Document:

QUALIFIED
      STOCK OPTION AGREEMENT

    

    THIS
      AGREEMENT (this “Agreement”), is effective as of the 25th
      day of April, 2007 (the “Grant Date”),
      between
      Manchester Inc. (the “Company”), and Stephen
      Scorgie (the
      “Optionee”).

    

    WHEREAS,
      the Board of Directors has determined that it is in the best interest of the
      Company to provide additional incentive to selected directors, officers,
      employees and consultants of the Company; and

    

    WHEREAS,
      the Company desires to grant to the Optionee an Option (as defined below) to
      purchase shares of its common capital stock under and for the purposes of the
      Company’s 2006 Equity Incentive Plan (the “Plan”); and

    

    WHEREAS,
      the Company and the Optionee understand and agree that any terms used herein
      have the same meanings as in the Plan.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants hereinafter set forth and
      for other good and valuable consideration, the parties hereto agree as
      follows:

    

    1. Grant of Option.
      Effective as of the Grant Date, the Company hereby grants to the Optionee the
      right and option (the “Option”) to purchase all or any part of an aggregate of
100,000
      shares (the
      “Shares”) of the Company’s common stock, par value $.001 per share (the “Common
      Stock”), subject to, and in accordance with, the terms and conditions set forth
      in this Agreement. 

    

    2. Purchase Price.

    

    The
      price
      at which the Optionee shall be entitled to purchase the Shares upon the exercise
      of the Option shall be US$3.50
      per Share.
      

    

    3. Exerciseability
      of Option.

    

    The
      Option shall vest in accordance with the following schedule and become
      exercisable with respect to the following number of the shares covered by the
      Option so long as Optionee remains employed by the Company or continues to
      serve
      the Company in a consulting capacity as of each such vesting date: 50% of the
      Shares shall vest on the six month anniversary of the date of this Agreement
      and
      the remaining 50% of the Shares shall vest on the twelve month anniversary
      of
      the date of this Agreement.

    

    4. Duration of Option.

    

    (a) The
      Option shall be exercisable to the extent vested and in the manner provided
      herein until the fifth anniversary of the date hereof so long as Optionee
      remains in good standing with the Company as an employee or continuing in
      service as a consultant to the Company. In the event the Optionee is an employee
      of the Company and such employment of the Optionee is terminated for cause,
      the
      Option, whether or not exercisable, shall terminate on the effective date of
      the
      Optionee's termination of employment. If the employment of the Optionee is
      terminated for any reason other than cause, the Optionee may at any time within
      ninety (90) days after such termination of employment (but in no event beyond
      the expiration of the stated term of the Option), exercise the Option to the
      extent, but only to the extent, that the Option or portion thereof was
      exercisable on the date of the termination of employment, after which time
      the
      Option shall terminate in full. Nothing in this Agreement shall be interpreted
      or construed to confer upon the Optionee any right with respect to continuance
      of employment or consulting arrangements with the Company, nor shall this
      Agreement interfere in any way with the right of the Company to terminate the
      Optionee's employment or consulting services at any time.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

    

    

    (b)
       Notwithstanding
      any provision to the contrary herein, in
      the event of Optionee's death, his Option shall terminate on the date of death,
      provided that all or a portion of the Option to the extent that the right is
      exercisable but not exercised on the date of death may be exercised by
      Optionee’s survivors. Such Option must be exercised by the Optionee’s survivors,
      if at all, within six (6) months after the date of death of Optionee or, if
      earlier, within the originally prescribed term of the Option, notwithstanding
      that the decedent might have been able to exercise the Option as to some or
      all
      of the shares on a later date if the Optionee were alive and had continued
      to be
      a Optionee of the Company or of an affiliate thereof.

    

    5. Manner of Exercise and Payment.

    

    5.1 Subject
      to the terms and conditions of this Agreement the Option may be exercised by
      delivery of written notice to the Company in the form attached hereto, at its
      principal executive office. Such notice shall state that the Optionee is
      electing to exercise the Option and the number of Shares in respect of which
      the
      Option is being exercised and shall be signed by the person or persons
      exercising the Option. If requested by the Company, such person or persons
      shall
      (i) deliver this Agreement to an Officer of the Company who shall endorse
      thereon a notation of such exercise and (ii) provide satisfactory proof as
      to
      the right of such person or persons to exercise the Option.

    

    5.2 The
      notice of exercise described in Section 5.1 shall be accompanied by payment
      of
      the full purchase price for the Shares in respect of which the Option is being
      exercised, in cash or by check.

    

    5.3 Upon
      receipt of the notice of exercise and any payment or other documentation as
      may
      be necessary pursuant to Section 5.2 relating to the Shares in respect of which
      the Option is being exercised, the Company shall, subject to this Agreement,
      take such action as may be necessary to effect the transfer to the Optionee
      of
      the number of Shares as to which such exercise was effective.

    

    5.4 The
      Optionee shall not be deemed to be the holder of, or to have any of the rights
      of a holder with respect to any Shares subject to the Option until (i) the
      Option shall have been exercised pursuant to the terms of this Agreement and
      the
      Optionee shall have paid the full purchase price for the number of Shares in
      respect of which the Option was exercised, (ii) the Company shall have issued
      and delivered the Shares to the Optionee, and (iii) the Optionee's name
      shall have been entered as a stockholder of record on the books of the Company,
      whereupon the Optionee shall have full voting and other ownership rights with
      respect to such Shares during the period of ownership thereof.

     

    
      
        
        

      

      
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    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

    

    

    5.5 In
      lieu
      of payment upon exercise of the Option as set forth above in this Section 5,
      the
      Optionee may alternatively surrender to the Company for cancellation a portion
      of this Option representing that number of unissued shares underlying this
      Option which is equal to the quotient obtained by dividing (A) the product
      obtained by multiplying the Purchase Price by the number of shares of stock
      being purchased underlying the Option upon such exercise, by (B) the difference
      obtained by subtracting the Purchase Price from the closing price of the
      Company's common stock on the date immediately preceding such date of such
      exercise ("Cashless Exercise"); or (iii) by a combination of the foregoing
      methods of payment selected by the Holder of this Option. 

    

    6. Notices.
      All
      notices, demands, instructions and other communications required or permitted
      to
      be given to or made upon either party hereto or any other person shall be in
      writing and shall be personally delivered or sent by registered or certified
      mail, postage prepaid, return receipt requested, or by a reputable courier
      delivery service, or by telegram (with messenger delivery), or by telecopy
      (confirmed by mail), and shall be deemed to be given for purposes of this
      Agreement on the day that such writing is delivered or sent to the intended
      recipient thereof in accordance with the provisions of this Section. Unless
      otherwise specified in a notice sent or delivered in accordance with the
      foregoing provisions of this Section, notices, demands, instructions and other
      communications in writing shall be given to or made upon the respective parties
      hereto, in the case of the Optionee to
      the
      address of record on file with the Company; and in the case of the Company,
      to
      the principal executive office of the Company addressed to the Corporate
      Secretary.

