Document:

exv10w3

Exhibit 10.3

VF EXECUTIVE DEFERRED SAVINGS PLAN II

(Adopted January 1, 2005 and amended and restated effective January 1, 2009)

     Prior to 2005, VF Corporation maintained the VF Executive Deferred Savings Plan (the “Old
EDSP”). In response to the addition of section 409A to the Internal Revenue Code of 1986, as
amended (the “Code”), VF Corporation ceased participation in the Old EDSP effective December 31,
2004 and adopted the VF Executive Deferred Savings Plan II (the “Plan”) effective January 1, 2005
which served as an interim plan until necessary revisions, effective January 1, 2009, could be made
to bring the Plan into documentary compliance with Code section 409A. The Old EDSP shall continue
to hold those vested accounts under the Old Plan as of December 31, 2004.

     The Plan permits senior executive employees, who are among a select group of management or
highly-compensated employees of VF Corporation or a Participating Employer, to defer compensation
and be credited with matching deferrals in a manner similar to that offered to other VF Corporation
employees who participate in the VF Corporation Retirement Savings Plan for Salaried Employees (the
“Savings Plan”). Those employees who are eligible to participate in this Plan are not eligible to
participate in the Savings Plan. In addition, this Plan also provides an additional benefit (i.e.,
Company Retirement Deferrals) for any eligible employee who begins employment with VF Corporation
or a Participating Employer on or after January 1, 2005 (or, earlier, if determined by the VF
Corporation Pension Plan Committee) and who is not eligible to participate in the VF Corporation
Pension Plan.

     The intention of VF Corporation is that the Plan be at all times maintained on an unfunded
basis for federal income tax purposes, administered as a “top hat” plan exempt from the substantive
requirements of the Employee Retirement Income Security Act of 1974, as amended, and operated in
accordance with the requirements of section 409A of the Code.

SECTION I

DEFINITIONS

     Unless otherwise required by the context, the terms used herein shall have the meanings as set
forth below:

     1. “Accrued Benefit” means the sum of a Participant’s Basic Deferrals and the vested portion
of the Participating Employer’s Matching Deferrals and Company Retirement Deferrals. A
Participant’s Accrued Benefit shall also include any Matching Deferrals that, as of December 31,
2004, were not vested under the Old EDSP.

     2. “Basic Deferral” means that portion of a Participant’s Earnings elected to be deferred
under the terms of this Plan.

 

 

     3. “Beneficiary” means the individual or entity named pursuant to the Plan to receive benefit
payments hereunder in the event of the death of the Participant. In the case of any Participant
who also was a participant in the Old EDSP, such Participant’s Beneficiary under this Plan shall be
the same Beneficiary designated by the Participant under the Old EDSP unless and until a different
Beneficiary is otherwise designated.

     4. “Change of Control” means, for purposes of vesting under Article III, the same as it does
in the Company’s change of control agreements with its senior management in place at the relevant
time; provided, however, that if there is ever a time that the Company no longer has any such
agreements in place with its senior management, then the Committee shall determine the meaning of
“Change of Control.” Notwithstanding the foregoing, for purposes of benefit entitlement under
Article VI and payment rights under Article VII, when used in connection with a Participating
Employer (including the Company), “Change of Control” means the same as “change in the ownership or
effective control of a corporation” under Code section 409A.

     5. “Code Section 409A” means, collectively, Section 409A of the Code and any Treasury
regulations and guidance issued thereunder.

     6. “Committee” means the VF Corporation Pension Plan Committee, as appointed from time to time
by the Board of Directors of the Company. In the event the Committee has delegated an authority or
responsibility under this Plan in accordance with subsection 3 of Section X, the term “Committee”
where used herein shall be deemed to refer to the applicable delegate.

     7. “Company” means VF Corporation, a Pennsylvania corporation.

     8. “Company Controlled Group” shall include the Company and each related company or business
which is part of the same controlled group under Code sections 414(b) or 414(c); provided that in
applying Code section 1563(a)(1) — (a)(3) for purposes of determining a controlled group of
corporations under Code section 414(b) and in applying Treasury Regulation section 1.414(c)-2 for
purposes of determining whether trades or businesses are under common control under Code section
414(c), the phrase “at least 50 percent” is used instead of “at least 80 percent.”

     9. “Company Retirement Deferral” means the additional deferral amount credited to a
Participant by a Participating Employer under the terms of Subsection 3 of Section III of this
Plan.

     10. “Deferrals” means, collectively, a Participant’s Basic, Matching, and Company Retirement
Deferrals under the Plan (and, unless specified otherwise, shall include any gains or losses
attributable thereto).

     11. “Earnings” means the Participant’s total compensation, including any salary and any cash
bonus payments made to a Participant by a Participating Employer in the relevant year under a
Participating Employer’s performance-based incentive compensation plans.

2

 

For purposes of the Plan, Earnings shall be determined without regard to any salary or bonus
deferrals or reductions which may be made by a Participant pursuant to section 401(k) or section
125 of the Code. However, Earnings shall not include any reimbursement for expenses paid to a
Participant by a Participating Employer nor shall it include any payments or contributions made by
a Participating Employer to a plan or arrangement, on behalf of a Participant, which results in
imputed income to the Participant for federal income tax purposes. In the discretion of the
Committee, a Participant’s deferral election may identify additional forms of compensation to be
included in or excluded from the Participant’s Earnings.

     12. “Excess Earnings” means:

          (a) Earnings received by a Participant during a Plan Year in excess of the annual compensation
limit described in section 401(a)(17) of the Code (as adjusted by the Secretary of the Treasury);
and

          (b) Earnings not described in (a) above with respect to which the Participant did not receive
an allocation of Company Retirement Contributions under the Savings Plan because such Earnings
were deferred as Basic Deferrals under this Plan.

     13. “Initial Eligibility Date” means the earliest date on which a newly eligible employee may
participate in the Plan. The Initial Eligibility Date shall be established by the Committee and
may not be earlier than the date the employee is notified, in writing, by the Participating
Employer of the material terms of the Plan.

     14. “Matching Deferral” means the additional deferral amount credited to a Participant by a
Participating Employer under the terms of Subsection 2 of Section III of this Plan. In addition,
the term “Matching Deferral” shall include any Matching Deferrals (and any gains and losses
credited thereon) that, as of December 31, 2004, were not vested under the Old EDSP.

     15. “Old EDSP” means the VF Executive Deferred Savings Plan, as it may be amended from time to
time.

     16. “Participant” means an eligible employee who participates in this Plan in accordance with
its provisions.

     17. “Participating Employer” means the Company and each related company or business within the
Company Controlled Group the eligible employees of which are designated by the Committee to
participate in this Plan with respect to Basic and Matching Deferrals and/or Company Retirement
Deferrals.

     18. “Performance-Based Compensation” shall have the meaning as set forth under Code section
409A.

     19. “Plan” means the VF Executive Deferred Savings Plan II as it may be amended subsequently
from time to time.

3

 

     20. “Plan Year” means the calendar year.

     21. “Service” means the sum of (i) the vesting service, if any, the Participant accrued, or
such service as is recognized for the Participant, under the VF Corporation Retirement Savings Plan
for Salaried Employees as of the date the Participant commences participation in this Plan (or, if
earlier, the date the Participant commenced participation in the Old EDSP), (ii) service, if any,
while eligible to participate under the Old EDSP, and (iii) service while eligible to participate
under this Plan. An employee shall be credited with Service under (iii) hereof for each calendar
month during which he or she performs services while eligible to participate in this Plan
determined, for these purposes, without regard to any period of suspension attributable to a
hardship withdrawal under Section VIII. Service shall also include the following periods:

          (a) Any leave of absence from employment which is authorized by the Participating Employer;

          (b) Any period of military service in the Armed Forces of the United States required to be
credited by law; provided, however, that the Participant returns to the employment of a
Participating Employer within the period his or her re-employment rights are protected by law; and

          (c) Service with any entity or enterprise related to the Company if, and to the extent that,
the Committee determines that such service should be counted.

     22. “Severance from Service” shall have the same meaning as the term “separation from service”
as set forth under Code section 409A. Notwithstanding the foregoing, a Severance from Service does
not occur if a Participant is transferred to another Participating Employer or any member of the
Company Controlled Group.

     23. “Social Security Wage Base” means the applicable dollar amount for the Plan Year of the
contribution and benefit base as determined under section 230 of the Social Security Act.

     24. “Specified Employee” means as of any given date, the one-hundred (100) highest compensated
employees as of the end of the preceding Plan Year; provided that the group of one-hundred (100)
employees shall include at least fifty (50) officers, and provided further that such group of
employees and officers shall be determined from a listing of same drawn from the Company Controlled
Group, and complied as of the end of such preceding Plan Year.

     25. “Spouse” means the person to whom the Participant is legally married at the time relevant
to any determination under the Plan.

     26. “Total Disability” means a physical or mental impairment that qualifies a Participant for
disability benefits under a long-term disability benefits plan maintained by a Participant’s
Participating Employer and/or eligibility for disability benefits under the Social

4

 

Security Act; provided that such impairment would also qualify as a “disability” as defined in
Code section 409A. All determinations of Total Disability for purposes of this Plan shall be based
on the fact that the Participant is in receipt of disability payments under either or both the
above-referenced disability benefits plans.

SECTION II

ELIGIBILITY

     1. Requirements. An individual shall be eligible to elect to contribute Basic
Deferrals and be credited with Matching Deferrals if he or she is working for a Participating
Employer in a capacity classified by the Participating Employer as that of an employee and, for
compensation purposes, is assigned by the Participating Employer to grade 20 (or its equivalent) or
above. An individual shall be eligible to be credited with Company Retirement Deferrals if he or
she satisfies the foregoing requirements and satisfies the requirements of Subsection 3(a) of
Section III. An employee shall be eligible to participate only if the employee is so notified, in
writing, by the Participating Employer of the material terms of the Plan and the employee’s Initial
Eligibility Date.

     2. Participation. Participation in this Plan by an eligible employee is voluntary
with respect to the right to elect to contribute Basic Deferrals and be credited with Matching
Deferrals but is mandatory with respect to Company Retirement Deferrals.

