Document:

Andatee
China Marine Fuel Services Corporation

    2009
Equity Incentive Plan

    

    TABLE
OF CONTENTS

     

    
      
        	 	 	
                Page

              
	 	 	 
	
                1.

              	
                Purpose
      and Objectives

              	
                2

              
	
                 
      

              	 
      	 
      
	
                2.

              	
                Definitions

              	
                2

              
	 
      	 
      	 
      
	
                3.

              	
                Administration

              	
                4

              
	 
      	 
      	 
      
	
                4.

              	
                Grants

              	
                4

              
	 
      	 
      	 
      
	
                5.

              	
                Shares
      Subject to the Plan

              	
                4

              
	 
      	 
      	 
      
	
                6.

              	
                Eligibility
      for Participation

              	
                5

              
	 
      	 
      	 
      
	
                7.

              	
                Options

              	
                5

              
	 
      	 
      	 
      
	
                8.

              	
                Stock
      Units

              	
                7

              
	 
      	 
      	 
      
	
                9.

              	
                Stock
      Awards

              	
                8

              
	 
      	 
      	 
      
	
                10.

              	
                Stock
      Appreciation Rights and Other Stock-Based Awards

              	
                8

              
	 
      	 
      	 
      
	
                11.

              	
                Qualified
      Performance-Based Compensation

              	
                9

              
	 
      	 
      	 
      
	
                12.

              	
                Deferrals

              	
                10

              
	 
      	 
      	 
      
	
                13.

              	
                Withholding
      of Taxes

              	
                10

              
	 
      	 
      	 
      
	
                14.

              	
                Transferability
      of Grants

              	
                10

              
	 
      	 
      	 
      
	
                15.

              	
                Consequences
      of a Change of Control

              	
                11

              
	 
      	 
      	 
      
	
                16.

              	
                Requirements
      for Issuance of Shares

              	
                11

              
	 
      	 
      	 
      
	
                17.

              	
                Amendment
      and Termination of the Plan

              	
                11

              
	 
      	 
      	 
      
	
                18.

              	
                Miscellaneous

              	
                12

              

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

     

    Andatee
China Marine Fuel Services Corporation

    

    2009
Equity Incentive Plan

    

    1.           Purpose and
Objectives

    

    The Andatee China Marine Fuel Services
Corporation 2009 Equity Incentive Plan (the "Plan") is designed to align the
interests of (i) designated employees of Andatee China Marine Fuel Services
Corporation (the "Company") and its subsidiaries, (ii) non-employee members
of the board of directors of the Company, and (iii) consultants and key
advisors of the Company and its subsidiaries with the interests of the Company's
stockholders and to provide incentives for such persons to exert maximum efforts
for the success of the Company. By extending the opportunity to receive grants
of stock options, stock units, stock awards, stock appreciation rights and other
stock-based awards, the Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefiting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders. The Plan may furthermore be
expected to benefit the Company and its stockholders by making it possible for
the Company to attract and retain the best available talent. The Plan shall be
effective as of July _, 2009, subject to approval by the shareholders of the
Company.

    

    2.           Definitions

    

    Whenever used in this Plan, the
following terms will have the respective meanings set forth below:

    

    (a)           "Board"
means the Company's Board of Directors.

    

    (b)           "Cause"
means, except to the extent otherwise specified by the Committee, a finding by
the Committee of a Participant's incompetence in the performance of duties,
disloyalty, dishonesty, theft, embezzlement, or unauthorized disclosure of
customer lists, product lines, processes or trade secrets of the Employer,
individually or as an employee, partner, associate, officer or director of any
organization.

    

    (c)           "Change
of Control" shall be deemed to have occurred if:

    

    (i)            Any
"person" (as such term is used in sections 13(d) and 14(d) of the Exchange Act)
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than 50% of the voting power of the then outstanding securities of the Company;
provided that a Change of Control shall not be deemed to occur as a result of a
transaction in which the Company becomes a subsidiary of another corporation and
in which the shareholders of the Company, immediately prior to the transaction,
will beneficially own, immediately after the transaction, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
parent corporation would be entitled in the election of directors;

    

    (ii)            The
consummation of (i) a merger or consolidation of the Company with another
corporation where the shareholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the merger
or consolidation, shares entitling such shareholders to more than 50% of all
votes to which all shareholders of the surviving corporation would be entitled
in the election of directors, (ii) a sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company; or

    

    (d)           "Code"
means the Internal Revenue Code of 1986, as amended.

    

    (e)           "Committee"
means the Compensation Committee of the Board or another committee appointed by
the Board to administer the Plan. Grants that are intended to be "qualified
performance-based compensation" under section 162(m) of the Code shall be
made by a committee that consists of two or more persons appointed by the Board,
all of whom shall be "outside directors" as defined under section 162(m) of
the Code and related Treasury regulations.

    

    (f)           "Company"
means Andatee China Marine Fuel Services Corporation and any successor
corporation.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (g)           "Company
Stock" means the common stock of the Company.

    

    (h)           "Consultant"
means a consultant or advisor who performs services for the Employer and who
renders bona fide services to the Employer, if the services are not in
connection with the offer and sale of securities in a capital-raising
transaction and the Consultant does not directly or indirectly promote or
maintain a market for the Employer's securities.

    

    (i)           "Disability"
means a Participant's becoming disabled within the meaning of
section 22(e)(3) of the Code, within the meaning of the Employer's
long-term disability plan applicable to the Participant, or as otherwise
determined by the Committee.

    

    (j)           "Effective
Date" of the Plan means June __, 2009, subject to approval of the Plan by the
shareholders of the Company.

    

    (k)           "Employee"
means an employee of the Employer (including an officer or director who is also
an employee).

    

    (l)           "Employer"
means the Company and its subsidiaries.

    

    (m)           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.

    

    (n)           "Exercise
Price" means the per share price at which shares of Company Stock may be
purchased under an Option, as designated by the Committee.

    

    (o)           "Fair
Market Value" of Company Stock means, unless the Committee determines otherwise
with respect to a particular Grant, (i) if the principal trading market for
the Company Stock is the American Stock Exchange or another national securities
exchange, the "closing transaction" price at which shares of Company Stock are
traded on such securities exchange on the relevant date or (if there were no
trades on that date) the latest preceding date upon which a sale was reported,
(ii) if the Company Stock is not principally traded on a national
securities exchange, but is quoted on The Nasdaq Stock Market, Inc.
National Market System ("NMS") or Small-Cap Market ("Small-Cap"), the OTC
Bulletin Board ("OTCBB") or the Pink Sheets, the last reported "closing
transaction" price of Company Stock on the relevant date, as reported by the
NMS, Small-Cap, OTCBB or Pink Sheets, or, if not so reported, as reported in a
customary financial reporting service, as the Committee determines, or
(iii) if the Company Stock is not publicly traded or, if publicly traded,
is not subject to reported closing transaction prices as set forth above, the
Fair Market Value per share shall be as determined by the Committee.
Notwithstanding the foregoing, for federal, state and local income tax purposes,
the Fair Market Value may be determined by the Committee in accordance with
uniform and non-discriminatory standards adopted by it from time to
time.

    

    (p)           "Grant"
means an Option, Stock Unit, Stock Award, SAR or Other Stock-Based Award granted
under the Plan.

    

    (q)           "Grant
Agreement" means the written instrument that sets forth the terms and conditions
of a Grant, including all amendments thereto.

    

    (r)           "Incentive
Stock Option" means an Option that is intended to meet the requirements of an
incentive stock option under section 422 of the Code.

    

    (s)           "Non-Employee
Director" means a member of the Board who is not an employee of the
Employer.

    

    (t)           "Nonqualified
Stock Option" means an Option that is not intended to be taxed as an incentive
stock option under section 422 of the Code.

    

    (u)           "Option"
means an option to purchase shares of Company Stock, as described in
Section 7.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (v)           "Other
Stock-Based Award" means any Grant based on, measured by or payable in Company
Stock (other than a Grant described in Sections 7, 8 or 9 of the Plan), as
described in Section 10.

    

    (w)           "Participant"
means an Employee, Consultant or Non-Employee Director designated by the
Committee to participate in the Plan.

    

    (x)           "Plan"
means this Andatee China Marine Fuel Services Corporation 2009 Equity Incentive
Plan, as in effect from time to time.

    

    (y)           "SAR"
means a stock appreciation right as described in Section 10.

    

    (z)           "Stock
Award" means an award of Company Stock as described in
Section 9.

    

    (aa)           "Stock
Unit" means an award of a phantom unit representing a share of Company Stock, as
described in Section 8.

    

    3.           Administration

     

    (a)           Committee.  The
Plan shall be administered and interpreted by the Committee. Ministerial
functions may be performed by an administrative committee comprised of Company
employees appointed by the Committee.

     

    (b)           Committee
Authority.  The Committee shall have the sole authority to
(i) determine the Participants to whom Grants shall be made under the Plan,
(ii) determine the type, size and terms and conditions of the Grants to be
made to each such Participant, (iii) determine the time when the grants
will be made and the duration of any applicable exercise or restriction period,
including the criteria for exercisability and the acceleration of
exercisability, (iv) amend the terms and conditions of any previously
issued Grant, subject to the provisions of Section 17 below, and
(v) deal with any other matters arising under the Plan.

     

    (c)           Committee
Determinations.  The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
Participants.

    

    4.           Grants

    

    (a)           Grants
under the Plan may consist of Options as described in Section 7, Stock
Units as described in Section 8, Stock Awards as described in
Section 9, and SARs or Other Stock-Based Awards as described in
Section 10. All Grants shall be subject to such terms and conditions as the
Committee deems appropriate and as are specified in writing by the Committee to
the Participant in the Grant Agreement.

    

    (b)           All
Grants shall be made conditional upon the Participant's acknowledgement, in
writing or by acceptance of the Grant, that all decisions and determinations of
the Committee shall be final and binding on the Participant, his or her
beneficiaries and any other person having or claiming an interest under such
Grant. Grants under a particular Section of the Plan need not be uniform as
among the Participants.

    

    5.           Shares Subject to the
Plan

     

    (a)           Shares
Authorized.  The aggregate number of shares of Company Stock
that may be issued under the Plan is 5,000,000 shares, subject to adjustment as
described in subsection (e) below.

