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Franchise Agreement


Franchise Agreement

Important Notice: This document is written for reference purposes only. It does not carry any liabilities or legal responsibilities. All terms and conditions are subjected to completed and signed documents.


Topic Page

I. GRANT OF FRANCHISE AND LICENSE
1.1 Grant of Franchise

II. FRANCHISED SANJIU TCM MEDICAL CENTRE
2.1 Franchised Sanjiu TCM Medical Centre
2.2 Territory
2.3 Construction and Renovation

III. TERM OF FRANCHISE AGREEMENT
3.1 Term
3.2 Renewal
3.3 Form and Manner of Renewal
3.4 Conditions Precedent to Renewal
3.5 Non-Applicability of Renewal Provision
3.6 Notice Required by Law

IV. PAYMENTS BY FRANCHISEE
4.1 Initial Franchise Fee
4.2 Continuing Royalty
4.3 Advertising Fee
4.4 Other Payments to Company
4.5 Gross Sales
4.6 Reporting
4.7 Payments
4.8 Application of Funds
4.9 Interest on Late Payments
4.10 Audit Expenses

V. TRADEMARKS
5.1 Non-ownership of Trademarks
5.2 Use of Trademarks
5.3 Non-Use of Trade Name
5.4 Use of other Trademarks
5.5 Defense of Trademarks
5.6 Prosecution of Infringers
5.7 Modification of Trademarks
5.8 Acts in Derogation of the Trademarks
5.9 Prohibition Against Disputing Company's Rights
5.10 Assumed Name Registration

VI. ADVERTISING AND PROMOTION BY FRANCHISEE
6.1 General
6.2 Local Advertising
6.3 Co-Op Advertising
6.4 Telephone Numbers and Directory Advertising
6.5 Promotional Campaigns
6.6 Advertising Fund

VII. OPERATION OF THE BUSINESS
7.1 Products
7.2 Commitment of Time
7.3 Operations Manua
7.4 Insurance
7.5 Books and Records
7.6 Right of Inspection
7.7 Compliance with Laws
7.8 Suggested Prices
7.9 Cash Registers

VIII. OTHER SERVICES OF THE COMPANY
8.1 Training and Supervision
8.2 Reporting Forms

IX. ASSIGNMENT AND RIGHT OF FIRST REFUSAL
9.1 Assignment by Company
9.2 Assignment by Franchisee
9.3 Franchisee Information
9.4 Right of First Refusal
9.5 Corporate or Partnership Franchisee

X. NON-COMPETITION
10.1 Genera
10.2 Personnel

XI. DEFAULT AND TERMINATION
11.1 Termination with Notice
11.2 Termination without Notice
(a) Abandonment
(b) Bankruptcy and Insolvency
(c) Death or Incapacity of Franchisee
(d) Knowing Underreporting
(e) Repeated Defaults
(f) Misrepresentation
(g) Violation of Law
11.3 Cross Default
11.4 Notice Required By Law

XII. FURTHER OBLIGATIONS AND RIGHTS OF THE
PARTIES UPON TERMINATION OR EXPIRATION

12.1 Company's Rights
12.2 Termination Without Prejudice
12.3 Telephone Numbers

XIII. ARBITRATION
13.1 General

XIV. GENERAL CONDITIONS AND PROVISIONS
14.1 Relationship of Franchisee to Company
14.2 Indemnity by Franchisee
14.3 Company's Right To Cure Defaults
14.4 Waiver and Delay
14.5 Survival of Covenants
14.6 Successors and Assigns
14.7 Joint and Several Liability
14.8 Governing Law
14.9 Entire Agreement
14.10 Titles For Convenience
14.11 Gender
14.12 Severability
14.13 Counterparts
14.14 Fees and Expenses
14.15 Notices

XV. SUBMISSION OF AGREEMENT
15.1 General

XVI. ACKNOWLEDGMENT
16.1 General

 

UNIT FRANCHISE AGREEMENT

THIS FRANCHISE AGREEMENT ("Agreement") is made and entered into this__________ day of _______________, 20 ___________(the "Execution Date"), by and between SANJIU E-TECH CORPORATION, a Canadian corporation, located at 3570 Victoria Park Ave., North York, Ontario, Canada, ("Company"), and located at _____________________________________("Franchisee") with reference to the following facts:

A. Company has developed and is continuing to develop certain training, management and marketing techniques and other procedures and methods of operation (the "System") used in connection with the development, operation and maintenance of Sanjiu TCM Medical Centres operated under the Trademarks, as defined below, featuring and such other authorized menu items as Company may authorize or direct from time to time (the "Franchised Business").

B. Company is the owner of certain proprietary and other property rights and interests in and to the "SANJIU E-TECH CORPORATION" name and such other trademarks, trade names, service marks, logotypes, insignias, trade dress and designs which Company may from time to time authorize or direct Franchisee to use in connection with the Franchised Business (the "Trademarks").

C. Franchisee desires to obtain a franchise and license to use the Company's System and Trademarks in conjunction with the operation of one (1) "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centre (the "Sanjiu TCM Medical Centre"), and Company desires to grant to Franchisee said franchise and license in accordance with the terms and conditions of this Agreement, and the Operations Manual (as defined below) pertaining thereto.


WHEREFORE IT IS AGREED


I. GRANT OF FRANCHISE AND LICENSE

1.1 Grant of Franchise

Company hereby grants to Franchisee and Franchisee hereby accepts, a license to use and display the Trademarks, and the right to use the System, in connection with the operation of one (1) Sanjiu TCM Medical Centre at, and only at, the location described below upon the terms and subject to the provisions of this Agreement and all ancillary documents thereto, during the term hereof.

II. FRANCHISED SANJIU TCM MEDICAL CENTRE

2.1 Franchised Sanjiu TCM Medical Centre

(a) The Franchised Business shall be located at the following address , __________________
(the "Location").

(b) If the Location is leased by Franchisee:

(i) The lease shall be subject to Company's prior approval, a true and correct copy of which shall be delivered to Franchisor prior to Franchisee's execution thereof. Following approval by Company, and execution by Franchisee, a fully executed copy of said lease shall be promptly delivered to Company.
(ii) Franchisee shall duly and timely perform all of the terms, conditions, covenants and obligations imposed upon him under the lease.
(iii) The lease shall contain such terms as may be required by the Operations Manual (as defined in paragraph 7.3 below) and shall provide that it may not be modified or amended without Company's prior written consent which shall not be unreasonably withheld, and that Company shall be provided with copies of all such modifications or amendments.

2.2 Territory

For so long as this Agreement shall remain in effect, Company shall not operate or grant a franchise to any other entity to operate a Franchised Business within the territory set forth on Exhibit "A," which is attached hereto and incorporated herein by this reference (the "Territory").

2.3 Construction and Renovation

(a) If at the time of execution of this Agreement the Sanjiu TCM Medical Centre has not been constructed, or if the building at the Location has been constructed but does not comply with Company's standards in effect for new SANJIU TCM Medical Centres at the time of the execution of this Franchise Agreement, Franchisee shall at his sole cost and expense promptly cause the Sanjiu TCM Medical Centre and Location to be constructed, equipped and improved in accordance with such standards. Promptly following the execution hereof, but in any event prior to the renovation or construction of the Sanjiu TCM Medical Centre and Location, the Company shall provide Franchisee with copies of Company's specifications for the design and layout of the Sanjiu TCM Medical Centre and required building, fixtures, equipment, furnishings, decor, and signs. Franchisee shall, in all respects, comply with all such specifications and criteria unless Company shall, in writing, agree to modifications thereof. Such modifications will customarily be made only if required by zoning or similar laws, landlord requirements, unique plot problems or similar matters. Franchisee shall employ architects and general contractors of his own selection, and at his sole cost and expense, to prepare such architectural, engineering and construction drawings and site plans, and to obtain all permits and approvals, required to construct, remodel, renovate, and/or equip the Sanjiu TCM Medical Centre and Location. When completed, said Sanjiu TCM Medical Centre and Location shall in all respect comply with the Company's specifications therefor.

(b) Franchisee shall commence construction or renovation, as the case may be, as soon as possible but in no event later than two (2) months after the date of execution of this Agreement.