     3. Termination of Participation. In the event that a Participant ceases to be an
eligible employee, the Participant’s Basic Deferral election shall remain in effect through the end
of the Plan Year in which the Participant remains employed but has ceased to be an eligible
employee (and such Participant shall remain eligible to be credited with Company Retirement
Deferrals during such period), and thereafter, the Participant shall make no further Basic
Deferrals (or be credited with Company Retirement Deferrals) unless and until the Participant
again becomes an eligible employee.

SECTION III

DEFERRALS

     1. Basic Deferrals.

          (a) Election. A Participant may elect to defer any portion of his or her Earnings
(“Basic Deferral”) by directing his or her Participating Employer to reduce his or her Earnings by
an amount authorized by the Participant in the form and manner designated by the Committee
provided, however, that a Participant may not elect to defer an amount under this Plan that, when
aggregated with any similar amount deferred under any other nonqualified deferred compensation plan
maintained by the Company would either (A) with regard to annual salary, result in a reduction of
his or her annual salary below the lesser of: (1) the Social

5

 

Security Wage Base, or (2) fifty percent (50%) of annual salary, or (B) with regard to
bonuses, exceed one hundred percent (100%) of any cash bonus payment that qualifies as Earnings;
provided the following requirements are met:

               (i) With respect to deferrals of a Participant’s Earnings other than Performance-Based
Compensation, a Participant’s Basic Deferral Election shall be made no later than the December
immediately preceding the Plan Year to which the election relates;

               (ii) With respect to deferrals of Performance-Based Compensation, a Participant’s Basic
Deferral Election shall be made no later than six (6) months preceding the end of the performance
period to which the Performance-Based Compensation relates;

               (iii) Notwithstanding the foregoing, with respect to an individual who is first eligible to
participate in the Plan, such individual may submit a Basic Deferral Election within the first
thirty (30) days after the individual’s Initial Eligibility Date with respect to: (A) salary to be
paid for services to be performed after the Basic Deferral Election is submitted, and (B)
Performance-Based Compensation, if so permitted by the Committee at the time, provided that such
election shall be prorated in accordance with Code section 409A; and

               (iv) In the event a Participant is on a bona fide leave of absence with the Participating
Employer’s consent, or in military service in conformity with the Participating Employer’s
policies, such Participant’s Basic Deferrals shall continue if Earnings are being continued by the
Participating Employer.

          (b) Vesting. A Participant shall have a nonforfeitable right to his or her Basic
Deferrals.

          (c) Change of Election. The percentage or amount of Earnings designated by a
Participant as a Basic Deferral for any given Plan Year shall continue in effect for such Plan
Year, notwithstanding any change in Earnings.

          (d) Manner of Deferral. A Participant’s Basic Deferrals may be taken from the
Participant’s Earnings ratably during the applicable Plan Year or in any other manner determined by
the Committee; provided that such Basic Deferrals during the Plan Year, in the aggregate, reflect
the Participant’s Basic Deferral Election in accordance with Code section 409A.

          (e) Hardship. In the event a Participant receives a hardship withdrawal pursuant to
Section VIII or in the event the Participant receives a hardship distribution (as defined in
Treasury Regulations section 1.401(k)-1(d)(3)) under the Company’s 401(k) plan, such Participant’s
Basic Deferral Election with respect to the Plan Year during which such hardship withdrawal under
this Plan or hardship distribution under the Company’s 401(k) plan occurs shall be cancelled in
accordance with Code section 409A. The Participant

6

 

may submit a new Basic Deferral Election with respect to future Plan Years to the extent
permitted under this Subsection 1 of this Section III.

     2. Matching Deferrals.

          (a) Amount. The Participating Employer shall credit an additional deferral amount
(“Matching Deferral”) equal to 50% of a Participant’s Basic Deferral; provided, however, that such
Matching Deferral shall not exceed $12,500 for any given Plan Year or such other amount as the
Committee shall approve from time to time.

          (b) Vesting. A Participant shall become vested in his or her Matching Deferrals at
the rate of one-sixtieth (1/60th) per month of Service. Notwithstanding the foregoing, a
Participant shall become 100% vested in his or her Matching Deferrals if, prior to his or her
Severance from Service the Participant attains age sixty-five (65), incurs a Total Disability,
dies, or a Change of Control of the Company occurs.

          (c) Forfeitures. A Participant shall forfeit, upon his or her Severance from Service
prior to becoming vested in accordance with Subsection 2(b) of this Section III, any right to
Matching Deferrals in which he or she is not vested.

     3. Company Retirement Deferrals.

          (a) Amount. A Participating Employer shall credit an additional deferral amount
(“Company Retirement Deferral”) equal to the percentage of the Excess Earnings of each eligible
Participant employed by such Participating Employer in accordance with the following schedule:

	 	 	 	 	 
	Years of Service	 	Percentage of Excess Earnings
	Less than 10
	 	 	2	%
	10, but less than 15
	 	 	3	%
	15, but less than 20
	 	 	4	%
	20 or more
	 	 	5	%

          A Participant shall be eligible for Company Retirement Deferrals under the Plan only if he or
she began employment with the Participating Employer on or after January 1, 2005 (or earlier, if
determined by the Committee) and is either not covered by the VF Corporation Pension Plan or not
eligible to actively participate in the VF Corporation Pension Plan. For purposes of the above
schedule, the term “Years of Service” shall mean each 12-month period of Service accrued by the
Participant after December 31, 2004, unless otherwise determined by the Committee.

          (b) Vesting. A Participant shall become vested in his or her Company Retirement
Deferrals at the rate of one-sixtieth (1/60th) per month of Service. Notwithstanding the
foregoing, a Participant shall become 100% vested in his or her Company Retirement

7

 

Deferrals if, prior to his or her Severance from Service, the Participant attains age
sixty-five (65), incurs a Total Disability, dies, or a Change of Control of the Company occurs.

          (c) Forfeitures. A Participant shall forfeit upon his or her Severance from Service
prior to becoming vested in accordance with Subsection 3(b) of this Section III, any right to
Company Retirement Deferrals in which he or she is not vested.

SECTION IV

INVESTMENT

     1. Investment Election. A Participant may elect, pursuant to procedures established
by the Committee and subject to applicable limitations herein, that his or her Basic, Matching, and
Company Retirement Deferrals be credited with gains and losses as if such Deferrals had been
invested (in increments of at least one percent (1%)) in one or more of the investment funds
offered under the Plan, as may be determined by the Committee from time to time; provided, however,
that a Participant may not elect to have any Company Retirement Deferrals credited with gains and
losses as if such amounts had been invested in a fund composed of common stock of the Company (the
“VF Corporation Stock Fund”).

     2. Change of Investment Election. A Participant may elect, pursuant to procedures
established by the Committee and subject to applicable limitations herein, a change with respect to
his or her previously-made investment election.

     3. Special Rule for Certain Participants Who Invest in the VF Corporation Stock Fund.
If a Participant who is either a director or officer of the Company or otherwise subject to Section
16 of the Securities Exchange Act of 1934 (the “Exchange Act”) has Basic or Matching Deferrals
which, under this Plan, are credited with gains and losses as if invested in the VF Corporation
Stock Fund, then such amounts shall continue to be so credited until such Participant’s Severance
from Service, Total Disability, or death, and, prior thereto, shall not be available for hardship
withdrawal pursuant to Section VIII except as provided therein. Any Participant who becomes
subject to this limitation by reason of being appointed a director or officer of the Company or to
such other position subject to Section 16 of the Exchange Act may elect, in accordance Subsection
2, that any portion of his or her prior Deferrals that had been previously credited with gains and
losses as if invested in the VF Corporation Stock Fund be changed to a different fund or funds
under this Plan; provided, however, that such election is made and such change is implemented prior
to the date of such appointment. For purposes of this Subsection 3, the term “officer” shall have
the same meaning as that term is defined in Rule 16a-1(f) under the Exchange Act.

8

 

SECTION V

RECORDS

     The Committee shall create and maintain, or may direct a third party to create and maintain,
adequate records, in book entry form, for each Participant of Basic, Matching, and Company
Retirement Deferrals. Each Participant shall, to the extent permitted by the Committee, have
electronic access to the status of his or her account balance and vested percentage.

SECTION VI

PLAN BENEFITS

     1. Severance from Service. Upon a Participant’s Severance from Service, he or she
shall be entitled to his or her Accrued Benefit payable in accordance with Section VII.

     2. Death. In the event of the death of a Participant prior to Severance from Service,
the Participant’s Beneficiary shall be entitled to a benefit equal to the Participant’s Accrued
Benefit payable in accordance with Section VII. In the event of the death of a Participant after a
Severance from Service, the Participant’s Beneficiary shall be entitled to that part, if any, of
the Participant’s Accrued Benefit which has not yet been paid to the Participant payable in
accordance with Section VII.

     3. Total Disability. In the event a Participant incurs a Total Disability prior to
Severance from Service, the Participant shall be entitled to his or her Accrued Benefit payable in
accordance with Section VII.

     4. Change of Control. In the event a Participant’s Participating Employer undergoes a
Change of Control prior to a Participant’s Severance from Service, the Participant shall be
entitled to his or her Accrued Benefit payable in accordance with Section VII.

     5. Beneficiary. Each Participant may designate a Beneficiary (along with alternate
beneficiaries) to whom, in the event of the Participant’s death, any benefit is payable hereunder.
Each Participant has the right to change any designation of Beneficiary and such change
automatically revokes any prior designation. A designation or change of Beneficiary must be in
writing on forms supplied by the Committee and any change of Beneficiary shall not become effective
until filed with the Committee; provided, however, that the Committee shall not recognize the
validity of any designation received after the death of the Participant. The interest of any
Beneficiary who dies before the Participant shall terminate unless otherwise provided. If a
Beneficiary is not validly designated, or is not living or cannot be found at the date of payment,
any amount payable pursuant to this Plan shall be paid to the Spouse of the Participant if living
at the time of payment, otherwise in equal shares to such of the children of the Participant as may
be living at the time of payment; provided, however, that if there is no surviving Spouse or child
at the time of payment, such payment shall be made to the estate of the Participant.

9

 

SECTION VII

PAYMENT OF BENEFITS

     1. Normal Form. The normal form for the payment of a Participant’s Accrued Benefit
shall be a lump-sum payment in cash payable to the Participant not earlier than the first business
day of the month occurring three full calendar months following the event giving rise to the
distribution and not later than the close of the Plan Year during which such three month period
ends or any such later date as may be permitted under Code section 409A.