     

    (b)           Limit on Stock Awards, Stock Units,
SARs and Other Stock-Based Awards.  Within the aggregate limit
described in subsection (a), the maximum number of shares of Company Stock that
may be issued under the Plan pursuant to Stock Awards, Stock Units, SARs and
Other Stock-Based Awards during the term of the Plan is 500,000 shares, subject
to adjustment as described in subsection (e) below.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (c)           Source of Shares; Share
Counting.  Shares issued under the Plan may be authorized but
unissued shares of Company Stock or reacquired shares of Company Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options and SARs granted under the Plan terminate,
expire, or are canceled, forfeited, exchanged or surrendered without having been
exercised, and if and to the extent that any Stock Awards, Stock Units or Other
Stock-Based Awards are forfeited or terminated, or otherwise are not paid in
full, the shares reserved for such Grants shall again be available for purposes
of the Plan.

     

    (d)           Individual
Limits.  All Grants under the Plan shall be expressed in shares
of Company Stock. The maximum number of shares of Company Stock with respect to
which all Grants may be made under the Plan to any individual during any
calendar year shall be 500,000 shares, subject to adjustment as described in
subsection (e) below. The individual limits of this subsection
(d) shall apply without regard to whether the Grants are to be paid in
Company Stock or cash. All cash payments shall equal the Fair Market Value of
the shares of Company Stock to which the cash payments relate.

     

    (e)           Adjustments.  If
there is any change in the number or kind of shares of Company Stock outstanding
(i) by reason of a stock dividend, spinoff, recapitalization, stock split,
or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation, (iii) by reason of a reclassification or
change in par value, or (iv) by reason of any other extraordinary or
unusual event affecting the outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced as a result of a spinoff or the Company's
payment of an extraordinary dividend or distribution, the maximum number of
shares of Company Stock available for issuance under the Plan, the maximum
number of shares of Company Stock for which any individual may receive Grants in
any year, the number of shares covered by outstanding Grants, the kind of shares
issued and to be issued under the Plan, and the price per share or the
applicable market value of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.  To the extent that any Grant
is subject to section 409A of the Code, or becomes subject to section 409A of
the Code as a result of any adjustment made hereunder, such adjustment shall be
made in compliance with section 409A of the Code.

    

    6.           Eligibility for
Participation

     

    (a)           Eligible
Persons.  All Employees, Consultants and Non-Employee Directors
shall be eligible to participate in the Plan.

     

    (b)           Selection of
Participants.  The Committee shall select the Employees,
Consultants and Non-Employee Directors to receive Grants and shall determine the
number of shares of Company Stock subject to each Grant.

    

    7.           Options

     

    (a)           General
Requirements.  The Committee may grant Options to an Employee,
Consultant or Non-Employee Director upon such terms and conditions as the
Committee deems appropriate under this Section 7. The Committee shall
determine the number of shares of Company Stock that will be subject to each
Grant of Options to Employees, Consultants and Non-Employee
Directors.

     

    (b)           Type of Option, Price and
Term

    

    (i)            The
Committee may grant Incentive Stock Options or Nonqualified Stock Options or any
combination of the two, all in accordance with the terms and conditions set
forth herein. Incentive Stock Options may be granted only to Employees of the
Company or its parents or subsidiaries, as defined in section 424 of the
Code. Nonqualified Stock Options may be granted to Employees, Consultants or
Non-Employee Directors.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    (ii)            The
Exercise Price of Company Stock subject to an Option shall be determined by the
Committee; provided, however, that the Exercise Price for an Option (including
Incentive Stock Options or Nonqualified Stock Options) will be equal to, or
greater than, the Fair Market Value of a share of Company Stock on the date the
Option is granted and further provided that an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary, as defined in section 424 of the Code,
unless the Exercise Price per share is not less than 110% of the Fair Market
Value of the Company Stock on the date of grant

    

    (iii)            The
Committee shall determine the term of each Option, which shall not exceed ten
years from the date of grant. However, an Incentive Stock Option that is granted
to an Employee who, at the time of grant, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any
parent or subsidiary, as defined in section 424 of the Code, may not have a
term that exceeds five years from the date of grant.

     

    (c)           Exercisability of
Options.

    

    (i)            Options
shall become exercisable in accordance with such terms and conditions as may be
determined by the Committee and specified in the Grant Agreement. The Committee
may accelerate the exercisability of any or all outstanding Options at any time
for any reason.

    

    (ii)            The
Committee may provide in a Grant Agreement that the Participant may elect to
exercise part or all of an Option before it otherwise has become exercisable.
Any shares so purchased shall be restricted shares and shall be subject to a
repurchase right in favor of the Company during a specified restriction period,
with the repurchase price equal to the lesser of (A) the Exercise Price or
(B) the Fair Market Value of such shares at the time of repurchase, or such
other restrictions as the Committee deems
appropriate.  Notwithstanding the foregoing, to the extent that an
Option would otherwise be exempt from section 409A of the Code, the Committee
may only include such a provision in a Grant Agreement for such an Option if the
inclusion of such a provision will not cause that Option to become subject to
section 409A of the Code.

    

    (iii)            Options
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after
the date of grant (except that such Options may become exercisable, as
determined by the Committee, upon the Participant's death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by
applicable regulations).

     

    (d)           Termination of Employment or
Service.  Upon termination of employment or the services of a
Participant, an Option may only be exercised as follows:

    

    (i)            In
the event that a Participant ceases to be employed by, or provide service to,
the Employer for any reason other than Disability, death, or termination for
Cause, any Option which is otherwise exercisable by the Participant shall
terminate unless exercised within three months after the date on which the
Participant ceases to be employed by, or provide service to, the Employer (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Participant's Options that are
not otherwise exercisable as of the date on which the Participant ceases to be
employed by, or provide service to, the Employer shall terminate as of such
date.

    

    (ii)            In
the event the Participant ceases to be employed by, or provide service to, the
Employer on account of a termination for Cause by the Employer, any Option held
by the Participant shall terminate as of the date the Participant ceases to be
employed by, or provide service to, the Employer. In addition, notwithstanding
any other provisions of this Section 7, if the Committee determines that
the Participant has engaged in conduct that constitutes Cause at any time while
the Participant is employed by, or providing service to, the Employer or after
the Participant's termination of employment or service, any Option held by the
Participant shall immediately terminate and the Participant shall automatically
forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by the Company
of the Exercise Price paid by the Participant for such shares. Upon any exercise
of an Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a
forfeiture.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (iii)            In
the event the Participant ceases to be employed by, or provide service to, the
Employer on account of the Participant's Disability, any Option which is
otherwise exercisable by the Participant shall terminate unless exercised within
one year after the date on which the Participant ceases to be employed by, or
provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Participant's Options which are not otherwise exercisable as of the
date on which the Participant ceases to be employed by, or provide service to,
the Employer shall terminate as of such date.

    

    (iv)            If
the Participant dies while employed by, or providing service to, the Employer or
while an Option remains outstanding under Section 7(d)(i) or
7(d)(iii) above (or within such other period of time as may be specified by
the Committee), any Option that is otherwise exercisable by the Participant
shall terminate unless exercised within one year after the date on which the
Participant ceases to be employed by, or provide service to, the Employer (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Participant's Options that are
not otherwise exercisable as of the date on which the Participant ceases to be
employed by, or provide service to, the Employer shall terminate as of such
date.

     

    (e)           Exercise of
Options.  A Participant may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Participant shall pay the Exercise Price for the Option (i) in
cash, (ii) if permitted by the Committee, by delivering shares of Company
Stock owned by the Participant and having a Fair Market Value on the date of
exercise equal to the Exercise Price or by attestation to ownership of shares of
Company Stock having an aggregate Fair Market Value on the date of exercise
equal to the Exercise Price, (iii) by payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board, or (iv) by such other method as the Committee may approve. Shares of
Company Stock used to exercise an Option shall have been held by the Participant
for the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option. Payment for the shares pursuant to the
Option, and any required withholding taxes, must be received by the time
specified by the Committee depending on the type of payment being made, but in
all cases prior to the issuance of the Company Stock.

     

    (f)           Limits on Incentive Stock
Options.  Each Incentive Stock Option shall provide that, if
the aggregate Fair Market Value of the stock on the date of the grant with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year, under the Plan or any other stock option
plan of the Company or a parent or subsidiary, as defined in section 424 of
the Code, exceeds $100,000, then the Option, as to the excess, shall be treated
as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted
to any person who is not an Employee of the Company or a parent or subsidiary,
as defined in section 424 of the Code.

    

    8.           Stock Units

     

    (a)           General
Requirements.  The Committee may grant Stock Units to an
Employee, Consultant or Non-Employee Director, upon such terms and conditions as
the Committee deems appropriate under this Section 8. Each Stock Unit shall
represent the right of the Participant to receive a share of Company Stock or an
amount based on the value of a share of Company Stock. All Stock Units shall be
credited to bookkeeping accounts on the Company's records for purposes of the
Plan.

     

    (b)           Terms of Stock
Units.  The Committee may grant Stock Units that are payable on
terms and conditions determined by the Committee, which may include payment
based on achievement of performance goals. Stock Units may be paid at the end of
a specified vesting or performance period, or payment may be deferred to a date
authorized by the Committee. The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock
Units.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (c)           Payment With Respect to Stock
Units.  Payment with respect to Stock Units shall be made in
cash, in Company Stock, or in a combination of the two, as determined by the
Committee. The Grant Agreement shall specify the maximum number of shares that
can be issued under the Stock Units.

     

    (d)           Requirement of Employment or
Service.  The Committee shall determine in the Grant Agreement
under what circumstances a Participant may retain Stock Units after termination
of the Participant's employment or service, and the circumstances under which
Stock Units may be forfeited.

    

    9.           Stock Awards

     

    (a)           General
Requirements.  The Committee may issue shares of Company Stock
to an Employee, Consultant or Non-Employee Director under a Stock Award, upon
such terms and conditions as the Committee deems appropriate under this
Section 9. Shares of Company Stock issued pursuant to Stock Awards may be
issued for cash consideration or for no cash consideration, and subject to
restrictions or no restrictions, as determined by the Committee. The Committee
may establish conditions under which restrictions on Stock Awards shall lapse
over a period of time or according to such other criteria as the Committee deems
appropriate, including restrictions based upon the achievement of specific
performance goals. The Committee shall determine the number of shares of Company
Stock to be issued pursuant to a Stock Award.