    

    7. Non-Transferability.

    

    The
      Option shall not be transferable other than by will or by the laws of descent
      and distribution or pursuant to a qualified domestic relations order as defined
      in the U.S. Internal Revenue Code. During the lifetime of the Optionee, the
      Option shall be exercisable only by the Optionee, except in the case of an
      Option transferred pursuant to a qualified domestic relations order.

    8. Securities
      Act Restrictions; Sales of Shares.

    

    The
      Optionee acknowledges that neither the U.S. Securities and Exchange Commission
      (the “SEC”) nor any state securities commission has approved the Option nor any
      Shares issuable upon exercise thereof, nor passed upon or endorsed the merits
      of
      this Option or the Shares; the Optionee further understands and agrees that
      neither the Option nor the Shares have been registered (i) under with the SEC
      under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) with
      any state securities commission. The Optionee understands that the neither
      the
      Option nor the Shares may be offered, sold, transferred or otherwise disposed
      of
      in the U.S., its territories or possessions, or to persons known to be residents
      of the U.S. or to a U.S. person within the meaning of the Securities Act and
      the
      rules promulgated thereunder; provided that the Shares may be so sold after
      the
      earlier to occur of the effectiveness of a registration statement registering
      the Shares under the Securities Act or the expiration of the restricted period
      under Rule 144 promulgated under the Securities Act and thereafter only if
      the
      Shares are registered under the Securities Act or an exemption from the
      registration requirements under the Securities Act is available. The Optionee
      acknowledges that the Company has no obligation to cause the registration of
      this Option or the Shares under the Securities Act. Following exercise of some
      or all of the Option, Optionee agrees not to sell or transfer more than 25%
      of
      the aggregate of all such Shares underlying the Option during any single
      calendar quarter and that the certificates representing such Shares shall bear
      a
      legend to such effect. 

     

    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      

    

    9. Adjustments.

    

    In
      the
      event of a change applicable to the entire class of shares of Common Stock,
      such
      as a stock split, stock dividend, or similar action with respect to all issued
      and outstanding shares of Common Stock, the Board of Directors shall make
      corresponding adjustments to the number of Shares subject to this Option and
      the
      purchase price for such Shares. For purposes of clarity, however, no adjustments
      shall be made with respect to issuances of Common Stock by the Company or any
      instruments exercisable or convertible into shares of Common Stock.

    

    10. Effect of a Liquidation, Merger or Consolidation.

    

    Upon
      the
      effective date of (i) the liquidation or dissolution of the Company or
      (ii) a merger or consolidation of the Company (a “Transaction”), the
      Option shall continue in effect in accordance with its terms and the Optionee
      shall be entitled to receive in respect of each Share subject to the Option,
      upon exercise of the Option, the same number and kind of stock, securities,
      cash, property or other consideration that each holder of a Share was entitled
      to receive in the Transaction in respect of a Share.

    

    11. Withholding of Taxes;
      Qualified Stock Option Treatment

    

    The
      Company shall have the right to deduct from any distribution of cash to the
      Optionee an amount equal to the federal, state and local income taxes and other
      amounts as may be required by law to be withheld (the “Withholding Taxes”) with
      respect to the Option. If the Optionee is entitled to receive Shares upon
      exercise of the Option, the Optionee shall pay the Withholding Taxes to the
      Company in cash prior to the issuance of such Shares. In satisfaction of the
      Withholding Taxes, the Optionee may make a written election, which may be
      accepted or rejected in the discretion of the Company, to have withheld a
      portion of the Shares issuable to him or her upon exercise of the Option, having
      an aggregate Fair Market Value, on the date preceding the date of such issuance,
      equal to the Withholding Taxes. This Option shall be construed as a qualified
      stock option for purposes of interpretation under the Internal Revenue Code
      of
      1986, as amended, and the rules and regulations promulgated
      thereunder.

    
      
        
        

      

      
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    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

     

    12. No
      Assignment.

    

    Except
      as
      otherwise provided herein, the rights of the Optionee hereunder may not be
      assigned or otherwise transferred to any other party.

    

    13. Modification of Agreement.

    

    This
      Agreement may be modified, amended, suspended or terminated, and any terms
      or
      conditions may be waived, but only by a written instrument executed by the
      parties hereto.

    

    14. Severability.

    

    Should
      any provision of this Agreement be held by a court of competent jurisdiction
      to
      be unenforceable or invalid for any reason, the remaining provisions of this
      Agreement shall not be affected by such holding and shall continue in full
      force
      in accordance with their terms.

    

    15. Successors in Interest.

    

    All
      obligations imposed upon the Optionee and all rights granted to the Company
      under this Agreement shall be final, binding and conclusive upon the Optionee's
      heirs, executors, administrators, successors and (subject to Section 12 above)
      assigns of the parties hereto.

    

    16. Counterparts.
      This
      Agreement may be executed in several counterparts, each of which shall be deemed
      to be an original but all of which together will constitute one and the same
      instrument.

    

    17. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement, and supersedes all prior agreements,
      of the parties hereto relating to the subject matter hereof, and there are
      no
      written or oral terms or representations made by either party hereto other
      than
      those contained herein. This Agreement cannot be modified, altered or amended
      except by a writing signed by all the parties hereto. No waiver by either party
      hereto of any provision or condition of this Agreement at any time shall be
      deemed a waiver of such provision or condition at any prior or subsequent time
      or of any other provision or condition at the same or any prior or subsequent
      time.

    18. Governing
      Law; Arbitration.

    

    (a)
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the State of Texas without giving effect to any choice of law or
      conflict of law provision or rule (whether of the State of Texas or any other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than the State of Texas.

     

    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      

    

    (b)
      The
      parties hereto agree to submit to arbitration any and all matters in dispute
      or
      in controversy among them concerning the terms and provisions of this Agreement.
      All such disputes and controversies shall be determined and adjudged by the
      decision of an arbitrator (hereinafter sometimes called the “Arbitrator”)
      selected by mutual agreement of the parties hereto or if the parties hereto
      fail
      to reach agreement on the Arbitrator within ten days after a party hereto has
      notified the other of its interest to submit a matter to arbitration, the
      Arbitrator shall be selected by the American Arbitration Association upon
      application made to it for such purpose by the parties hereto. Arbitration
      shall
      take place in Dallas, Texas or such other place as the parties hereto may agree
      in writing. The Arbitrator shall reach and render a decision in writing with
      respect to the amount, if any, of payment respecting the disputed matter.
      Notwithstanding anything to the contrary herein, in no event will any award
      include consequential or punitive damages of any kind or nature. The arbitration
      proceedings shall be held in accordance with the applicable rules of the
      American Arbitration Association. Any award rendered shall be final and
      conclusive upon the parties and adjudgment thereon may be entered in the highest
      court of the forum, state or federal, having jurisdiction. The fees and expenses
      of the Arbitrator and the respective fees and expenses of the parties hereto
      in
      connection with any such arbitration (including, without limitation, reasonable
      fees and expenses of legal counsel and consultants) shall be paid by the party
      against whom a decision by the Arbitrator is rendered. 