     2. Installments. Notwithstanding the foregoing, a Participant may elect in the form
and manner designated by the Committee, that payment of his or her Accrued Benefit be made in
annual installments over a period of not more than ten (10) years. Such election must be made to
the Committee at the same time that the Participant makes his or her Basic Deferral Election for
such Plan Year in accordance with Subsection 1 of Section III.

     3. Death.

          (a) If a Participant dies prior to a Severance from Service, his or her Accrued Benefit shall
be distributed to his or her Beneficiary in a lump-sum payment in cash in accordance with
Subsection 1 of this Section VII unless the Participant has elected an installment form of
distribution in accordance with Subsection 2 of this Section VII, in which case, distribution to
the Beneficiary shall be made in accordance with such election.

          (b) If a Participant dies after a Severance from Service, his or her Accrued Benefit shall be
distributed to his or her Beneficiary in the same form and at the same time as it would have been
paid to the Participant had he or she survived.

     4. Change of Control.

          (a) In the event of a Change of Control of a Participant’s Participating Employer (other than
the Company), his or her Accrued Benefit shall be distributed in a lump sum payment in accordance
with Subsection 1 of this Section VII unless the Participant has elected an installment form of
distribution in accordance with Subsection 2 of this Section VII, in which case, distribution to
the Participant shall be made in accordance with such election.

          (b) In the event of a Change of Control of the Company, all Accrued Benefits under the Plan
(regardless of whether or not in pay status) shall be distributed in a lump sum payment as soon as
practicable and in accordance with procedures determined by the Committee.

     5. Specified Employee Restrictions. During any period in which the stock of any
member of the Company Controlled Group is publicly traded on an established securities market, in
the event benefits become payable to a Participant who is a Specified Employee due to the
Participant’s Severance from Service, distribution of the Participant’s Accrued Benefit shall not
commence any earlier than six (6) months following the Participant’s Severance from Service. Any
payment that would have been made during such six (6) month period shall be

10

 

retained in the Plan as part of the Participant’s Accrued Benefit (and credited with any
applicable earnings and losses) and paid as soon as administratively feasible following the end of
the six (6) month period.

SECTION VIII

HARDSHIP WITHDRAWALS

     Distribution may be made to a Participant of some or all of his or her Accrued Benefit
(excluding any Company Retirement Deferrals) in the event of an unforeseeable emergency; provided,
however, that such a distribution shall not be made to any Participant who is a director of the
Company or an officer as defined in Subsection 3 of Section IV or otherwise subject to Section 16
of the Exchange Act, from any Basic or Matching Deferrals which have been credited with gains and
losses as if invested in the VF Corporation Stock Fund unless approved by the Committee. The
Participant shall file a written request with the Committee, and the Committee shall determine in
its sole discretion, if an unforeseeable emergency exists, based on the facts of each case. For
this purpose, “unforeseeable emergency” shall have the meaning as set forth under Code section
409A.

SECTION IX

FUNDING STATUS

     This Plan is unfunded. All obligations hereunder shall constitute an unsecured promise of the
Company to pay a Participant’s benefit out of the general assets of the Company, subject to all of
the terms and conditions of the Plan, as amended from time to time, and applicable law. A
Participant shall have no greater right to benefits provided hereunder than that of any unsecured
general creditor of the Company.

SECTION X

ADMINISTRATION

     1. Powers and Responsibilities. The Plan shall be administered by the Committee which
shall have the following powers and responsibilities.

          (a) to amend the Plan;

          (b) to terminate the Plan;

          (c) to construe the Plan, make factual determinations, decide all benefit requests made by a
Participant or any other person, correct defects, and take any and all similar actions considered
by the Committee to be necessary to administer the Plan, with any such determinations under or
interpretations of the Plan made in good faith by the Committee to be final and conclusive for all
purposes;

11

 

          (d) determine the investment options which may be utilized under the Plan, including any
default option to be utilized if a Participant makes no investment request;

          (e) to designate a related company or business as a Participating Employer and to revoke such
status if, in the Committee’s discretion, such action is in the best interest of the Company; and

          (f) to take all other actions and do all other things which are considered by the Committee to
be necessary to the administration of the Plan.

     2. Actions Conclusive. The Committee shall have complete discretion in carrying out
its powers and responsibilities under the Plan, and its exercise of discretion hereunder shall be
final and conclusive.

     3. Delegation. The Committee may, in writing, delegate some or all of its powers and
responsibilities to any other person or entity.

     4. Meetings. The Committee may hold meetings upon such notice, at such time or times,
and at such place or places as it may determine. The majority of the members of the Committee at
the time in office shall constitute a quorum for the transaction of business at all meetings and a
majority vote of those present and constituting a quorum at any meeting shall be required for
action. The Committee may also act by written consent of a majority of its members.

     5. Rules of Administration. The Committee may adopt such rules for administration of
the Plan as is considered desirable, provided they do not conflict with the Plan.

     6. Agents. The Committee may retain such counsel, and actuarial, medical, accounting,
clerical and other services as it may require to carry out the provisions and purposes of the Plan.

     7. Reliance. The Committee shall be entitled to rely upon all tables, valuations,
certificates, and reports furnished by any duly appointed auditor, or actuary, upon all
certificates and reports made by any investment manager, or any duly appointed accountant, and upon
all opinions given by any duly appointed legal counsel.

     8. Liability and Indemnification. No member of the Committee shall be personally
liable by virtue of any instrument executed by the member, or on the member’s behalf, as a member
of the Committee. Neither the Company nor a Participating Employer, nor any of their respective
officers or directors, nor any member of the Committee, shall be personally liable for any action
or inaction with respect to any duty or responsibility imposed upon such person by the terms of the
Plan except when the same is finally judicially determined to be due to the self dealing, willful
misconduct or recklessness of such person. The Company shall indemnify and hold harmless its
officers, directors, and those of any Participating Employer, and each member of the Committee
against any and all claims, losses, damages, expenses (including attorneys’ fees and the
advancement thereof), and liability (including, in

12

 

each case, amounts paid in settlement), arising from any action or failure to act regarding
the Plan, to the greatest extent permitted by applicable law. The foregoing right of
indemnification shall be in addition to any other rights to which any such person may be entitled.

     9. Conflict of Interest. If any Participant is a member of the Committee, he or she
shall not participate as a member of the Committee in any determination under the Plan relating
specifically to his or her Basic, Matching, or Company Retirement Deferrals.

SECTION XI

MODIFICATION AND TERMINATION

     The Committee reserves the right to terminate this Plan at any time or to modify, amend or
suspend it from time to time, such right to include, without limitation, the right to distribute
any and all Accrued Benefits following a termination of the Plan. Any such termination,
modification, amendment or suspension shall be effective at such date as the Committee may
determine and may be effective as to all Participating Employers, or as to one or more
Participating Employers, and their respective employees. The Committee shall notify all affected
Participants of any such termination, modification, amendment or suspension and, in appropriate
circumstances as determined by the Committee, shall also notify the relevant Participating
Employers. A termination, modification, amendment or suspension may affect Participants generally,
by class or individually, and may apply irrespective of whether they are past, current or future
Participants; provided, however, that any such action may not eliminate or reduce the Accrued
Benefit of any Participant as of the effective date of such action.

SECTION XII

GENERAL PROVISIONS

     1. No Employment Right. Nothing contained herein shall be deemed to give any employee
the right to be retained in the service of the Company or a Participating Employer, as applicable,
or to interfere with the rights of any such employer to discharge any employee at any time.

     2. Interest Not Assignable. It is a condition of this Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any Participant under this Plan
or in his or her credited Deferrals shall be assignable or transferable in whole or in part, either
directly or by operation of law or otherwise, including without limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy, or in any other manner, subject, however, to
applicable law, but excluding devolution by death or mental incompetency, and no right or interest
of any Participant under this Plan or in his or her credited Deferrals shall be liable for or
subject to any obligation or liability of such Participant, subject, however, to applicable law.

     3. Taxes and Withholding. All Deferrals and payments under the Plan shall be subject
to such taxes and other withholdings (federal, state or local) as may be due thereon,

13

 

and the determination of the Committee as to withholding with respect to Deferrals and
payments shall be binding upon the Participant and each Beneficiary.

     4. Sale of Assets. The sale of all or substantially all of the assets of the Company,
or a merger, consolidation or reorganization of the Company wherein the Company is not the
surviving corporation, or any other transaction which, in effect, amounts to a sale of the Company
or voting control thereof, shall not terminate this Plan or any related agreements and the
obligations created hereunder or thereby and the same shall be binding upon the successors and
assigns of the Company.

     5. Legal Incapacity. If a Participant or Beneficiary entitled to receive any benefits
hereunder is deemed by the Committee or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, the benefits will be paid to such persons as the Committee
designates or to the duly appointed guardian.

     6. Governing Law. This Plan shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania, notwithstanding the conflict of law rules applicable
therein.

     7. Compliance with Code Section 409A. Notwithstanding any other provision of the Plan
to the contrary, the Plan shall be administered in accordance with all applicable requirements of
Code section 409A and the regulations or guidance issued with regard thereto, and any distribution,
acceleration or election feature that could result in the early inclusion in gross income shall be
deemed restricted or limited to the extent necessary to avoid such result.

[END]

14

 

Pursuant to its authority under Sections X and XI of the Plan, as adopted effective January 1,
2005, the Committee, as evidenced by the signatures of its members below, hereby amends and
restates the Plan effective January 1, 2009 for the stated purposes set forth herein and this
amended and restated Plan shall, on and after such effective date, be applicable to all
Participating Employers and their respective employees until such time as the Committee may, in
its discretion, further amend or take any other authorized action with respect to the Plan.

APPROVED BY:

	 	 	 	 	 
	 	 	 
	 	     /s/ Candace S. Cummings
 	 
	 	Candace S. Cummings 	 
	 	 	 
	 
	 	 	 
	October 30, 2008	     /s/ Frank C. Pickard III
 	 
	 	Frank C. Pickard III 	 
	 	 	 
	 
	 	 	 
	 	     /s/ Susan L. Williams
 	 
	 	Susan L. Williams 	 
	 	 	 
	 

15EXHIBIT 10.8

-------------------------------------------------------------  [PURADYN(R) LOGO]

                    Puradyn Filter Technologies Incorporated
                        MASTER DISTRIBUTORSHIP AGREEMENT
                                  International

This Master Distributor Agreement ("Agreement"), is made and effective this 18th
of February,  2008, by and between  Puradyn  Filter  Technologies,  Incorporated
("PFTI") or ("The Company"), whose principal address is at 2017 High Ridge Road,
Boynton Beach, FL 33426 and Filter Solutions Ltd (FSL) (hereinafter  referred to
as "Master  Distributor")  having  Principal  offices at 33A  Kingfisher  Court,
Hambridge Road, Newbury RG14 5SJ United Kingdom.