     

    (b)           Requirement of Employment or
Service.  The Committee shall determine in the Grant Agreement
under what circumstances a Participant may retain Stock Awards after termination
of the Participant's employment or service, and the circumstances under which
Stock Awards may be forfeited.

     

    (c)           Restrictions on
Transfer.  While Stock Awards are subject to restrictions, a
Participant may not sell, assign, transfer, pledge or otherwise dispose of the
shares of a Stock Award except upon death as described in Section 14(a).
Each certificate for a share of a Stock Award shall contain a legend giving
appropriate notice of the restrictions in the Grant. The Participant shall be
entitled to have the legend removed when all restrictions on such shares have
lapsed. The Company may retain possession of any certificates for Stock Awards
until all restrictions on such shares have lapsed.

     

    (d)           Right to Vote and to Receive
Dividends.  The Committee shall determine to what extent, and
under what conditions, the Participant shall have the right to vote shares of
Stock Awards and to receive any dividends or other distributions paid on such
shares during the restriction period.

    

    10.          Stock Appreciation Rights and Other
Stock-Based Awards

    

    (a)           The
Committee may grant SARs to an Employee, Non-Employee Director or Consultant
separately or in tandem with an Option. The following provisions are applicable
to SARs:

    

    (i)            Base Amount. The Committee
shall establish the base amount of the SAR at the time the SAR is granted. The
base amount of each SAR shall be equal to the per share Exercise Price of the
related Option or, if there is no related Option, an amount that is at least
equal to the Fair Market Value of a share of Company Stock as of the date of
Grant of the SAR.

    

    (ii)            Tandem SARs. The Committee
may grant tandem SARs either at the time the Option is granted or at any time
thereafter while the Option remains outstanding; provided, however, that, in the
case of an Incentive Stock Option, SARs may be granted only at the date of the
grant of the Incentive Stock Option. In the case of tandem SARs, the number of
SARs granted to a Participant that shall be exercisable during a specified
period shall not exceed the number of shares of Company Stock that the
Participant may purchase upon the exercise of the related Option during such
period. Upon the exercise of an Option, the SARs relating to the Company Stock
covered by such Option shall terminate. Upon the exercise of SARs, the related
Option shall terminate to the extent of an equal number of shares of Company
Stock.

    

    (iii)            Exercisability. An SAR shall
be exercisable during the period specified by the Committee in the Grant
Agreement and shall be subject to such vesting and other restrictions as may be
specified in the Grant Agreement. The Committee may grant SARs that are subject
to achievement of performance goals or other conditions. The Committee may
accelerate the exercisability of any or all outstanding SARs at any time for any
reason. SARs may only be exercised while the Participant is employed by, or
providing service to, the Employer or during the applicable period after
termination of employment or service as described in Section 7(d). A tandem
SAR shall be exercisable only during the period when the Option to which it is
related is also exercisable.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (iv)            Grants to Non-Exempt
Employees. SARs granted to persons who are non-exempt employees under the
Fair Labor Standards Act of 1938, as amended, may not be exercisable for at
least six months after the date of grant (except that such SARs may become
exercisable, as determined by the Committee, upon the Participant's death,
Disability or retirement, or upon a Change of Control or other circumstances
permitted by applicable regulations).

    

    (v)            Value of SARs. When a
Participant exercises SARs, the Participant shall receive in settlement of such
SARs an amount equal to the value of the stock appreciation for the number of
SARs exercised. The stock appreciation for an SAR is the amount by which the
Fair Market Value of the underlying Company Stock on the date of exercise of the
SAR exceeds the base amount of the SAR as described in subsection
(i).

    

    (vi)            Form of Payment. The
Committee shall determine whether the stock appreciation for an SAR shall be
paid in the form of shares of Company Stock, cash or a combination of the two.
For purposes of calculating the number of shares of Company Stock to be
received, shares of Company Stock shall be valued at their Fair Market Value on
the date of exercise of the SAR. If shares of Company Stock are to be received
upon exercise of an SAR, cash shall be delivered in lieu of any fractional
share.

     

    (b)           Other Stock-Based
Awards.  The Committee may grant other awards not specified in
Sections 7, 8 or 9 above that are based on or measured by Company Stock to
Employees, Consultants and Non-Employee Directors, on such terms and conditions
as the Committee deems appropriate. Other Stock-Based Awards may be granted
subject to achievement of performance goals or other conditions and may be
payable in Company Stock or cash, or in a combination of the two, as determined
by the Committee in the Grant Agreement.

    

    11.         Qualified Performance-Based
Compensation

     

    (a)           Designation as Qualified
Performance-Based Compensation.  The Committee may determine
that Stock Units, Stock Awards, SARs or Other Stock-Based Awards granted to an
Employee shall be considered "qualified performance-based compensation" under
section 162(m) of the Code, in which case the provisions of this
Section 11 shall apply to such Grants. The Committee may also grant Options
under which the exercisability of the Options is subject to achievement of
performance goals as described in this Section 11 or
otherwise.

     

    (b)           Performance
Goals.  When Grants are made under this Section 11, the
Committee shall establish in writing (i) the objective performance goals
that must be met, (ii) the period during which performance will be
measured, (iii) the maximum amounts that may be paid if the performance
goals are met, and (iv) any other conditions that the Committee deems
appropriate and consistent with the requirements of section 162(m) of the
Code for "qualified performance-based compensation." The performance goals shall
satisfy the requirements for "qualified performance-based compensation,"
including the requirement that the achievement of the goals be substantially
uncertain at the time they are established and that the performance goals be
established in such a way that a third party with knowledge of the relevant
facts could determine whether and to what extent the performance goals have been
met. The Committee shall not have discretion to increase the amount of
compensation that is payable, but may reduce the amount of compensation that is
payable, pursuant to Grants identified by the Committee as "qualified
performance-based compensation."

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (c)           Criteria Used for Objective
Performance Goals.  The Committee shall use objectively
determinable performance goals based on one or more of the following criteria:
stock price, earnings per share, price-earnings multiples, gross profit, net
earnings, operating earnings, revenue, revenue growth, number of days sales
outstanding in accounts receivable, number of days of cost of sales in
inventory, productivity, margin, EBITDA (earnings before interest, taxes,
depreciation and amortization), net capital employed, return on assets,
shareholder return, return on equity, return on capital employed, growth in
assets, unit volume, sales, cash flow, market share, relative performance to a
comparison group designated by the Committee, debt reduction, market
capitalization or strategic business criteria consisting of one or more
objectives based on meeting specified R&D programs, new product releases,
revenue goals, market penetration goals, customer growth, geographic business
expansion goals, cost targets, quality improvements, cycle time reductions,
manufacturing improvements and/or efficiencies, human resource programs,
customer programs, goals relating to acquisitions or divestitures or goals
relating to FDA or other regulatory approvals. The performance goals may relate
to one or more business units or the performance of the Company as a whole, or
any combination of the foregoing. Performance goals need not be uniform as among
Participants. Performance goals may be set on a pre tax or after tax basis, may
be defined by absolute or relative measures, and may be valued on a growth or
fixed basis.

     

    (d)           Timing of Establishment of
Goals.  The Committee shall establish the performance goals in
writing either before the beginning of the performance period or during a period
ending no later than the earlier of (i) 90 days after the beginning of
the performance period or (ii) the date on which 25% of the performance
period has been completed, or such other date as may be required or permitted
under applicable regulations under section 162(m) of the Code.

     

    (e)           Certification of
Results.  The Committee shall certify the performance results
for the performance period specified in the Grant Agreement after the
performance period ends. The Committee shall determine the amount, if any, to be
paid pursuant to each Grant based on the achievement of the performance goals
and the satisfaction of all other terms of the Grant Agreement.

     

    (f)           Death, Disability or Other
Circumstances.  The Committee may provide in the Grant
Agreement that Grants under this Section 11 shall be payable, in whole or
in part, in the event of the Participant's death or Disability, a Change of
Control or under other circumstances consistent with the Treasury regulations
and rulings under section 162(m) of the Code.

    

    12.         Deferrals

    

    The Committee may permit or require a
Participant to defer receipt of the payment of cash or the delivery of shares
that would otherwise be due to the Participant in connection with any Grant. The
Committee shall establish rules and procedures for any such deferrals,
consistent with applicable requirements of section 409A of the
Code.

    

    13.         Withholding of
Taxes

     

    (a)           Required
Withholding.  All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require that the Participant or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.

     

    (b)           Election to Withhold
Shares.  If the Committee so permits, a Participant may elect
to satisfy the Company's tax withholding obligation with respect to Grants paid
in Company Stock by having shares withheld, at the time such Grants become
taxable, up to an amount that does not exceed the minimum applicable withholding
tax rate for federal (including FICA), state and local tax liabilities. The
election must be in a form and manner prescribed by the Committee.

    

    14.          Transferability of
Grants

     

    (a)           Restrictions on
Transfer.  Except as described in subsection (b) below,
only the Participant may exercise rights under a Grant during the Participant's
lifetime, and a Participant may not transfer those rights except by will or by
the laws of descent and distribution. When a Participant dies, the personal
representative or other person entitled to succeed to the rights of the
Participant may exercise such rights. Any such successor must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Participant's will or under the applicable laws of descent and
distribution.