(c) Subject only to causes beyond the reasonable control of Franchisee, such as, by way of illustration, strikes, material shortages, fires and other acts of God, which Franchisee could not by the exercise of due diligence have avoided, Franchisee shall complete construction or renovation, as the case may be, of the Sanjiu TCM Medical Centre and all improvements therein, including installation of all fixtures, signs, equipment and furnishings as soon as possible but in no event later than three (3) months after commencement thereof. At all times prior to Franchisee commencing the operation of the Franchised Business, Company shall have the right to inspect and examine the premises and any fixtures, signs, furnishings and equipment for the purpose of insuring compliance with Company's standards and specifications.

(d) Franchisee agrees that the operation of the Franchised Business by Franchisee shall commence not later than six (6) months following the date of the execution hereof.

(e) The time periods for the commencement and completion of construction and the installation of fixtures, signs, machinery and equipment as referred to in this Paragraph 2.3 are of the essence of this Agreement.

(f) If Franchisee fails to perform his obligations contained in this Paragraph 2.3, the Company may deem the Franchisee's failure to so perform his obligations as aforesaid to constitute a material breach of this Agreement, in which event the Company shall notify Franchisee to such effect. If the Franchisee cures such default within fifteen (15) days after Company's notice of the material breach specified in Company's notice, which time shall be of the essence of this Agreement, such default shall be deemed cured. If, however, Franchisee fails to cure such default within said fifteen (15) day period, then in such event this Agreement shall be deemed terminated without any further notice.


III. TERM OF FRANCHISE AGREEMENT


3.1 Term

(a) Unless sooner terminated in accordance herewith, and subject to paragraphs 3.1(b) below, the term of this Agreement (the "Term") shall commence on the date that the Franchised Sanjiu TCM Medical Centre shall be opened for business and shall expire ten (10) years thereafter.

(b) Notwithstanding paragraph 3.1(a), if this Agreement is executed by Franchisee in connection with Franchisee's purchase of an existing Franchised Business, the Term hereof shall be equal to the then remaining term of the franchise agreement which relates to the Franchised Business so purchased.


3.2 Renewal

(a) Subject to paragraph 3.4, Franchisee shall have the right, but not the obligation, following the expiration of the Term hereof, to enter into a new franchise agreement in the form then generally being offered to prospective "SANJIU E-TECH CORPORATION" franchisees in the state in which the Sanjiu TCM Medical Centre is located, as modified pursuant to paragraph 3.2(b) hereof (the "Renewal Franchise Agreement") for a term equal to ten (10) years, or the duration of Franchisee's right to occupy the Location, whichever is less. The term of such new franchise agreement shall commence upon the date of expiration of the Term hereof.

(b) Notwithstanding anything herein contained to the contrary, the Renewal Franchise Agreement, if executed by the parties hereto, shall differ, and be modified, from Company's then-current form of Franchise Agreement in the following respects:

(i) Franchisee shall not be required to pay any Initial Fee (as defined in paragraph 4.1 below); and
(ii) All reference to a renewal term contained in the Renewal Franchise Agreement shall be deleted and Franchisee shall have no further right of renewal.


3.3 Form and Manner of Renewal

If Franchisee desires to exercise its right to enter into the Renewal Franchise Agreement (the "Renewal Right"), it shall do so in the following manner:

(a) Not less than eight (8) months nor more than twelve (12) months prior to the expiration of the Term of this Agreement, Franchisee shall request from Company in writing a copy of its then-current Offering Circular (including its then-current franchise agreement).

(b) Within thirty (30) days after receipt of Franchisee's said written request, Company shall deliver to Franchisee a copy of its Offering Circular and two (2) copies of its Renewal Franchise Agreement and promptly upon receipt of same Franchisee shall, in writing, acknowledge receipt thereof by executing and returning to Company the form prescribed in said Offering Circular.

(c) No sooner than ten (10) business days but no more than twenty (20) business days after Franchisee receives Company's then-current Offering Circular and said copies of the Renewal Franchise Agreement, Franchisee shall execute two (2) copies of said Renewal Franchise Agreement and return same to Company.

(d) If Franchisee shall fail to perform any of the acts, or deliver any of the notices required pursuant to the provisions of subsections (a), (b) or (c) of this paragraph 3.3, in a timely fashion, such failure shall be deemed an election by Franchisee not to exercise his right and option to enter into the Renewal Franchise Agreement, and such failure shall cause Franchisee's said right and option to automatically lapse and expire.

(e) Provided that Franchisee shall have exercised his Renewal Right, in the form and manner herein described, and shall have complied with all of the conditions contained in paragraph 3.4 hereof, Company shall execute the Renewal Franchise Agreement executed by Franchisee and shall, promptly at the expiration of the Term hereof, deliver one (1) fully executed copy of the Renewal Franchise Agreement to Franchisee.


3.4 Conditions Precedent to Renewal

Franchisee's right to enter into the Renewal Franchise Agreement, in accordance with the provisions of Section 3.2 hereof, is conditioned upon Franchisee's fulfillment of each and all of the following conditions precedent:

(a) At the time Franchisee notifies Company of its election to renew pursuant to paragraph 3.3(a) above and at all times from such notification to the time of the commencement of the term of the Renewal Franchise Agreement, Franchisee shall have fully performed all of his obligations under this Agreement, the Operations Manual and under all other agreements which may during said period be in effect between Franchisee and Company.

(b) Franchisee shall have not committed two (2) or more events constituting default during any twenty-four (24) month period during the Term of this Agreement, whether or not such defaults were cured.

(c) Franchisee shall have obtained the right to continue to occupy the Sanjiu TCM Medical Centre following the expiration of the Term hereof.

(d) Prior to the expiration of this Agreement, Franchisee shall have remodeled and renovated the Sanjiu TCM Medical Centre to conform to the Company's then current standards and specifications for remodeled Sanjiu TCM Medical Centres, which have been approved by Company within twelve (12) months of the date of the expiration of this Agreement.


3.5 Non-Applicability of Renewal Provision

If Franchisee has executed this Agreement as a Renewal Franchise Agreement, Paragraphs 3.2, 3.3, and 3.4 hereof shall not be applicable, and Franchisee shall have no further right to renew upon the expiration of the Term hereof.
3.6 Notice Required by Law

If applicable law requires that Company give notice to Franchisee prior to the expiration of the Term, this Agreement shall remain in effect on a month to month basis until the Company has given the requisite notice required by such applicable law. Notwithstanding anything to the contrary contained herein, if Company is not offering new franchises, is in the process of revising, amending or renewing its form of franchise agreement or offering circular, or is not lawfully able to offer Franchisee its then-current form of franchise agreement, at the time Franchisee advises Company pursuant to paragraph 3.3(a) hereof that Franchisee desires to renew, Company may, in its sole subjective discretion, (i) offer to renew this Agreement upon the same terms set forth herein for a renewal term determined in accordance with paragraph 3.2 hereof, or (ii) offer to extend the Term hereof on a month to month basis following the expiration of the Term hereof for as long as it deems necessary or appropriate so that it may lawfully offer its then-current form of franchise agreement.

IV. PAYMENTS BY FRANCHISEE


4.1 Initial Franchise Fee

(a) Unless the Franchise Agreement is executed in connection with the renewal or transfer of an existing franchise, Franchisee shall pay to Company the sum of Three Thousand Dollars ($3,000) as an initial franchise fee (the "Initial Fee"), payable upon the execution of this Agreement. Except as herein expressly provided this fee is not refundable in whole or in part, and shall be deemed fully earned upon the execution hereof.

(b) If Franchisee has executed this Franchise Agreement in connection with a transfer of an existing franchisee's Franchised Business, no Initial Fee shall be payable, however, Franchisee shall pay Company a transfer fee in the amount of two thousand dollars ($2,000) which is intended to cover the Company's administrative costs and expenses associated with the transfer, and, in addition, a training fee in the amount of three thousand dollars ($3,000) unless transferee is then an existing Franchisee of Company and has satisfactorily completed Company's training program.


4.2 Continuing Royalty

Subject to paragraph 4.2(b) below, Franchisee shall pay to Company a continuing royalty (the "Continuing Royalty") equal to five percent (5%) of Franchisee's Gross Sales for the products supplied by SANJIU and 1.5% (1.5%) of Franchisee's Gross Sales for the products other than supplied by SANJIU, as hereinafter defined, in accordance with paragraph 4.7 below.


