's request, NCB will cooperate in making any modifications to this Agreement and to the parties' relationship hereunder to the extent any such modifications will permit NPC to continue processing, settling and authorizing bankcard transactions (or continue performing some of such functions) in compliance with the laws, rules, regulations or any official interpretations thereof applicable to NCB as a National Bank and the Visa and MasterCard rules, regulations, and interpretations thereof and any contractual terms required by Visa or MasterCard and acceptable to NPC (any such modifications being referred to as Compliance Modifications) provided that such Compliance Modifications are reasonable and are not unduly burdensome to NCB, and NPC reimburses NCB for any additional costs reasonably incurred by NCB in connection with such Compliance Modifications.

               6.2 FAILURE TO MAKE COMPLIANCE MODIFICATION. If NPC does not request any Compliance Modifications or the parties cannot agree upon the terms of any Compliance Modifications, then either party may terminate this Agreement upon prior written notice to the other party effective at the later of: (a) the deadline imposed by Visa or MasterCard for complying with any such rule, regulation, official interpretation or contract requirement or (b) 120 days after actual notice to NPC of such rule, regulation, interpretation or contract requirement.

                    ARTICLE VII - TERM AND TERMINATION                        ----------------------------------

               7.1 TERM. The term of this Agreement shall be five years commencing on the Effective Date and ending at the close of business on the fifth anniversary of the Effective Date. This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal.





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               7.2 TERMINATION. Either party may terminate this Agreement without penalty and without prejudice to any claims arising prior to termination as follows:

               (a) Upon the written agreement of both parties.

               (b) Upon the other party's breach of this Agreement provided          the terminating party has given written notice of the breach to the          other party specifying the breach, the action necessary to cure the          breach and the breaching party has not cured the breach within five          business days after notice is given of any failure by NPC to provide          any funds required hereunder to be provided by NPC to pay Merchants or          within thirty business days after notice is given of any other breach.

               (c) By NCB immediately upon NPC's voluntary filing of any          petition or complaint seeking relief under any federal or state          bankruptcy or other debt relief statute or upon an involuntary petition          in bankruptcy being filed against NPC if such petition is not dismissed          within sixty days after it is filed.

               (d) By NPC immediately in the event that any agreements          between NCB and Visa and/or MasterCard or NCB's membership in either          such bankcard association shall be terminated or materially limited          which termination or material limitation would impair the ability of          NPC to authorize, process or settle merchant bankcard transactions.

               7.3 SURVIVAL. The provisions of Sections 3.3, 4.2, 5.1, 8.1 and 10.6 of this Agreement shall survive any termination. No termination shall prejudice any claim or rights of any party which accrued prior to termination.

                      ARTICLE VIII - CONFIDENTIALITY                          ------------------------------

               8.1 CONFIDENTIALITY. In performing this Agreement, each party will have access to confidential information of the other. Each party agrees to hold in confidence and to instruct its employees and agents to hold in confidence all information and materials, in whatever form, reasonably designated as confidential by the party requesting confidentiality. NPC agrees to comply with all laws and regulations relating to confidentiality of customer lists and other information which are applicable to NCB and its agents or to NPC. NCB agrees to comply with all contractual obligations of NPC actually known to NCB and all laws and regulations applicable to NCB or NPC relating to confidentiality of customer lists and other information.

                           ARTICLE IX - NOTICES                               --------------------

               9.1 NOTICES. All notices which are required or permitted by this Agreement shall be in writing and shall be (i) delivered personally to the designated addressee, (ii) sent by the United States Mail addressed to the designated person by certified mail, return receipt requested, all postage prepaid, or (iii) sent by overnight delivery service addressed to the designated person, all charges prepaid, or (iv) by other means such as facsimile machine if the designated addressee acknowledges receipt in writing. Notices shall be addressed as follows:

If to NPC:                         Louis Parker                         Executive Vice President                         National City Processing Company                         1231 Durrett Lane                         Louisville, KY  40285-0001

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with copies to:         Kurt Knipp                         Executive Vice President                         National City Processing Company                         1231 Durrett Lane                         Louisville, KY  40285-0001

If to NCB:              Peter J. Barrick                         Senior Vice President                         National City Bank of Kentucky                         101 S. 5th Street                         Louisville, KY  40202

with copies to:         Curtis M. Jacobs                         Senior Vice President and Counsel                         National City Bank of Kentucky                         101 S. 5th Street                         Louisville, KY  40202





Notices personally delivered are given when received. Notices sent by United States Mail, certified mail, return receipt requested, are given five business days after delivery to the United States Postal Service unless prior actual receipt by the addressee is proven. Notice sent by overnight delivery service is deemed given one business day after delivery to and acceptance by overnight delivery service for next day delivery. Notices sent by other means and acknowledged are deemed given when acknowledged in writing.

                         ARTICLE X - MISCELLANEOUS                             -------------------------

               10.1 HEADINGS. The headings are for information and are not part of this Agreement.

               10.2 ENTIRE AGREEMENT, MODIFICATION. This Agreement and the attachments to it represent the entire agreement of the parties with respect to the subject matter of the Agreement. This Agreement may not be modified except by a written agreement which expressly refers to the Agreement and is signed by both parties.

               10.3 SEVERABILITY. If any section of this Agreement is deemed void, illegal or unenforceable, that section shall be severed and the balance shall remain in effect.

               10.4 GOVERNING LAW. This Agreement and its interpretation shall be governed by the laws of the United States and, to the extent not inconsistent therewith, by the laws of the Commonwealth of Kentucky without regard to conflicts of laws rules.

               10.5 BINDING AGREEMENT, ASSIGNMENT PROHIBITED. This Agreement shall bind the parties, their successors and permitted assigns. Neither party shall assign this Agreement or any rights under it except with the prior written consent of the other.

               10.6 MONITORING BY NCB. NPC shall admit properly identified and authorized NCB employees and agents onto its premises for purposes of monitoring NPC's compliance with this Agreement. It is understood that such monitoring will occur during normal business hours, will be preceded by reasonable notification to NPC, and must not interfere with NPC's normal operations.

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          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.

                              NATIONAL PROCESSING COMPANY

                              By: /s/ Mark D. Schatz                                      --------------------------------                                  Name: Mark D. Schatz                                        ------------------------------                                  Title: Vice President                                         -----------------------------

                              NATIONAL CITY BANK OF KENTUCKY                                  By: /s/ Peter J. Barrick                                      --------------------------------                                  Name: Peter J. Barrick                                        ------------------------------                                  Title: Senior Vice President                                         -----------------------------

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                                SCHEDULE A                                      to the                         SPONSORSHIP AGREEMENT BETWEEN NCB                                        and                                        NPC                                       dated                                   June 30, 1996

1.       BUSINESSES GENERALLY NOT SOLICITED. NPC does not generally solicit          customers engaged in any of the following businesses, but in special          circumstances it sometimes accepts customers engaged in one of these          businesses. Such exceptions occur primarily when NPC acquires another          processor's customer base or when NPC enters into a processing          agreement with an ISO/MSP which maintains merchant customers engaged in          such businesses.          - Telemarketing (In-bound or out-bound)





      - Pawn Shops          - Door-to-Door Sales          - Massage Parlors          - Bail & Bond Payments          - Business operated out of Residence          - Flea Markets          - Fulfillment Houses          - Timesharing          - Travel Clubs/Packages

2.       DOCUMENTATION REQUIRED FOR MERCHANT CUSTOMERS          - Merchant Application - all pertinent personal and business            information, including previous processor          - Site Visitation Report (when applicable)          - Bankcard Agreement - signed by Principal/Officer          - Personal Guarantee - signed by Principal (when applicable)          - Business Financial Statements (when applicable)          - Business and/or Personal Income Tax Filings if Financial Statements            unavailable (when applicable)          - Catalogues, Advertising Copy, etc. - as needed

3.       CREDIT REVIEW PROCEDURES. The following credit review procedures are          completed by NPC before a Merchant is accepted as a new customer. These          procedures may be repeated with respect to any existing Merchant          customer if such Merchant has unusual credit card activity, unusual or          higher than normal chargebacks, or if other circumstances arise which,          in the judgment of NPC's management, warrant a new or on-going credit          review.          - Inquire against Terminated Merchant File          - Obtain and Review Personal Credit Reports on Principal(s) (when            applicable)          - Obtain and Review Dun & Bradstreet Report (when applicable)          - Review of Financial Statements, Tax Returns and all other pertinent            data (when applicable)          - Investigation of previous processing relationship

4.       REASONS FOR DECLINING A MERCHANT.          - Listed on the terminated merchant file          - Insufficient credit history established          - Significant derogatory credit - personal or business          - Poor financial condition of business          - Derogatory report from previous processor          - Unacceptable line of business

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                                SCHEDULE B                                      to the                         SPONSORSHIP AGREEMENT BETWEEN NCB                                        and                                        NPC                                       dated                                   June 30, 1996

                 NAME                          NCB TITLE                     ----                          ---------                                                         Tony G. Holcombe              Contracting Officer

           Kurt S. Knipp                 Contracting Officer

           Wayne A. Chatham, Jr.         Contracting Officer

                                    10
Example Output: Highlight the parts (if any) of this contract related to License Grant that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty?