     

    (b)           Transfer of Nonqualified Stock
Options to or for Family Members.  Notwithstanding the
foregoing, the Committee may provide, in a Grant Agreement, that a Participant
may transfer Nonqualified Stock Options to family members, or one or more trusts
or other entities for the benefit of or owned by family members, consistent with
the applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately
before the transfer.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    15.         Consequences of a Change of
Control

    

    In the event of a Change of Control,
the Committee may take any one or more of the following actions with respect to
any or all outstanding Grants, without the consent of any Participant:
(i) the Committee may determine that outstanding Options and SARs shall be
fully exercisable, and restrictions on outstanding Stock Awards and Stock Units
shall lapse, as of the date of the Change of Control or at such other time or
subject to specific conditions as the Committee determines, (ii) the
Committee may require that Participants surrender their outstanding Options and
SARs in exchange for one or more payments by the Company, in cash or Company
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Company Stock subject to the
Participant's unexercised Options and SARs exceeds the Exercise Price, if any,
and on such terms as the Committee determines, (iii) after giving
Participants an opportunity to exercise their outstanding Options and SARs, the
Committee may terminate any or all unexercised Options and SARs at such time as
the Committee deems appropriate, (iv) with respect to Participants holding
Stock Units or Other Stock-Based Awards, the Committee may determine that such
Participants shall receive one or more payments in settlement of such Stock
Units or Other Stock-Based Awards, in such amount and form and on such terms as
may be determined by the Committee, or (v) the Committee may determine that
Grants that remain outstanding after the Change of Control shall be converted to
similar grants of the surviving corporation (or a parent or subsidiary of the
surviving corporation). Such acceleration, surrender, termination, settlement or
assumption shall take place as of the date of the Change of Control or such
other date as the Committee may specify.  Notwithstanding the
foregoing, to the extent required to comply with section 409A of the Code, a
Grant Agreement will include a definition of "Change of Control" that complies
with and falls within the definition of "change in control event" set forth in
section 409A of the Code and any Internal Revenue Service regulations or other
guidance issued thereunder.

    

    16.         Requirements for Issuance of
Shares

    

    No Company Stock shall be issued in
connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Grant made to any Participant hereunder on such Participant's undertaking in
writing to comply with such restrictions on his or her subsequent disposition of
such shares of Company Stock as the Committee shall deem necessary or advisable,
and certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued under the
Plan will be subject to such stop-transfer orders and other restrictions as may
be required by applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon. No Participant shall have any right
as a shareholder with respect to Company Stock covered by a Grant until shares
have been issued to the Participant.

    

    17.          Amendment and Termination of the
Plan

     

    (a)           Amendment.  The
Board may amend or terminate the Plan at any time; provided, however, that the
Board shall not amend the Plan without approval of the shareholders of the
Company if such approval is required in order to comply with the Code or
applicable laws, or to comply with applicable stock exchange requirements. No
amendment or termination of this Plan shall, without the consent of the
Participant, materially impair any rights or obligations under any Grant
previously made to the Participant under the Plan, unless such right has been
reserved in the Plan or the Grant Agreement, or except as provided in
Section 18(b) below. Notwithstanding anything in the Plan to the contrary,
the Board may amend the Plan in such manner as it deems appropriate in the event
of a change in applicable law or regulations.

     

    (b)           Shareholder Approval for "Qualified
Performance-Based Compensation."  If Grants are made under
Section 11 above, the Plan must be reapproved by the Company's shareholders
no later than the first shareholders meeting that occurs in the fifth year
following the year in which the shareholders previously approved the provisions
of Section 11, if additional Grants are to be made under Section 11
and if required by section 162(m) of the Code or the regulations
thereunder.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (c)           Termination of
Plan.  The Plan shall terminate on the day immediately
preceding the tenth anniversary of its Effective Date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the shareholders. The termination of the Plan shall not impair the power and
authority of the Committee with respect to an outstanding Grant.

    

    18.          Miscellaneous

     

    (a)           Grants in Connection with Corporate
Transactions and Otherwise.  Nothing contained in this Plan
shall be construed to (i) limit the right of the Committee to make Grants
under this Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees, or
for other proper corporate purposes, or (ii) limit the right of the Company
to grant stock options or make other stock-based awards outside of this Plan.
Without limiting the foregoing, the Committee may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company in substitution for a grant made by such corporation. The
terms and conditions of the Grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives, as
determined by the Committee

     

    (b)           Compliance with
Law.  The Plan, the exercise of Options and the obligations of
the Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to
section 16 of the Exchange Act, it is the intent of the Company that the
Plan and all transactions under the Plan comply with all applicable provisions
of Rule 16b-3 or its successors under the Exchange Act. In addition, it is
the intent of the Company that Incentive Stock Options comply with the
applicable provisions of section 422 of the Code, that Grants of "qualified
performance-based compensation" comply with the applicable provisions of
section 162(m) of the Code and that, to the extent applicable, Grants
comply with the requirements of section 409A of the Code. To the extent
that any legal requirement of section 16 of the Exchange Act or
section 422, 162(m) or 409A of the Code as set forth in the Plan ceases to
be required under section 16 of the Exchange Act or section 422,
162(m) or 409A of the Code, that Plan provision shall cease to apply. The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Participants. The Committee may, in its sole discretion, agree to limit its
authority under this Section.

     

    (c)           Enforceability.  The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.

     

    (d)           Funding of the Plan; Limitation on
Rights.  This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under this Plan.
Nothing contained in the Plan and no action taken pursuant hereto shall create
or be construed to create a fiduciary relationship between the Company and any
Participant or any other person. No Participant or any other person shall under
any circumstances acquire any property interest in any specific assets of the
Company. To the extent that any person acquires a right to receive payment from
the Company hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Company.

     

    (e)           Rights of
Participants.  Nothing in this Plan shall entitle any Employee,
Non-Employee Director or other person to any claim or right to receive a Grant
under this Plan. Neither this Plan nor any action taken hereunder shall be
construed as giving any individual any rights to be retained by or in the
employment or service of the Employer.

     

    (f)           No Fractional
Shares.  No fractional shares of Company Stock shall be issued
or delivered pursuant to the Plan or any Grant. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (g)           Employees Subject to Taxation
outside the United States.  With respect to Participants who
are subject to taxation in countries other than the United States, the Committee
may make Grants on such terms and conditions as the Committee deems appropriate
to comply with the laws of the applicable countries, and the Committee may
create such procedures, addenda and subplans and make such modifications as may
be necessary or advisable to comply with such laws.

     

    (h)           Governing Law.  The
validity, construction, interpretation and effect of the Plan and Grant
Agreements issued under the Plan shall be governed and construed by and
determined in accordance with the laws of the State of Delaware, without giving
effect to the conflict of laws provisions thereof.

    
      
         

      

      
        13CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

    EXHIBIT
10.1

    

    EXCLUSIVE
DISTRIBUTION AGREEMENT

    

    EXCLUSIVE
DISTRIBUTION AGREEMENT by and between Dais Analytic Corporation, a New York
corporation (“Supplier”), 11552 Prosperous Drive, Odessa, FL USA, and Genertec
America, Inc., a California corporation ("Distributor”), 805 Veterans Blvd., Suite 210, Redwood
City, CA94063, USA

    

    RECITALS

    

      WHEREAS, Supplier manufactures
and sells a line of nanotechnology-based membrane products and related
products;

    

      WHEREAS, Distributor desires to
obtain the right to distribute and market Supplier’s products on an exclusive
basis in the Territory (as defined herein) and Supplier is willing to grant such
right under the terms and conditions hereof; and

    

      NOW THEREFORE, in consideration
of the premises and mutual and dependent promises set forth herein, the parties
hereto agree as follows:

    

    1.      CERTAIN
DEFINITIONS.

    

      (a) “Affiliate” shall mean any
person or entity which controls, is controlled by or is under common control
with a party to this Agreement.  For the purpose of this Agreement
"control" shall mean the ownership of at least 50% of the entity (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction) having the power to vote on or direct the affairs of
the entity and any person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control with a party to this
Agreement.

    

     
(b) “Products” means the Products set forth on Schedule A hereto.

    

     
(c) “Territory” means Great China including main land China, Hong Kong, Macau,
and Taiwan

    

     
(d) “Buyer” is a person or firm who will be authorized by the Distributor to
sell Products within the Territory.

    

    
      2.      APPOINTMENT OF
Distributor.

    

    

      (a) Supplier hereby appoints
Distributor, and Distributor accepts appointment, as the distributor of the
Products in the Territory on an exclusive basis subject to the terms of this
Agreement.  Nothing in this Agreement is intended to limit or prevent
Supplier or its Affiliates, either directly, through Distributors or otherwise,
from distributing, selling and/or marketing the Products outside the
Territory.  Distributor may not sell, distribute or promote the
Products outside of the Territory without the express prior written consent of
Supplier.  Distributor shall not sell, distribute or promote the
Products to any customer that Distributor has reason to believe will sell or
distribute the Products outside of the Territory.

    

     
(b)  In the event that Distributor’s purchase of Products during any
contract year is less than *** in the aggregate, Supplier shall have the right
in its sole discretion to (i)
convert the exclusivity of the Distributor to a non-exclusive basis, or
(ii) terminate this Agreement upon written notice.  During the initial
term of this Agreement, Distributor hereby agrees to order and purchase Products
in the aggregate amount of Two Hundred Million U.S. Dollars
($200,000,000).

    

     
(c)  Distributor shall have the right to appoint Buyers for the
installation, engineering, maintenance, sale and use of the Products in the
Territory.  Notwithstanding the foregoing, any Buyers appointed by
Distributor shall be subject to the terms and conditions of this Agreement as it
applies to Distributor and Buyer and Distributor shall use best efforts to
ensure such Buyers are in compliance with this Agreement.  Upon the
reasonable request of Supplier, Distributor shall terminate any Buyer appointed
by Distributor.  Distributor shall be responsible for any breaches by
a Buyer of Distributor’s or Buyer’s obligations hereunder.

    

     
(d) Upon 60 days’ prior written notice, Supplier shall have the right, at any
time, to make changes to or discontinue the sale of any of the Products without
incurring any liability to Distributor.  Supplier shall have the
right, at any time, without incurring any liability to Distributor, to amend
Schedule A to delete any non-commercially available Products.

    

     
(e) Distributor, and Buyer may not alter, modify, reverse engineer, decompile or
change any Product, its package, and package contents; labeling, manufacturer’s
directions or trademark for any reason. Each party will make best efforts to
prevent these types of situations from occurring. If Distributor, or Buyer(s),
modifies, reverse engineers, decompiles or changes any Product component,
package or package contents, labeling, Supplier’s directions or trademark, the
offending party(s) will; ***.  Distributor or Buyer, as the case may
be, shall promptly notify Supplier of such infraction.

     

    
      
        
          	
                  Confidential
      – not for Disclosure

                	
                  1

                	
                  August
      21,
      2009                       
      

                

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

     
(f) Distributor shall comply with all applicable laws, rules and regulations
related to the sale, distribution, promotion, marketing, handling, storage and
shipment of the Products.