4.3 Advertising Fee

In addition to all other payments provided for herein, the Franchisee shall pay to Company, concurrently with the submission of Franchisee's Royalty payment as described in paragraph 4.2 above, an Advertising Fee in an amount equal to two percent (2%) of the Franchisee's Gross Revenues, which shall be contributed to the Company's Advertising Fund, which shall be administered in accordance with Section 6.6 below.


4.4 Other Payments to Company

In addition to all other payments provided herein, Franchisee shall pay to Company, or its subsidiaries, affiliates or designees, as applicable, promptly when due:


(a) The amount of all sales taxes, use taxes, personal property taxes and similar taxes, imposed upon Franchisee and required to be collected or paid by Company on account of goods or services furnished by the Franchisee by sale, lease or otherwise or on account of royalties or initial franchise fees collected by Company from Franchisee.

(b) All amounts advanced by Company or which Company has paid, or for which Company has become obligated to pay on behalf of Franchisee for any reason whatsoever.

(c) All sums due on account of the purchase of products or services supplied by Company or any affiliate of Company to Franchisee.


4.5 Gross Sales

Gross Sales are divided into two categories

a. Products and services supplied by SANJIU and bear the name of, or related to "SANJIU".
b. Products and service, not supplied by, or related to "SANJIU", but approved by SANJIU, to be sold in the centers.

The term "Gross Sales of (a) " as used herein shall mean all sums received or receivable by Franchisee, directly or indirectly, from or in connection with the operation of the Franchised Business, including revenues generated from any and all sources on account of the sale of products, and from the rendering of services of any kind or nature, at or from the Sanjiu TCM Medical Centre, or under, or in any way connected with the use of, the Trademarks, whether for cash, credit, or barter.

The term "Gross Sales of (b)"as used herein shall mean all sum received or receivable by Franchisee, directly from or in connection with the products which carry brand name other than SANJIU and under, or in any way not connected with the use of, the SANJIU Trademarks.

There shall be deducted from Gross Sales for purposes of said computation (but only to the extent that they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to customers, if such taxes are separately stated when the customer is charged, and the amount of any actual refunds, rebates, over-rings, and allowances given to customers in good faith.

4.6 Reporting

(a) On Monday of each week during the Term hereof, Franchisee shall submit a weekly sales report, on a form prescribed by Company, reporting all Gross Sales for the preceding week. In addition, on or before the tenth (10th) day of each month during the Term hereof, simultaneously with Franchisee's Royalty payment, Franchisee shall submit a monthly sales summary signed by Franchisee, on a form prescribed by Company, reporting all Gross Sales for the preceding month, and such additional financial information as Company may from time to time request. (Such reports are hereinafter referred to as "Weekly Sales Reports", "Monthly Sales Reports", or collectively as "Gross Sales Reports").

(b) On or before the thirtieth (30th) day following each calendar quarter during the Term hereof, Franchisee shall submit to Company financial statements for the preceding quarter, including a balance sheet and profit and loss statement, prepared in the form and manner by the Company and in accordance with generally accepted accounting principles.

(c) Within sixty (60) days following the end of each of calendar year, Franchisee shall submit to Company an unaudited annual financial statement prepared in accordance with generally accepted accounting principles, and in such form and manner prescribed by Company, which shall be certified by Franchisee to be accurate and complete.


4.7 Payments

(a) On or before the tenth (10th) day of each month during the Term hereof, all at one time, Franchisee shall pay Company the full amount of:

(i) the Continuing Royalty due to Company for the preceding month;
(ii) the Advertising Fee due to Company for the preceding month; and

(b) Company shall have the right, but not the obligation, at any time during the Term hereof, to require Franchisee to instruct its bank to pay the amounts identified in this Section 4.7 directly to Company from Franchisee's account, by such automatic payment mechanism as Company may reasonably designate and upon the terms and conditions set forth herein. Upon Company's written notice of such election, Franchisee shall so instruct its bank.

4.8 Application of Funds

If Franchisee shall be delinquent in the payment of any obligation to Company hereunder, or under any other agreement with Company, Company shall have the absolute right to apply any payments received from Franchisee to any obligation owed, whether under this Agreement or otherwise, notwithstanding any contrary designation by Franchisee as to application.

4.9 Interest on Late Payments

If Franchisee shall fail to pay to Company the entire amount of Franchisee's Royalty Fee, Advertising Fee, or any other sums owed to Company, promptly when due, Franchisee shall pay to Company, in addition to all other amounts which are due but unpaid, interest on the unpaid amounts, from the due date thereof, at the rate of one and one-half percent (1-1/2%) per month, or the highest rate allowable under applicable law, whichever is less.

4.10 Audit Expenses

If Company should cause an audit to be made and the Gross Sales as shown by Franchisee's records for any reporting period should be found to be understated by more than two percent (2%), Franchisee shall be responsible for and shall immediately pay to Company the cost of such audit (in addition to all amounts which are due but unpaid); otherwise, the cost of such audit shall be paid by Company.

V. TRADEMARKS

5.1 Non-ownership of Trademarks

Nothing herein shall give Franchisee any right, title or interest in or to any of the Trademarks, except a mere privilege and license during the term hereof, to display and use the same according to the terms and conditions herein contained.

5.2 Use of Trademarks

(a) Subject to paragraph 5.7, Franchisee agrees that the Franchised Business herein licensed and franchised shall be named "SANJIU " without any suffix or prefix attached thereto and that Franchisee shall use and display such of the Company's Trademarks and such signs, advertising and slogans as Company may from time to time prescribe or approve.

(b) Upon expiration or sooner termination of this Agreement, Company may, if Franchisee does not do so, execute in Franchisee's name and on Franchisee's behalf, any and all documents necessary in Company's judgment to end and cause the discontinuance of Franchisee's use of the Trademarks and Company is hereby irrevocably appointed and designated as Franchisee's attorney-in-fact so to do.

5.3 Nonuse of Trade Name

If Franchisee is a corporation or general or limited partnership, it shall not use Company's Trademarks, or Company's trade name, or any words or symbols which are confusingly similar thereto, as all or part of Franchisee's name.

5.4 Use of Other Trademarks

Franchisee shall not display the trademark, service mark, trade name, insignia or logotype of any other person, firm or corporation in connection with the operation of the Franchised Business without the express prior written consent of Company, which may be withheld in its sole subjective discretion.

5.5 Defense of Trademarks

In the event that Franchisee receives notice, or is informed, of any claim, suit or demand against Franchisee on account of any alleged infringement, unfair competition, or similar matter on account of its use of the Trademarks in accordance with the terms of this Agreement, Franchisee shall promptly notify Company of any such claim, suit or demand. Thereupon, Company shall take such action as it may deem necessary and appropriate to protect and defend Franchisee against any such claim by any third party and shall indemnify Franchisee against any loss, costs or expenses incurred in connection therewith. Franchisee shall not settle or compromise any such claim by a third party without the prior written consent of Company. Company shall have the sole right to defend, compromise or settle any such claim, in its discretion, at Company's sole cost and expense, using attorneys of its own choosing, and Franchisee agrees to cooperate fully with Company in connection with the defense of any such claim. Franchisee may participate at its own expense in such defense or settlement, but Company's decisions with regard thereto shall be final.

5.6 Prosecution of Infringers

In the event that Franchisee shall receive notice or is informed or learns that any third party, which he believes to be unauthorized to use the Trademarks, is using the Trademarks or any variant thereof, Franchisee shall promptly notify Company of the facts relating to such alleged infringing use. Thereupon, Company shall, in its sole discretion, determine whether or not it wishes to take any action against such third person on account of such alleged infringement of the Trademarks. Franchisee shall have no right to make any demand against any such alleged infringer or to prosecute any claim of any kind or nature whatsoever against such alleged infringer for or on account of such infringement.

5.7 Modification of Trademarks

From time to time, in the Operations Manual or in directives or bulletins supplemental thereto, Company may add to, delete or modify any or all of the Trademarks. Franchisee shall use, or cease using, as may be applicable, the Trademarks, including but not limited to, any such modified or additional trade names, trademarks, service marks, logotypes and commercial symbols, in strict accordance with the procedures, policies, rules and regulations contained in the Operations Manual or in written directives issued by Company to Franchisee, as though they were specifically set forth in this Agreement.