Example Input: Exhibit 10.1 MANUFACTURING, DESIGN AND MARKETING AGREEMENT This MANUFACTURING, DESIGN AND MARKETING AGREEMENT (this Agreement) is entered into by and between Zounds Hearing, Inc., a Delaware corporation (Subcontractor) and InnerScope Hearing Technologies, Inc., a Nevada corporation, (the Manufacturer) Manufacturer dated effective October 3, 2018 (the Effective Date). Subcontractor and Manufacturer may also be referred to herein individually as Party or collectively as the Parties. RECITALS WHEREAS, Subcontractor currently is the registered manufacturer of hearing aids and related components and accessories (the Zounds Products) that are sold under the Subcontractor's brand names through various marketing and distribution channels. WHEREAS the Parties desire to enter an agreement whereby the Subcontractor as the Manufacturer's subcontractor will provide design, technology, manufacturing and supply chain services to the Manufacturer to enable the Manufacturer to manufacture comparable hearing aids and related components and accessories to be sold under Manufacturer's exclusive brand names (the Manufacturer's Products) through the Manufacturer's various marketing and distribution channels. WHEREAS, the Parties also desire to enter into a lease agreement of Subcontractor's current Chandler, Arizona facility that provides the Manufacturer an FDA medical device facility for the Manufacturer's Products. WHEREAS, the Parties also desire to enter into an agreement that provides for the joint marketing and sale of each other's products. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties hereby agree as follows: 1. Term. Subject to earlier termination as provided in this Agreement, the initial term of this Agreement shall be for a period beginning on the Effective Date and ending ten (10) years thereafter unless this Agreement is terminated earlier as provided herein. This Agreement will renew automatically thereafter for successive one-year terms unless and until one Party gives notification of termination with at least sixty (60) days written notice. All orders placed under this Agreement must be placed prior to the expiration or termination of this Agreement.

2. Technology Access Fee. Manufacturer will pay Subcontractor One Million and No/100 USD ($1,000,000) (the Technology Access Fee). The Technology Access Fee will be paid in two equal installments of $500,000 each. The first installment will be due thirty (30) days following the Effective Date and the second installment will be due sixty (60) days following the Effective Date.

3. Orders for Manufacturer's Products to be Manufactured by Subcontractor

3.1 Purchase Orders: Excess Inventory. Manufacturer shall provide to Subcontractor a purchase order setting forth the proposed quantity of Manufacturer's Products to be purchased by Manufacturer and delivery dates, which purchase order will be subject to written acceptance by Subcontractor. All purchase orders are non-cancellable, and the Manufacturer shall pay for the purchaser orders as follows: (i) for purchase orders for less than or equal to a total of five hundred (500) units in any given calendar month, payment of fifty percent (50%) of Product Cost (as defined below) shall be made in full at the time the order is placed and the remaining balance paid in full before the Manufacturer's Products are shipped; and (ii) for purchase orders for more than five hundred (500) units in any given calendar month, payment of one hundred percent (100%) of Product Cost shall be made in full at the time the order is placed. Manufacturer's purchase orders accepted by Subcontractor and any forecast provided to Subcontractor by Manufacturer will constitute authorization for Subcontractor to procure product components to manufacture the Manufacturer's Products covered by such purchase orders based on their lead times. Subcontractor will advise Manufacturer of the lead time of components contained within their order and any forecast and Manufacturer will pay for the components prior to the Subcontractor placing orders for the components.

3.2 Contract Formation: Acceptance and Entire Agreement. Each time Manufacturer submits an order for Manufacturer's Products and Subcontractor accepts the order or ships the ordered Manufacturer's Products to Manufacturer, a new contract is formed consisting of this Agreement, the quantities and delivery dates specified in the order and the prices then offered by Subcontractor. ACCEPTANCE OF MANUFACTURER'S ORDER IS EXPRESSLY LIMITED TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, NOTWITHSTANDING ANY ORAL OR WRITTEN STATEMENT MADE BY MANUFACTURER, AND DOES NOT IN ANY WAY WHATSOEVER CONSTITUTE ACCEPTANCE OF MANUFACTURER'S TERMS AND CONDITIONS EXCEPT AS SET FORTH IN THE TERMS OF THIS AGREEMENT. NO TERMS AND CONDITIONS CONTAINED IN ANY PURCHASE ORDER FORM, WHETHER PROVIDED BY MANUFACTURER OR SUBCONTRACTOR, WILL BECOME A PART OF THE CONTRACT AND THIS CONTRACT WILL GOVERN ALL PURCHASES. Manufacturer's acceptance of or payment for Manufacturer's Products that Manufacturer has not ordered creates a contract comprised of this Agreement, the quantities of Manufacturer's Products accepted or paid for, and the prices then offered by Subcontractor. This Agreement shall constitute the entire agreement with respect to any contract formed and shall not be altered, amended, supplemented or canceled without the express written agreement of both Manufacturer and Subcontractor.





3.3 Product Prices. Pricing shall be the actual cost of the manufacturing of each Manufacturer's Product plus the proportional allocation of the costs of Subcontractor's manufacturing, engineering, and supply chain overhead, as mutually agreed by the Parties (the Product Cost). Title of the product will transfer to the Manufacturer at the shipping dock of the manufacturing facility. Manufacturer will be responsible for shipping costs. Manufacturer shall pay any taxes incurred in the manufacture of Manufacturer's Products, including any taxes incurred as a result of purchasing components or maintaining inventory. In addition to the Royalties paid under this Agreement to the Subcontractor, Manufacturer shall pay any other third-party royalties for technology that are required to manufacture the Manufacturer's Products for their intended purpose. As of the date of this Agreement neither Party is aware of any third-party royalties for technology that Manufacturer would be liable to pay. Subcontractor will provide Manufacturer with documentation substantiating any Product Cost variance upon request.

3.4 Cost Reductions. Potential Product Cost reductions as a result of materials pricing will be reviewed and implemented periodically as mutually agreed and passed on to the Manufacturer. Product Cost reductions resulting from engineering changes or other changes, initiated by Manufacturer, that would impact either Product Costs or process changes at Subcontractor will be implemented at an agreed upon time. Manufacturer will be responsible for their proportionate share of any Product Cost reduction that is a result of engineering investment by the Subcontractor. If the Manufacturer does not pay its proportionate share, the Manufacturer will pay the Product Cost as if the cost reduction had not been made (i.e., the Product Cost prior to the cost reduction as if the cost reduction were not made). The Subcontractor will list the new Product Cost and a line item for engineering investment that accounts for the difference.

3.5 Royalties. In addition to paying the Product Costs of Manufacturer's Products, Manufacturer shall also pay to Subcontractor the following royalty payments (each a Royalty and collectively the Royalties) for each of Manufacturer's Product purchased under this Agreement. Royalties shall be paid 50% at time of shipping and the remaining balance of 50% due in 15-days after the Manufacturer's Products have shipped from the manufacturing facility. a) Non-Rechargeable Products. For Manufacturer's Products that are non-rechargeable, Manufacturer shall pay Subcontractor a Royalty equal to the higher of (i) eighty percent (80.0%) of the Product Cost; and (ii) $80 per unit. b) Rechargeable Products. For Manufacturer's Products that are rechargeable, Manufacturer shall pay Subcontractor a Royalty equal to the higher of (i) one hundred percent (100.0%) of the Product Cost; and (ii) $100 per unit. 3.6 Zounds' Products and Manufacturers Products Built to Manufacturer's Specifications. Subject to Section 7 below, Subcontractor agrees to manufacture Manufacturer's Products (i) that are identical to Zounds' Products allowing Manufacturer to utilize Subcontractor's existing product designs and features and/ or (ii) to specifications provided by Manufacturer from time to time with approval of such changes by Subcontractor. Any advice given by Subcontractor to Manufacturer before or after delivery of Products built to Manufacturer's specifications is based solely upon the information available to Subcontractor, and the use of such advice by Manufacturer is solely and entirely at Manufacturer's own risk. Manufacturer represents and warrants that it has independently determined the fitness, need, usefulness, and applicability of the Manufacturer's Products built to Manufacturer's specifications it has ordered and does not rely on any representation of Subcontractor in that regard.