WHEREAS:

      A.    The  Manufacturer  is in  the  business  of  designing,  developing,
            manufacturing  and  marketing  bypass oil refiners and filters under
            the trademark "puraDYN(R)" hereinafter referred to as the "PRODUCT".

      B.    The Manufacturer is the exclusive  licensee of Patents No. 5,591,330
            5,639,965   5,630,912   5,718,258   6,139,725  and  pending   patent
            applications.

      C.    The  Manufacturer  has the right to grant to the Master  Distributor
            the right to purchase and sell the product in the Service  Territory
            (as defined herein);

      D.    The Master  Distributor  warrants that it is now solvent and capable
            of acting as a Master Distributor within the Service territory; and

      E.    The Master  Distributor  is desirous of  purchasing  and selling the
            Product in The Service  Territory,  and the Manufacturer is desirous
            of  granting  the  Master  Distributor,  the right to do so upon the
            following  terms and  conditions;  in  consideration  of the  mutual
            promises  and  understandings  set  forth  below,  the  receipt  and
            sufficiency of which are hereby  acknowledged,  the parties agree as
            follows:

PFTI desires to appoint Master  Distributor,  and Master Distributor  desires to
accept  appointment as, a exclusive Master  Distributor of PFTI's product as set
forth herein.

The parties agree as follows:

1.    Rights Granted and Appointment

      A.    PFTI hereby grants to Master  Distributor an Exclusive  RIGHT on the
            terms and conditions contained below to purchase inventory,  promote
            and resell "PFTI  Products"  (as defined  below) in United  Kingdom,
            Mainland   Europe  and   Ireland   plus   additional   international
            territories on a case-by-case  basis to (i) end-users with fleets of
            vehicles;  (ii) users of hydraulic  applications  for  manufacturing
            processes;  and (iii)  Distributors  who  market to  end-users  with
            fleets  of  vehicles  and/or  users of  hydraulic  applications  for
            manufacturing  processes (those persons  identified in paragraph 1,B
            (i), (ii) and (iii) shall be collectively referred to as "Customers"
            and  individually  as  a  "Customer),   subject  to  the  terms  and
            conditions  set forth and stated in this  Agreement and its attached
            exhibits. The Master Distributor hereby accepts such appointment and
            agrees to use its best  efforts in the  performance  of such  duties
            hereunder.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     1 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      B.    Manufacturer agrees to forward all inquiries for sales and/or Master
            Distributors  to the Master  Distributor  no matter what industry or
            market segment inquiry  originate.  Master Distributor will have ten
            (10)  working  days to  respond  to  Manufacturer  in regards to how
            inquiry  will be  handled.  In the event that  inquiry  has not been
            adequately  satisfied and  Manufacturer  receives third contact from
            said  inquirer,  Manufacturer  will  notify in  writing  the  Master
            Distributor that the Manufacturer will handle the inquiry.

      C.    The Manufacturer  reserves the right to sell the Product directly to
            any U.S. Manufacturer of engines,  vehicles,  and other machinery as
            original equipment  (hereinafter  referred to as "OEM"). The OEM has
            the right to sell the Product through its dealer network.

      D.    Master Distributors activities shall include, but not be limited to,
            building  sales  volume  to  existing   accounts,   identifying  and
            developing new accounts,  diligently  promoting new products  and/or
            services to Customers,  identified by Master Distributor,  providing
            any and all services necessary for the support of Customers in their
            channels of  distribution,  effectively  communicate to Manufacturer
            all relevant  information on the market,  competition  and Customers
            that could in any way impact  Manufacturer's  business,  and monitor
            the creditworthiness of Customers in the Territory.

      E.    Master  Distributor  shall not sell or deliver the Products  outside
            the territory or to individuals it knows will transport the Products
            outside the Territory  without first receiving  written consent from
            one of  Manufacturer's  Officers.  In addition,  Master  Distributor
            shall not,  directly or  indirectly  engage in any of the  following
            activities outside the Territory without,  the prior written consent
            of  Manufacturer  in each case:  advertise  the  Products;  maintain
            warehouses  for the Products;  or seek Orders or engage in any other
            kind of sales promotion for the Products.

      F.    The Master  Distributor  shall not sell,  offer for sale,  or act as
            sales agent for the  solicitation  of Orders for any products  which
            are  competitive  with any of the Products  without first  receiving
            written authorization from Manufacturer.

      G.    Installation  must be performed and completed by a properly  trained
            and authorized representative of the Company or Master Distributor.

2.    Products

      As used in this  Agreement,  the term  "PFTI's  Products"  shall  mean the
      products,  related service parts and accessories  manufactured and/or sold
      by PFTI as outlined  in the PFTI price list,  a copy of the most recent of
      which is attached.

3.    Term of Agreement

      This Master Distributor contract will have duration of five (5) years from
      the signing date provided Master Distributor has fulfilled his obligations
      hereunder.  The contact will renew automatically,  negotiated with minimum
      quantities, for an additional twelve (12) months on each anniversary date.
      This  contract  may be  cancelled  by either  party with 30 days'  written
      notice.

4.    Minimum Annual Purchases

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     2 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      The parties  agree that the Master  Distributor  shall  purchase  from the
      Manufacturer  not less than US $600,000 through December 2008 from date of
      this contract and to be allocated  approximately  US$200,000  per quarter,
      beginning  March 1, 2008. (As an example,  if Master  Distributor  were to
      purchase  US$  250,000  in 2nd  Quarter  and US$  250,000  during  the 3rd
      Quarter, 4th Quarter purchases would have to be only US$ 100,000 to comply
      with   Agreement.)   (Reference   Exhibit   1   for   quarterly   purchase
      requirements.)

      A.    Master  Distributor agrees to sell US $600,000 of Product during the
            first 9 months beginning March 1, 2008.

      B.    After  the first 9 months,  Master  Distributor  agrees to a minimum
            fifteen  percent  (15%)  increase over the previous 12 months annual
            rata (of $800,000).  This fifteen  percent (15%) increase will apply
            to each successive 12 month calendar period:

                         2nd year   $  920,000   U.S. Dollars
                         3rd year   $1,058,000   U.S. Dollars

5.    Price and Terms of Sale

      A.    Price of Products.  Master Distributor shall purchase the Product at
            the prices  set forth on the Price  Schedule  attached  as Exhibit 2
            (the "Price  Schedule").  The Price Schedule does not include Master
            Distributor  taxes,  duties,  licenses,  excises and tariffs,  which
            shall be paid by the Master Distributor.

      B.    Change in price of Products.  Manufacturer  may,  from time to time,
            change the Price  Schedule in its sole  discretion  after  providing
            Master  Distributor  with  sixty  (60) days  written  notice of such
            change.

      C.    Payments Free of Taxes,  Withholding,  etc. Master Distributor shall
            pay any and all taxes and any other surcharges,  fees,  licenses and
            other amounts  charged or payable in connection with the importation
            of  the  Products  into,  and  the  sale  of  Products  within,  the
            Territory.

      D.    Payment Terms. The Master  Distributor  shall pay for the Product by
            wire transfer the purchase  price prior to  Manufacturer  making the
            shipment available to Master Distributor EXW Manufacturer's shipping
            dock, Boynton Beach, Florida, or by Letter of Credit initially at 30
            days after shipment and at some later period, 7 days after shipment.

      E.    Carrier.  The Carrier  will be selected  and  shipment  scheduled by
            PFTI, unless Master  Distributor  requests a reasonable  alternative
            which does not negatively affect or delay shipment.

6.    Order Processing, Returns and Repurchase Option

      A.    PFTI will  employ  its best  efforts  to fill  Master  Distributor's
            orders  promptly  on  acceptance,  but  reserves  the right to allot
            available inventories among Master Distributors at its discretion.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     3 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      B.    PFTI will accept  returns of products that are defective at the time
            of sale to Master Distributor or prove defective during the warranty
            period.  PFTI will also allow Master  Distributor  to return salable
            goods to The  Company,  but only within the policy  established  for
            returned goods, shown below.

7.    Financial Policies

      Master   Distributor   acknowledges  the  importance  to  PFTI  of  Master
      Distributor's sound financial  operation and Master Distributor  expressly
      agrees that it will:

      A.    Maintain and employ in connection with Master Distributor's business
            and operations  under this  Agreement  such working  capital and net
            worth as may be required to enable Master  Distributor  properly and
            fully to carry out and perform all of Master  Distributor's  duties,
            obligations and responsibilities under this Agreement;

      B.    Pay promptly all amounts due PFTI in  accordance  with terms of sale
            extended by PFTI; and

            Furnish PFTI with financial  information and references in such form
            as PFTI may reasonably  require from  time-to-time for determination
            of credit worthiness.

      Shipments and contract may be suspended at PFTI's  discretion in the event
      that Master  Distributor  fails to promptly and  faithfully  discharge any
      obligation in this Section.

8.    Use of PFTI's Name

      Master  Distributor will not use, authorize or permit the use of, the name
      "Puradyn Filter  Technologies  Incorporated" or derivatives,  or any other
      trademark  or trade name owned by PFTI as part of its firm,  corporate  or
      business name in any way. Master  Distributor  shall not contest the right
      of PFTI to exclusive use of any trademark or trade name used or claimed by
      PFTI. Master  Distributor may, subject to PFTI's written approval of same,
      utilize  PFTI's name,  trademarks or logos in  advertising  on stationery,
      business cards and signage.

9.    Termination

      A.    Termination after Notice. This agreement may be terminated by either
            party in the  event of a breach  by the  other  party (or any of its
            Officers  or  Principals  joining  this  agreement)  of  any  of its
            obligations  under this Agreement (other than those  obligations set
            forth in paragraphs 9.C and 9.D, below,  which may result in earlier
            termination)  which has not been  corrected by the  breaching  party
            within a period of thirty  (30) days from the date on which  written
            notice of termination is given. In such event,  termination shall be
            effected by written notice of  termination  to the breaching  party.
            Termination on such grounds shall not preclude the terminating party
            from taking recourse to any legal action or remedy to which it might
            be entitled.