5.8 Acts in Derogation of the Trademarks

Franchisee agrees that the Trademarks are the exclusive property of Company and Franchisee now asserts no claim and will hereafter assert no claim to any goodwill, reputation or ownership thereof by virtue of Franchisee's licensed and/or franchised use thereof, or otherwise. Franchisee agrees that it will not do or permit any act or thing to be done in derogation of any of the rights of Company in connection with the same, either during the Term of this Agreement or thereafter, and that it will use the Trademarks only for the uses and in the manner licensed and/or franchised hereunder and as herein provided.

5.9 Prohibition Against Disputing Company's Rights

Franchisee agrees that he will not, during or after the Term of this Agreement, in any way dispute or impugn the validity of the Trademarks licensed hereunder, or the rights of Company thereto, or the rights of Company or other franchisees of Company to use the same, both during the Term of this Agreement and thereafter.

5.10 Assumed Name Registration

In the event that Franchisee is required to do so by any statute or ordinance, Franchisee shall promptly upon the execution of this Agreement file with applicable government agencies or offices, a notice of its intent to conduct its business under the name "SANJIU E-TECH CORPORATION". Promptly upon the expiration or termination of this Agreement for any reason whatsoever, Franchisee shall promptly execute and file such documents as may be necessary to revoke or terminate such assumed name registration, and if Franchisee shall fail to promptly execute and file such documents as may be necessary to effectively revoke and terminate such assumed name registration, Franchisee hereby irrevocably appoints Company as his Attorney-in-fact to do so for and on behalf of Franchisee.

VI. ADVERTISING AND PROMOTION BY FRANCHISEE

6.1 General

Franchisee shall conduct all local advertising and promotion in accordance with such provisions with respect to format, content and media as are from time to time contained in the Operations Manual. No advertising material may be used by Franchisee without Company's prior written approval.

6.2 Local Advertising

In addition to the advertising fees required to be paid by Franchisee pursuant to paragraphs 4.3 and 6.4 hereof, Franchisee shall expend not less than two percent (2%) of its Gross Sales during each semi-annual period for local advertising relating to Franchisee's Sanjiu TCM Medical Centre.

6.3 Co-op Advertising

(a) The Company shall have the right at any time, and from time to time, to create Co-op Advertising Regions. If and when Company creates a Co-op Advertising Region for the region in which the Franchised Business is located, Franchisee shall become a subscriber and member thereof, and participate therein, in accordance with the Subscription Agreement and By-laws of such Co-op Advertising Region. The size and content of such regions, when and if established by the Company, shall be binding upon Franchisee and all other "SANJIU E-TECH CORPORATION" franchisees similarly situated who are required by the terms of their franchise agreements to so participate. At all meetings of such Co-op Advertising Region each participating Franchisee, and Company, shall be entitled to one (1) vote for each of its "SANJIU " Sanjiu TCM Medical Centres located within such Co-op Advertising Region. At any time upon reasonable notice, twenty percent (20%) of the eligible member votes, a majority of the directors, or Company by itself, may call a meeting of all members of a Co-op Advertising Region. Except as provided in paragraph 6.3(b), and except for any amendment of the Certificate of Incorporation or By-laws of the Co-op Advertising Region (which shall require the affirmative vote of the Company), all matters concerning operation of a Co-op Advertising Region shall be decided by majority vote, provided that a quorum is present, and such vote shall bind all members of said region, including Company. For purposes hereof, a quorum shall consist of members entitled to cast at least 50% of the total number of votes in such Cooperative Advertising Region.

(b) Upon the approval of at least a majority of the votes represented by all of the members of the Co-op Advertising Region, the Co-op Advertising Region members may vote to require each member to contribute up to, but not greater than__________, percent (_____ %) and not less than one percent (1%) of the Gross Sales of all of such member's "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centres in said Co-op Advertising Region for a regional co-op advertising program or programs. In the event of approval of such additional regional advertising contributions as aforesaid, each franchisee, including Franchisee, and Company, shall contribute to the Co-op Advertising Region in accordance with said vote.

(c) Expenditures made by Franchisee pursuant to any Co-op Advertising Region program, in accordance with paragraph 6.3, shall be credited against Franchisee's local advertising requirement described in paragraph 6.2 above.

6.4 Telephone Numbers and Directory Advertising

(a) Franchisee shall at its sole expense subscribe for and maintain throughout the term hereof one (1) or more telephone numbers, which shall be listed in the white pages and, at Franchisee's option, in the yellow pages of the telephone directory or directories servicing Franchisee's Territory and such adjacent or nearby areas as Company may designate. In all advertising placed by Franchisee in which such listed number(s) appear, there shall not appear any other telephone numbers subscribed for by Franchisee personally or in the conduct of any other business.

6.5 Promotional Campaigns

From time to time during the term hereof, Company shall have the right to establish and conduct promotional campaigns on a national or regional basis, which may by way of illustration and not limitation promote particular products or marketing themes. Franchisee agrees to participate in such promotional campaigns upon such terms and conditions as the Company may establish. Franchisee acknowledges and agrees that such participation may require Franchisee to purchase point of sale advertising material, posters, flyers, product displays and other promotional material. Nothing herein shall be construed to require Franchisee to charge any prices for the good and services offered at Franchisee's Sanjiu TCM Medical Centre other than those determined by Franchisee in his sole and absolute discretion.

6.6 Advertising Fund

(a) Company administratively segregates on its books and records all advertising fees received from Franchisee and all other franchisees of Company. Company will similarly contribute to the Advertising Fund for each Franchised Business that Company operates, the amount that Company would be required to contribute if it were a franchisee.

(b) If less than the total of all contributions to the Advertising Fund are expended during any fiscal year, such excess may be accumulated for use during subsequent years. If Company advances money to the Advertising Fund, Company will be entitled to be reimbursed for such advances.

(c) Advertising Fund revenues will be expended for national, regional, or local advertising, public relations or promotional campaigns or programs designed to promote and enhance the image, identity or patronage of franchised subfranchised and Company-owned "SANJIU E-TECH CORPORATION" businesses. Such expenditures may include, without limitation (a) conducting marketing studies, and the production and purchase of advertising art, commercials, musical jingles, print advertisements, point of sale materials, media advertising, outdoor advertising art, vehicle decals, and direct mail pamphlets and literature; and (b) a payment to Company or its affiliates, for internal expenses incurred in connection with the operation of its advertising department, if any, and the administration of the Advertising Fund; provided, however, that Company shall not allocate more than fifteen percent (15%) of all such Advertising Fund contributions to said internal expenses incurred by Company or its affiliates. Actual direct costs incurred by Company or its affiliates for the production of advertising shall not be subject to or included in said Fifteen percent (15%) limitation. Company shall determine, in its final and subjective discretion, exercised in good faith, the cost, media, content, format, style, timing, allocation and all other matters relating to such advertising, public relations and promotional campaigns. Nothing herein shall be construed to require Company to allocate or expend Advertising Fund Contributions so as to benefit any particular franchisee or group of franchisees on a pro rata or proportional basis or otherwise. Any additional advertising shall be at the sole cost and expense of Franchisee, subject to the provisions set forth herein in Article VII.

(d) Upon written request, Company shall furnish to Franchisee within one hundred twenty (120) days after the end of each calendar year, a report for the preceding year, prepared and certified correct by an officer of the Company containing the calculations of the amount which Company actually expended during such calendar year and the amount remaining which shall be carried over for use during the following year(s).

VII. OPERATION OF THE BUSINESS

7.1 Products

(a) Company may, from time to time throughout the Term hereof in its sole subjective discretion, require that Franchisee use, offer and/or promote, and maintain in stock at the Sanjiu TCM Medical Centre in such quantities as are needed to meet reasonably anticipated consumer demand, specifications and/or formulas ("Proprietary Products"). Franchisee shall purchase Proprietary Products only from Company or its designees. Company shall not be obligated to reveal such specifications and/or formulas of such Proprietary Products to Franchisee, non-designated suppliers, or any other third parties.