    

    [Signature
      Page Follows]

    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above with the understanding that this Agreement shall constitute
      a legal, valid, binding and enforceable obligation of the Company and the
      Optionee, respectively. 

    

    
      	 	 	 
	 	MANCHESTER
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
Name:
              Richard Gaines
	 	Title:  
              Corporate Secretary

    
      	 	 	 
	 	OPTIONEE
	 
 	 
 	 
 
	 	/s/   	Stephen
              Scorgie 
	 	
              

            

    

     

    
      
        
        

      

      
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    MANCHESTER
      INC. 

    

    STOCK
      OPTION AGREEMENT

    

    Notice
      of Exercise

    

    

      
        	
                Optionee

              	
                     
                  

              
	
                 

              	
                 

              
	
                Number
                  of Shares purchased pursuant

              
	
                to
                  Exercise of Option

              	
                     
                  

              
	
                 

              	
                 

              
	
                Exercise
                  Date

              	
                     
                  

              
	
                 

              	
                 

              
	
                Exercise
                  Price per Share

              	
                        
                  

              
	
                 

              	
                 

              
	
                Aggregate
                  Purchase Price

              	
                     
                  

              
	
                 

              	
                 

              
	
                Form
                  of Payment

              	
                              
                  

              

      

    

    By
      this
      exercise, the Optionee agrees to (i) promptly provide such additional documents
      as the Company may reasonably require and (ii) provide for the payment to the
      Company (in the manner designated by the Company) of tax withholding
      obligations, if any, relating to the exercise of this Option.

     

    

      
        	
                Optionee:
                  

              	
                         
                       

              

      

    

     

    
      	 	 	 
	 	By:  	 
	 	
              
Name:
              _____________________________________       
              
	 	Title: 
              _____________________________________

    

     

    Accepted:

    

    MANCHESTER
      INC.

    
       

      
        	 	 	 
	 	By:  	 
	 	
                
Name:
                _______________________________________
	 	Title: 
                _______________________________________Exhibit
      10.1

    Master
      Supply Agreement

    

    This
      Master Supply Agreement (hereinafter the “Agreement”) is made the 10th
      day of
      July, 2007 (hereinafter the “Effective Date”), by and between VERSADIAL, INC., a
      Nevada corporation with offices located at Suite 4510, 305 Madison Avenue,
      New
      York, New York 10165 (hereinafter the “Supplier”), and AVON PRODUCTS, INC., a
      New York corporation with offices located at 1345 Avenue of the Americas, New
      York, New York 10105 (hereinafter “Avon”).

    

    WHEREAS,
      Supplier
      is engaged in the business of manufacturing, selling and distributing raw
      ingredients, components, packaging materials and/or finished goods to
      manufacturers and/or distributors for resale and wishes to manufacture,
      distribute and sell to Avon such products;

    

    WHEREAS,
      Avon
      has
      agreed to purchase certain products from Supplier as specifically set forth
      on
      the purchase confirmation delivered contemporaneously with the delivery of
      this
      Agreement (the “Purchase Confirmation”);

    

    WHEREAS,
      Avon
      may
      desire from time to time to purchase some or all of its requirements for certain
      products from Supplier; and

    

    WHEREAS,
      Avon
      and
      Supplier are entering into this Agreement to establish their respective rights
      and obligations with respect to all orders by Avon for the purchase of such
      products from Supplier.

    

    NOW,
      THEREFORE,
      in
      consideration of the recitals set forth above, the mutual promises herein
      contained and for other good and valuable consideration the receipt and adequacy
      of which is hereby acknowledged, Avon and Supplier agree as
      follows:

    

    1. Definitions.
      The
      following terms shall have the meanings given in this Section, unless explicitly
      stated otherwise:

    

    1.1 Account
      Manager.
      “Account Manager” shall have the meaning set forth in Section 14.

    

    1.2 Agreement.
      “Agreement” shall have the meaning set forth in the recitals above.

    

    1.3 Avon.
“Avon”
      shall have the meaning set forth in the recitals above.

    

    1.4 Supplier.
      “Supplier” shall have the meaning set forth in the recitals above.

    

    1.5 Competitor.
      “Competitor” shall mean any company or any subsidiary, affiliate or division of
      a company whose principal business is the manufacture, sale and distribution
      of
      women’s beauty products (e.g., cosmetics, skin care and personal care
      products).

    

    1.6 Confidential
      Information.
      “Confidential Information” shall have the meaning set forth in Section
      20.

    

    1.7 Effective
      Date.
      “Effective Date” shall have the meaning set forth in the recitals
      above.

    

    1.8 Products.
      “Products” shall mean those products identified in the Purchase Confirmation as
      may be amended from time-to-time by Avon and Supplier. 

    

    1.9 Required
      Supplier Insurance.
      “Required Supplier Insurance” shall have the meaning set forth in Section
      25.

     

    
      
         

      

      
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    1.10 Product
      and Service Level Standards.
      The
      Product and Service Level Standards listed on the Purchase
      Confirmation.

    

    1.11 Term.
“Term”
      shall have the meaning set forth in Section 7.

    

    1.12 Third
      Party Supplier.
“Third
      Party Supplier” shall have the meaning set forth in Section 15(b).

    

    2. Purpose.
      The
      purpose of this Agreement is to satisfy the ultimate customer by entering into
      a
      long-term, mutually beneficial business relationship which will increase total
      value through continuous improvement processes. It is understood between the
      parties that the use of the terms "partnering" and "partnership" in this
      Agreement or any of the Exhibits thereto shall not create a legal partnership
      between the parties. These terms are used solely to indicate a spirit of
      cooperation and sharing.

    

    3. Mutual
      Understanding of Governing Principles.
      The
      parties mutually understand and agree that the following principles will govern
      this Agreement:

    

    (a)
      The
      relationship shall be viewed and managed as a whole rather than as individual
      transactions.

    

    (b)
      Both
      Avon and Supplier are totally committed to continuous improvement in cost,
      quality, productivity, and technology.

    

    (c)
      The
      parties recognize that a shared destiny in business decisions will result in
      a
      long-term, productivity-based relationship and agree to share information,
      at
      either party’s discretion, on a confidential basis to achieve this
      end.