3.7 Engineering Services and Design Changes. Manufacturer may elect to utilize Subcontractor's design engineering resources (the Engineering and Design Services) to further customize Manufacturer's Products. The cost of Engineering and Design Services to be paid by Manufacturer will be agreed to in a written document setting forth the scope, timing and other terms of such Engineering and Design Services executed by the Parties prior to any services being provided by Subcontractor. Subject to the written agreement of the parties with respect to any resulting change in price, delivery schedule and other terms, Subcontractor will accept design changes (i.e., Engineering Change Orders or ECO's) according to Manufacturer's instructions.

3.8 Tooling, Setup and Non-Recurring Engineering (NRE) Charges. Subcontractor agrees to provide Manufacturer with a quote for any one-time tooling, setup or NRE charges payable by Manufacturer as a result of a change in design requested by Manufacturer, change in minimum quantity requirements by Manufacturer as originally quoted by Subcontractor, or an addition to the Manufacturer's Products purchased under this Agreement requested by Manufacturer. If Manufacturer elects to proceed with the design change, minimum quantity requirements change or addition as specified in Subcontractor's quote, Manufacturer will provide Subcontractor with written acceptance of Subcontractor's quoted terms.

3.9 Inventory Reports. Subcontractor agrees to report its inventory position to Manufacturer on a monthly basis, including the following information: quantity of raw material, work in process and any open orders that cannot be cancelled to the supplier lead time. The report will specifically identify any material on hand or on order where the quantity exceeds the agreed three (3) month forward looking forecast plus safety stock as agreed upon by Subcontractor and Manufacturer. The Subcontractor and Manufacturer will review inventory levels and safety stocks quarterly.

4. Delivery and Shipping. The agreed upon delivery dates are based on the Subcontractor's projected lead time, current inventory, commitments and Subcontractor's advice. Manufacturer agrees and acknowledges that all shipment dates are firm delivery dates. All shipments shall be F.O.B. the manufacturing facility unless otherwise mutually agreed upon in writing. The method and route of shipment shall be at Subcontractor's discretion, unless Manufacturer supplies instructions in writing at least five days prior to shipment. In addition to the purchase price, Manufacturer shall pay any and all transportation charges (including insurance). The risk of loss of and title to the Manufacturer's Products pass to Manufacturer upon the receipt of the Manufacturer's Products by the carrier. Subcontractor is not responsible for any installation of Manufacturer's Products sold





hereunder or delays caused by Manufacturer-specified suppliers.

5. Leased Space Agreement. Manufacturer will lease from Subcontractor a well-defined space for Manufacturer's Products within the Subcontractor's current FDA registered manufacturer's facility. Subcontractor is solely responsible for maintaining all aspects of such leased space including but not limited to; (i) segregation of Manufacturer's Products with all Manufacturer's Products clearly segregated and marked; and (ii) meeting all necessary requirements deemed appropriate by the FDA and any regulatory authorities for a medical device manufacturer's facility. Subcontractor will be also solely responsible for remaining in good standings at all times with all regulatory authorities including but not limited to the standards set forth by the FDA for medical device manufacturing facilities. The Manufacturer may list the address of the Subcontractor's current FDA registered manufacturer's facility as the Manufacturer's own FDA approved manufacturer's facility for the Manufacturer's Products. The terms of such lease agreement will be mutually agreed to by the Parties in a separate document.

6. Payment Terms. Upon Subcontractor's approval and acceptance of a production forecast provided by Manufacturer, Manufacturer's payment for Manufacturer's Products will be due when forecasted materials or components must be ordered by the Subcontractor as set forth in Section 3 above. A schedule of the forecast payables will be provided by the Subcontractor to the Manufacturer based on the approved forecast. Components and products will only be procured and/or manufactured once payment has been received. All payments will be made by electronic wire transfer and all of the appropriate forms will need to be signed so that this can happen efficiently. Alternately, payments can be made to Subcontractor's address as shown Subcontractor's invoice. No offsets are allowed to be taken by either Party. Manufacturer represents that all sales to Manufacturer under this Agreement are sales for use in production or resale; therefore no sales, use, excise or other taxes are due as a result of such sales and Manufacturer will be responsible for payment of any such taxes. A copy of the Manufacturer's resale certificate will be provided by Manufacturer within 15-days of the Effective Date.

7. Limited Warranty; Nonconforming Products. Since Manufacturer is paying the actual manufacturing cost of the product, Supplier has not reserved for any warranty related costs. The Manufacturer acknowledges that it is solely responsible for any warranty costs associated with Manufacturer's Products. Should any nonconformities be detected during or after the manufacturing process, Subcontractor will assist Manufacturer in resolving any quality issues with the suppliers. Subcontractor will provide support to Manufacturer to train Manufacturer's employees to repair the non-conforming products as appropriate. Upon Manufacturer's request, Subcontractor will provide repair services for a fee equal to the actual cost of these services. In the event Manufacturer in good faith believes that Manufacturer's Products are nonconforming under the specifications agreed to among the Parties (the Standards), Manufacturer shall give written notice to Subcontractor specifying in detail the nonconformity within thirty (30) days of Manufacturer's receipt of such Manufacturer's Products. Upon Manufacturer's request, Subcontractor will facilitate such Manufacturer's Products being repaired or replaced, Manufacturer must return the Manufacturer's Products to Subcontractor, transportation charges prepaid by Manufacturer, within fifteen (15) days of the end of such thirty (30) date notice period. Notwithstanding anything else in this Agreement, Subcontractor makes no representations or warranties whatsoever with respect to: (i) any materials, components or subassemblies; (ii) defects resulting from the Specifications or the design of the Manufacturer's Products; (iii) Manufacturer's Product that has been abused, damaged, altered or misused by any person or entity after title passes to Manufacturer; (iv) first articles, prototypes, pre-production units, test units or other similar Manufacturer's Products; or (v) defects resulting from tooling, designs or instructions produced or supplied by Manufacturer. Manufacturer shall be liable for costs or expenses incurred by Subcontractor related to the foregoing exclusions to Subcontractor's express limited warranty. If Subcontractor determines that the Manufacturer's Products are nonconforming under the Standards, Subcontractor, shall work with their vendors to rework the Manufacturer's Products or otherwise replace the Manufacturer's Products. Manufacturer shall be liable for the cost of rework or replacement and all associated costs therewith including, without limitation, transportation charges and inspection fees. If requested by the Manufacturer, Subcontractor will provide a cause of failure, a failure analysis provided in Subcontractor's standard format and correction action.





MANUFACTURER ACKNOWLEDGES THAT SUBCONTRACTOR IS NOT THE MANUFACTURER OF MOST, IF NOT ALL, OF THE COMPONENTS OF THE MANUFACTURER'S PRODUCTS OR ANY THIRD PARTY MANUFACTURER'S AGENT. SUBCONTRACTOR MAKES NO REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THE PRODUCTS OR COMPONENTS THEREOF WHICH SUBCONTRACTOR DID NOT MANUFACTURE. FURTHER, SUBCONTRACTOR SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY OPERATION OF LAW OR OTHERWISE, CONTAINED IN OR DERIVED FROM THIS AGREEMENT, ANY ORDER, OR IN ANY OTHER MATERIALS, BROCHURES, PRESENTATIONS, SAMPLES, MODELS OR OTHER DOCUMENTATION OR COMMUNICATIONS WHETHER ORAL OR WRITTEN, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMANCE WITH THIRD PARTY MANUFACTURER'S SPECIFICATIONS OR OTHERWISE, WHICH WOULD EXTEND BEYOND THE WARRANTIES EXPRESSLY CONTAINED HEREIN. SUBCONTRACTOR AUTHORIZES MANUFACTURER TO ASSERT AT MANUFACTURER'S EXPENSE FOR SUBCONTRACTOR'S ACCOUNT, ALL OF SUBCONTRACTOR'S RIGHTS UNDER ANY APPLICABLE THIRD PARTY MANUFACTURER'S WARRANTY, AND SUBCONTRACTOR AGREES TO COOPERATE WITH MANUFACTURER IN ASSERTING SUCH RIGHTS; PROVIDED, HOWEVER, THAT MANUFACTURER WILL DEFEND, INDEMNIFY AND HOLD SUBCONTRACTOR HARMLESS FROM AND AGAINST ANY LOSS, LIABILITY OR EXPENSE, INCLUDING REASONABLE ATTORNEY'S FEES, RESULTING FROM OR ARISING IN CONNECTION WITH ANY ACTION BY MANUFACTURER RELATING TO THE ABOVE AUTHORIZATION. THIS SECTION 7 SETS FORTH SUBCONTRACTOR'S SOLE AND EXCLUSIVE LIABILITY, AND MANUFACTURER'S SOLE AND EXCLUSIVE REMEDY, AS TO ANY FAILURE OF THE MANUFACTURER'S PRODUCTS TO MEET THE WARRANTY STANDARDS. 8. Orders; Termination.