(b) Company may designate health food products, Chinese medicine, Chinese medicine formulae, medical equipment and instrument and equipment, fixtures, furnishings, equipment, uniforms, supplies, forms and other products and equipment other than Proprietary Products which Franchisee may or must use and/or offer and sell at the Sanjiu TCM Medical Centre ("Non-Proprietary Products"). Franchisee may, but shall not be obligated to, purchase such Nonproprietary Products from Company, if Company supplies same. Franchisee may use, offer or sell only such Nonproprietary Products that Company has expressly authorized, or that were purchased or obtained from Company or a supplier designated or approved by Company pursuant to subparagraph (c) below.

(c) Franchisee may purchase authorized Nonproprietary Products from (i) Company, (ii) suppliers designated by Company, or (iii) suppliers selected by Franchisee and approved in writing by Company prior to Franchisee making such purchase(s). With respect to each such supplier designated or approved by Company, such supplier shall have demonstrated to the reasonable satisfaction of Company:

1. Its ability to supply a Nonproprietary Product meeting the specifications of Company, which may include, without limitation, specifications as to brand name, contents, quality, and compliance with governmental standards and regulations, and
2. Its reliability with respect to the consistent quality of its products or services. In the event that Franchisee should desire to procure any authorized Nonproprietary Products from a supplier other than Company or a supplier previously approved or designated by Company, Company shall, upon request of Franchisee, furnish to Franchisee specifications for such Nonproprietary Products if such are not contained in the Operations Manual. Franchisee shall thereafter deliver written notice to Company of his desire to seek approval of such supplier, which notice shall (i) identify the name and address of such supplier, (ii) contain such information as may be requested by Company or required to be provided pursuant to the Operations Manual, and (iii) identify the authorized Nonproprietary Products desired to be purchased from such supplier. The Company may thereupon request that the proposed supplier furnish Company at no charge with product samples, specifications and such other information as Company may require. Should Company not deliver to Franchisee, within thirty (30) business days after it has received such notice and all information and other items requested by Company in order to evaluate the proposed supplier, a written statement of disapproval with respect to such supplier, it shall be deemed that such supplier is approved by Company as a supplier of the authorized Nonproprietary Products described in such notice until such time as Company may subsequently withdraw such approval. As a further condition of such approval, Company may require such supplier to agree in writing (i) to provide from time to time upon Company's request free samples of any Nonproprietary Product it intends to supply to Franchisee, and (ii) to faithfully comply with Company's specifications for applicable Nonproprietary Products sold by it, and (iii) that it shall sell any Nonproprietary Product bearing the Company's Trademarks only to franchisees of Company and only pursuant to a Trademark License Agreement in form prescribed by Company. Franchisee shall reimburse Company for all product testing costs paid by Company to third parties in determining whether to approve a supplier selected by Franchisee.

3. Company may, from time to time, authorize Franchisee to test market products and/or services in connection with the operation of the Franchise Business. Franchisee agrees to cooperate with Company in connection with the conduct of such test marketing programs and agrees to comply with the Company's rules and regulations established from time to time in connection herewith.

7.2 Commitment of Time

During the Term of this Agreement, Franchisee, or a manager acceptable to Company, shall, except as otherwise expressly agreed to by Company in writing, devote his part-time/full time and best efforts to the operation of the Franchised Business. If Franchisee is a corporation or a general or limited partnership, such Franchisee shall select a full time manager acceptable to Company in its sole discretion to devote his or her part-time/full-time and best efforts to the Franchised Business. It is understood and agreed by the parties hereto that the Franchised Business shall be operated during such minimum hours and days established by Company from time to time, but in any event during not less than the hours and days during which other Sanjiu TCM Medical Centres in Franchisee's vicinity are typically open and operating. If Franchisee operates more than one (1) Sanjiu TCM Medical Centre, Franchisee shall devote his part-time/full time efforts to all such Sanjiu TCM Medical Centres, collectively, and shall employ a part-time/full time manager, acceptable to Company, to supervise each such Sanjiu TCM Medical Centre.

7.3 Operations Manual

(a) Franchisee shall operate the Franchised Business in strict compliance with the standard procedures, policies, rules and regulations established by Company and incorporated in Company's operations manual(s) as same may be amended and revised from time to time, including all bulletins, supplements and ancillary manuals (collectively referred to herein as the "Operations Manual"). The subject matter of the Operations Manual may include, without limitation, matters such as: forms, information relating to product and menu specifications, cash control, purchase orders, general operations, labor schedules, personnel, Gross Sales reports, payroll procedures, training and accounting; safety and sanitation; design specifications and color of uniforms; display of signs and notices; authorized and required equipment and fixtures, including specifications therefor; Trademark usage; insurance requirements; lease requirements; decor; standards for management and personnel, hours of operation; yellow page and local advertising formats; standards of maintenance and appearance of the Sanjiu TCM Medical Centre.

(b) Company shall have the right to modify the Operations Manual at any time and from time to time by the addition, deletion or other modification to the provisions thereof. All such modifications shall be equally applicable to all similarly situated franchisees who are required by their franchise agreements to comply therewith, and no such modification shall alter Franchisee's fundamental status and rights under this Agreement. Modifications in the Operations Manual shall become effective upon delivery of written notice thereof to Franchisee unless a longer period is specified in such written notice. The Operations Manual, as modified from time to time as hereinabove provided shall be an integral part of this Agreement and reference made in this Agreement, or in any amendments, exhibits or schedules hereto, to the Operations Manual shall be deemed to mean the Operations Manual kept current by amendments from time to time. Upon the execution of this Agreement, Company shall furnish to Franchisee one (1) copy of the Operations Manual, unless Franchisee purchased the Franchised Business from an existing franchisee or entered into this Agreement as a Renewal Franchise Agreement. Upon the expiration or termination of this Agreement for any reason whatsoever, Franchisee shall immediately return the Operations Manual to Company. Franchisee shall not make, or cause or allow to be made, any copies or reproductions of all or any portion of the Operations Manual without Company's express prior written consent.

7.4 Insurance

Company shall prescribe minimum standards and limits for certain types of insurance coverage to be purchased by Franchisee, in order to standardize insurance coverage and afford Franchisee and Company protection against insurable risks, including but not limited to business interruption coverage, and Franchisee shall purchase such insurance promptly after execution hereof and in any event prior to commencing construction of the Sanjiu TCM Medical Centre and keep same in full force and effect during the entire Term and any extensions of this Agreement, amending said insurance from time to time as necessary in order to remain in compliance with Company's standards and specifications. Said standards and limits shall be established in Company's Operations Manual. If Franchisee fails or refuses to purchase insurance conforming to the standards and limits prescribed by Company, Company may obtain, through agents and insurance companies of its own choosing, such insurance as is necessary to meet such standards. Payments for such insurance shall be made by Franchisee. Nothing contained herein shall be construed or deemed to impose on Company any duty or obligation to obtain or maintain any specific forms, kinds or amounts of insurance for or on behalf of Franchisee, or as an undertaking or representation by Company that such insurance as may be obtained by Franchisee or by Company for Franchisee will insure Franchisee against any or all insurable risks of loss which may or can arise out of, or in connection with, the operation of the Franchisee's Business. Franchisee may obtain, on Franchisee's own behalf, and at Franchisee's own cost and expense, such insurance as Franchisee may from time to time desire, in addition to that obtained on Franchisee's behalf by Company, or as may be required herein. All insurance as may be obtained by Company for Franchisee may be amended, canceled, terminated or modified at any time upon ten (10) days written notice to Franchisee. All insurance purchased by Franchisee shall name Company as an additional assured, and shall provide that Company be given at least ten 10 days prior written notice of any termination, amendment, cancellation, or modification thereof. Franchisee shall promptly provide Company with certificates of insurance evidencing such coverage no later than ten (10) days after the purchase of the insurance required herein, and throughout the term and any extension hereof evidencing continued coverage.

7.5 Books and Records

(a) Franchisee covenants and agrees that he shall keep and maintain during the term hereof full, complete and true records of all revenues and all expenditures in the form and manner as specified or directed by Company in its Operations Manual or otherwise. All financial records must be kept by Franchisee for a minimum of five (5) years or such longer period as may be prescribed by law.

(b) Franchisee shall, from time to time, deliver to Company such reports and information as Company shall reasonable require. All such requirements shall be specified in the Operations Manual.