      B.    Immediate Termination without Notice. This agreement shall be deemed
            terminated  immediately without notice upon the occurrence of any of
            the following events:

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     4 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

                  1.    An  assignment  of all or a  substantial  portion of the
                        assets of the  Master  Distributor  for the  benefit  of
                        creditors;

                  2.    The insolvency of Master  Distributor (as defined in the
                        Uniform Commercial Code);

                  3.    The filing of a voluntary  petition in  bankruptcy by or
                        against the other party;

                  4.    The   filing  of  any   attachment,   distraint,   levy,
                        execution,  or judgment against Master Distributor,  the
                        filing of an  involuntary  petition under the provisions
                        of the U.S.  Bankruptcy  Act,  or similar  act under the
                        Master  Distributor's  local  laws  as  amended,  or any
                        applications  for  the  appointment  of a  receiver  for
                        Master  Distributor's  property,  the  filing  of  which
                        remains  unsatisfied and  undischarged  after the end of
                        thirty (30) days after the occurrence of such event;

                  5.    The filing of a petition for  bankruptcy,  receivership,
                        suspension or payments or  dissolution by or against the
                        other party or any equivalent thereof under the national
                        law of that  party,  which  petition  is not  discharged
                        within thirty (30) days thereafter.

      C.    Immediate  Termination  By Either Party With Notice.  This Agreement
            may be terminated  with immediate  effect by either party by written
            notice in the event of:

                  1.    The  occurrence  of a  "Force  Majeure"  as  defined  in
                        paragraph 17.A hereof; and

                  2.    Any representation  made or furnished by the other party
                        or any of its Officers or Principals  who have joined in
                        the   execution  of  this   Agreement   being  false  or
                        misleading  in any  material  respect at the time it was
                        made.

      D.    Immediate Termination by Manufacturer.  Moreover, this Agreement may
            be  terminated  by  Manufacturer  with  immediate  effect by written
            notice to Master Distributor in the event that:

                  1.    Master  Distributor is acquired by or becomes affiliated
                        with a  company  which  is or may  potentially  become a
                        competitor   of   the   Manufacturer   or   any  of  the
                        Manufacturer's affiliates;

                  2.    A change occurs of more than fifty percent (50%) or more
                        in the  direct  or  indirect  voting  control  of Master
                        Distributor;

                  3.    Master  Distributor's  failure  to meet any  Budget  set
                        forth for any period listed in Exhibit 1, hereof;

                  4.    Master Distributor's assignment,  transfer, or attempted
                        assignment  or  transfer,  of the rights and  privileges
                        granted  hereunder  without the prior written consent of
                        the Manufacturer;

                  5.    Master  Distributor  fails  to make  timely  payment  to
                        Manufacturer  for amounts owed  hereunder in  accordance
                        with the terms herein.

10.   Relationship of the Parties

      A.    The relationship of the Master Distributor to the Manufacturer shall
            be that of an independent contractor. This Agreement does not in any
            way create the relationship of joint venture partnership, franchiser
            and franchisee or principal and agent between the  Manufacturer  and
            the  Master  Distributor,  and  it  is  not  contemplated  that  the
            Manufacturer will render  significant  assistance or guidance to the
            Master Distributor in the management,  promotion or operation of the
            Master Distributor's business.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     5 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      B.    At  the  expiration  of  the  Term,  this  Agreement   automatically
            terminates and no further  relationship  between Master  Distributor
            and  the  Manufacturer   will  exist,  and  no  further   commission
            whatsoever are due to Master  Distributor  for any sales made by the
            Manufacturer to any other entity,  whether Master  Distributor dealt
            with the entity or not,  after  expiration  or  termination  of this
            Agreement,  except such amounts as have accrued and or due and owing
            to the Master Distributor for sales made in the Master Distributor's
            Service territory as of the date of termination.

      C.    Master Distributor agrees that it will:

                  1.    Not act in any way that would give the  impression  that
                        it has the power or authority  to bind the  Manufacturer
                        in any respect whatsoever.

                  2.    Not  make any  representation  (oral  or  written)  that
                        varies from the specifications,  operating  instructions
                        or  representations  given to Master Distributor or made
                        by  the  manufacturer  with  respect  to  the  Products,
                        including warranties.

                  3.    Maintain a place of business  in the  Service  Territory
                        and  employ  sufficient  personnel  to carry out  Master
                        Distributor's obligations under this Agreement.

                  4.    Comply with all applicable United Kingdom and applicable
                        international  territory,  federal,  province, state and
                        local laws, rules, regulations,  ordinances,  and orders
                        in the  solicitation of orders for the Products,  and in
                        its other activities.

                  5.    Master  Distributor  shall  ensure  that each  installer
                        chosen by Master Distributor (and/or Master Distributor,
                        if  applicable)  to  install  the  Products   carries  a
                        commercial  general liability  insurance policy,  with a
                        reputable  insurance company,  subject to Manufacturer's
                        reasonable   approval,   that  is  compliant   with  and
                        effective under the laws of the Territory (including any
                        laws of any  province,  state  or  locality  within  the
                        Territory),  which policy  shall insure  against any and
                        all liability due to improper installation.  Such policy
                        shall have a face amount of not less than $1,000,000.00.
                        Master  Distributor  shall ensure that  Manufacturer  is
                        named as an "additional insured" under the policy.

                  6.    Send a  progress  report  to the  Manufacturer  on  each
                        six-month  anniversary  of the contract  indicating  the
                        condition and the progress of the Service Territory.

                  7.    Acknowledge  that the  manufacturer has the right at any
                        time to change the design of, discontinue,  or limit the
                        manufacture  or  provision of any of the  Products,  or,
                        upon not less than thirty (30) days prior written notice
                        to Master  Distributor to change the price thereof or to
                        withdraw from the market entirely.

                  8.    Acknowledge  that  if  the  Master   Distributor   sells
                        controlling interest of Master Distributorship  (defined
                        as 50.1% of the voting share  capital or more),  it must
                        first  be  approved  by  the  Manufacturer,  and  may be
                        subject to  immediate  termination  by  Manufacturer  in
                        accordance  with section 9.D.2  (above).  Every year the
                        Master  Distributor shall inform the Manufacturer of any
                        stockholder changes.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     6 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

                  9.    Not  file  any  (other)   trademark   applications,   or
                        otherwise seek  intellectual  property rights in or for,
                        any other  trademark  or trade name of PFTI,  and agrees
                        that PFTI has the right to an injunction (as well as any
                        other relief available) if this provision is violated.

                  10.   Use  Manufacturer's  or its subsidiaries' or affiliates'
                        trademarks   "PURADYN";   "KEEP  IT   CLEAN")   only  in
                        accordance with established  guidelines and not use such
                        trademarks   in  any  manner   that  would   convey  the
                        impression that Master  Distributor is selling  Products
                        or acting on behalf of the Manufacturer.

                  11.   Not  use or  disclose  any  Trade  Secrets  (information
                        concerning  Manufacturer's marketing and business plans,
                        sales strategies,  advertising programs, pricing, costs,
                        customers, technology or manufacturing methods) and will
                        make  every  effort to take  reasonable  precautions  to
                        prevent any such disclosure by its employees.

                  12.   Appoint    sub-representatives    (agents,    sub-Master
                        Distributors or dealers) which meet all criteria of this
                        agreement, but will receive Manufacturer's prior written
                        approval for all  sub-representatives  which do not meet
                        all criteria.

                  13.   Not make any  representations  about the  Product  other
                        than those  contained  in written  information  and data
                        supplied by the Manufacturer and wilt be responsible for
                        all representations.

                  14.   Provide  at its cost any  language  translations  of all
                        commercial    communications,    such   as   quotations,
                        proposals, conditions,  catalogues and other promotional
                        materials,   and  will   indemnify   and  hold  harmless
                        Manufacturer  as a result  of  incorrect  or  incomplete
                        translations.

                  15.   Pay all expenses incurred by Master  Distributor and its
                        employees in the  performance of its  obligations  under
                        this agreement.

                  16.   Promptly  inform  Manufacturer  if it knows or  suspects
                        that  customers  or  prospective   customers  intend  to
                        re-export  Products outside the territory,  and will not
                        assist  same  without  prior  written   permission  from
                        Manufacturer.

                  17.   Be  responsible  for  Product   installation,   customer
                        training and customer service, including but not limited
                        to post-warranty service and/or repair.

                  18.   Comply with all governmental requirements,  statutes and
                        laws,  and  will  notify  Manufacturer  of any  conflict
                        between  its  national  laws and any  provision  of this
                        agreement.

                  19.   Not directly or indirectly  make any offer or promise to
                        improperly  influence  an  agent,  government  official,
                        political  party or  candidate  for  office  in order to
                        obtain  or  retain   business   or  gain   inappropriate
                        advantage.

                  20.   Forward to manufacturer  any complaint or grievance with
                        respect  to  products  immediately  upon  receiving  the
                        complaint.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     7 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

                  21.   Distribute  and sell Products in the  Territory  through
                        its own sales organization.

                  22.   Use its best  efforts to promote and  increase  sales of
                        the Products in its Territory and protect Manufacturer's
                        interests in the Territory.

                  23.   Maintain an inventory  of all Products  adequate to meet
                        the needs of the market in the Territory for a period of
                        ninety (90) days.

                  24.   Maintain  a spare  parts  inventory  sufficient  to meet
                        demand on a timely basis.

                  25.   Not deface, alter, improve or otherwise make any changes
                        to the product.

                  26.   Properly train installers of the Product and participate
                        in  one  or  more   training   sessions   given  by  the
                        Manufacturer  at its  facilities  (or off-site  with all
                        expenses  incurred  by  Manufacturer  repaid  by  Master
                        Distributor)  and will pay for all expenses  incurred by
                        the Master Distributor for this training.