8.1 Orders: All orders whether for Manufacturer's Products or components or inventory to be used in the manufacture of Manufacturer's Products are non-cancellable. 8.2 Termination. Either Party may terminate this Agreement and either may terminate a purchase order, effective upon written notice in any of the following events: (a) the other Party materially breaches this Agreement and such breach remains uncured for thirty (30) days following written notice of breach to the breaching Party; (b) the other Party (i) voluntarily suspends transaction of business; (ii) becomes insolvent or unable to pay any indebtedness as it matures; (iii) commences a voluntary case in bankruptcy or a voluntary petition seeking reorganization or to effect a plan or other arrangement with creditors; (iv) makes an assignment for the benefit of creditors; (v) applies for or consents to the appointment of a receiver or trustee for it or for any substantial portion of its property; (vi) makes an assignment to an agent authorized to liquidate any substantial part of its assets; (vii) has an involuntary case commenced against it with any court or other authority seeking liquidations, reorganization or a creditor's arrangement; (viii) by an order of any court or other authority, has appointed any receiver of trustee for it or for any substantial portion of its property; or (ix) has a writ or warranty of attachment or any petition seeking liquidation, reorganization or a creditor's arrangement or such order appointing a receiver or trustee is not vacated or stayed, or such writ, warranty of attachment or similar process is not vacated, released or bonded off within thirty (30) days after its entry or levy. 8.3 Party Liability Upon Termination a) Manufacturer Termination Without Cause. If the Manufacturer terminates this Agreement or cancels any purchase order without cause pursuant to Section 8.2, Subcontractor will stop all shipments and retain all inventory. Subcontractor may, at its sole discretion, assist Manufacturer in the liquidation of any inventory that is generic that does not utilize any of Subcontractor's technology. Manufacturer shall be liable for cancellation charges including the Product Costs and the costs as provided in Section 3.8. b) Manufacturer Termination With Cause. If the Manufacturer terminates this Agreement or cancels any purchase order for cause pursuant to Section 8.2 Manufacturer shall not be liable for any termination or cancellation charges but Subcontractor may, at Subcontractor's sole discretion, purchase all or part of any remaining inventory. c) Subcontractor Termination for Cause. If the Subcontractor terminates this Agreement or any purchase order for cause pursuant to Section 8.2, Manufacturer shall be liable for cancellation charges including the Product Costs and the costs as provided in Section 3.8. Subcontractor may at its sole discretion make commercially reasonable efforts to mitigate these costs by attempting to return products or components thereof to suppliers. 9. Joint Marketing. Subcontractor and Manufacturer have agreed to assist each other with marketing in other channels. When the Subcontractor helps the Manufacturer there will be a marketing fee associated with that assistance. When the Manufacturer helps the Subcontractor there will likewise be a marketing fee associated with that assistance. The Subcontractor and Manufacturer will mutually agree on the marketing fee before any assistance is provided. In some cases the marketing fee will be a percentage of the margin received by the other Party. The terms of such joint marketing agreement will be mutually agreed to by the Parties in a separate document. 10. Limitation of Liability. No Other Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY COVER DAMAGES (INCLUDING INTERNAL COVER DAMAGES WHICH THE PARTIES AGREE MAY NOT BE CONSIDERED DIRECT DAMAGES), OR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF MANUFACTURER'S PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT





FAIL OF THEIR ESSENTIAL PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM DELAY IN MANUFACTURE, SHIPMENT OR DELIVERY OF ANY MANUFACTURER'S PRODUCTS, IF SUCH DELAYS ARE DUE TO FORCE MAJEURE, AS DEFINED IN SECTION 15.2. 11. Confidentiality; Public Announcements; Non-Use; Intellectual Property Rights. 11.1 Confidentiality. Parties acknowledge that during the term of this Agreement, either Party may disclose to the other Party from time to time certain business, product pricing, financial, marketing, technical and other proprietary and sensitive information of each party. Both Parties shall use commercially reasonable efforts to keep confidential (a) the existence and terms of this Agreement and all information concerning the unit number and fees for Manufacturer's Products and inventory, and (b) any and all information concerning customers, suppliers, trade secrets, methods, processes or procedures and any other confidential, financial and business information of the other Party that is marked Confidential or the like or, if delivered verbally, confirmed in writing to be Confidential within thirty (30) days of the initial disclosure (Confidential Information) with the same standard of care as it uses for its own Confidential Information. Neither Party shall disclose Confidential Information to any third Party without the prior written consent of the other party, except that both parties agree that the other party may disclose Confidential Information to its auditors and contractors under an obligation of confidentiality, to governmental authorities having jurisdiction over such Party or as otherwise required by applicable law, provided however, in the event the Manufacturer or Subcontractor is ordered to provide Confidential Information by a lawful judicial or government order, the party who is subject to such order shall promptly inform the Party whose information is to be disclosed and shall permit the Party to defend against such order of disclosure and shall assist in such defense to the extent permitted by law. In no other circumstances may the Manufacturer or Subcontractor disclose information without the consultation and prior written consent of the non-disclosing Party. Confidential Information of either Party hereto shall not include information which (i) is in the public domain, (ii) is previously known or independently developed by the receiving Party, (iii) is acquired by the receiving Party from any third party having a right to disclose such information or (iv) the receiving party is obligated to produce under a court or governmental order; provided, the disclosing Party complies with the notice requirements of the previous paragraph with respect the information subject to such court or governmental order. The Parties acknowledge that a breach by either Party of this Section 11 will give rise to irreparable injury to the other, inadequately compensable in damages. Accordingly, the Parties hereby consent to allow the other Party to seek injunctive relief against the breach or threatened breach of the undertakings of the Parties contained in this Section 11. The Parties further agree that such an order so enjoining a Party may be issued pending final determination thereof, without the requirement to post bond. 11.2 Public Announcements. Each Party reserves the right to publish press releases and public announcements (collectively, the Publications) pertaining to this Agreement; provided, however, no Publications will contain any Confidential Information of a Party without such Party's prior written consent. The publishing Party shall indemnify and hold the non-publishing Party its, officers, agents, shareholders, and employees harmless against any and all claims, demands, damages, liabilities and costs which directly or indirectly result from, or arise in connection with, any negligent act or omission of the disclosing Party, its agents, or employees, pertaining to such disclosing Party's Publications under this Agreement. 11.3 Non-Use. Each Party to this Agreement acknowledges and agrees that at any time during the Term of this Agreement and at all times following the termination of this Agreement, neither Party may use any Confidential Information, Inventions and Intellectual Property (as these terms are defined in Section 11.3 below) of the other Party for any purpose other than in conjunction with its obligations under this Agreement. The Parties further agree that neither Party may analyze, or reverse engineer any samples, software or hardware provided by the other Party to determine composition, method of manufacture, or construction. 11.4 Intellectual Property Rights. Except as otherwise expressly provided in this Section 11,4, all inventions, discoveries, and trade secrets whether or not patentable, that are made by Subcontractor or Manufacturer, either alone or with others, in the course of its performance of its obligations under this Agreement (collectively, Inventions) will become the exclusive property of Subcontractor. In the event this Agreement terminates for any reason or no reason, all licenses of Subcontractor's patents, trademarks, software, trade secrets or other intellectual property (collectively the Intellectual Property) of Subcontractor, granted expressly or otherwise to Manufacturer under the terms of this Agreement or any other Agreement between Subcontractor and Manufacturer shall immediately terminate and Manufacturer must immediately cease use of all of Subcontractor's Intellectual Property. 12. Manufacturer's Indemnity. Manufacturer shall indemnify, defend and hold Subcontractor and its affiliates (Subcontractor Indemnities) harmless from and against any and all loss, liability or expense, including reasonable attorneys' fees, resulting from or arising in connection with any claim or suit by any third party against the Subcontractor Indemnities (i) alleging infringement or dilution of any copyright, trademark, trade name, trade secret, patent or other third party proprietary rights, relating to the design, manufacture, sale, normal use or normal disposition of any Manufacturer's Products built to the specification of Manufacturer, (ii) alleging any failure of any Manufacturer's Product (or any Manufacturer's Product components contained therein) sold by Subcontractor hereunder to comply with any safety standards or any environmental regulations, or (iii) alleging loss, damages, bodily injury, sickness, disease, or death, or injury to property which is caused by (1) the negligence or intentional acts of Manufacturer, its agents, employees or subcontractors, or (2) a defect in Manufacturer Specifications or Manufacturer specified materials, components or design of the Manufacturer's Products or caused by Manufacturer specified suppliers; provided however, that Subcontractor shall have the right, at its option, to participate in the defense of any such claim or suit,





without relieving Manufacturer of any obligations hereunder. 13. Ownership of Tooling and Testing Equipment. All tooling and testing equipment used in connection with this Agreement shall be owned by Subcontractor.