    

    4. Scope.
      This
      Agreement shall apply to all divisions, subsidiaries, affiliates, locations,
      and
      operations of Avon and Supplier.

    

    5. Purchase
      Orders.
      This
      Agreement does not constitute a purchase order. Purchases under this Agreement
      shall be made with purchase orders issued by individual Avon subsidiary or
      affiliate procurement departments which, in turn, shall be subordinate to all
      terms or Exhibits in this agreement. In the case of purchases made under this
      Agreement for the United States, the Purchase Order Terms and Conditions with
      Avon Products, Inc., attached to the Purchase Confirmation, apply to such
      purchases. Notwithstanding the foregoing, both parties have agreed to the terms
      and conditions set forth on the Purchase Confirmation. In the absence of any
      other written agreement applicable to any purchase made pursuant to this
      Agreement, such purchase(s) shall be subject to the terms and conditions of
      this
      Agreement and the individual Avon subsidiary or affiliate procurement
      departments then-current purchase order terms and conditions (to the extent
      such
      terms and conditions are not inconsistent with the terms and conditions of
      this
      Agreement). Except as otherwise expressly set forth in the Purchase
      Confirmation, in the event of a conflict between the provisions in the body
      of
      the Purchase Confirmation, the Agreement and the Purchase Order Terms and
      Conditions, the provisions in the body of the Purchase Confirmation shall
      prevail. Except as otherwise expressly set forth in the Purchase Confirmation
      or
      this Agreement, in the event of a conflict between the provisions in this
      Agreement and the Purchase Order Terms and Conditions, the provisions of this
      Agreement shall prevail.

    

    5.1 Placement
      of Orders.
      Avon
      will place all orders for Products by one of the following methods:

    

    (a) Sending
      to Supplier a purchase order utilizing the individual Avon subsidiary or
      affiliate procurement departments then-current purchase order terms and
      conditions, which are subordinate to the terms in this Agreement, regardless
      of
      whatever is represented on the individual Purchase Order; or

     

    
      
         

      

      
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    (b) Transmitting
      the order to Supplier by telephone, electronic mail, facsimile transmission,
      telex, cable, wire, telecopy, telegram, or similar means of communication.
      Such
      order shall be subject to the same limitations of the previous
      paragraph.

    

    (c) All
      submitted Purchase Orders have to be accepted by Supplier, who cannot reject
      an
      order if it is received at least sixty (60) days prior to ship date and is
      within the monthly capacity as determined in the exercise of its good faith
      business judgment. Once accepted by Supplier, Avon cannot cancel or adjust
      the
      order, without agreement from Supplier which will not be unreasonably withheld.
      

    

    5.2 Exclusion
      of Additional or Inconsistent Terms.
      Supplier agrees that any terms or conditions set forth on any documents or
      forms
      utilized by Supplier which are inconsistent with, or are not included in, this
      Agreement or the individual Avon subsidiary or affiliate procurement departments
      then-current purchase order terms and conditions shall be of no force or effect
      unless signed by an authorized employee of Avon.

    

    5.3 Purchase
      Obligation.
      Avon
      agrees to purchase from Supplier the quantities of Product at the prices set
      forth in the Purchase Confirmation and subject to the price discount set forth
      in the credit memo between the parties dated May 8, 2007, (“Credit Memo”). The
      parties acknowledge that a Credit Memo has been issued in connection with
      Supplier’s obligation to supply the Products to Avon under this Agreement.
      Supplier agrees to timely deliver to Avon the quantities of Product ordered,
      in
      accordance with the delivery schedule and other terms provided for herein and
      in
      the Purchase Confirmation.

    

    6. Continuous
      Improvement; Changes.

    

    (a) The
      Products shall meet mutually accepted specifications. The specifications shall
      describe the Products as a function of Supplier's process capabilities using
      mutually accepted measurements, sampling methods, and testing frequencies.
      All
      additions, changes or deletions to specifications shall be confirmed in writing
      by both parties.

    

    (b) Supplier
      shall notify Avon in writing of any proposed specification changes to the
      Products and obtain Avon's acceptance prior to making the change. Supplier
      may
      replace or modify the components and raw materials used to manufacture the
      Products only when such changes are evaluated and approved in writing by
      Avon.

    

    (c) Avon
      shall have the right at any time to propose changes to Product designs,
      specifications, materials, packaging, time and place of delivery, and method
      of
      transportation. Supplier agrees to use reasonable commercial efforts within
      the
      scope of its obligations to its licensors of rights and its other Protected
      Rights as defined below to evaluate and meet, to the extent practicable, Avon's
      requests under this Section; provided, however, that Supplier shall notify
      Avon
      within thirty (30) days if Supplier is not able to meet such request. If any
      such changes cause an increase or decrease in the cost, or the time required
      for
      performance, an equitable adjustment shall be made and this Agreement shall
      be
      modified in writing accordingly acknowledging that the cost of such changes
      will
      be borne by Avon.

    

    (d) Supplier
      and Avon agree to actively pursue a program of continuous improvement in regards
      to the Products and their relationship on both technical and commercial levels.
      Supplier shall promptly advise Avon of any changes to raw material,
      manufacturing, process or any other reasonably available technological advances
      which Supplier becomes aware of and which may result in Product improvements
      or
      cost reductions, provided that Supplier has no third party restrictions on
      the
      sharing of such information. Supplier agrees to use reasonable commercial
      efforts to reduce the cost of supply of the Products and to incorporate, to
      the
      extent practicable, cost improvement techniques developed or suggested by Avon,
      provided, however, that any capital or developmental costs shall be borne by
      the
      parties in amounts mutually agreed by the parties pursuant to good faith
      discussions.

     

    
      
         

      

      
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    7. Term.
      This
      Agreement shall commence on the Effective Date and shall expire at the end
      of a
      two (2) year period (the “Term”) from the date of first commercial shipment of
      Products unless otherwise earlier terminated pursuant to the terms and
      conditions of this Agreement.

    

    8. Termination
      for Cause.

    

    (a)
      Default.
      Either
      party has the right to terminate this Agreement if the other party is in default
      of any obligation hereunder, which default is incapable of cure or which
      default, being capable of cure, has not been cured within thirty (30) days
      after
      receipt of written notice of such default (or such additional cure period as
      the
      non-defaulting party may authorize).

    

    (b)
      Act
      of
      Insolvency.
      Either
      party may regard the other party as in default of this Agreement and may
      terminate this Agreement immediately by written notice to the other party,
      if
      the other party becomes insolvent, makes a general assignment for the benefit
      of
      creditors, suffers or permits the appointment of a receiver for its business
      or
      assets, becomes subject to any proceeding under any bankruptcy or insolvency
      law
      whether domestic or foreign, or has wound up or liquidated, voluntarily or
      otherwise.