    

    
      	
              3.

            	
                PRICING AND PAYMENT
      TERMS.

            

    

    

     
(a) The initial prices for the Products will be as set forth in Schedule A to
this Agreement.   Supplier may change the prices of any or all of
the Products upon 30 days prior written notice to
Distributor.  Distributor may determine the prices at which it sells
the Products.

    

     
(b) Sales, use, or other taxes measured by sales or receipts, shipping expense
and duties and levies, are not included in the prices shown on Schedule
A.  Where applicable, such taxes, expenses, duties and levies will be
billed to Distributor, provided, however, the sales taxes will not be billed to
Distributor if Distributor delivers to Supplier a valid sales tax exemption
certificate.  Distributor must provide to Supplier evidence that its
sales tax exemption is in effect on an annual basis.

    

     
(c) Invoices will be issued by Supplier promptly upon shipment of the
Products.  Invoices will include the Product cost plus taxes, levies,
duties and fees applicable to the sale of the Products by Supplier to
Distributor.  Payment is due within 10 days from the date of date of
delivery of the Product and is to be made in U.S. Dollars.

    

     
(d) A late payment fee of the greater of 1.0% per month (12% per year) or the
maximum rate permitted by applicable law will be applied to all invoices not
paid within 30 days of the due date, with interest accruing from the date
payment was due through the date that payment in full of the overdue invoice
plus the interest accrued thereon is received by Supplier.

    

    4.      ORDERING and
INVENTORY.

    

      (a) Distributor shall submit to
Supplier quarterly written non-binding forecasts projecting its requirement for
Products.  Each forecast shall be based upon the purchase orders made
in the preceding quarter.  Subject to Section 4(a) below, Supplier
reserves the right to refuse to fill orders that exceed the preceding quarter’s
forecast by *** Supplier requires a minimum *** lead time on orders for all
Products.

    

      (b) All purchase orders
submitted by Distributor shall be in the form set forth in Schedule B and be
subject to acceptance by Supplier by either shipment of Product or written
notice of acceptance.  Each purchase order submitted by Distributor
shall be binding upon Distributor and shall set forth the type of Products
ordered, quantities to be supplied and delivery dates.  No term or
condition set forth in any purchase order submitted by Distributor will have any
effect other than the identification of Product type, quantity, delivery dates
and other general non-contractual invoice information.  All other
terms and conditions contained in Distributor’s purchase orders shall be deemed
null and void.  The terms set forth in this Agreement shall apply to
all purchase orders placed by Distributor and accepted by Supplier.

    

      (c) Distributor shall pay to
Supplier, pursuant to the wire instructions provided by Supplier, the amount of
*** (the “Deposit”) to be paid as follows:

    

    ***

    

    Beginning
with the payment of the full Deposit amount to the Supplier the Deposit shall be
used to credit the first five percent (5%) of invoiced purchase orders made by
Distributor to the Supplier. In the event Distributor does not purchase and
order Products in sufficient quantities to recoup the Deposit prior to
termination of this Agreement, the Deposit (or any remaining portion thereof)
shall not be refundable.

    

      (d) If, at any time, it becomes
necessary for Supplier to allocate shipments, Supplier will take whatever action
in its judgment is fair and appropriate.

    

    5.      SHIPPING OF
PRODUCTS.  All Products will be sold FOB Port of Oakland, with
transportation charges to be pre-paid by Distributor.  The method of
transportation and carrier will be at Supplier’s discretion.  Requests
for adjustments on shipping errors (including concealed shortages/overages) must
be reported within 5 days after receipt of the shipment.  Distributor
will provide suitable storage facilities and follow all storage and handling
instructions provided by Supplier at all times while the Products are in
Distributor’s possession or in transit from Distributor to its
customers.

    

    6.      DISTRIBUTOR’S
OBLIGATIONS.

    

     
(a)      Distributor and Buyer each agrees, at its
respective costs, to (i) use its best efforts to sell the Products and increase
demand for the Products, including but not limited to development and
implementation of a business plan and strategy; (ii) maintain an adequate number
of full-time, personnel trained in marketing, sales, and operations of the
Products; (iii) have Distributor's or Buyer’s sales representatives, as the case
may be, participate in Supplier’s sales and technical training programs and such
trade shows and sales meetings as Supplier may designate from time to time; (iv)
provide demonstration assistance to promote the Products; (v) allow Supplier, at
Supplier’s option, to participate during Distributor’s or Buyer’s sales meetings
at no charge to Supplier; (vi) generate and qualify sales leads; (vii) support
the sales process with cost proposals, demonstrations, customer agreements,
etc.; (viii) assist current and new customers in ordering appropriate Products
for their needs; (ix) promptly deliver Products to its customers upon order; (x)
maintain adequate sales and warehouse facilities and sufficient inventory to
fulfill the requirements of its customers;  (xi) maintain adequate
records with respect to the Product for Warranty coverage purposes (to include,
without limitation, serial and model numbers, installation date and location and
customer’s name); (xii) not issue free goods of or credits on Products without
the prior written consent of Supplier; (xiii) send Supplier, upon request, a
quarterly listing of itemized Product volumes purchased by individual customers,
product inventory status, and general market conditions (including customer
trends, competition and economic and regulatory conditions that effect sales);
and (xiv) maintain a list of the locations of its customers to which Products
have been delivered.

     

    
      
        
          	
                  Confidential
      – not for Disclosure

                	
                  2

                	 
      

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

      (b) Distributor and Buyer shall
each support and assist Supplier and/or Buyer, upon request, in performing
activities and responsibilities related to Product safety.  Functions
to be performed by Distributor or Buyer, as the case may be, may include, but
are not limited to (i) documenting and aiding Supplier in responding to
complaints from customers; (ii) taking actions requested in writing by Supplier
to respond to customer complaints; (iii) correcting problems with Product(s) in
the field or in inventory as directed by Supplier; and (iv) notifying Supplier
within twenty-four hours after becoming aware of any and all adverse reactions
reported to Distributor or Buyer, as the case may be, alleged to have been
caused by any Product. If requested by Supplier, Distributor or Buyer will use
their respective best efforts in the event of a recall to notify their
respective customers of the recall and to facilitate retrieval of Products
recalled.

    

      (c) Distributor and Buyer will
allow Supplier the right to conduct an annual remote and/or on site inspection
of Distributor’s or Buyer’s facilities to determine if Distributor or Buyer has
adequate systems in place to fulfill its obligations under this
Agreement.  Distributor  and Buyer each acknowledges that
the granting of such rights to Supplier shall in no way relieve Distributor or
Buyer, as the case may be, of any of its obligations under this Agreement, nor
shall such provisions require Supplier to conduct any such
inspections.

    

     
(d)  Distributor shall assist and support Buyer with respect to the
Products as set forth in Schedule D.

    

     
(e)  Intentionally Omitted.

    

     
(f) Nothing herein shall be deemed to constitute a party an agent of another
party, and no party shall make any statements or representations to the contrary
by advertising, signs, letterheads, or otherwise.  No contracts,
commitments, statements, or representations made by or on behalf of a party
shall be binding in any respect on another party.

    

     
(g)  Intentionally Omitted.

    

     
(h) Nothing contained in this Agreement shall be construed to grant to
Distributor or Buyer any rights or license whatsoever in any trademark, trade
name, trade dress, service mark or original packaging of Supplier or any of its
Affiliates (collectively, the “Marks”), except rights expressly granted herein
to sell Products on which the Marks appear and to advertise the
Products.  Distributor and Buyer each disclaims any interest in and
right to any of the Marks or the goodwill pertaining thereto, whether arising
out of this Agreement or arising in some other manner. All sales of Products to
Distributor (and subsequently to Buyer) are made with the understanding that any
such trademarks, trade names, trade dress, service marks or original packaging
will not be altered or misused by Distributor, Buyer or any of their respective
officers, directors, employees or agents.  Distributor and Buyer will
promptly notify Supplier in writing of any infringement or threatened
infringement of any of the Marks of which Distributor or Buyer, as the case may
be, becomes aware, and will, at Supplier’s request and expense, assist Supplier
in preventing or eliminating such infringement.  Distributor and Buyer
may attach an identification label, at their own expense, to the Products
stating that the Products are being distributed or sold by Distributor or Buyer,
so long as such identification label does not prevent the plain view of the
Marks and other information and designs appearing on the Product and
packaging.

    

     
(i) Intentionally Omitted.

    

     
(j) Distributor and Buyer each agrees that in the performance of this Agreement,
Distributor and Buyer, as the case may be, will not make any illegal payments of
any kind or give other consideration to any local, state or federal government
official at any time or under any circumstance.