14. Regulatory Compliance and Record Keeping.

14.1 Approvals. Manufacturer shall be registered as the manufacturer of Manufacturer's Products and shall obtain such approvals from the United States Food and Drug Administration (the FDA) and other regulatory bodies, public or private as may be required to manufacture and sell the products in the United States or internationally. Both Manufacturer and Subcontractor shall be responsible for complying with all federal, state and local laws, rules, regulations, guidelines and the like in the United States and in other countries as they may pertain to the Manufacturer's Products and to the obligations on the Parties to perform under this Agreement, including, without limitation, requirements in the United States with respect to registration of establishment, listing of medical devices, reporting of deaths, serious injuries and certain malfunctions under 21 CFR Medical Device Regulations and the potential therefore, tracking of medical devices, recalls, safety alerts and process controls. In no event shall either Party assume any risk arising out of the other Party's failure to comply with such laws, rules, regulations, guidelines and the like, and each Party shall cooperate with the other in all respects to facilitate and promote strict compliance with the provisions of this Section 14.

14.2 Regulatory Inspection and Revision of Specifications. Following inspections by applicable regulatory authorities, including, without limitation, the FDA, Subcontractor shall do such actions or cause such actions to be done that are necessary, advisable or appropriate so that Subcontractor remains in good standing with any such regulatory authorities. Prior to undertaking any action pursuant to this section, Subcontractor shall notify Manufacturer of the inspection and disclose to Manufacturer the regulatory authorities' findings and related results of such inspection (the Findings) pertaining to the business with Manufacturer. Subcontractor shall also provide full disclosure to Manufacturer with respect to any action undertaken or proposed to be undertaken pursuant to this Section prior to acting. Subcontractor shall keep correct and complete records and books covering the manufacture of the Manufacturer's Products and other documents relating to this Agreement. Each of the Parties will immediately notify the other of any complaints, adverse events, deaths or serious injuries relating to Manufacturer's Products that are manufactured by Subcontractor. All complaints, adverse events, deaths or serious injuries pertaining to Manufacturer's Products will be reported to Subcontractor's Quality Assurance departments in accordance with the requirements established in Subcontractor's and Manufacturer's Complaints Handling and Reporting procedures. All complaint related Manufacturer's Products returned to Manufacturer will be forwarded to Subcontractor for complaint handling and failure investigation. Subcontractor agrees to provide Manufacturer, at Manufacturer's expense and reasonable request and during ordinary business hours, access to, and copies of, such records, books and all other documents and materials in the possession and under the control of Subcontractor relating to or pertaining to the subject matter of this Agreement; including, but not limited to, the following:

a) Subcontractor will provide Manufacturer a schedule of all audits of Subcontractors for materials used in the manufacture of Manufacturer's Products upon request. The schedule will be provided in accordance with the requirements established in Subcontractor's Auditing procedure. Reports on all material Subcontractors for the Manufacturer's Products will be made available to Manufacturer upon request.

b) Upon reasonable notice, Manufacturer may review at any time routine reports relating to all nonconforming materials identified by Subcontractor during the manufacture or inspection of the Manufacturer's Products.

Subcontractor shall maintain quality systems in compliance with ISO 9001 (the 2000 or current version) and the Quality System Requirements of the FDA. 14.3 Change Notification. Subcontractor will notify Manufacturer and obtain approval prior to implementing changes that may require amendments to the Device Master Record, manufacturing process changes or material changes relating to the manufacture and distribution of Manufacturer's Products. Manufacturer will notify Subcontractor of all changes to the Device Master Record, manufacturing process changes or material changes relating to the manufacture of Manufacturer's Products manufactured by Subcontractor. Manufacturer will provide appropriate documentation to Subcontractor to effect any changes to the Device Master Record, manufacturing process or changes in materials. 15. General Provisions.

15.1 Notice. Notice shall be deemed effective and delivered three days after mailing if sent certified mail, return receipt requested, or when received if sent by electronic mail (e-mail), telecopy, prepaid courier, express mail or personal delivery to the intended recipient thereof at the address shown on the first page hereof with confirmation of delivery, or to such other address as either Party may specify in a written notice to the other Party pursuant hereto.





15.2 Force Majeure. Except as otherwise provided herein, neither Party shall be liable to the other for its failure to perform any of its obligations hereunder during any period in which performance is delayed by circumstances beyond its reasonable control, including, without limitation, an act of God, war, civil disturbance, court order, labor dispute, third party nonperformance, acts of third parties, or failures, fluctuations or non-availability of materials, components, electrical power, heat, light, air conditioning, computing or information systems or telecommunications (force majeure), provided that the Party experiencing such delay promptly notifies the other Party of the delay and the cause thereof. The happening of any contingency beyond Subcontractor's reasonable control, including delays caused by Manufacturer or suppliers, shall not constitute cause for cancellation of Manufacturer's order, but shall extend Subcontractor's time to ship goods for a period equal to the duration of such contingency.

15.3 Relationship of Parties. Subcontractor, in providing Manufacturer's Products hereunder, is acting as an independent contractor and does not undertake by this Agreement or otherwise to perform any obligation of Manufacturer, or to assume liability for Manufacturer's business or operations. Subcontractor has the sole right and obligation to supervise, manage, contract, direct, procure, perform, or cause to be performed, all work to be performed by Subcontractor hereunder.

15.4 Right of Subcontractor to Sell Products to Others. Manufacturer understands and agrees that Subcontractor may itself use, manufacture or sell similar products as provided to Manufacturer hereunder to third parties and affiliates, some of whom may be competitors of Manufacturer, so long as: (a) Subcontractor does not use or disclose any Confidential Information of Manufacturer, (b) Subcontractor and third party do not infringe any of Manufacturer's patents or other intellectual property rights.

15.5 No Third Party Beneficiaries. The Parties agree that this Agreement is for the benefit of the Parties hereto only and is not intended to confer any legal rights or benefits on any third party, and that there are no third party beneficiaries to this Agreement or any part or specific provision of this Agreement.

15.6 Attorneys' Fees. The prevailing Party in any legal proceedings brought by or against the other Party to enforce any provision of this Agreement shall be entitled to recover against the non-prevailing Party the reasonable attorneys' fees, court costs and other expenses incurred by the prevailing Party. 15.7 Assignment; Change of Control. Neither Party may assign or transfer this Agreement by operation of law or otherwise. Any assignment made by either Party in contravention of this Section 15.7 shall be null and void for all purposes. In the event of a Change of Control (as defined below) this Agreement shall immediately terminate. A Change of Control shall occur with respect to the Manufacturer, unless Subcontractor shall have expressly consented to such Change of Control in writing. A Change of Control shall mean any event or circumstance as a result of which (i) any Person or group (as such terms are defined in Sections 13(d) and 14(d) of The Securities Exchange Act of 1934 (the Exchange Act), as in effect on the date hereof), other than the Subcontractor, is or becomes the beneficial owner (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 50% or more on a fully diluted basis of the then outstanding voting equity interest of the Company, (ii) the board of directors of the Manufacturer shall cease to consist of a majority of the Manufacturer's board of directors on the date hereof (or directors appointed by a majority of the board of directors in effect immediately prior to such appointment) or (iii) the Manufacturer or any of its affiliates merges or consolidates with, or sells all or substantially all of its assets to, any other person or entity; 15.8 Amendment. This Agreement may be amended only by written amendment duly signed by authorized representatives of both Parties.