    

    (c)
      Right
      of Avon to Terminate.
      In the
      event Avon, for any reason, elects to discontinue selling Products, it may
      at
      any time terminate this Agreement by giving Supplier thirty (30) days notice
      of
      its intent to do so.

    

    (d)
      Effect
      of Termination.
      The
      termination or expiration of this Agreement shall not affect the rights and
      obligations of the parties accrued prior to the effective date of such
      termination or expiration.

    

    9. Pricing.

    

    (a)
      The
      prices and/or pricing formula for the Products, as established by the Purchase
      Confirmation, shall be applicable to all purchase orders issued under this
      Agreement.

     

    (b)
      Supplier
      represents and warrants that the pricing for the Products is no greater than
      the
      lowest price at which such Products or similar materials are sold by Supplier
      to
      any other competitive customer or Third Party Supplier. Supplier further
      covenants that, during the Term of this Agreement and any renewal periods,
      if
      Supplier grants to any competitive customer or Third Party Supplier a price
      for
      any Products or similar material (similar in terms of quality and delivery
      terms) and said Third Party Supplier or competitive customer has offered
      Supplier similar or less commercial terms than Avon, which is less than the
      price then in effect for Avon, which is subject to the quantity of Products
      offered, Supplier shall make such lower price immediately available to Avon
      without action or request by Avon.

    

    (c)
      If
      Avon is able to obtain raw materials that are equivalent with Products (in
      terms
      of quality and delivery terms) at a net price lower than Suppliers net price
      for
      raw materials, and said raw materials, as approved by Avon, are available for
      Supplier to purchase at more advantageous terms, inclusive of delivery and
      availability considered both on an individual and long term ordering basis,
      Supplier will either purchase said materials or provide Avon with a cost savings
      equal to the material savings cost. 

    

    10. Invoicing
      and Payment.

    

    (a)
      Invoices will be submitted by Supplier to the Avon's location indicated on
      the
      individual purchase order. Invoices will reference Avon's purchase order number
      and will contain such other information as Avon may reasonably
      request.

    

    (b)
      Avon
      shall pay all undisputed amounts on each Supplier invoice for Products as
      specifically set forth on the Purchase Confirmation. 

     

    
      
         

      

      
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    11.  Conditions
      to Avon's Obligations. The
      obligation of Avon to consummate the transactions contemplated by this Agreement
      is, at its option, subject to the specific conditions set forth in the Purchase
      Confirmation.

     

    12. Delivery
      Dates.
      Delivery dates stated on releases against Avon's blanket purchase order and
      Supplier's acknowledgment thereof shall be the date availability of the Products
      by Supplier at its shipping points (e.g., Supplier’s distribution facility in
      North America for Products destined for Avon’s North American markets and
      Supplier’s distribution facility in Nuremberg/Geroldsgruen, Germany, for
      Products destined for Avon’s markets outside North America).

    

    13. Intentionally
      Deleted.
      

    

    14. Account
      Management Personnel.
      Supplier shall appoint an account manager, satisfactory to Avon, (“Account
      Manager”) with overall responsibility for Supplier’s performance under this
      Agreement. Subject to and in accordance with the terms and requirements of
      this
      Agreement, the Account Manager shall:

    

    (a)
      ensure that the Product and Service Level Standards in the Purchase Confirmation
      are met;

    

    (b)
      meet
      at least once per month with designated Avon representatives to review
      Supplier’s performance, coordinate the provision of Products to Avon and discuss
      future Avon requirements including, but, not limited to, review of new products,
      promotional activity, volume forecasts, special handling items, review of
      Supplier’s current staffing and capacity and any new systems
      requirements;

    

    (c)
      ensure that adequate Supplier personnel are available and provided the tools,
      training, and support necessary to meet performance requirements;

    

    (d)
      respond to all inquiries from Avon regarding its Products;

    

    (e)
      supervise Supplier personnel to ensure that services are provided in accordance
      with this Agreement; and

    

    (f)
      serve
      as the principal interface between Supplier and Avon with respect to all issues
      relating to the services.

    

    15. Product.

    

    (a)
      Supplier shall provide a secured source of supply and protection against
      allocations for the Products. The parties acknowledge that Products to be
      delivered hereunder may be subject to obligations to licensors of the Protected
      Rights, and no representation or warranty can be made by Supplier that a third
      party source of supply can be secured or is available. 

    

    16. Technological
      Obsolescence.

    

    (a)
      In
      the event that one or more of the Products becomes obsolete or technologically
      inferior during the Term of this Agreement or any renewal periods (as evidenced
      by commercially reasonable standards), Avon hereby grants Supplier the right
      of
      first opportunity over a 90 day period to work with Avon to develop a successor
      product designed to replace the obsolete or inferior Product.

    

    (b)
      If
      Supplier accepts such right and the parties develop a replacement product,
      the
      sales by Supplier to Avon of such successor product shall be governed by the
      terms of this Agreement (at a mutually acceptable price). The product
      specifications and the price shall be set forth in writing as an amendment
      to
      this Agreement.

     

    
      
         

      

      
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    17. Design
      of Products.
      Supplier shall have responsibility for producing Products which are
      non-infringing and comply with all current local, state, and federal
      governmental specifications and standards existing at the time of the sale
      of
      such Products to Avon. Further, Supplier is responsible for producing Products
      which are of good workmanship and performance and of merchantable quality and
      fit for the purpose intended.

    

    18. Hazardous
      Conditions.
      

    

    (a)
      In
      the event that Supplier or Avon learns of any issue relating to a potential
      safety hazard or unsafe condition in any of the Products produced hereunder,
      or
      is advised of such by competent authorities of any government having
      jurisdiction over such Products, it will immediately advise the other party
      by
      the most expeditious means of communication. The parties shall cooperate in
      communication with the public and governmental agencies and in correcting any
      such condition that is found to exist.

    

    (b)
      Avon
      shall consult with Supplier prior to making any statements to the public or
      to
      any governmental agency concerning issues related to the safety hazard or unsafe
      condition except in circumstances in which a failure to do so would prevent
      the
      timely notification which may be required to be given under an applicable law
      or
      regulation.

    

    (c)
      Expenses associated with the correction of a safety hazard or unsafe condition,
      caused by or associated with Products produced by Supplier, including reasonable
      attorneys' fees, court costs, expenses, and the like, if they become necessary,
      shall be solely Supplier's responsibility, subject only to any other arrangement
      negotiated by the parties in light of the particular facts and circumstances
      then existing.

    

    19. Representations
      and Warranties.
      Supplier represents, warrants, and covenants to Avon as follows:

    

    (a) The
      Products will be free from defects in workmanship and material and design,
      and
      will be merchantable, fit, and sufficient for their intended use and particular
      purpose.