7.6 Right of Inspection

Company shall have the right from time to time, and without prior notice to Franchisee, to send representatives to the Sanjiu TCM Medical Centre, to inspect Franchisee's operations, business methods, service, management, Financial Records and administration, and to determine the quality thereof and the faithfulness of Franchisee's compliance with the provisions of this Agreement and the Operations Manual, and Franchisee shall cooperate fully with Company and its representatives and agents with respect to such inspections. Franchisee shall permit Company and its representatives or agents to copy, examine or audit, physically or by electronic or other methods, with or without notice, the computers, books of accounts, bank statements, check stubs, customer invoices, documents, records, papers, and federal, state and local tax return records ("Financial Records") of Franchisee at any time or times. Upon fifteen (15) days prior notice, Franchisee shall deliver all Financial Records to Company or its representatives at such location as Company may designate. Upon Company's request, Franchisee shall permit Company and its representatives and agents to temporarily remove such Financial Records to the offices of Company or such representatives or agents for copying, review, and/or audit. Company shall bear the cost of all such inspections, provided that if any such inspection discloses that Franchisee has failed to comply with any provision of this Agreement or the Operations Manual in a manner that would permit Company to terminate this Agreement if uncured, the direct costs of such inspections shall be borne by Franchisee.

7.7 Compliance with Laws

Franchisee shall operate the Franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities, shall comply with all applicable wage, hour, and other laws and regulations of the federal, state or local governments (including any and all licensing requirements), and shall prepare, file and retain all necessary tax returns, and pay promptly all taxes imposed upon Franchisee or upon Franchisee's Franchised Business or property. Franchisee shall timely file all fictitious business name statements and similar submissions required by any law, rule or regulation of any federal, state, or local government in connection with Franchisee's use of the Company's Trademarks.

7.8 Suggested Prices

Company may advise Franchisee, from time to time, as to the various suggested prices. Company and Franchisee hereby agree that any such list or schedule of prices furnished to Franchisee by Company is by way of recommendation only, and is not to be construed as binding or mandatory upon Franchisee.

7.9 Cash Registers

Subject to paragraph 7.5(b), Franchisee shall cause all sales to be registered upon an electronic non-resettable cash register of the type and having the characteristics specified by Company, and shall provide to Company access to permit reading of the running total of said cash register at any time or times at Company's sole discretion. Franchisee shall repair all malfunctions immediately and shall follow Company's policies and procedures as established from time to time during any period during which the cash register is not fully operational. Franchisee shall provide Company with the serial number of each such cash register prior to using same and shall keep and preserve all cash register tapes, tape readings, and other mechanical or electronic recordation of cash register readings, for a period of five (5) years or such longer period as may be prescribed by the Internal Revenue Code, or any rules or regulations promulgated pursuant thereto, or any applicable state law, rule or regulation.


VIII. OTHER SERVICES OF THE COMPANY

8.1 Training and Supervision

(a) Unless the Franchisee is an existing franchisee of the Company at the time this Agreement is executed, at no extra charge, Company shall provide initial training in the Company's System and methods of operation to one (1) person who shall be the manager of the Sanjiu TCM Medical Centre, and:
(i) in the case of a corporate or partnership Franchisee, to a shareholder or general partner selected by Franchisee and approved by Company pursuant to paragraph 8.3 hereof; and
(ii) in the case of a sole proprietor who will not also be the manager of the Sanjiu TCM Medical Centre, to such sole proprietor.

(b) The initial training program shall consist of

(i) two (2) weeks of training at a Company-owned or a franchised SANJIU E-TECH CORPORATION Sanjiu TCM Medical Centre designated by the Company,
(ii) one (1) week of training at Franchisee's Sanjiu TCM Medical Centre prior to the opening of the Sanjiu TCM Medical Centre and
(iii) one (1) week of training at Franchisee's Sanjiu TCM Medical Centre following the opening thereof.

Company will pay no compensation for any services performed by such trainee(s), and Franchisee shall pay all travel and living expenses incurred by such trainee(s).

(c) Each Sanjiu TCM Medical Centre manager employed by Franchisee shall attend the Company's training program, unless waived by the Company by reason of such manager's prior training and qualifications. If Company trains any additional managers or other personnel after the initial training provided pursuant to Section 8.1(a), Franchisee shall pay the Company's standard training fees then in effect. The Franchisee, in all cases, shall bear all travel and living expenses incurred by such trainee(s), and Company shall pay no compensation for any services performed by such trainee(s) in connection with such training program.

(d) Company may, from time to time, at its discretion, make available to Franchisee additional training courses or programs during the term of this Agreement. Company shall have the right to make attendance by Franchisee or the manager of the Sanjiu TCM Medical Centre mandatory with respect to certain of such courses and optional with respect to other such training courses. Company shall make no charge for mandatory training courses but may, in its discretion, establish charges applicable to all franchisees similarly situated, for optional training courses. With respect to either mandatory or optional training courses, Franchisee shall pay all transportation costs, food, lodging and similar costs incurred in connection with attendance at such courses. The time and place of both mandatory and optional training courses shall be at Company's sole discretion.

(e) Company may, from time to time, at its discretion, cause its field representatives to visit Franchisee's Sanjiu TCM Medical Centre for the purpose of rendering advice and consultation or training, with respect to the Sanjiu TCM Medical Centre, its operation and performance, and compliance by Franchisee with the Operations Manual. If provided at the Franchisee's request, the Company may require the Franchisee to pay such training charges as may be then in effect, and to reimburse Company for all transportation costs, food, lodging and similar costs incurred by Company and its personnel in connection with such training.

(f) Franchisee shall have the right to inquire of Company's headquarters staff, its field representatives and training staff with respect to problems relating to the operation of the Sanjiu TCM Medical Centre, by telephone or correspondence, and Company shall use its best efforts to diligently respond to such inquiries, in order to assist Franchisee in the operation of the Sanjiu TCM Medical Centre.

8.2 Reporting Forms

Company will furnish to Franchisee the standard reporting forms and charts of accounts that are required to be used by Franchisee.

IX. ASSIGNMENT AND RIGHT OF FIRST REFUSAL

9.1 Assignment by Company

Company shall have the right to assign this Agreement, and all of its rights and privileges hereunder to any other person, firm or corporation without Franchisee's prior consent; provided that, in respect to any assignment resulting in the subsequent performance by the assignee of the functions of Company, the assignee shall expressly assume and agree to perform such obligations.

9.2 Assignment by Franchisee

(a) This Agreement has been entered into by Company in reliance upon and in consideration of the singular personal skill, qualifications and trust and confidence reposed in Franchisee or, in the case of a corporate or partnership franchisee, the principal officers or partners thereof who will actively and substantially participate in the ownership and operation of the Franchised Business. Therefore, neither Franchisee's interest in this Agreement nor any of its rights or privileges shall be assigned, transferred, shared or divided, voluntarily or involuntarily, by operation of law or otherwise, in any manner, without the prior written consent of Company and subject to Company's right of first refusal as provided for in subparagraph 9.4 of this Article IX. Notwithstanding anything herein to the contrary, in the event of the death or legal incapacity of Franchisee or, if Franchisee is a corporation, a stockholder owning 20 percent (20%) or more of the Franchisee's capital stock or voting power, or if Franchisee is a general or limited partnership, (i) a general partner, or (ii) a limited partner owning 20 percent (20%) or greater interest in the voting power, property, profits or losses of the partnership, the transfer of Franchisee's interest in this Agreement or the transfer of such stockholder's or partner's voting power, stock or partnership interest to his heirs, personal representatives or conservators, as applicable, shall require Company's written consent, but shall not give rise to Company's right of first refusal hereunder, although such right shall apply as to any proposed transfer or assignment by such heirs, personal representatives or conservators.