                  27.   The  Master  Distributor  shall not  manufacture  and/or
                        cause  to  be   manufactured   and/or   purchase  and/or
                        distribute and/or sell and/or  commercialize  during the
                        term of this Agreement,  and for a period of ninety (90)
                        days  following  termination  or  cancellation  of  this
                        Agreement   products   which  in  the  judgment  of  the
                        Manufacturer   are   similar   in   performance   to  or
                        competitive  with the  Manufacturer's  Products from any
                        source other than the Manufacturer.

                  28.   Manufacturer  agrees during the term of the Agreement to
                        permit the Master  Distributor to use the Manufacturer's
                        trademarks  and trade names in the Master  Distributor's
                        sales  program for the sole purpose of  advertising  and
                        promoting  the sale of the product.  Master  Distributor
                        agrees not to use or cause the use of the Manufacturer's
                        trademarks  or trade  names in any  manner  which  shall
                        directly or indirectly tend to lessen their value.

11.   Advertising and Marketing Allowances

      A.    The  Master   Distributor  will  assume  full   responsibility   for
            developing all promotional  material  including,  but not limited to
            brochures, flyers, and advertisements. The Master Distributor agrees
            to dedicate a reasonable  amount of gross purchases  annually of the
            product to funding the development of these  promotional  materials.
            The  Manufacturer  agrees to provide any artwork not  restricted  by
            licensee  to  support  Master  Distributor's   promotional  material
            development.

      B.    Any printed  advertising  and  promotional  material  created by the
            Master  Distributor  referring  to the Product  shall be sent to the
            Manufacturer for approval prior to any use, and the Manufacturer may
            disapprove  within  ten (10)  days by fax,  the use of any  material
            which, in the Manufacturer's  opinion,  misrepresents the Product or
            which might mislead Customers.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     8 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

          C.   Master Distributor agrees to conduct its promotion,  advertising,
               sales,  pricing  and  business  generally  at all times in strict
               compliance with all applicable Master Distributor federal,  state
               and local laws and regulations.

Master Distributor with a functioning website will be required to link that site
with the Puradyn website  (www.puradyn.com) within 30 days of signing the Master
Distributor Agreement.  Puradyn will link to Master Distributor's site within 10
days  of  signing  Master  Distributor  Agreement.  If  the  Master  Distributor
Agreement is terminated, the links must be removed within 5 days.

12.   Returns

Subject to PFTI  headquarters  approval,  Master  Distributor may return twice a
year,  for credit  against  future  purchase of PFTI product,  an amount of PFTI
product  (filter  cases  and  units  only)  not  to  exceed  5%  of  the  Master
Distributors  net purchases  during the  preceding  six (6) months.  Returns are
subject to the following conditions:

      A.    Approval by PFTI headquarters.

      B.    Shipped pre-paid to PFTI.

      C.    Product  in salable  condition,  subject  to PFTI inspection  before
            acceptance, and subject to a 20% restocking charge.

      D.    Credits for returns will be issued at the Master  Distributor  price
            in effect at the time the Product was purchased.

13.   Special Orders

Emergency  orders  [shipped  within 7 (seven) working days] are subject to a ten
(10) percent up charge.

14.   Product Liability and Limitation of Warranty

      A.    Manufacturer's  Responsibility.  Manufacturer  shall be  responsible
            only for damages  caused by  manufacturing  defects of the  Products
            arising in the ordinary use of the Products.  Manufacturer shall not
            be liable  for  damages  caused  directly  or  indirectly  by Master
            Distributor  or third parties as a result of the handling or storage
            of the Products (and Master Distributor shall indemnify Manufacturer
            and its shareholders, directors, officers, employees and agents, and
            their  respective  successors  and  assigns,  from and  against  any
            damages,  liabilities,  claims,  losses, suits,  actions,  costs and
            expenses to  Manufacturer  so  caused),  or of their  inadequate  or
            improper use.  Manufacturer  shall provide a limited warranty of one
            (1) year on the units,  including  heater  (Exhibit  3.) An extended
            four-year  warranty is available for puraDYN  units.  Please contact
            Puradyn Filter Technologies, Inc. for additional information.

      B.    Limitation of Liability.  THE FOREGOING WARRANTIES ARE EXCLUSIVE AND
            IN LIEU OF ALL OTHER  EXPRESSED AND IMPLIED  WARRANTIES  WHATSOEVER,
            INCLUDING BUT NOT LIMITED TO IMPLIED  WARRANTIES OF  MERCHANTABILITY
            AND FITNESS FOR A PARTICULAR  PURPOSE.  UNDER NO CIRCUMSTANCES SHALL
            THE  MANUFACTURER  BE  SUBJECT  TO  ANY  CONSEQUENTIAL,  INCIDENTAL,
            INDIRECT OR  CONTINGENT  DAMAGES  WHATSOEVER  WITH RESPECT TO CLAIMS
            MADE HEREUNDER OR BY ANY PURCHASER OR USER OF PRODUCTS.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                     9 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      C.    Product Liability and Limitation of Warranty.  Master Distributor at
            its own cost and expense shall maintain a standard form of insurance
            insuring all goods and merchandise  sold by the  Manufacturer to the
            Master  Distributor for all risks to their invoice value,  while all
            the goods and merchandise  are in the possession,  care and custody,
            or control of the Master  Distributor or in which Master Distributor
            may have an interest.

15.   Consequences of Termination.

      A.    Cessation of Sales  Activities.  Upon  termination of this Agreement
            for any reason  whatsoever,  Master Distributor shall cease the sale
            of  the  Products  and  use  of the  Trademarks  in  the  Territory,
            including  but  not  limited  to  any  use  of  the  Trademarks  for
            advertising purposes,  and make immediate payment to Manufacturer of
            any and all  amounts  due  Manufacturer.  Subject to  Manufacturer's
            right of repurchase in paragraph  15.B below,  upon  termination  of
            this Agreement.  Master  Distributor shall be authorized to sell its
            then-existing  stock of the Products at normal  prices and otherwise
            in  accordance  with the  Agreement,  during  the three  (3)  months
            following the effective  date of  termination,  and shall  thereupon
            cease any use of the  Trademarks.  Any or all Orders not accepted by
            the Manufacturer on or before the date of termination  shall, at the
            Manufacturer's  sole option, be canceled.  Master  Distributor shall
            forthwith return,  at its own cost and expense,  to the Manufacturer
            all  promotional   sales   information   materials  and  literature,
            stationery, price lists, catalogues, photographs, letters and papers
            that  shall  have  been  furnished  by the  Manufacturer  to  Master
            Distributor  during the term of this Agreement,  it being understood
            that no copies  of these  foregoing  materials  may be  retained  by
            Master  Distributor   subsequent  to  the  date  of  termination  or
            expiration of this Agreement.  Master  Distributor  shall provide to
            Manufacturer  all  documentation  identifying the names,  addresses,
            telephone  numbers and contact  individuals  of  customers of Master
            Distributor   who  bought  Products  or  were  solicited  by  Master
            Distributor.  Master  Distributor  shall  also  remove and return to
            Manufacturer,  or in the alternative remove and destroy, any and all
            signs designating Master Distributor as a Master Distributor for the
            Products,  any and all signs which  include any  trademarks or trade
            names of Manufacturer  and any and all signs which associate  Master
            Distributor with Manufacturer.

      B.    No Damages and Repurchase Option.  Master  Distributor  acknowledges
            and  expressly  agrees that upon  termination  or expiration of this
            Agreement for any reason  whatsoever,  the Manufacturer shall not be
            liable to Master  Distributor and Master  Distributor  hereby waives
            any claims  for  compensation  or  damages of any kind or  character
            whatsoever,  whether on account of the loss by Master Distributor of
            present or prospective compensation or anticipated compensation,  or
            of   expenditures,   investments  or  commitments   made  either  in
            connection  therewith  or  in  connection  with  the  establishment,
            development  or  maintenance   of   establishment,   development  or
            maintenance of Master Distributor's business. The Manufacturer shall
            have no obligation to repurchase or to credit the Master Distributor
            for its inventory of the Products at the time of termination of this
            Agreement. The Manufacturer may, at its sole option, repurchase from
            the Master  Distributor,  either (i) at Manufacturer's  then current
            list  prices or at the net prices  paid by the  Master  Distributor,
            whichever  is lower,  and less any and all  restocking  and  freight
            charges  relating  thereto,  or (ii) by giving Master  Distributor a
            credit on its account(s) with Manufacturer (valued as in (i) above),
            at  Manufacturer's  sole discretion,  any or all of the inventory of
            Products  originally  purchased by the Master  Distributor  from the
            Manufacturer  and in new and  marketable  condition.  Any restocking
            charge shall not exceed twenty (20) percent of the repurchase price.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    10 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

16.   Indemnification.

      A.    By Master  Distributor.  The Master  Distributor agrees to indemnify
            and  hold  harmless  Manufacturer  and its  shareholders,  officers,
            directors, employees and agents, and their respective successors and
            assigns, from and against all damages, liabilities,  claims, losses,
            suits,  actions,  costs and  expenses  of  whatever  form or nature,
            including  legal/attorneys'  fees and other costs of legal  defense,
            whether  direct or indirect,  that they, or any of them, may sustain
            or  incur  as a  result  of any  acts  or  omissions  of the  Master
            Distributor or any of its directors,  officers, employees or agents,
            including,  but not limited to, (1) breach of any of the  provisions
            of this  Agreement,  (2) negligence or other tortious  conduct,  (3)
            representations   or  statements  not  specifically   authorized  by
            Manufacturer  herein or otherwise in writing or (4) violation by the
            Master  Distributor  (or  any of its  owners,  Directors,  Officers,
            employees or agents) of any applicable law, regulation,  or order in
            the Territory or of the United States.

      B.    By Manufacturer.  Manufacturer agrees to indemnify and hold harmless
            the  Master  Distributor  and  its  owners,   officers,   directors,
            employees and agents,  and their respective  successors and assigns,
            from and against all damages,  liabilities,  claims,  losses, suits,
            actions,  costs and expenses of whatever  form or nature,  including
            attorneys' fees and other costs of legal defense,  whether direct or
            indirect,  that  they,  or any of them,  may  sustain  or incur as a
            result of any (1) breach of any of the  provisions of this Agreement
            by  Manufacturer  or (2)  negligence  or other  tortious  conduct of
            Manufacturer.