    

    7.   
   CONFIDENTIALITY.

    

     
(a) Distributor and Buyer each acknowledges that it will be given access to
confidential and proprietary information regarding Supplier and the Products
(the “Confidential Information”).  For the purposes of this Agreement,
Confidential Information includes, but is not limited to, drawings and
specifications, know-how, Product development data, customer lists, marketing
information, competitive strategies, and trade secrets.  Distributor
and Buyer each acknowledge that the Confidential Information remains the
property of Supplier.   Distributor and Buyer shall not, either
during the term of this Agreement or thereafter, disclose any Confidential
Information to any person or entity, other than those of its employees and
agents to whom disclosure is reasonably necessary in order for Distributor or
Buyer, as the case may be, to fulfill its obligations hereunder (each of such
persons to be advised by Distributor or Buyer of the confidential nature of the
information and to be subject to contractual obligations of confidentiality to
Distributor or Buyer, as the case may be, substantially equivalent to
Distributor’s or Buyer’s undertakings in this paragraph), and will not use the
Confidential Information for any purpose other than in the performance of its
obligations hereunder.   This restriction on use and disclosure
shall not apply to Supplier’s information that is (i) in the public domain at
the time of disclosure to Distributor or Buyer, as the case may be, or which
subsequently becomes part of the public domain through no fault of Distributor,
Buyer or their respective employees or agents, as the case may be; (ii)
disclosed to Distributor or Buyer, as the case may be, by a third party without
any obligation of confidentiality; (iii) in Distributors’ or Buyer’s possession,
as the case may be, prior to disclosure by Supplier, as evidenced by reasonable
written evidence; or (iv) independently developed by employees or agents of
Distributor or Buyer, as the case may be, that did not have access to Supplier’s
information, as evidenced by reasonable written evidence.  Distributor
and Buyer have the burden to establish that any of the foregoing exceptions is
applicable.   Distributor or Buyer, as the case may be, shall not
be deemed to have violated its obligations under this Section 7(a) if it is
compelled by law to disclose any Confidential Information, so long as it
provides prompt written notice of such compelled disclosure to Supplier and
permits Supplier to intercede in the matter, at its own expense, for the purpose
of obtaining a protective order.  Upon termination of this Agreement,
Distributor and Buyer shall return to Supplier all tangible copies of
Confidential Information, destroy all notes, memoranda, work papers, extracts
and the like containing Confidential Information, and provide Supplier with a
certificate of a senior executive officer of Distributor and Buyer confirming
Distributors’ and Buyer’s fulfillment of their respective obligations under this
paragraph

     

    
      	
              Confidential
      – not for Disclosure

            	
              3

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

     
(b) Distributor and Buyer each understands that the Confidential Information
constitute unique and valuable trade secrets of Supplier and acknowledges that
the breach of the provisions of Section 7(a) of this Agreement may result in
irreparable harm to Supplier for which monetary damages may be
inadequate.  Accordingly, Distributor  and Buyer each agrees
that in the event of any breach or threatened breach by Distributor, Buyer or
any of their respective employees or agents of Section 7(a), Supplier may seek
to obtain temporary or permanent injunctive relief or other equitable relief
from any court of competent jurisdiction, in addition to any other remedies
available to it, and Distributor and Buyer will not claim as a defense to such
petition for injunctive relief that Supplier has an adequate remedy at
law.

    

    8.       LICENSE
AGREEMENT.  During the initial term of this Agreement, Supplier
and Distributor agree to negotiate in good faith a royalty bearing license
agreement whereby Distributor shall be granted a license to manufacture the
Products (excluding components relating to Supplier’s polymer and polymer
membrane products) in the Territory. Said license will contain commercially
reasonable terms and condition, and the parties agree to negotiation in good
faith.

    
      9.       ACCEPTANCE;
WARRANTY.

    

    

     
(a)      Distributor shall immediately inspect the
Product upon delivery for defects and non-conformities.  In the event
Distributor fails to notify Supplier of any Product defect or non-conformity
within 30 days after delivery of the Products in question, then the delivered
Products shall be deemed to have been accepted by Distributor.

    

     
(b)  The warranty for the Products and all remedies for breach of such
warranty are set forth in Schedule C (the “Warranty”).  The Warranty
does not extend to any Products which have been subject to misuse, accident or
improper installation, maintenance or application, nor does the Warranty extend
to any labor charges for removal and/or replacement of the nonconforming or
defective Product or part thereof.  The Warranty does not cover
service or parts for any attachments, accessories, or alteration not provided by
Supplier, nor correction of problems resulting from the use of attachments,
accessories or alterations not provided by Supplier.

    

      (c) The Warranty period for the
Products shall be set forth in Schedule C (the “Warranty Period”).

    

      (d) THE WARRANTY SET FORTH IN
THIS SECTION 9 AND SCHEDULE C IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
ALL OF WHICH ARE EXPRESSLY DISCLAIMED AND EXCLUDED.  Distributor
ACKNOWLEDGES THAT SUPPLIER HAS MADE NO UNDERSTANDINGS, AGREEMENTS OR
REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS
TRANSACTION OTHER THAN AS EXPRESSLY SET FORTH IN THESE TERMS AND
CONDITIONS.  NO PERSON IS AUTHORIZED TO EXPAND OR IN ANY MANNER MODIFY
SUPPLIER’S EXPRESS WARRANTY DESCRIBED ABOVE.

    

      (e) Notwithstanding anything to
the contrary set forth herein, the liability of Supplier with respect to a claim
of any kind, whether as to quality or amount of Products delivered or for
non-delivery of Products, shall not exceed the invoice price of the quantities
of Products as to which the claim is made.

    

      (f)  IN NO EVENT SHALL
SUPPLIER BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES ARISING IN TORT, CONTRACT, STRICT LIABILITY OR ANY OTHER LEGAL THEORY
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFIT OR REVENUE, DOWNTIME COSTS, LOSS
OF USE OF THE PRODUCTS, COST OF ANY SUBSTITUTE PRODUCT, FACILITY OR SERVICE, AND
ANY CLAIMS OF DISTRIBUTOR, DISTRIBUTOR’S CUSTOMERS OR OTHER THIRD PARTIES FOR
ANY SUCH DAMAGES).

      (g) The delivering carrier, and
not Supplier, is responsible for damage in shipment.  Packing material
should not be discarded when damage is found.  The delivering carrier
should be notified to inspect any damages. Damaged items cannot be returned to
Supplier without authorization.  Distributor or its customer should
contact Supplier for complete instructions.

    

      (h)  Buyer shall be
responsible for the installation, engineering, maintenance and sale of the
Products for its customer’s use.  Supplier shall provide Distributor
and Buyer with training and pre-sale technical support set forth in Schedule
D.   In addition to the foregoing, upon the reasonable request of
Distributor, Supplier agrees to review Distributor’s marketing materials and
provide advice with respect to such materials; provided, however, Supplier shall
not be responsible in any manner for such marketing materials or any statement,
representation or warranty made therein.

     

    
      	
              Confidential
      – not for Disclosure

            	
              4

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

      (i)  Distributor and
its customers assume all responsibility and liability for injury or damages
resulting from their handling, possession, use or sale of Products including,
but not limited to any injury or damage resulting from the use of Products by
customers in their business operations or in combination with other substances
or products, and agree to defend and indemnify Supplier, its Affiliates and
their respective directors, officers, employees and agents from and against all
claims, losses, liabilities and expenses (including attorneys' fees and other
litigation or settlement costs) arising out of such handling, possession, use or
sale.  Buyer and its customers assume all responsibility and liability
for injury or damages resulting from their handling, possession, installation,
engineering, maintenance use or sale of Products including, but not limited to
any injury or damage resulting from the use of Products by customers in their
business operations or in combination with other substances or products, and
agree to defend and indemnify Supplier, its Affiliates and their respective
directors, officers, employees and agents from and against all claims, losses,
liabilities and expenses (including attorneys' fees and other litigation or
settlement costs) arising out of such handling, possession, installation,
engineering, maintenance, use or sale.

    

      (j)  Buyer shall
provide the pre-sale, post-sale, technical support and other services set forth
in Schedule D.

    

      (k)  Distributor and
Buyer each acknowledges and agrees that upon the expiration of the Warranty
Period, Supplier will have no further obligation for the maintenance, service or
repair of any Products unless the customer enters into a Supplier Service
Contract, and in such case, Supplier’s obligations shall be limited by the terms
of this Supplier Service Contract.

    

      (l)  Buyer shall
comply with all applicable laws, rules and regulations related to the Product
pre-sale, post-sale, technical support and other services provided hereunder and
the handling, possession, installation, engineering, maintenance and sale of the
Products.

    10.    
RETURN POLICY AND
CREDITS. Distributor shall not have the right to return any Products,
either during the term of this Agreement or upon termination hereof, unless (i)
such Product is defective or is in non-conformity, as determined by Supplier in
its reasonable determination, and Distributor has notified Supplier pursuant to
Section 9(a), and (ii) such Product does not comply with the Warranty contained
herein and Schedule C.  Returns of non-conforming Products require
prior written authorization from Supplier and shipping in accordance with
instructions provided by Supplier.  When contacting Supplier for
return authorization, Distributor must provide the invoice number, serial number
and date of shipment.  Authorized returns must be in clean factory
packaging.  All returns must be made by prepaid transportation unless
otherwise specified by Supplier.  Shipping charges on all returns will
be at Distributor’s or its customer’s expense unless Supplier confirms that the
product is defective, in which case reasonable shipping charges will be refunded
by Supplier.

    

    
      11.      INDEMNIFICATION.

    

    

      (a) Distributor shall indemnify,
defend and hold Supplier, Buyer, their Affiliates and their respective
directors, officers, employees, agents and advisors harmless from and against
any and all claims, demands, actions, causes of action, judgments, losses,
liabilities, costs and expenses of any kind, nature and description, including
but not limited to reasonable attorneys’ fees and other litigation expenses
(collectively, “Losses”), arising from or related to (i) any bodily injury or
wrongful death suffered by third parties arising out of the use of the Products,
to the extent attributable to the negligence or misconduct of Distributor, any
sub-Distributor or customer, (ii) Distributor’s and/or any sub-Distributor’s
breach of any of Distributor’s covenants or representations contained herein,
and (iii) any statement, representation or warranty made by Distributor, any
sub-Distributor or any of their respective employees or agents with respect to a
Product or its use that is not consistent with the statements, representations
or Warranty contained herein and Schedule C.  During the term of this
Agreement, Distributor agrees to maintain Commercial General Liability Insurance
in such an amount as is reasonably acceptable to Supplier.

    

      (b) Supplier shall indemnify,
defend and hold harmless Distributor and Buyer from and against any and all
Losses arising from or related to (i) any bodily injury or wrongful death
suffered by third parties arising out of the use of the Products, to the extent
attributable to the negligence or misconduct of Supplier, or (ii) any breach by
Supplier of any of its covenants, representations or warranties set forth
herein, subject to the limitations set forth in Section 9 hereof.

    

      (c)  Buyer shall
indemnify, defend and hold Supplier, Distributor, their Affiliates and their
respective directors, officers, employees, agents and advisors harmless from and
against any and all Losses arising from or related to (i) Buyer’s breach of any
of its covenants or representations contained herein, (ii) any statement,
representation or warranty made by Buyer or any of its employees or agents with
respect to a Product that is not consistent with the statements, representations
or Warranty contained herein and Schedule C, and (iii) any bodily injury or
wrongful death suffered by third parties arising out of the negligent
installation, engineering, maintenance, servicing or repairing of the Products
by Buyer or Buyer’s customer.  During the term of this Agreement,
Buyer agrees to maintain Commercial General Liability Insurance in such an
amount as is reasonably acceptable to Supplier and Distributor.