15.9 Non-Solicitation of Employees. During the term hereof and for a period of five (5) years thereafter, each Party agrees not to, either directly or indirectly, for itself or on behalf of any other person, firm, partnership, corporation or other entity hire, solicit, contract for, attempt to solicit, or cause to be solicited, the employment or services of any current or previous employee of the other Party (unless a period of sixty months has elapsed from the last date that such employee was employed by such party) without the prior written consent of such other Party. Each Party agrees that in the event it violates the provisions of this Section 15.9, it will pay to the other Party as liquidated damages, and not as a penalty, an amount equal to one hundred times (100 X) of any such employee's then-current base annual salary. 15.10 Severability; Validity. If any provision of this Agreement is held invalid or unenforceable under applicable law, the parties agree to renegotiate such provision(s) in good faith, in order to maintain or achieve the economic position enjoyed by each Party as close as possible to that under the provision(s) rendered unenforceable. In the event that the Parties cannot reach a mutually agreeable and enforceable replacement for such provision(s), then (i) such provisions shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision(s) were so excluded, (iii) the balance of the Agreement shall be enforceable in accordance with its terms, and (iv) the parties will revise the Agreement to effect the intent of such excluded provisions. 15.11 Waiver. Any waiver of any kind by a Party of a breach of this Agreement must be in writing, shall be effective only to the extent set forth in such writing and shall not operate or be construed as a waiver of any subsequent breach. Any delay or omission in exercising any right, power or remedy pursuant to a breach or default by a Party shall not impair any right, power or remedy which either Party may have with respect to a future breach or default.

15.12 Dispute Resolution. 15.12.1 Obligation to Negotiate. Any dispute arising out of or relating to this Agreement shall be resolved exclusively in accordance with the procedures specified in this Section 15.12. The Parties shall attempt in good faith to resolve any





dispute arising out of or relating to this Agreement by negotiation between a committee composed of four (4) members (two (2) from each Party) mutually agreed upon from the Subcontractor and Manufacturer boards of directors. Any Party may give the other Party written notice of any dispute not resolved in the normal course of business. Such notice shall include (a) a statement of that Party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will be representing that Party and of any other person who will accompany the executive in the negotiations. Within fifteen (15) days after delivery of the notice, the receiving Party shall respond with (a) a statement of that Party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that Party and of any other person who will accompany the executive in the negotiations. Within thirty (30) days after delivery of the initial notice, the executives of both Parties shall meet at a mutually acceptable time and place and thereafter as often as they reasonably deem necessary to attempt to resolve the dispute. All reasonable requests for information made by one Party to the other will be honored. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. 15.12.2 Mediation. If the dispute has not been resolved by the negotiation process specified in Section 15.12.1 within forty-five (45) days following the initial notice, the Parties may endeavor to settle the dispute by mediation under the then current CPR Mediation Procedure published by the CPR Institute for Dispute Resolution (NYC). Unless otherwise agreed, the Parties will select a mediator from the CPR Panels of Distinguished Neutrals. 15.12.3 Choice of Law; Venue. If any dispute has not been resolved by a non-binding procedure as provided herein, within one-hundred twenty (120) days of the initiation of such procedure the complaining Party may seek such legal or equitable relief as may be appropriate in the federal or state courts located in Maricopa County, Arizona. The Parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law provisions thereof or any other applicable law and that exclusive venue shall be in the federal or state courts located in Maricopa County, Arizona. Nothing stated herein is intended to limit either Party's right to seek emergency, temporary or permanent injunctive relief and both Parties expressly agree that either Party will be entitled to such relief to prevent actual or threatened violation of the confidentiality provisions in Section 11 herein. If there is a dispute or legal action regarding this agreement, the prevailing Party shall be entitled to reasonable attorney's fees and costs. 15.13 Binding Effect; Recitals. This Agreement shall be binding on and inure to the benefit of the Parties and their respective successors and assigns. The recitals to this Agreement are incorporated into and shall constitute a part of this Agreement.

15.14 Survival. The rights, limitations, obligations and duties under Sections 7, 10, 11, 12, 14 and 15 shall survive the expiration or termination of this Agreement. 15.15 Entire Agreement. This Agreement and the attachments attached hereto contain the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersede all prior negotiations, agreements and understandings with respect thereto. Signature Page to Follow





IN WITNESS WHEREFORE, the Parties have caused this Agreement to be executed by their duly authorized representatives as set forth below: ZOUNDS HEARING, INC. Date: ________________________ By:______________________________ Name: Samuel L. Thomasson Title: President & Chief Executive Officer Address: 6825 W. Galveston Street, Suite 9 Chandler, AZ 85226 Fax: _____________________________ Email: ____________________________ INNERSCOPE HEARING TECHNOLOGIES, INC. Date: ________________________ By:________________________________ Name: Matthew Moore Title: CEO Address: 2151 Professional Drive 2nd Floor Roseville, CA. 95616 Fax: (916) 218-4101 Email: matthew@innd.com
Example Output: Highlight the parts (if any) of this contract related to Warranty Duration that should be reviewed by a lawyer. Details: What is the duration of any  warranty against defects or errors in technology, products, or services  provided under the contract?

Example Input: Exhibit 4(b)(ii).3

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                        Maintenance and support contract                               for SICAP(R) modules                                 PPB, VCA and OTA

                              dated 10 October 2000

    This contract replaces in full the Annex 7 Maintenance and Support for         SICAP(R) modules PPB, VCA and OTA and Sun Hardware which was an            integral part of the original Swisscom PURCHASE & LICENSE                    CONTRACT, made effective on 06 April 1998.

concluded between:                                                      EuroTel

 Bratislava a.s., Stefanikova 17, PO Box 54, 838 01 Bratislava 38, Slovakia and           Sicap Ltd, Bernstrasse 34, 3072 Ostermundigen, Switzerland.

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                                Table of contents

1   INTRODUCTION                                                               4

  1.1 Standard service                                                         4

  1.2 Over all responsibilities                                                4

  1.3 Additional service on request (as per clause 5)                          5

2   PROCEDURES FOR SUPPORT                                                     5

  2.1 Hotline ISC SICAP(R)(Case of incidents)                                  5

  2.2 Procedures for incidents                                                 5

  2.3 Main flowchart                                                           6

3   RESPONSE TIME                                                              8

  3.1 Response time for hotline                                                8     3.1.1 Working hours at Sicap Ltd                                           8

  3.2 Emergency priority                                                       8

4   CHANGE MANAGEMENT                                                          9

  4.1 Responsibilities                                                         9

  4.2 Procedures                                                               9

5   ADDITIONAL SUPPORT                                                         9

  5.1 Remote support outside working hours                                    10

  5.2 On-site support                                                         10

6   PRICING                                                                   10

  6.1 Pricing for standard service                                            10

  6.2 Pricing for additional support                                          11

7   GENERAL TERMS AND CONDITIONS FOR MAINTENANCE AND SUPPORT                  12

  7.1 Introduction                                                            12

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  7.2 Definitions                                                             12

  7.3 Remuneration                                                            13     7.3.1 Prices                                                              13     7.3.2 Price adjustments                                                   13     7.3.3 Costs and expenses                                                  13

  7.4 Co-operation by EuroTel                                                 14

  7.5 Term and termination                                                    14

  7.6 Liability                                                               15





  7.7 Assignment                                                              15

  7.8 Changes to the contract                                                 15

  7.9 Counterparts                                                            16

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1     Introduction

      Sicap Ltd provides to EuroTel a standard service for the SICAP(R) PPB, VCA       and OTA modules.

      EuroTel can also request additional support which is not part of the       offered standard support and is subject to a separate quotation and       ordering procedure as described in Article 5.

1.1   Standard service

      The following services are included for the SICAP(R) PPB, VCA and OTA       modules

      o     HotLine support (resolving of incidents)

      o     20 hours telephone support (during office hours) per month. This             support includes every necessary support for the SICAP(R) PPB, VCA             and OTA (no accumulation of unused hours)

      o     Remote support via ISDN line (establishment and communication costs             to be paid by customer). Security can be guaranteed under the             following conditions: Firewall, only outgoing connections allowed

      o     Change Management

      The following service is charged:

      o     Installation costs if on-site support is required

      This Maintenance and Support contract does not include the following       cases:

      Bugs or problems in third party software or middleware, like for example       Veritas Cluster, Oracle, not-correct DB-management, faults of EuroTel's       system management, hidden modification and/or foreign       developments/adaptations of the SICAP application and/or the entire       prepaid system. Misuse will be charged at cost.

1.2   Over all responsibilities

      EuroTel is responsible for the initial fault tracing within the entire       prepaid system including first level maintenance, Sicap Ltd for second       level maintenance, as described under clause 1.1.

      First level of maintenance means all day by day activities in order to       have the entire prepaid system running under normal condition including       application administration, dB administration and system administration       (hardware & operating system).

      For second level of maintenance are intended all the activities needed to       have the SICAP(R) application running under unexpected conditions like       bugs, unexpected performance limitations, etc. (HW configuration and any       changes to be confirmed by Sicap Ltd)

      The clause 2.2 defines the procedure, which will allow EuroTel to qualify       problems within its own support organisation in order to achieve problem       resolution with Sicap Ltd support.

