MANUFACTURING AND SUPPLY AGREEMENT

1.1

Affiliate shall mean any Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, another Person.

1.2

Control shall mean the right to exercise, directly or indirectly, the power to direct or materially influence the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

1.3

Confidential Information shall include any formulae, revisions of formulae, know-how, processes and methods, business plans, financial data, product development plans,

2

TRADEMARKS .

3

TERM . Subject to other provisions of this Agreement, the term of this Agreement is two (2) years, commencing on the Effective Date. Thereafter, the term shall continue year by year until and unless either Party gives written notice of termination to the other Party at least 120 days prior to the end of the then current term.

4

PURCHASE .

4.3

Payment terms will be net 30 days. All past-due invoice balances shall bear interest at the rate of 1.5% per month until paid in full. If at any time Customer is in default with respect to any of its obligations under this Agreement, or Customer is insolvent or the subject of an insolvency or bankruptcy proceeding, then in addition to its other rights and remedies hereunder for breach Manufacturer may suspend all production and shipment.

4.4

The Products will be manufactured, tested, and delivered, in accordance with agreed upon Specifications. Any changes to Specifications must be agreed to in writing by both Parties.

4.5

Subject to pre-existing contractual obligations, Manufacturer’s compliance with this Agreement and Manufacturer’s capacity, during the term of this Agreement, Customer covenants and agrees to purchase from Cornerstone a minimum of 100% of Customer’s requirements of the type of Products and reformulations of or improvements to those Products described in Schedule 1.

5.1

During the term of this Agreement, Manufacturer and Customer may work together to develop new products and new technology, or to make improvements to existing Products. In addition, Customer may desire from time to time to terminate a supply relationship with another manufacturer for an existing product of Customer. Such new or other products may be added to this Agreement and to Schedule 1 upon the mutual written agreement of the Parties regarding issues such as pricing, manufacturing, packaging, reimbursement to Manufacturer for costs of research and development, etc.

5.2

When a product is added to Schedule 1, its manufacture and sale by Manufacturer to Customer shall be subject to all of the terms and conditions of this Agreement for the remaining term of this Agreement, except as otherwise specified in writing by the Parties

6.1

Customer shall give Cornerstone a written product specification and formulation sheet as notice of the product which Customer is interested in marketing or with respect to which product Customer desires to discontinue a supply relationship with another manufacturer (the “First Notice”). The First Notice shall describe the product in reasonable detail and shall include detailed information about any previous relationship with another manufacturer for said product, including product formulation, product specifications, etc.

6.2

Within 30 days after receiving the First Notice, Cornerstone must give written notice of Cornerstone’s desire to supply said product to Customer (the “Second Notice”). If Cornerstone fails to give the Second Notice within said 30-day period, its first right of negotiation hereunder shall expire. If Cornerstone timely gives the Second Notice, then the parties shall enter into good faith negotiations for the manufacturing and pricing of said product with the intent that it be added to the list of Products in Exhibit A to this Agreement. For a period of 45 days after the date of the Second Notice, Customer shall refrain from contacting or negotiating with any other potential manufacturer for the product which is the subject of the Second Notice. If the parties are unable to reach a mutual agreement on manufacturing and pricing terms for said product within said 45-day period, then Cornerstone’s right to negotiate to supply said product hereunder to Customer shall expire.

6.3

When a product is added to Exhibit A, its manufacture and sale by Cornerstone to Customer shall be subject to all of the terms and conditions of this Agreement for the remaining term of this Agreement, except as otherwise specified in writing by the parties.