     

    
      	
              Confidential
      – not for Disclosure

            	
              5

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

    12.    TERM AND
TERMINATION.

    

     
(a) The initial term of this Agreement shall commence on the date hereof and
continue for a period of 5 years, unless earlier terminated as provided
herein.  Unless notice of termination is delivered to the other
parties 180 days prior to the initial term or any renewal term, this Agreement
will automatically renew for consecutive additional periods of 1 year
each.

    

     
(b)   In the event the Deposit is not made as outlined in Section
3c the Supplier may (i) terminate this Agreement or (ii) at its option, to
negotiate in good faith to amend this Agreement.

    

            
 (c)  Supplier may terminate this Agreement with written notice
if Distributor’s purchase of Products during any contract year is less than ***
in the in the aggregate.   Supplier may terminate this Agreement
immediately with or without notice upon a breach by Distributor or Buyer, as the
case may be, of Distributor’s or Buyer’s obligations hereunder if Distributor or
Buyer, as the case may be, fails to cure such breach within 30 days after
receipt of a written demand from Supplier.  Any party may immediately
terminate this Agreement, with or without notice to the applicable other party,
if such other party files a petition for relief from its creditors under
applicable bankruptcy laws, becomes insolvent, has a receiver appointed for its
assets, or is subject to an involuntary bankruptcy petition which is not
discharged within 30 days after it is filed.  The termination of this
Agreement for any reason shall neither release Distributor or Buyer from the
obligation to pay any sum that may be owed to Supplier, nor operate to discharge
any liability that had been incurred by Distributor or Buyer prior to any such
termination.  Neither Supplier, Buyer nor Distributor shall, by reason
of the termination of this Agreement be liable to any other for compensation,
reimbursement or damages due to loss of profits on sales or anticipated sales or
losses due to expenditures, investments or commitments made hereto or in
connection with the establishment, development or maintenance of the business or
good will of Supplier, Buyer or the Distributor or on account of any cause
whatsoever.

    

     
(d) At the discretion of Supplier this Agreement may be canceled immediately
upon the transfer, directly or indirectly, of fifty percent (50%) or more of
either the assets or the voting stock or other indicia of ownership of
Distributor to any third party other than those owning or holding such assets or
equity on the date herein above set forth. Notice is to be provided to the
Distributor in writing.

    

      (e) Upon termination of this
Agreement and upon Supplier’s written consent (such consent not to be
unreasonably withheld), Distributor shall have the right to deplete their
respective existing inventory of Products through sales to their respective then
existing customers unless termination was for violation of any portion of
Section 2 then Distributor or Buyer loses the right to deplete their respective
existing inventory of Products. Supplier reserves the right in any event to
repurchase from Distributor or Buyer all or any part of Distributor’s or Buyer’s
existing inventory of Products for the lesser of the prevailing prices being
charged to Distributor, or the price paid by Distributor to Supplier for such
Products.  Other than the foregoing, Distributor will cease all use of
the Marks, cease to represent itself as authorized Distributor of Supplier
products and otherwise desist from all conduct that might lead any person or
entity to believe that Distributor is so authorized.

    

    
      13.    MISCELLANEOUS.

    

    

     
(a) This Agreement constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all
previous undertakings, agreements and representations between the parties,
written or oral, with respect to the subject matter hereof.  No
modification of, addition to, or waiver of any provisions of this Agreement
shall be binding upon a party hereto unless the same shall be in writing and
duly executed by a duly authorized representative of the parties
hereto.  No waiver by a party of any of its rights hereunder shall be
effective unless in writing and signed by the party to be charged
therewith.

    

     
(b) This Agreement may not be assigned in whole or in part by Distributor to any
third party.  Any attempt to assign, or any actual assignment of any
part of this Agreement by Distributor to any third party without Supplier’s
prior written approval, shall be deemed null and void and shall result in the
immediate termination of this Agreement.  This Agreement will be
freely assignable by Supplier to its affiliates or to any successor to its
business, whether acquisition of all or substantially all of its assets,
acquisition of equity, merger, consolidation or otherwise.

    

    (c) No
party shall be liable to another party for any delay or failure to perform
hereunder (excluding the failure to pay money due hereunder), which delay or
failure is due to causes beyond the reasonable control of said party, including
but not limited to acts of God, acts of the public enemy, acts of the United
States of America or any state, territory or political subdivision thereof or of
the District of Columbia, fires, floods, epidemics, quarantine restrictions,
strikes or freight embargoes.

    

     
(d) Intentionally Omitted.

    

     
(e)      Any notice permitted or required to be
given hereunder shall be in writing and delivered by certified mail, return
receipt requested, or by internationally recognized overnight express courier,
addressed to the parties at their respective addresses set forth on the
signature page of this Agreement or to such other address as either party may
designate by written notice delivered to the other party.

    

     
(f) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and together shall constitute one and the same
document.

    

     
(g) Intentionally Omitted.

    

     
(h) Intentionally Omitted.

     

    
      	
              Confidential
      – not for Disclosure

            	
              6

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

     
(i) This Agreement shall be governed by and construed in accordance with the
laws of the state of New York without giving effect to the conflicts of laws
principles thereof, except that the interpretation and enforcement of this
arbitration provision shall be governed by the Federal Arbitration
Act.  Any controversy or claim arising out of or relating to this
Agreement or the validity, inducement, or breach thereof, shall be settled by
arbitration before a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) then
pertaining, except where those rules conflict with this provision, in which case
this provision controls.  The arbitration shall be held in New York,
New York, or such other place that the parties may agree.  Within 30
days after initiation of arbitration, the parties shall reach agreement upon and
thereafter follow procedures assuring that the arbitration will be concluded and
the award rendered within no more than six months from selection of the
arbitrator.  Failing such agreement, the AAA will design and the
parties will follow such procedures.  THE ARBITRATOR SHALL NOT AWARD
ANY PARTY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES.  Each party has the
right before or during the arbitration to seek and obtain from the appropriate
court provisional remedies such as attachment, preliminary injunction, replevin,
etc., to avoid irreparable harm, maintain the status quo or preserve the subject
matter of the arbitration.  In addition, a party may seek the
imposition of temporary or permanent injunctive relief to prevent or stop the
disclosure or misuse of any Confidential Information that it discloses to any
other party.  The parties hereby consent to the jurisdiction of the
Federal District Court for the District of New York, New York, for the
enforcement of these provisions and the entry of judgment on any award rendered
hereunder.  Should such court for any reason lack jurisdiction, any
court with jurisdiction shall enforce this clause and enter judgment on any
award.  The parties further agree that service of process shall be
proper if served pursuant to Section 13(e).  This paragraph shall
survive any termination or expiration of this Agreement.

    

     
(j)  In the event the English translation of this Agreement is
inconsistent with the translation of this Agreement into any other language, the
English translation shall control.

    

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized respective representatives as of the day and year written
below.

    

    [SIGNATURES
TO FOLLOW]

    

    DAIS
ANALYTIC CORPORATION

    

    
      
        	
                By:

              	
                /s/ Timothy Tangredi

              
	 
      	 
      
	
                Name:

              	
                   Timothy
    Tangredi

              
	 
      	 
      
	
                Title:

              	
                   President and
    CEO

              

      

    

    

    Address:  11552
Prosperous Drive

     
Odessa, FL 33556 USA

    

    GENERTEC
AMERICA, INC.

    

    
      
        	
                By:

              	
                  /s/ Yuen Kong

              
	 
      	 
      
	
                Name:

              	
                   Yuen Kong

              
	 
      	 
      
	
                Title:

              	
                  
CSO

              

      

    

    

    Address: 805 Veterans
Blvd

     Suite210

     Redwood
City, CA 94063, USA

     

    
      	
              Confidential
      – not for Disclosure

            	
              7

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    

    SCHEDULE
A

    

    Products and Pricing:
Commercial, and Development Items

    

    Commercial
Retail Pricing Schedule:

    

    ***

    

    Development/Prototype (not
available at this time)

    

    
      	
               
      

            	
              ·

            	
              NanoAir

            	
              -
      Pricing to be determined after completion of
  development

            

    

    

    
      	
               
      

            	
              ·

            	
              NanoClear
      – Pricing to be determined after completion of
  development

            

    

     

    
      	
              Confidential
      – not for Disclosure

            	
              2

            	 
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

    SCHEDULE
B

    

    Form of Purchase Order and
Required Information – ConsERV  (NanoAir, and NanoClear need to be
developed)

    

    

     

    
      
        	
                Confidential
      – Not for Disclosure

              	
                1

              	
                August
      21, 2009    

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
        	 
      	
                CONFIDENTIAL
      TREATMENT REQUESTED

              
	 
      	
                WITH
      RESPECT TO PORTIONS HEREOF

              
	 
      	
                DENOTED
      WITH “***”

              

      

    

    

    SCHEDULE
C

    

    Product Warranty and
Remedies – ConsERV (NanoAir, and NanoClear are to be
developed)

    

    ConsERVTM
ENERGY RECOVERY VENTILATOR - LIMITED WARRANTY

    

    
      	
              1. 

            	
              LIMITED
      WARRANTY

            

    

    

    
      	
               
      

            	
              a.

            	
              ***
      PARTS WARRANTY-Dais Analytic Corporation (“DAC”) warrants to the original
      end user of this product that should a product manufactured by DAC and
      contained in this ERV product prove substantially defective due to
      improper workmanship and/or material under normal use and given proper
      installation for a period of *** from the date of installation, DAC will
      repair or replace, at its option, any DAC part which is defective without
      charge for the part. Such replacement parts are warranted for the
      remainder of the original warranty
period.

            

    

    

    
      	
               
      

            	
              b.

            	
              THIS
      WARRANTY DOES NOT INCLUDE LABOR or other costs incurred in servicing,
      repairing, removing, installing, return freight or handling either
      defective or replacement DAC parts or complete
  unit.

            

    

    

    
      	
               
      

            	
              c.