17.   Other Provisions

      A.    Force  Majeure.  If the  performance  of  this  Agreement  or of any
            obligation  hereunder is prevented by reason of any cause beyond the
            reasonable  control  of the  affected  party,  which  reasons  shall
            include  but not be  limited  to fire,  floods,  acts of G-d,  civil
            revolution  or   disturbance,   strikes,   lockouts,   epidemics  or
            governmental measures, the party so affected,  upon prompt notice to
            the other  party,  shall be  excused  from such  performance  to the
            extent of such  prevention,  restriction or  interference,  provided
            that the party so  affected  shall use its best  efforts to avoid or
            remove  such   cause(s)  of   nonperformance   and  shall   continue
            performance   hereunder  with  the  utmost  dispatch  whenever  such
            cause(s) is/are removed. In the event that either party is prevented
            from performing its obligations hereunder by reason of force majeure
            for a continuous  period of more than thirty days, then either party
            may forthwith terminate this Agreement.

      B.    Assignment.  This  Agreement  may not be  assigned  by either  party
            except with the prior written  consent of the other party,  with the
            exception that:

                  1.    Master   Distributor  shall  not  assign,   delegate  or
                        otherwise  transfer  its rights  under  this  Agreement.
                        Notwithstanding such assignment,  Master Distributor may
                        retain or utilize agents or sub-Master  Distributors  in
                        the sale of Products,  without the prior written consent
                        of Manufacturer; and

                  2.    Manufacturer  may assign this  Agreement  in  connection
                        with the sale of its  business,  whether such sale takes
                        the form of a sale of assets, a sale of capital stock, a
                        merger, or otherwise.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    11 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      Subject to the foregoing, this Agreement shall inure to the benefit of and
      be binding upon, the parties and their respective successors and assigns.

      C.    Independent  Contractors.   This  Agreement  is  not  an  employment
            contract  nor  joint  venture  or  partnership   agreement   between
            Manufacturer and Master  Distributor.  The relationship  between the
            parties is that of vendor and  purchaser and not principal and agent
            and,  accordingly,  any  purchase  of or sale of  Products by Master
            Distributor   or  any  agreement  or   commitment   made  by  Master
            Distributor to any person,  firm or corporation  with respect hereto
            is made by Master  Distributor  for its own  account  as  principal.
            Master Distributor is an independent  contractor purchasing Products
            for its own account  and is not  obliged to account to  Manufacturer
            for any profits earned by it on sales. Master Distributor shall have
            no right or authority to execute any  agreement or give any warranty
            or statement in the name of or on behalf of Manufacturer.

      D.    Notices.  Any notices  required or authorized to be given hereunder,
            except for routine and typical shipment of documentation shall be in
            writing,  in  English,  and  shall be  delivered  by DHL or  Federal
            Express  to the  following  respective  addresses  or to such  other
            addresses as the parties may  hereinafter  communicate to each other
            in writing.  Such notice  shall be deemed  given three (3) days from
            the day delivered to DHL or Federal Express:

<TABLE>
<S>                                           <C>
               To Manufacturer:               Puradyn Filter Technologies Incorporated
                                              2017 High Ridge Road
                                              Boynton Beach, Florida 33426
                                              Attn: Alan J. Sandler

               To Master Distributor and/or
               any of its Officers or
               Principals:

               With a copy to:                ________________________________________

                                              ________________________________________

                                              ________________________________________
</TABLE>

      Notwithstanding,  nothing  contained herein shall justify or excuse either
      party's  failure to give oral notice for purposes of  informing  the other
      party of  circumstances  or events that require prompt  notification,  but
      such oral notice shall not satisfy the requirements of written notice.

      E.    Entire Agreement;  Amendments. This Agreement including the Exhibits
            hereto  incorporates  the  entire  understanding  of the  parties in
            respect  of  its  subject   matter,   and  supersedes  any  and  all
            agreements,  contracts,  undertakings  or  arrangements,  written or
            oral,  that  might  have  existed  heretofore  between  the  parties
            regarding the subject matter hereof except any outstanding  accounts
            receivable  owed to  Manufacturer  shall  remain due and  payable in
            accordance  with  their  terms.  This  Agreement  may not be amended
            except by means of a written instrument signed by both parties.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    12 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      F.    Waivers.  Any  waiver  by  either  party  of any  provision  of this
            Agreement  or breach  hereof  shall not  constitute a waiver of that
            provision  or that  breach on any  future  occasion  or of any other
            provision or breach of this Agreement.  Neither failure nor delay on
            the part of a party  to  exercise  any  right,  power  or  privilege
            hereunder shall operate as a waiver thereof,  nor shall any singular
            or partial  exercise  of any  right,  power or  privilege  hereunder
            preclude  any other or further  exercise  thereof or the exercise of
            any other right,  power or privilege.  No understanding or course of
            dealing between the parties shall be effective to change,  modify or
            discharge any provision of this  Agreement or to constitute a waiver
            of any breach.

      G.    Severability.  In case any provision of this Agreement is held to be
            prohibited by or invalid or unenforceable  under applicable law by a
            court of competent  jurisdiction,  the  invalidity of such provision
            shall not affect the validity of the  remaining  provisions  hereof.
            The  parties  agree to  substitute  any such  prohibited  or invalid
            provision by another which shall lead to the economic result nearest
            to the one  which  would  have  resulted  under the  provision  held
            invalid or prohibited.

      H.    Governing Law. To the extent  permitted by the law of the Territory,
            the validity,  interpretation  and enforcement of this Agreement and
            all other instruments and documents executed in connection with this
            transaction  shall be  governed  by Florida  law  without  regard to
            conflicts of laws provisions.  The parties agree that, to the extent
            permitted by the law of the Territory,  the exclusive  venue for any
            action  brought  under  paragraph  17.K shall be Palm Beach  County,
            Florida, and the parties hereby attorn to the courts of the State of
            Florida for such purpose.  To the extent permitted by the law of the
            Territory,  the  parties  waive  any  other  jurisdiction  which may
            correspond to them.

      I.    Interpretation and Rules of Construction.  The headings and captions
            contained in this  Agreement  are for  reference  purposes  only and
            shall not affect in any way the  meaning or  interpretation  of this
            Agreement.  The  parties  acknowledge  and agree that each party has
            reviewed this Agreement with their respective  counsels and that any
            rule of  construction  resolving  ambiguities  against the  drafting
            party shall not be employed in the  interpretation of this Agreement
            or any amendment,  Exhibit or schedule hereto.  Whenever the context
            shall  require,  all words  herein in any gender  shall be deemed to
            include the other  gender(s),  all singular  words shall include the
            plural,  and all plural  words  shall  include  the  singular.  This
            Agreement  is  executed  in  English  but may be  translated  to the
            language  of the  Territory  and both  versions  shall have the same
            legal effect. However, if permitted by the laws of the Territory, in
            case of any discrepancy between the texts, the English version shall
            govern.

      J.    Arbitration.  In the event that the  parties  fail to resolve  their
            dispute  through  the  process of  mediation  then the suit shall be
            finally settled under the Rules of Arbitration of the  International
            Chamber of Commerce by three (3) arbitrators appointed in accordance
            with the said Rules.  The language of arbitration  shall be English.
            The arbitration shall take place in Palm Beach County, Florida, USA.
            The time limit within which the  Arbitral  Tribunal  must render its
            final  award  shall be four (4) months  from the date of the initial
            Request for  Arbitration.  The parties  hereby  agree to maintain as
            confidential  the existence of the  arbitration  and the disclosures
            made during the proceedings.  This  confidentiality  agreement shall
            survive this Agreement, but in no manner shall this provision render
            the  enforcement  of the arbitral  award by any  judicial  branch or
            court of law, a breach hereunder.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    13 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      K.    Enforcement Of Restrictive Covenants. In the event that Manufacturer
            seeks  to  enforce  any of the  covenants  contained  in  paragraphs
            10.C.11 and 10.C.27,  the parties agree that Manufacturer may seek a
            preliminary  injunction  in the  courts of  Florida or of the United
            States for the Southern  District of Florida,  and by execution  and
            delivery of this Agreement,  each party hereto consents,  for itself
            and in respect of its property, to the nonexclusive  jurisdiction of
            those courts.  Each party hereto  irrevocably  waives any objection,
            including  any  objection  to the  laying  of  venue or based on the
            grounds of forum non conveniens,  which it may now or hereafter have
            to the bringing of any action or proceeding in such  jurisdiction in
            respect of this Agreement or any document related hereto.

      L.    Judgment Currency

            1.    If a judgment or order is rendered by any  arbitration  panel,
                  court or  tribunal  for the  payment of any  amounts  owing to
                  Manufacturer  under  this  Agreement  or for  the  payment  of
                  damages in respect of any breach of this Agreement or under or
                  in respect of a judgment or order of another court or tribunal
                  for the payment of such  amounts or damages and such  judgment
                  or order is expressed in a currency (the "Judgment  Currency")
                  other than United States  dollars,  Master  Distributor  shall
                  indemnify   and  hold   harmless   Manufacturer   against  any
                  deficiency  in terms of United  States  dollars in the amounts
                  received  by  Manufacturer   arising  or  resulting  from  any
                  variation  as between (i) the rate of exchange at which United
                  States  dollars are converted  into the Judgment  Currency for
                  the purposes of such  judgment or order,  and (ii) the rate of
                  exchange at which  Manufacturer is able to purchase the United
                  States  dollars  with  the  amount  of the  Judgment  Currency
                  actually received by Manufacturer.

            2.    The above  indemnity  constitutes  a separate and  independent
                  obligation   of  the   Master   Distributor   from  its  other
                  obligations   hereunder  and  applies   irrespective   of  any
                  indulgence  granted by the Manufacturer.  No proof of evidence
                  of any actual loss shall be required by Manufacturer.

            3.    The term "rate of  exchange"  shall  include any  premiums and
                  costs of exchange  payable in connection  with the purchase of
                  or conversion into the relevant currency.