    

    (b) The
      Products and their immediate packaging will comply with all applicable laws,
      regulations, and ordinances of United States of America and the European
      Union.

     

    (c) The
      Products and their manufacture and use do not violate or infringe upon the
      rights of third parties, including contractual, employment, trade secrets,
      proprietary information trademark, copyright, and patent rights.

    

    (d) This
      paragraph shall only apply to the extent it is applicable to the Products.
      The
      Products, their ingredients and materials used in manufacturing such Products
      will be free from, and shall not be derived from, bovine (i.e., cattle) born,
      raised or slaughtered in countries where the United States Food and Drug
      Administration has declared that Bovine Encapholy Spongifom (“BSE”) is known to
      exist or presents an undue risk of introducing BSE as set forth in 9 C.F.R.
      §94.18, and as amended (“BSE Countries”). In addition, Supplier and Avon
      covenants, represents and warrants that the Products, their ingredients and
      materials used in manufacturing such Products will be free from, and shall
      not
      be derived from, the specific bovine tissues (brain,
      spinal cord, ileum, lymph nodes, proximal colon, spleen, tonsil, dura mater,
      pineal gland, placenta, cerebrospinal fluid, pituitary gland, adrenal gland,
      distal colon, nasal mucosa, sciatic nerve, bone marrow, liver, lung, pancreas,
      thymus gland) obtained from cattle born,
      raised or slaughtered in countries other than BSE Countries.

    

    (e) Supplier
      has the full corporate authority to execute and deliver this Agreement and
      to
      carry out the transactions contemplated hereby. This Agreement is binding and
      enforceable upon Supplier in accordance with its terms. With respect to any
      contract or agreement, including license agreements, to which Supplier is a
      party or may be bound, the execution and delivery by Supplier of this Agreement
      and the consummation of the transactions contemplated hereby will not result
      in
      any violation, conflict or default, or give to other any interest or rights,
      including rights of termination, cancellation or acceleration.

     

    
      
         

      

      
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    (f) Supplier
      shall be in compliance, and continue to remain in compliance during the Term
      of
      this Agreement, with Avon’s then-current Supplier Code of Conduct. 

    

    20. Confidential
      Information.

    

    (a)
      Confidential
      Information.
      “Confidential Information” shall mean any and all information disclosed by Avon
      to Supplier or Supplier to Avon, that either Party designates as being
      confidential or which, under the circumstances surrounding disclosure, ought
      to
      be treated as confidential, including, without limitation, that relating to:
      (i)
      either Party’s business, such as financial data, business plans and strategies,
      business operations and systems, trade secrets; and (ii) the medical records,
      names, addresses, telephone numbers, social security account numbers, dates
      of
      birth, wages, payroll, compensation, bank account numbers and all other personal
      information of and pertaining to either Party’s sales representatives,
      employees, customers, and/or vendors and their dependents; and/or (iii) either
      Party’s technology, such as systems, discoveries, inventions, improvements,
      research, development, know-how, designs, product specifications, software,
      codes, flow charts, schematics, blue prints, prototypes, devices, hardware,
      technical documentation, and manufacturing processes.

    

    (b)
      Nondisclosure
      of Confidential Information.
      Supplier or Avon shall neither: (i) disclose, disseminate or publish
      Confidential Information received hereunder to any person or entity without
      the
      prior written consent of the other Party, except to employees of either Party
      who have a need to know, who have been informed of the Parties obligations
      hereunder, and who have agreed in writing not to use or disclose Confidential
      Information; nor (ii) use Confidential Information for any purpose other than
      the to provide the Services. Both Parties agree to use reasonable care, but
      in
      no event less than the same degree of care that it uses to protect its own
      most
      highly confidential information, to prevent any unauthorized disclosures of
      Confidential Information.

    

    (c)
      Exceptions.
      Supplier or Avon shall have no obligation under this Agreement to maintain
      in
      confidence any information which either Party can prove: (i) is disclosed in
      a
      printed publication available to the public; or (ii) is otherwise in the public
      domain at the time of disclosure or subsequently becomes part of the public
      domain through no fault of either Party or persons or entities to whom either
      Party has disclosed such information; or (iii) is in the possession of either
      Party prior to the time of disclosure by either Party and is not subject to
      any
      duty of confidentiality; or (iv) is approved for release in writing by either
      Party; or (v) either Party is compelled to disclose or deliver in response
      to a
      law, regulation, or governmental or court order (to the least extent necessary
      to comply with such order), provided that either Party notifies the other Party
      promptly after receiving such order to give either Party time to contest such
      order.

    

    (d)
      Injunctive
      Relief.
      The
      Parties acknowledge and agree that either Party will not have adequate relief
      at
      law in the event of any breach or threatened breach by either party of any
      of
      the provisions of this Section, and that in such event the non-offending party
      shall be entitled, in addition to all remedies available at law, to injunctive
      or other equitable relief, without the necessity of posting bond
      therefor.

    

    21. Audits
      and Maintaining Records.
      Supplier agrees to keep complete and accurate records in connection with this
      Agreement, individual purchase orders issued pursuant to this Agreement between
      supplier and Avon, Product sold to Avon and fees charged to Avon, including
      records and documentation of all charges to Avon relating thereto, relating
      to
      this Agreement and any prior agreement with Avon, and to preserve such records
      for the lesser of: (i) six (6) years; or (ii) three (3) years after the
      expiration or termination of this Agreement. Avon, or Avon’s representatives,
      shall have the right, at Avon’s expense, from time to time, upon forty-eight
      (48) hours notice to Supplier, and no more than two (2) times annually, to,
      examine and make extracts from all such records of charges to Avon.

    

    22. Patents.

    

    (a)
      Supplier hereby represents that, to the best of its knowledge, there are no
      third-party patents, trade secret, or copyright rights which would be infringed
      by the manufacture, use, or sale of the Products to be supplied hereunder,
      other
      than the Protected Rights or licenses thereto and that Supplier has the right
      to
      use all such Protected Rights. Supplier makes no representation as to the
      underlying intellectual property rights of Avon (e.g., Avon’s formulations used
      in the Products).

     

    
      
         

      

      
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    (b)
      Supplier will defend any suit or proceeding brought against Avon or its
      customers, exclusive of suits or proceedings based on formulas supplied by
      Avon,
      based on a claim that the manufacture, use, or sale of any Products purchased
      from Supplier hereunder constitutes an infringement of any patent or copyright
      of any country or any trade secret, provided Supplier is notified in writing
      and
      given authority, information, and assistance (at Supplier's expense) for the
      defense of same, and shall pay all damages and costs awarded therein against
      Avon or Avon's customers in such suit or proceeding. If, as a result of any
      such
      suit or proceeding, the use or sale of any Products purchased by Avon from
      Supplier hereunder is enjoined, Supplier shall, at its own expense and option,
      either (1) procure the right for Avon and Avon's customers to use and sell
      such
      Products, (2) replace the same with interchangeable Products which have
      substantially the same quality and performance but which are noninfringing,
      (3)
      modify any infringing Products so they become noninfringing, or (4) authorize
      Avon to return said enjoined Products and refund to Avon the full purchase
      price
      and any direct costs of Avon associated with such return.