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      EuroTel will ensure that its personal is adequate trained to support the       entire SICAP(R) prepaid application.

1.3   Additional service on request (as per clause 5)

      o     On-site support       o     Remote support (not covered by Hotline)       o     Training after acceptance

2     Procedures for support

2.1   Hotline ISC SICAP(R) (Case of incidents)

      The HotLine can be reached as follows:

      Phone:

      +41 878 807 387 (24 hours, 7 days a week)





      Fax:

      +41 41 360 10 29

      Trouble Ticket:

      http:www.swissgsm.ch/gnats/SKEUROTEL

      (WEB based GNATS problem report system, used by ISC, Lucerne)

      EuroTel defines up to 5 system administrators from their own staff. They       must be trained for the following modules:

      o     SICAP(R)VCA       o     SICAP(R)PPB       o     SICAP(R)OTA

      Only these system administrators have the permission to use the HotLine       and the GNATS tool.

2.2   Procedures for incidents

      According to the priority request of EuroTel, ISC SICAP(R) (Installation       and Service Center) will contact the responsible engineer from Sicap Ltd       with its Subcontractor(s) immediately.

      The following procedures are applicable:

      1.    After the discovery of an incident, ISC SICAP(R) has to be notified             without delay by the Web based GNATS trouble ticket tool and by             phone (called HotLine).

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      2.    EuroTel shall use the HotLine number to report every incident.             Together with notification of the HotLine the following information             has to be provided:

            o     Date and time of incident occurrence             o     User domain, site domain, application domain             o     Configuration item detail and a full and accurate description                   of the incident             o     Priority of Incident

      3.    On request from Sicap Ltd, EuroTel has to provide the following             supplementary information:

            o     SICAP(R) modules VCA- or PPB- or OTA-logfile             o     System logfiles             o     all necessary information from the crashed system in                   electronic way (if possible ) like memory dumps.

      4.    On request from Sicap Ltd, EuroTel has to open the ISDN remote             access to the system to ISC SICAP(R)

2.3   Main flowchart

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          --------------------      ---------      ---------           System Administrator    \               \              /Project manager  ----  Incident ----- Priority           --------------------    / ---------     /---------                   |                                     |                   |                     ----------------|----------------  &sbsp;                |                     |               |                |                         ---------    -------      --------------   -----------                                                       GNATS         Incidents                         [GRAPHIC]    HotLine      trouble ticket   Information                         ---------    -------      --------------   -----------                   |                                     |                   |                                     |             --------------                              |                  RFC        /                           |              (request for   -------                     |                 change)     \     |                 ------------    ----------             --------------        ---------------\  ISC SICAP(R)     [GRAPHIC]                   |               |       |-------  ------------    ----------             --------------        |       |      /      |                 GNATS      ----------------             |             --------------        |                  --------                   |               |                  Response                   |               |                  --------             -------------- /      |                     |               Quotation    -------|                     |              (schedule &   \                            |             delivery plan)                              |             --------------                              |





                  |                                  --------                   |                                  Problem                   |                                  detected                   |                                  --------                   |                                     |                   |                           ----------|-----------                   |                           |         |           |                   |        Problem         -------   -------    -----------                   |        fixing          On-site    Remote    Explanation                   |        &               action     action     with Call,                   |        Installation                         E-Mail, Fax                   |                        -------   -------    -----------                   |                          |  |       |             |                   |                           --|-------|-------------                   |                             |                   |                             |                ---------                     --------        --------------                Quotation                \     Change      \  Problem solved                accepted   ---------------    accepted  ----                ---------                /    --------     /  --------------

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3     Response time

3.1   Response time for hotline

      The Response Time during the HotLine availability hours shall be the       following:

      --------------------------------------------------------------------------       Priority of reques    Availability              Response Time       --------------------------------------------------------------------------       emergency             24 hours, 7 days a week   4 hours       --------------------------------------------------------------------------       high                  during working hours      4 hours       --------------------------------------------------------------------------       medium                during working hours      next working day       --------------------------------------------------------------------------       low                   during working hours      day after next working day       --------------------------------------------------------------------------

      It is up to EuroTel to decide which priority occurs. In case of an obvious       misuse, Sicap Ltd has the right to charge the costs.

      Sicap Ltd will perform every possibility to make the system running as       soon as possible. Staff of EuroTel must be on-site on request of Sicap       Ltd.

3.1.1 Working hours at Sicap Ltd

      The working hours for Sicap Ltd, ISC are:

      08.00h - 18.00h except Saturday, Sunday and public holidays in       Switzerland.

      Public holidays in Switzerland are:

        New Year                           January 1st         Berchtoldsday                      January 2nd         St. Joseph's day                   (date is not fixed)         Good Friday                        Friday before Eastern         Easter Monday                      Monday after Eastern         Ascension day                      Thursday, 10 days before Whitsuntide         White Monday                       Monday after Whitsuntide         Corpus Christi                     (date is not fixed)         National Holiday                   August 1st         Assumption                         August 15th         St. Leodegar                       October 2nd         All Saints                         November 1st         Immaculate Conceptions             December 8th         Before Christmas day               December 24th after 12:00 am         Christmas day                      December 25th         Boxing day                         December 26th         Sylvester                          December 31st after 12:00 am

3.2   Emergency priority

      In an emergency case Sicap Ltd shall do every effort to make the SICAP(R)       application running within 24 hours after response. This also includes to       find temporary solution (work around) until the definitive acceptable       solution is implemented.

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      The following standard procedure shall apply in such a case:

      emergency case happens:





      +    4 hours:  Response from ISC       +   10 hours:  SICAP(R) application SW problem detected       +   10 hours:  SICAP(R) application SW problem solved.

      If Sicap Ltd is not successful within this time, Sicap Ltd's responsible       shall come on-site with the next available flight or train and manages the       recovery process on-site.

      During the whole process the system responsible of EuroTel must be on-site       and work according to the instructions of Sicap Ltd.

4     Change management

      All changes in the functionality of the SICAP(R) application of EuroTel       must be proceeded by a Request for Change (RFC).

      A RFC can be originated by Sicap Ltd or EuroTel and can relate to any       component in the SICAP(R) application.

      Changes can consist of:

      o     Patches       o     Releases (also named upgrades)

4.1   Responsibilities

      Under Change Management, Sicap Ltd has the responsibility to:

      o     collect and assess RFC's, resulting in a quotation and a schedule to             EuroTel       o     co-ordinate and communicate about progress on a weekly basis.

      EuroTel has the responsibility to:

      o     accept or decline the quotation and the delivery plan       o     accept the implemented change

4.2   Procedures

      o     All communication concerning changes shall be in writing or entered             in the ISC trouble ticketing system (GNATS)       o     All RFC's shall be addressed to Sicap Ltd       o     After placing an order based on Sicap Ltd's quotation, Sicap Ltd             implements the change according to the agreed schedule.

5     Additional support

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      Sicap Ltd can, on a case by case basis, provide support which is tailor       made to EuroTel's requirements. This support is not part of the standard       service and subject to availability and a separate quotation.

5.1   Remote support outside working hours

      EuroTel can request Remote Support outside working hours, e.g. for       installations, new releases, reconfiguration, migration activities. The       written request must be received by Sicap Ltd at least 10 working days       prior to its intended implementation. After confirmation, Sicap Ltd can       provide a detailed planning after consultation with EuroTel, including a       description of the service to be performed.

5.2   On-site support

      In case Remote support is not feasible or in case of explicit request from       EuroTel in certain cases Sicap Ltd can provide EuroTel with on-site       support. Such support is subject to a separate quotation by Sicap Ltd and       mutual agreement between both parties.

6     Pricing

6.1   Pricing for standard service

      --------------------------------------------------------------------------       Description for                  annual fee after the   annual fee for       0-50'000 subscriber              initial period         the first year                                                               (during warranty                                                               period),                                                               beginning with                                                               launch of service       --------------------------------------------------------------------------

      SICAP(R) modules VCA,            151'440.-- CHF         not applicable       PPB & OTA

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

      --------------------------------------------------------------------------       Additional price                 annual fee after the   annual fee for the       for each further lot of 50 000   initial period         first year (during &sbsp;                                                             warranty period),                                                               beginning with





                                                              launch of service       --------------------------------------------------------------------------

      SICAP(R) modules VCA, PPB & OTA  49'500.-- CHF          not applicable

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

      o     Additional lots of licenses shall just be charged from the beginning             of each six month period.