(b) Should Company not elect to exercise its said right of first refusal, or should such right of first refusal be inapplicable, as herein provided, Company's consent to such assignment shall not be unreasonably withheld; provided, however, that the Company may impose any reasonable condition(s) to the granting of its consent. Without limiting the generality of the foregoing, the imposition of any or all of the following conditions to its consent to any such assignment shall be deemed to be reasonable:

(i) that the assignee (or the principal officers, shareholders, directors or general partners of the assignee in the case of a corporate or partnership assignee) demonstrate that he has the skills, qualifications and economic resources necessary, in Company's judgment, reasonably exercised, to own and operate the Franchised Business contemplated by this Agreement, and by all other agreements between the Company and such assignee, and all agreements proposed to be assigned to such assignee.
(Ii) that the assignee expressly assumes in writing for the benefit of Company all of the obligations of Franchisee under this Agreement;
(iii) that the assignee shall have completed the Company's training program been to Company's satisfaction, exercised in good faith;
(iv) that as of the date of any such assignment, the assignor shall have fully complied with all of its obligations to Company, whether under this Agreement or any other agreement, arrangement or understanding with Company;
(v) that unless Company agrees otherwise in writing the assignee shall execute Company's franchise agreement then being offered to prospective franchisees of Company (except that the assignee shall not be obligated to pay the Initial Fee and the Term thereof shall expire on the stated expiration date of this Agreement) and assignor shall assign to the assignee the lease or sublease for the Sanjiu TCM Medical Centre and all other agreements relating to the Franchised Business;
(vi) that the lessor, if any, of the Location shall have consented to the assignment of the Location lease;
(vii) that the assignee shall have delivered to Company a letter from an independent certified public accountant unaffiliated with Franchisee acknowledging, among other things, that such accountant has reviewed the terms of the proposed assignment, transfer or sale with the prospective assignee;
(viii) that Franchisee expressly agree in writing to comply with the non-competition covenants set forth in Article X hereof and with all other post-termination obligations contained herein; and
(ix) that the assignee shall pay to Company a transfer fee equal to Five Thousand Dollars ($5,000) which is reasonably required to cover Company's expenses relating to said assignment, and a training fee of Five Thousand Dollars ($5,000), unless assignee is an existing Franchisee who has satisfactorily completed Company's training program.

(c) If Franchisee is a corporation, or a limited or general partnership, each of the following shall be deemed to be an assignment of this Agreement within the meaning of this Section, (i) the death or legal incapacity of any shareholder owning twenty percent (20%) or more of the capital stock or voting power of Franchisee; (ii) if Franchisee is a general or limited partnership, the withdrawal, death or legal incapacity of a general partner, or a limited partner owning twenty percent (20%) or more of the voting power, property, profits or losses, of the partnership, or the admission of any additional general partner or transfer by any general partner of its interest in the property, management or profits and/or losses of the partnership; (iii) the issuance of any securities by Franchisee which itself or in combination with any other transaction(s) results in the shareholders or partners existing as of the Effective Date, as applicable, owning less than eighty percent (80%) of the outstanding shares or voting power of a corporate Franchisee, or of the voting power or interests in the property, profits or losses of a limited partnership; (iv) the transfer of twenty percent (20%) or more in the aggregate of the capital stock or voting power of Franchisee, by operation of law or otherwise; and (v) any merger, stock redemption, consolidation, reorganization or recapitalization involving Franchisee.

(d) Franchisee shall not in any event have the right to pledge, encumber, hypothecate or otherwise give any third party a security interest in this Agreement in any manner whatsoever without the express prior written permission of Company, which permission may be withheld for any reason whatsoever in Company's sole subjective judgment.

9.3 Franchisee Information

Company shall have the right, but not the obligation, to furnish any prospective assignee with copies of all financial statements which have been furnished by Franchisee to Company in accordance with this Agreement during the three (3) year period prior to the date of the approval of the proposed assignment, transfer or sale is sought. Company shall also have the right to advise any prospective assignee of any uncured breaches or defaults by assignor under this Agreement, or any other agreement relating to the Franchised Business proposed to be assigned, transferred, or sold. Company's approval of such proposed transaction shall not, however, be deemed a representation or guarantee by Company that the terms and conditions of the proposed transaction are economically sound or that, if the transaction is consummated, the assignee will be capable of successfully conducting the Franchised Business and no inference to such effect shall be made from such approval.

9.4 Right of First Refusal

Except as expressly provided in paragraph 9.2 to the contrary, any assignment of this Agreement, or any interest herein, shall be subject to Company's right of first refusal with respect thereto. Company's said right of first refusal shall be exercised in the following manner:

(a) Franchisee shall deliver to Company a complete copy of a fully executed Agreement, together with all exhibits thereto, and setting forth all of the terms and conditions of the proposed assignments. Additionally, Franchisee shall deliver to Company all available information concerning the proposed assignee, including but not limited to, information concerning the employment history, financial condition, credit history, skill and qualifications of the proposed assignee and, in the case of a partnership or corporate assignee, of its partners and shareholders as applicable.

(b) Within ten (10) days after Company's receipt of such notice (or if Company shall request additional information, within twenty (20) days after receipt of such additional information), Company may either consent or withhold its consent to such assignment, in accordance with paragraph 9.2 of this Article IX, or, at its option, accept the assignment to itself or to its nominee upon the terms and conditions specified in the notice. Company may substitute an equivalent sum of cash for any consideration other than cash specified in said notice.

(c) If Company shall elect not to exercise its said right of first refusal and shall consent to such assignment, Franchisee shall, subject to the provisions of paragraph 9.2 of this Article IX, be free to assign this Agreement to such proposed assignee on the terms and conditions specified in said notice. If, however, Company elects not to exercise its said right of first refusal and the terms shall be materially changed, or if more than ninety (90) days shall pass without such assignment occurring, such changed terms or lapse of time shall be deemed a new proposal and Company shall again have such right of first refusal with respect thereto.

9.5 Corporate or Partnership Franchisee

(a) If Franchisee is a corporation or limited partnership, there is set forth below the name and address of each shareholder or partner in Franchisee:

NAME ADDRESS NUMBER OF SHARES
OR PERCENTAGE
INTEREST


(b) If Franchisee is a corporation or general partnership, there is set forth below the name and address of each director or general partner, as applicable, of Franchisee:

NAME ADDRESS


(c) The address where Franchisee's Financial Records, and corporate or partnership records, as applicable, are maintained is:


(d) If Franchisee is a corporation or partnership, there is set forth below the names, and addresses and titles of Franchisee's principal officers or partners who will be devoting their full time to the Franchised Business of Franchisee:

NAME ADDRESS


(e) Franchisee shall notify Company in writing within ten (10) days of any change in the information set forth in subparagraphs (a) through (d) above.

(f) If Franchisee is a corporation or partnership, each of the shareholders or partners, as applicable, of Franchisee shall, by executing this Agreement, fully, unconditionally and irrevocably guarantee the performance by Franchisee of all of its obligations hereunder. In addition, Franchisee, if a corporation, shall cause all of its shareholders upon Company's request to execute the Company's standard form of Corporate Guarantee.

X. NON-COMPETITION

10.1 General

(a) During the term hereof, neither Franchisee, nor any officer, director shareholder, or general partner of a corporate or partnership franchisee, shall either directly or indirectly, own, operate, advise, be employed by, or have any interest in any Sanjiu TCM Medical Centre that features or other food products featured by "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centres within the county in which the Sanjiu TCM Medical Centre is located, or at or within an area within ten (10) miles from the Location or any "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centre, during the term of this Agreement, unless Company shall consent thereto in writing.

(b) During the one (1) year period after the expiration or termination hereof, for any reason, neither Franchisee, nor any officer, director, shareholder or general partner of a corporate or partnership franchisee, shall, either directly or indirectly, own, operate, advise, be employed by, or have any interest in any Sanjiu TCM Medical Centre that features Traditional Chinese Medicine Medical Center or other single herbal extract tea products featured by "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centres within the County in which the Sanjiu TCM Medical Centre is located, or at or within an area within ten (10) miles from the Location or any then existing "SANJIU E-TECH CORPORATION" Sanjiu TCM Medical Centre, without the Company's prior written consent. In applying for such consent, Franchisee will have the burden of establishing that any such activity by it will not involve the use of benefits provided under this Agreement or constitute unfair competition with Company or other franchisees of the Company.

(c) The parties have attempted in Section 10.1(a) and 10.1(b) above to limit the Franchisee's right to compete only to the extent necessary to protect the Company from unfair competition. The parties hereby expressly agree that if the scope or enforceability of Section 10.1(a) or 10.1(b) is disputed at any time by Franchisee, a court or arbitrator, as the case may be, may modify either or both of such provisions to the extent that it deems necessary to make such provision(s) enforceable under applicable law. In addition, the Company reserves the right to reduce the scope of either, or both, of said provisions without the Franchisee's consent, at any time or times, effective immediately upon notice to Franchisee.