            4.    The obligation of Master Distributor in respect of any sum due
                  from  it  to   Manufacturer   under  this   Agreement   shall,
                  notwithstanding  any judgment in a currency  other than United
                  States dollars or otherwise,  be discharged only to the extent
                  that on the business day following  receipt by Manufacturer of
                  any  sum  adjudged  to  be  so  due  in  such  other  currency
                  Manufacturer may in accordance with normal business procedures
                  purchase  United States dollars with such other  currency.  If
                  the United  States  dollars so purchased are less than the sum
                  originally  due to  Manufacturer  in  United  States  dollars,
                  Master   Distributor   agrees,   to   immediately    indemnify
                  Manufacturer  against  such loss with  interest at the highest
                  rate  allowable by law until such payment is made,  and if the
                  United States  dollars so purchased  exceed the sum originally
                  due to  Manufacturer  in United States  dollars,  Manufacturer
                  agrees to immediately remit to Master Distributor such excess.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    14 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

      M.    Brokerage.  The  parties  each hereby  represent  and warrant to the
            other that here is no party entitled to any broker's or finder's fee
            or commission in connection  with this Agreement or the  transaction
            contemplated  hereby, and each party indemnifies the other and holds
            such other  party  harmless  from and against any and all claims for
            any broker's or finder's fee or  commission  arising out of or based
            on any act of the indemnifying party.

      N.    Specific Performance;  Cumulative Remedies. The parties hereby agree
            that it is  impossible  to measure in money the  damages  which will
            accrue  by  reason  of  failure  of a party  to  perform  any of its
            obligations  under this Agreement.  Therefore,  if any party hereto,
            its heirs, personal representatives,  administrators,  successors or
            assigns  shall  institute  any action or  proceeding  to enforce the
            terms of this  Agreement,  the  party  against  whom the  action  or
            proceeding  is brought  hereby  waives the claim or defense  therein
            that such party has an adequate remedy at law, and all parties agree
            that the right of  specific  performance  and/or  injunctive  relief
            shall apply to the  enforcement  of all provisions set forth in this
            Agreement.  The  right of  specific  performance  and/or  injunctive
            relief shall be  cumulative to and not exclusive of any other rights
            or remedies of the party instituting suit.

      O.    Counterparts. This Agreement may be executed by telefacsimile and in
            any  number  of  counterparts,  each of  which  shall be  deemed  an
            original  of  this  Agreement,  but  all  of  which  together  shall
            constitute one and the same instrument.

      P.    Third  Party  Beneficiaries.  Nothing  expressed  or implied in this
            Agreement is intended, or shall be construed, to confer upon or give
            any  person,   firm  or  corporation  other  than  the  parties  and
            affiliates or subsidiaries  referred to herein,  their  subsidiaries
            and   their    heirs,    personal    representatives,    successors,
            administrators  or assigns,  any rights,  remedies,  obligations  or
            liabilities under or by reason of this Agreement, or result in their
            being deemed a third party beneficiary of this Agreement.

      Q.    Attorneys'  Fees.  In the event a suit or proceeding is brought by a
            party to this Agreement to enforce its provisions, or to seek remedy
            for any breach  hereof,  the  prevailing  party shall be entitled to
            receive its reasonable attorneys' fees and disbursements incurred in
            connection with such suit or proceeding, including fees and expenses
            incurred in any appellate proceedings.

      R.    Expenses. Except as specifically provided herein, each party to this
            Agreement shall pay its own expenses  incident to this Agreement and
            the transactions contemplated hereby.

      S.    Time.  Time is of the essence as to the terms and provisions of this
            Agreement.

      T.    General  Provision.   This  Agreement   specifically   excludes  the
            provisions of the UN  Convention on Contracts for the  International
            Sale of Goods.

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

      For Puradyn Filter Technologies Incorporated

Alan J. Sandler                         /s/ Alan J. Sandler
-------------------------------------   ------------------------------
Name (Print)                            Name (Sign)

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    15 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

Vice Pres./CAO                          561 547 9499
-------------------------------------   ------------------------------
Title                                   Phone

2017 High Ridge Road
Boynton Beach, Florida 33426
-------------------------------------
Address

For Filter Solutions Ltd

Tom Hamilton                            /s/ Tom Hamilton
-------------------------------------   -------------------------------
Name (Print)                            Name (Sign)

Principal DIRECTOR
-------------------------------------
Title

33A Kingfisher Court, Hambridge Road, Newbury RG14 5SJ United Kingdom
---------------------------------------------------------------------
Address

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    16 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

                                                                       EXHIBIT 1

                                  Sales Budget

      Master  Distributor shall purchase from Manufacturer and sell to Customers
in the Territory the following approximate amounts of Products:

During the period from March 1 through December 31, 2008: US$600,000 cumulative,
with a quarterly purchase of US$200,000.

During  the  period  from  January  1  through  December  31,  2009:  US$920,000
cumulative, with a quarterly purchase of US$230,000.

During  the  period  from  January 1 through  December  31,  2010:  US$1,058,000
cumulative, with a quarterly purchase of US$264,500.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                                    17 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
               * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

<PAGE>

                                                                       EXHIBIT 3

                    Puradyn Filter Technologies Incorporated
                                PRODUCT WARRANTY
                     puraDYN(R) Bypass Oil Filtration System

The puraDYN bypass oil filtration  system is warranted to the original  customer
to be free from  defects in material  and  workmanship  for a period of live (5)
years from the date of  installation,  with the exception of the heating element
which is  warranted  for one (1) year from the date of purchase,  providing  the
puraDYN is properly installed without any modifications or alterations  pursuant
to the Puradyn Filter Technologies  Incorporated,  ("PFTI") installation manual.
PFTI  products are  eligible for this  warranty  only if  registered  with PFTI.
Submission of the PFTI warranty registration is required upon installation.

The  puraDYN,  including  any  defective  part  therein,  must be returned to an
authorized sales  representative,  dealer,  distributor,  or to PFTI, within the
material and workmanship  warranty  period.  The sales  representative,  dealer,
distributor  or PFTI will then  execute the warranty  procedures  on the owner's
behalf.  PFTI's  responsibility  in  respect  to  warranty  claims is limited to
providing the required  repairs or replacements  to the product  itself,  and no
claim of breach of warranty shall be cause for cancellation or rescission of the
contract of sale of any PFTI  products.  Proof of  purchase  will be required to
substantiate any warranty claim.

PFTI shall repair the damage to any engine  caused  directly  and solely  during
said  warranty  period by the puraDYN  provided  that 1) the puraDYN is properly
installed  and  maintained  in  accordance  with  the  prescribed   installation
guidelines and service intervals  contained in the PFTI installation  manual; 2)
the puraDYN is installed and  maintained on an engine which is in normal running
and mechanical  condition at the time of installation  and which continues to be
properly  maintained in accordance  with the engine  manufacturer's  recommended
service  intervals  (other  than  recommended  oil  changes);  3) the puraDYN is
installed on an engine in which the replacement  engine oil meets or exceeds the
engine  manufacturer's  recommended  grade of engine oil; 4) the proper  puraDYN
filter  elements  and  the  engine's  standard  full-flow  filter  elements  are
installed,  used and replaced in accordance with the PFTI  installation  manual;
and 5) the oil analyses  are  performed  by a qualified  laboratory  at the same
intervals you change the puraDYN filter element, but at least once a year.

Additionally,  within five calendar days following the discovery of such damage,
the  customer  must  give  written   notice  to  Puradyn   Filter   Technologies
Incorporated,  2017 High Ridge Road,  Boynton Beach,  Florida 33426, and allow a
service  representative  of PFTI to (a) examine the damaged  engine on which the
puraDYN is installed; (b) examine the oil inside said damaged engine at the time
such damage is  discovered;  (c)  examine the  required  periodic  oil  analysis
reports;  and (d) examine the  installation of the puraDYN at the time damage is
discovered in order to permit PFTI to determine the extent of damage and whether
it was caused solely and directly by the puraDYN In the event that without prior
consultation  with  PFTI,  repair  work or any  other  change  to the  damage is
executed,  the right to warranty is invalidated and PFTI is not bound to pay any
compensation for damage. For other claims,  including bodily injury based on the
deficiency of the puraDYN filter, the legal stipulations apply.

This warranty does not cover any economic loss,  including  without  limitation,
communication  expenses,  towing mechanic's  travel time and/or mileage,  meals,
lodging,  loss of use of the engine or equipment,  loss of time,  inconvenience,
cargo  damage,  overtime  or any other cost or expense  resulting  from a defect
covered  by this  warranty.  Repairs  due to an  accident,  misuse,  alteration,
misapplication,  storage  damage,  negligence,  modification  exceeding  puraDYN
specifications,  or improper installation are not covered by this warranty.  The
above-mentioned  warranty and PFTI's  liability  will never  extend  beyond (the
consequence  of) defects in the puraDYN  systems  themselves.  Damage  caused by
other  means or by third  parties,  such as  errors  during  installation  or by
incorrect  mounting of pieces of hoses, is not covered,  either by this warranty
or by product liability.

This Warranty expires if and when.

      a.    The puraDYN systems are handled without due care or in contradiction
            with the  instructions  for use, of if used for purposes  other than
            its appropriate purpose.

      b.    Cartridges other than the original puraDYN filter elements have been
            applied.

      c.    The  defect  and/or  damage  is  a  result  of a  natural  disaster,
            accident, misuse, incorrect use or any other outside cause for which
            PFTI is not liable.

PFTI  reserves  the right to change or  improve  the  design of any PFT  product
without   assuming  any  obligation  to  modify  any  PFTI  product   previously
manufactured.

EXCEPT AS STATED  ABOVE,  PFTI  SHALL NOT BE LIABLE IN  CONTRACT,  TORT,  STRICT
LIABILITY OR NEGLIGENCE FOR ANY DIRECT,  INCIDENTAL OR CONSEQUENTIAL  DAMAGES OR
FOR  BREACH OF ANY  WRITTEN  OR  IMPLIED  WARRANTY.  PFTI  NEITHER  ASSUMES  OPR
AUTHORIZED ANY OTHER PERSON TO ASSUME FOR PFTI ANY OTHER LIABILITY IN CONNECTION
WITH THE SALE OF THE PRODUCT.  EXCEPT FOR THE EXPRESS  WARRANTY STATED ABOVE AND
ANY WARRANTY IMPLIED BY LAW, THERE ARE NOT WARRANTIES EXPRESSED OR IMPLIED.

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

INITIALS [ILLEGIBLE] PURADYN             INITIALS [ILLEGIBLE] MASTER DISTRIBUTOR

                               18 of 18

  2017 High Ridge Road, Boynton Beach, FL 33426 (TF) 1 866 PURADYN (787 2396)
              * (T) 561 547 9499 * (F) 561 547 8629 www.puradyn.com

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]