    

    (c)
      Supplier shall have no liability to Avon and Avon's customers, and Avon shall
      indemnify Supplier for any such claims of infringement insofar as any such
      claim
      is found to arise solely from the inclusion in Products purchased from Supplier
      hereunder of designs provided by Avon and incorporated in the Products without
      the written agreement of Supplier and as directed by Avon.

    

    (d)
      Supplier agrees, upon receipt of notification, to promptly assume full
      responsibility for defense of any suit or proceeding which may be brought
      against Avon or any of its agents or customers, for alleged patent infringement,
      exclusive of suits or proceedings related to product formula.

    

    (e)
      Protected Rights:

    

    i) 
      Avon
      recognizes that Supplier has certain rights and privileges in connection with
      the Product and its registered trademarks (“Trademarks”), claimed marks and
      licenses in connection with the Product, and Patents (all jointly hereinafter
      referred to as the “Protected Rights”).

    

    ii) Avon
      understands and agrees that as part of the agreement to advertise, sell,
      merchandise and distribute the Products, Avon is hereby granted the right to
      use
      the Protected Rights in all markets in which Avon intends to advertise, sell,
      merchandise and distribute such Products. Such grant conveys to the Avon no
      greater rights than those expressly stated in the written agreements between
      the
      parties and that in particular, Avon shall at no time acquire any legal or
      equitable right, title or interest of any sort in the Protected Rights or in
      the
      use thereof. The grant to use the Protected Rights is in connection with the
      advertising, sale, merchandising and distribution of the Product and for no
      other purposes. As between them, the parties acknowledge that Supplier has
      the
      exclusive right to use Supplier as part of a corporate name, and the right
      of
      Avon to use Supplier in connection with the Products is solely for the duration
      of this Agreement.

    

    iii) Avon
      recognizes the significant value of good will associated with the Protected
      Rights and acknowledges that all of same belong exclusively to Supplier. Avon
      shall not take any action or permit any action that may prejudice, impair or
      otherwise adversely affect the Protected Rights or the good will associated
      therewith. Avon agrees that it will not during the term of this agreement or
      thereafter attack the title of Supplier in and to the Protected Rights, nor
      shall Avon have any claim under common law for access to the Protected Rights.
      

    

    iv) Avon
      will
      cooperate with and take any reasonable actions requested by Supplier in
      connection with any enforcement or infringement action related to the Protected
      Rights. Supplier, if it so desires, may commence or prosecute any claims or
      suits in its own name or in the name of Avon or join Avon as a party thereto.
      Avon shall notify Supplier in writing of any infringements or imitations by
      others of the Product or Protected Rights which may come to Avon’s attention.
      Avon shall not institute any suit or take any action on account of Supplier
      without first obtaining the prior written consent of Supplier to do
      so.

     

    
      
         

      

      
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    v) Avon
      shall not, at any time, intentionally or recklessly, do or suffer to be done
      any
      act or thing which may adversely affect the rights of Supplier in and to the
      Intellectual Property Rights (as defined in the Purchase Confirmation),
      Protected Rights or any registrations thereof which, directly or indirectly,
      may
      reduce the value of the Intellectual Property Rights.

    

    vi) Upon
      termination of this agreement, Avon shall execute such documents as Supplier
      may
      request disclaiming any ownership in the Protected Rights, promptly upon demand
      by Supplier.

     

    23. Product
      Liability.

    

    (a)
      Supplier agrees to protect, defend, hold harmless, indemnify, and reimburse
      Avon
      and its distributors, dealers, affiliates, insurers, and customers during the
      term of this Agreement and any time thereafter for any and all costs and
      expenses (including, but not limited to, reasonable attorneys' fees and
      expenses, overhead, settlements, judgments, and court costs) arising out of
      or
      related to any liability, demand, lawsuit, or claim alleging or asserting in
      whole or in part, (1) any Failure of Products to comply with applicable
      specifications, warranties, and certifications under this Agreement; (2) the
      negligence or fault of Supplier in design, testing, development, manufacture,
      or
      otherwise with respect to Products or parts therefor; or (3) claims, demands,
      or
      lawsuits that, with respect to the Products or any parts thereof allege product
      liability, strict product liability, or any variation thereof.

    

    (b)
      Avon
      agrees to protect, defend, hold harmless, and indemnify in a similar fashion
      from and against any liability, claim, demands, or cost or expense that is
      the
      result of design or other special requirements specified by Avon and actually
      incorporated in the Products at the direction of Avon, or if Supplier is
      uninformed of such changes.

    

    (c)
      Avon
      also agrees to protect, defend, hold harmless, and indemnify Supplier in a
      similar fashion from and against any liability, claim, demands, or cost or
      expense arising out of death of or injury to any person or damage to tangible
      property which is the result of the negligence or other fault of
      Avon.

    

    24. Product
      Recall.

    

    (a)
      In
      the event that any of the Products are found by Supplier, Avon, or any
      governmental agency or court having jurisdiction to contain a defect, serious
      quality or performance deficiency, or not to be in compliance with any standard
      or requirement so as to require or make advisable that such Products be reworked
      or recalled, Supplier or Avon will promptly communicate all relevant facts
      to
      the unaware Party and undertake all corrective actions, including those required
      to meet all obligations imposed by laws, regulations, or orders, and shall
      file
      all necessary papers, corrective action programs, and other related documents,
      provided that the Parties shall cooperate with and assist one another in any
      such filing and corrective action, and provided that nothing contained in this
      section shall preclude either Party from taking such action as may be required
      of it under any such law or regulation. The responsible Party, to be determined
      by reason of recall, shall perform all necessary repairs or modifications at
      its
      sole expense, and pay all costs associated with a recall, except to any extent
      that Supplier and Avon shall agree to the performance of such repairs upon
      mutually acceptable terms.

    

    (b)
      The
      parties recognize that it is possible that other Supplier-manufactured products
      might contain the same defect or noncompliance condition as do the Products
      for
      Avon. Avon and Supplier agree that any recall involving any Products
      manufactured for Avon shall be treated separately and distinctly from similar
      results of Supplier's brand products, provided that such separate and distinct
      treatment is lawful and that Supplier shall in no event fail to provide at
      least
      the same protection to Avon on such Products as Supplier provides to its other
      customers in connection with such similar recalls. Each party shall consult
      the
      other prior to making any statements to the public or a governmental agency
      concerning issues relating to potential safety hazards affecting the Products,
      except where such consultation would prevent timely notification required to
      be
      given under any such law or regulation.