            	
              EXTENDED
      *** CORE WARRANTY- With respect to the third through the *** from the date
      of installation, should the core contained in the DAC energy recovery
      ventilator prove substantially defective due to improper workmanship
      and/or material under normal use and given proper installation DAC will
      repair or replace, at its option, the core without charge. Any such
      replacement core is warranted for the remainder of the original warranty
      period. THIS LIMITED WARRANTY DOES NOT INCLUDE LABOR or other costs
      incurred in servicing, repairing, removing, installing, or handling either
      the defective or replacement core.

            

    

    

    
      	
               
      

            	
              d.

            	
              NOTICE
      - To obtain replacement parts under the limited warranties herein, you
      must notify DAC in writing of any defect within the applicable warranty
      period.

            

    

    

    
      	
              2.

            	
              DAC
      shall have the right to inspect the product at the installation site. DAC
      shall have the option to (a) repair, replace or service at its factory or
      at the installation site any defect in material or workmanship contained
      in the DAC product; or (b) credit the owner for the cost of the repair; or
      credit owner for the purchase price paid for the DAC product. Any
      defective DAC product returned to DAC for repair or replacement must be
      shipped to DAC prepaid by owner in exchange for the repair or replacement.
      Owner must provide proof of the original date of installation of the
      product in order to establish the effective date of the warranty otherwise
      the effective date will be deemed to be the date of manufacture plus
      thirty (30) days. Return of any owner registration card is not a condition
      of the warranty nor shall it be used to establish the warranty period.
      However, please detach and return it so we can contact you should a
      question or issue of safety arise.  Warranty applies only to
      units for which DAC has received payment in
  full.

            

    

    

    
      	
              3.

            	
              This
      limited warranty applies only while the unit remains at the site of the
      original installation, only to units installed within the continental
      United States, Hawaii and Alaska. This limited warranty applies only if
      the init is installed and operated in accordance with DAC’s instructions
      and in compliance with applicable building codes and good trade
      practices.

            

    

    

    
      	
              4.

            	
              THIS
      WARRANTY DOES NOT COVER damages or injury caused
  by:

            

    

    
      	
               
      

            	
              a.

            	
              Accident,
      abuse, negligence, misuse or other improper use of the
      Product;

            

    

    
      	
               
      

            	
              b

            	
              Operating
      the product in a corrosive environment including an environment containing
      chlorine, fluorine or any other damaging
  chemicals;

            

    

    
      	
               
      

            	
              c.

            	
              Modification,
      alteration, repair or service by anyone other than a authorized DAC
      contractor;

            

    

    
      	
               
      

            	
              d.

            	
              Improper
      matching or application of the product or the
  components;

            

    

    
      	
               
      

            	
              e.

            	
              Failure
      to perform proper and timely maintenance and service of the product in
      accordance with the manufacturers’ instructions and good trade
      practices;

            

    

    
      	
               
      

            	
              f.

            	
              Fluctuations
      in electrical power, or any acts of
God.

            

    

    

    
      	
              5.

            	
              THIS
      LIMITED WARRANTY EXCLUDES ALL COSTS of installation, disconnecting or
      dismantling the product or core, any parts used in connection with normal
      maintenance (examples thereof being filters and belts) and any
      maintenance.

            

    

    

    
      	
              6.

            	
              No
      one is authorized to change this limited warranty in any respect or to
      create for DAC any other obligation or liability in connection with this
      product and its components.

            

    

     

    
      
        	
                Confidential
      – Not for Disclosure

              	
                1

              	
                August
      21, 2009    

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

     

    
      	
              7.

            	
              Warranties
      with regard to any manufacturer’s equipment purchased by or provided to
      DAC and resold or otherwise provided by DAC to owner as part of the energy
      recovery ventilator are limited to that manufacturer’s warranty, if any.
      DAC assumes no liability of any nature, including warranty liability, with
      regard to any such manufacturer’s
equipment.

            

    

    

    
      	
              8.

            	
              YOUR
      ONLY WARRANTY AND REMEDY IS PROVIDED IN THIS LIMITED WARRANTY. ANY AND ALL
      OTHER WARRANTIES AND/OR GUARANTEES, WHETHER EXPRESS, IMPLIED OR STATUTORY
      (INCLUDING BUT NOT LIMITED TO WARRANTY OF MERCHANTABILITY AND WARRANTY OF
      FITNESS FOR A PARTICUALR PURPOSE), AND ANY REMEDY, WHICH BUT FOR THIS
      PROVISION, MIGHT ARISE BY IMPLICATION OR OPERATION OF LAW, IS HEREBY
      EXCLUDED AND DISCLAIMED. UNDER NO CIRCUMSTANCES SHALL DAC BE LIABLE FOR
      ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR
      RELATING TO THIS PRODUCT, WHETHER ARISING OUR OF BREACH OF WARRANTY,
      BREACH OF CONTRACT OR OTHERWISE.

            

    

    

    9.    This warranty gives you specific legal
rights, and you may also have other rights that vary from state to state. This
warranty is not transferable.

     

    
      
        	
                Confidential
      – not for Disclosure

              	
                2

              	 
      

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	 
      	
            CONFIDENTIAL
      TREATMENT REQUESTED

          
	 
      	
            WITH
      RESPECT TO PORTIONS HEREOF

          
	 
      	
            DENOTED
      WITH “***”

          

    SCHEDULE
D

    Supplier, Distributor and
Buyer Support

    

    
      	 
      	
              Product Education

            
	 
      	 
      
	
              Distributor

            	
              Distributor
      shall participate in an initial product education session held by
      Supplier, as well as attend periodic product update education sessions.
      Distributor shall be responsible to provide education to Buyer on an
      initial and on-going or as-needed basis. Education shall consist of
      class-room style instructor lead sessions, and hand-out materials. These
      sessions and materials will cover topics of product function,
      configuration, application, pricing, and servicing.

            
	 
      	 
      
	
              Buyer

            	
              After
      the expiration of the initial training period, Buyer shall handle new
      employee training and refresher training without Supplier’ assistance, but
      Buyer shall still have the right to request technical knowledge and
      clarification from Supplier for the duration of this
      Agreement.  If Buyer requests the physical presence of a
      Supplier employee for training at a location other than a Supplier
      facility, Buyer shall be responsible for reasonable travel expenses for
      that Supplier employee.  In any information exchange or physical
      meeting that requires translation, Buyer shall be responsible for
      providing said translation services.

            
	 
      	 
      
	
              Supplier

            	
              ***

            
	 
      	 
      
	 
      	
              Engineering of Product

            
	 
      	 
      
	
              Distributor

            	
              Distributor
      may facilitate timely communications, if needed, between Buyer and
      Supplier to seek Supplier’s input on product engineering, installation,
      and servicing related issues. Buyer is ultimately responsible for field
      engineering of the Product.

            
	 
      	 
      
	
              Buyer

            	
              Buyer
      shall carry out any design and engineering tasks necessary to install the
      product in accordance with Supplier’s instructions. If Buyer or
      Distributor requests a change to the form factor or components of the
      product, Supplier shall have the right to request payment of a reasonable
      fee to cover Supplier’s direct expenses necessary to produce said changes
      in the product.

            
	 
      	 
      
	
              Supplier

            	
              ***

            
	 
      	 
      
	 
      	
              Information about
  Customers

            
	 
      	 
      
	
              Distributor

            	
              Distributor
      shall maintain reasonable and sufficient information about all sales of
      products to enable warranty service for the span of any warranty provided
      by Supplier.  Upon request by Supplier, Distributor may be asked
      to provide any reasonable data about the Buyer(s) including warranty
      replacements, or service calls, including but not limited to: geography,
      frequency, duration before failure, and service history of a given
      Product.

            
	 
      	 
      
	
              Buyer

            	
              Buyer
      shall maintain reasonable and sufficient information about all sales of
      products to enable warranty service for the span of any warranty provided
      by Supplier.  Upon request by Supplier, Buyer shall compile any
      reasonable data about these warranty replacement or service calls,
      including but not limited to: geography, frequency, duration before
      failure, and service history of a given Product.

            
	 
      	 
      
	
              Supplier

            	
              ***

            

    

     

    
      
        	
                Confidential
      – Not for Disclosure

              	
                1

              	
                August
      21, 2009

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
      	
              CONFIDENTIAL
      TREATMENT REQUESTED

            
	 
      	
              WITH
      RESPECT TO PORTIONS HEREOF

            
	 
      	
              DENOTED
      WITH “***”

            

    

     

    
      
        
          
            	 
      	
                    Service Requirements

                  
	 	 
	
                    Distributor

                  	
                    Distributor
      may facilitate timely communications, if needed, between Buyer and
      Supplier to seek Supplier’s input on product engineering, installation,
      and servicing related issues.

                  
	 	 
	
                    Buyer

                  	
                    Buyer
      shall investigate all inquiries relating to and service all Products
      located within the Territory and Market Segment. The foregoing obligation
      shall include but is not limited to responding to inquires and providing
      service relating to warranty and/or performance issues and applies to all
      such Products. No reimbursement or additional compensation for the
      foregoing support and service shall be provided by Supplier without prior
      approval by Supplier.

                  
	 	 
	
                    Supplier

                  	
                    ***

                  

          

        

      

    

    

    
      	 
      	
              Supplier Requests for
      Assistance

            
	 
      	 
      
	
              Distributor

            	
              Distributor
      may be asked to facilitate timely communications, and
      follow-up,  if needed, between Buyer and Supplier seeking to aid
      Supplier in a variety of issues related to the
products.

            
	 
      	 
      
	
              Buyer

            	
              Buyer
      shall, upon Supplier’ request and subject to any limitation made by
      Supplier with respect to said request, provide Supplier assistance,
      service and support in accordance with any Supplier product sold within
      the Territory.

            
	 
      	 
      
	
              Supplier

            	
              ***

            

    

    

    
      	 
      	
              Warranty Parts

            
	 
      	 
      
	
              Distributor

            	
              Buyer
      shall make warranty replacements of parts subject to warranty coverage by
      Supplier out of stock available in China if replacement parts meet all
      Supplier specifications.

            
	 
      	 
      
	
              Buyer

            	
              Buyer
      shall make warranty replacements of parts subject to warranty coverage by
      Supplier out of stock available in China if replacement parts meet all
      Supplier specifications.

            
	 
      	 
      
	
              Supplier

            	
              ***

            

    

     

    
      
        	
                Confidential
      – not for Disclosure

              	
                2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]