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6.2   Pricing for additional support

      --------------------------------------------------------------------------       Support service                                      Price       --------------------------------------------------------------------------       within Sicap Ltd working hours                       CHF 235.-- / hour       --------------------------------------------------------------------------       outside Sicap Ltd working hours                      CHF 352.50 / hour       --------------------------------------------------------------------------       Travel and accommodation expenses                    at cost       --------------------------------------------------------------------------

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7     General terms and conditions for maintenance and support

7.1   Introduction

      These General Terms and Conditions are applicable for the maintenance and       support services based on Service Levels Description which Sicap Ltd       provides for its SICAP(R) System. No deviations from these General Terms       and Conditions shall be valid unless expressly agreed in writing.

7.2   Definitions

      SICAP(R) software:

      Specific software which has been supplied by Sicap Ltd

      SICAP(R) module:

      Specific software component which is a part of the complete SICAP(R)       Software, but could be integrated separately or not

      System:

      Combination of third party hardware/software and SICAP(R) Software by       Sicap Ltd

      Change management:

      Management of change requests

      Configuration item:

      Component characteristic definition, as part of the system, which has been       defined for the customer specification

      Incident:

      A deviation from the normal behaviour of the System:

      o     Emergency Priority Incident             Critical, complete HA-System failure or a major impact on prepaid             functionality.             Priority Incident             Incident causing a major impact on the SICAP(R) System's             functionality. Conditions that prevent EuroTel normal business             operations from being carried out in timely manner.       o     Medium Priority Incident             Incident causing a partial or minor impact on the System's             functionality       o     Low Priority Incident             Incident having a low impact on the System's functionality such as             screen or report layout changes.

      Patch:

      A minor correction or adaptation to the SICAP(R) application software.

      Problem:

      A condition of the system, identified through incident(s) which indicates       an error for which the cause is yet unknown.

      Release / upgrade:





      A consistent set of software which provides major improvement and/or       extensions to the previous software on the System.

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      Response time:

      The time between the receipt of the notification by Sicap Ltd of an       incident or problem and the initiation by the HotLine of a solution for       the incident or problem.

      Subcontractor:

      A subcontractor of Sicap Ltd, supplying and supporting hardware and/or       software for the SICAP application.

      Third party:

      A party not being Sicap Ltd, supplying hardware and/or software for the       system.

      Working days/hours:

      Mondays to Fridays during Sicap Ltd's regular office hours (8.00h -       18.00h), except public holidays in Switzerland, as specified under clause       3.1.1.

7.3   Remuneration

      The General Terms and Conditions of the original Swisscom Purchase and       License Contract shall also be valid for Maintenance and Support.

7.3.1 Prices

      The total price for the selected service under the Maintenance and Support       contract is listed in chapter 6. Maintenance and Support fees are payable       semi-annually in advance. All prices are in CHF and exclusive of value       added tax that has to be paid in the Slovak Republic.

7.3.2 Price adjustments

      Prices are subject to yearly adjustments. Sicap Ltd may send a new offer.       The offer shall be sent two month prior to the beginning of the dedicated       next year.

7.3.3 Costs and expenses

      Prices quoted are exclusive of travel, accommodation expenses made by       Sicap Ltd personnel under this Maintenance and Support contract. Such       costs and expenses will be charged according to the effective costs.

      In the event Sicap Ltd personnel is required to travel to EuroTel's       premises under this maintenance and support contract, but is not able to       perform the required services due to reasons beyond the control of Sicap       Ltd, which means no physical access to the system or force major as well       as for support cases not included under standard service, as per clause       1.1, then EuroTel shall pay all costs and expenses (e.g. hours, travel and       accommodation expenses).

      All payments due under this Maintenance and Support contract shall be due       and payable 30 days after the invoice date, with the first invoice to be       issued on the date this Maintenance and Support contract comes into full       force and effect.

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      If any payment is not received by Sicap Ltd on the date or dates, as laid       down in this clause, or as may be further agreed upon by the parties, then       Sicap Ltd has the right to suspend the services to EuroTel until payment       has been received. Before suspending the services to EuroTel, a       notification from Sicap Ltd will be given.

      In the event of a suspension of services by Sicap Ltd, as a result of a       delay or lack of payment by EuroTel, Sicap Ltd will not be responsible for       any damages resulting from this suspension.

7.4   Co-operation by EuroTel

      EuroTel shall always give Sicap Ltd full co-operation and provide Sicap       Ltd in good time with required data or information useful and necessary to       the proper execution of the Maintenance and Support contract.

      EuroTel shall be responsible to maintain adequate climatic conditions in       the spaces where the SICAP(R) systems is placed, such in accordance with       the site specifications as mentioned in the Purchase and License Contract       for the system.

      EuroTel shall prevent:





      o     Installation deficiencies (unstable electricity supply network or             others) that result from the non-observance of the installation             standards of the Sicap Ltd equipment       o     The use of degraded or inappropriate consumable and accessories,             contrary to the manufacturer's specifications       o     Negligence, carelessness or improper use on the part of EuroTel,             specifically, the dropping of the equipment or the existence of             foreign objects inside the equipment;       o     Incompatibilities resulting from modifications, repairs or             maintenance carried out by personnel not belonging to Sicap Ltd             and/or third party, or the connection of equipment not supplied or             approved by Sicap Ltd.

      EuroTel shall grant access to Sicap Ltd or third party personnel to       EuroTel's site in question, provided that this personnel abides by the       security rules of EuroTel. Sicap Ltd or third party personnel will always       be accompanied by a representative of EuroTel, if so required by EuroTel.

      EuroTel shall provide Sicap Ltd with an actual list stating the system       administrators and how they can be reached.

7.5   Term and termination

      This contract replaces in full the Annex 7 Maintenance and Support for       SICAP(R) modules PPB, VCA and OTA and Sun Hardware which is an integral       part of the original Swisscom PURCHASE & LICENSE CONTRACT, made effective       on 06 April 1998.

      It shall be effective on 06 October 2000 and shall have a duration of two       years.

      The prices remain valid for the first 12 months.

      After this period, Sicap Ltd reserves the right to adjust the prices       annually. The offer must be submitted three (3) months in advance and       EuroTel may decide within one (1) month to prolong or terminate this       maintenance and support contract. If EuroTel doesn't react in writing, the       new offer shall be considered as accepted.

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      After the initial period of two years, the maintenance and support       contract shall be automatically renewed for a period of one year on each       renewal date, unless one of the parties terminates the maintenance and       support contract through written notification to the other party in the       form of a registered letter with proof of receipt, at least six (6) weeks       prior to the renewal date. There shall be no reimbursement of any paid       fee.

      In case of a substantial breach of this maintenance and support contract       by either party, which is not remedied within thirty days from the other       party's notice thereof, the other party shall have the right to terminate       this maintenance and support contract with immediate effect without       juridical procedures.

      The termination or expiration of the maintenance and support contract for       any reason whatever shall be without prejudice to any other right or       obligation of any party hereto in respect of this maintenance and support       contract which have arisen prior to such termination.

7.6   Liability

      Sicap Ltd's liability for indirect loss, including consequential loss,       loss of profit, lost savings and loss caused by interruption of operations       is excluded.

      No right to damages shall ever arise unless EuroTel reports the loss to       Sicap Ltd in writing as soon as possible after it has arisen.

7.7   Assignment

      This maintenance and support contract is for the benefit of and binding       upon each of the parties hereto and their respective successors and       assigns.

      The rights and obligations under this maintenance and support contract may       not be assigned in whole or in part by either party without the prior       written consent by the other party.

      The parties may assign the rights and obligations under this maintenance       and support Contract by written notice to a subsidiary. A subsidiary of a       party is considered a company of which the party is holding a majority of       the equities.

7.8   Changes to the contract

      Except as otherwise specifically indicated herein, this maintenance and       support contract will not be amended except by written agreement signed on       behalf of the parties by their duly authorised representatives.

      At the end of each agreementual period, or at such time as mutually agreed





      by both parties, EuroTel has the option to select a different services,       such with consequential price adjustments.

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7.9   Counterparts

      IN WITNESS WHEREOF, the parties hereto have executed this contract in two       (2) originals by their fully authorised representatives on the day and at       the place written here below, each party receiving one (1) original       hereof. For and on behalf of:

      --------------------------------       -----------------------------------       Thomas R. Berner                       Thomas Cancro       Key Account Manager                    CFO / Procurator

      --------------------------------       -----------------------------------       Andreas Martschitsch                   Jozef Barta       CEO (acting)                           CEO / Procurator

      Place:                                 Place:

      Date:                                  Date:
Example Output:
Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.