     

    
      
         

      

      
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    25. Insurance.

    

    (a)
      Required
      Insurance.
      Supplier shall, during the term of this Agreement and for three (3) years
      thereafter, maintain the insurance coverage as specifically set forth on the
      Purchase Confirmation (“Required Supplier Insurance”), at its sole cost and
      expense, issued by a nationally recognized insurance carrier acceptable to
      Avon
      with an A.M. Best Rating of A or better.

    

    (b)
      Additional
      Insureds.
      Supplier shall include Avon, its subsidiaries and affiliates as additional
      insureds under its liability policies, including the provisions of such policies
      insuring Supplier’s obligations under the indemnity provisions of this
      Agreement.

    

    (c)
      Certificates
      of Insurance.
      Upon
      Avon’s request Supplier shall provide evidence of such insurance in the form of
      certificates of insurance which shall include provision for thirty (30) days
      prior notice to Avon of change or cancellation of the policy.

    

    (d)
      No
      Limitation by Insurance.
      Supplier’s indemnities and obligations under this Agreement shall not be limited
      or defined in any fashion whatsoever by the amount of Required Supplier
      Insurance, as defined in this Section, or by any limitations or restrictions
      on
      the amount or type of damages.

    

    26. Publicity.
      Supplier and its employees, agents and representatives will not, without Avon’s
      prior written consent in each instance, use in advertising, publicity or
      otherwise Avon’s name or the name of any of Avon’s affiliates, or the name of
      any of its officers or employees, nor any trade name, trademark, trade device,
      service mark, symbol or any abbreviation, contraction or simulation thereof
      owned by Avon or its affiliates, nor represent, directly or indirectly, that
      any
      product or service provided by Supplier has been approved or endorsed by Avon,
      nor refer to the existence of the Agreement in press releases, advertising
      or
      materials distributed to prospective customers.

    

    27. Exclusivity.
      Avon
      shall have the sole and exclusive rights to advertise, promote, market, sell,
      distribute and exploit certain of the Products in specific markets and
      territories as specifically set forth on the Purchase Confirmation.

    

    28. Force
      Majeure.
      If
      either party becomes unable to perform any of its obligations under this
      Agreement or to enjoy the fruits of this Agreement because of any event
      (hereinafter referred to as “Force Majeure Event”) which is unavoidable and
      beyond the control of the nonperforming party (including, but not limited to,
      a
      judicial or governmental decree, regulation, or other direction not the fault
      of
      the party who has been so affected, communication line failure, power failure,
      and any natural disaster or act of God), the party who has been affected shall
      immediately send the other party a notice thereof and shall take all steps
      required to resume performance as soon as possible. Upon receipt of such notice,
      the party so affected may suspend performance of its obligation hereunder to
      the
      extent made necessary by the Force Majeure Event. If the nonperfoming party
      has
      been unable to resume full performance within ninety (90) days of the
      commencement of the Force Majeure Event, the unaffected party may terminate
      this
      Agreement by giving written notice to the nonperforming party.

    

    29. General
      Provisions. 

    

    (a)
      Assignment.
      Neither
      this Agreement, nor any of the rights or interests by Avon or Supplier
      hereunder, may be assigned, transferred, or conveyed by operation of law or
      otherwise without the prior written consent of the other party, except to a
      parent or subsidiary thereof, in which event the party so assigning shall remain
      obligated and liable to the other party for the full and complete performance
      of
      this Agreement by the parent or subsidiary to which this Agreement is
      assigned.

     

    
      
         

      

      
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    (b)
      Governing
      Law; Venue.
      The
      parties to this Agreement specifically agree that the provisions of the United
      Nations Convention on Contracts for the International Sale of Products do not
      apply to the interpretation of this Agreement. This contract shall be governed
      by and construed in accordance with the laws of the State of New York, including
      that state’s Uniform Commercial Code. Whenever any conflict exists between the
      terms of this Agreement and the provisions of such Uniform Commercial Code,
      the
      terms of this Agreement and the provisions of such Uniform Commercial Code,
      the
      terms of this Agreement shall govern. Any legal action or proceeding with
      respect to this Agreement or any Purchase Order shall be brought in the federal
      or state courts sitting in the City and County of New York, New York; and the
      parties hereby consent to the exclusive personal jurisdiction of the aforesaid
      courts.

    

    (c)
      Notices.
      Notices, reports, and other communications with respect to this Agreement will
      be referred to appropriate individuals within the respective Avon and Supplier
      organizations as required.

    

    (d)
      Survival
      of Rights of Parties.
      The
      termination of this Agreement shall not release either party from any liability,
      obligation, or agreement which, pursuant to any provision of this Agreement,
      is
      to survive or be performed after such expiration or termination.

    

    (d)
      Subject
      Headings.
      The
      subject headings on this Agreement have been placed thereon for the convenience
      of the parties and shall not be considered in any question of interpretation
      or
      construction of this Agreement.

    

    (e)
      Waivers
      and Amendments.
      The
      failure of either party to enforce at any time or for any period of time any
      provision of this Agreement shall not be construed as a waiver of such provision
      or of the right of such party thereafter to enforce such provision. In addition,
      no terms or provisions of this Agreement may be changed, waived, discharged,
      or
      terminated orally but only by an instrument in writing signed by the party
      against whom the enforcement of such change, waiver, discharge, or termination
      is sought. Supplier and Avon agree to renegotiate in good faith any provision
      of, or addition to, this Agreement.

    

    (f)
      Complete
      Agreement.
      This
      Agreement, in combination with the purchase orders issued pursuant hereto,
      constitutes the entire agreement between the parties relative to the Products
      listed in the Purchase Confirmation , and supersedes and replaces all prior
      or
      contemporaneous agreements, written or oral, between the parties regarding
      such
      Products.

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement as of the Effective Date set forth
      above.

    
      	 	 	 	 
	
              AVON
                PRODUCTS, INC.

            	 	 	 
	 	 	 	 
	
              By: 
                /s/
                Joseph M Thompson

            	 	 	
            
	
              
                

              

              Name:
                Joseph
                M Thompson

              Title:
                VP
                - Sourcing

            	 	 	
            
	 	 	 	 

      	 	 	 	 
	
              VERSADIAL,
                INC.

            	 	 	 
	 	 	 	 
	
              By: 
                /s/ Geoffrey Donalson

            	 	 	
            
	
              
                

              

              Name:
                Geoffrey Donaldson

              Title:
                CEO

            	 	 	
            

    

    

    
      
         

      

      
        11

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