10.2 Personnel

(a) During the term of this Agreement, Franchisee shall not, without the prior written consent of Company, directly or indirectly:
(i) employ or attempt to employ any person who at that time is employed by Company or any other franchisee, including, without limitation, any Sanjiu TCM Medical Centre manager or assistant Sanjiu TCM Medical Centre manager ("Personnel");
(ii) employ or attempt to employ any Personnel who within six (6) months prior thereto had been employed by Company or any other franchisee; or
(iii) induce or attempt to induce any Personnel to leave his or her employment with Company or any other franchisee.

(b) The prohibitions set forth in paragraph 10.2(a) above shall also apply during the one (1) year period after the expiration or termination of this Agreement.

XI. DEFAULT AND TERMINATION

11.1 Termination with Notice

Company shall have the right to terminate this Agreement only for "cause". "Cause" is hereby defined as a material breach of this Agreement. Company shall exercise its right to terminate this Agreement upon notice to Franchisee upon the following circumstances and in the following manner:

(a) Except with respect to Franchisee's failure to pay any of the sums due Company hereunder, or except as herein expressly provided, Company may terminate this Agreement only upon fifteen (15) days prior written notice to Franchisee, setting forth the material breach complained of. If Franchisee shall cure said breach, prior to the end of such period, Company's said right to terminate this Agreement shall cease; provided, however, that if, because of the nature of said breach, Franchisee shall be unable to cure the same within said fifteen (15) day period, Franchisee shall be given such additional time as shall be reasonably necessary within which to cure said breach, upon the condition that Franchisee shall, upon receipt of such notice from Company immediately commence to cure such breach and continue to use his best efforts to do so.

(b) With respect to any default by Franchisee of his obligation to pay any sums due Company under this Agreement, Company may terminate this Agreement upon not less than ten (10) days prior written notice of such default. If Franchisee shall cure said default prior to the end of such period, Company's said right to terminate shall cease.

(c) The description of any default in any notice served by Company hereunder upon Franchisee shall in no way preclude Company from specifying additional or supplemental defaults in any action, arbitration, hearing or suit relating to this Agreement or the termination thereof.

(d) Any default by Franchisee of its obligations under any Advertising Cooperative Subscription Agreement or any other agreement between Company and Franchisee shall be deemed to also constitute a breach of this Agreement.

11.2 Termination Without Notice

Company shall have the right to terminate this Agreement without prior notice to Franchisee upon the occurrence of any or all of the following events, each of which shall be deemed an incurable breach of this Agreement:

(a) Abandonment-In the event Franchisee shall abandon the Franchised Business. For purposes of this Agreement, "abandon" shall refer to (i) Franchisee's failure, at any time during the term of this Agreement, to keep the Business open and operating for business for a period of five (5) consecutive days, except as provided in the Operations Manual, (ii) Franchisee's failure to keep the Franchised Business open and operating for any period after which it is not unreasonable under the facts and circumstances for Company to conclude that Franchisee does not intend to continue to operate the franchise, unless such failure to operate is due to fire, flood, earthquake or other similar causes beyond Franchisee's control, (iii) failure to actively and continuously maintain and answer Franchisee's telephone.

(b) Bankruptcy and Insolvency-In the event that: (i) Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any contrary provisions of any applicable state or federal laws), shall admit to his inability to meet his financial obligations as they become due, or shall make a disposition for the benefit of his creditors; (ii) Franchisee shall allow a judgment against him in the amount of more than One Thousand Dollars ($1,000) to remain unsatisfied for a period of more than thirty (30) days; (iii) if the Franchised Business or the Sanjiu TCM Medical Centre are seized, taken over or foreclosed by a government official in the exercise of his duties, or seized, taken over, or foreclosed by a creditor or lienholder provided that a final judgment against the Franchisee remains unsatisfied for thirty (30) days (unless a supersedeas or other appeal bond has been filed); (iv) if a levy of execution of attachment has been made upon the license granted by this Agreement or upon any property used in the Franchised Business, and it is not discharged within five (5) days of such levy or attachment; (v) if Franchisee permits any mechanics lien to attach to the Sanjiu TCM Medical Centre or to any equipment; (vi) allows or permits any judgment to be entered against Company or its subsidiaries or affiliated corporations, arising out of or relating to the operation of Franchisee's Franchised Business; or (vii) is convicted of any felony, or any criminal misconduct relevant to the operation of the Franchised Business.

(c) Assignment, Death or Incapacity-If Franchisee shall purport to sell, assign, transfer or encumber in whole or in part the Franchised Business, without the prior written consent of Company; provided, however, that on written request and on condition that the Franchised Business continues to be operated in conformity with this Agreement, (i) upon the death or legal incapacity of a Franchisee who is an individual, Company shall allow up to six (6) months after such death or legal incapacity for the heirs, personal representatives, or conservators (the "Heirs") of Franchisee either to enter into a new Franchise Agreement upon Company's then current form (except that no initial franchise fee or transfer fee shall be charged), if Company is subjectively satisfied that the Heirs meet Company's standards and qualifications, or if not so satisfied to allow the Heirs to sell the Franchised Business to a person approved by Company, or (ii) upon the death or legal incapacity of a stockholder owning twenty percent (20%) or more of the capital stock or voting power of a corporate Franchisee, or a general or limited partner owning twenty percent (20%) or more of the property, voting power, or profits or losses of a Franchisee which is a partnership, Company shall allow a period of up to six (6) months after such death or legal incapacity for the Heirs to seek and obtain Company's consent to the transfer or assignment of such stockholders or partners stock or partnership interest to the Heirs or to another person acceptable by Company. If said Heirs fail, within said six (6) month period, either to enter into a new franchise agreement, receive Company's consent, or sell or assign to a buyer approved by Company, as provided above, this Agreement shall thereupon automatically terminate.

(d) Knowing Underreporting-If an audit or investigation conducted by Company pursuant to paragraph 4.5 hereof discloses that Franchisee has knowingly understated his Gross Revenues or withheld the reporting of same as herein provided.

(e) Repeated Defaults-If Franchisee shall default in any material obligation as to which Franchisee has previously received a notice of default from Company within the preceding twelve (12) months, such repeated course of conduct shall itself be grounds for termination of this Agreement without further notice or opportunity to cure.

(f) Misrepresentation-If Franchisee makes any material misrepresentations relating to the acquisition of the Franchised Business or if Franchisee engages in conduct which reflects materially and unfavorably upon the operation and reputation of the Franchised Business or System.

(g) Violation of Law-If Franchisee fails, for a period of ten (10) days after having received notification of noncompliance from Company or any governmental or quasi-governmental agency or authority, to comply with any federal, state or local law or regulation applicable to the operation of the Franchised Business.

11.3 Cross-Default

Any default by Franchisee under the terms and conditions of this Agreement or any other agreement between Company and Franchisee, which is so material as to permit Company to terminate this Agreement or said other agreement, or a default by Franchisee of his obligations to any Advertising Cooperative of which he is a member, shall be deemed to be a default of each and every said agreement. Furthermore, in the event of termination, for any cause, of this Agreement or any other agreement between the parties hereto, Company may, at its option, terminate any or all said agreements.

11.4 Notice Required By Law

Notwithstanding anything to the contrary contained in this Article XI, in the event any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this Agreement and the parties hereto shall limit Company's rights of termination hereunder or shall require longer notice periods than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon termination required by such laws and regulations. Company shall not, however, be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, arbitration, hearing or dispute relating to this Agreement or the termination thereof.

XII. FURTHER OBLIGATIONS AND RIGHTS OF THE PARTIES UPON TERMINATION OR EXPIRATION

12.1 Company's Rights

In the event of expiration or termination of this Agreement, whether by reason of default, lapse of time, or other cause, Franchisee shall: (i) forthwith discontinue the use of the Trademarks; (ii) not thereafter operate or do business under any name or in any manner that might tend to give the general public the impression that he is operating a business as a franchisee of Company and shall promptly take such action as Company may direct to prevent any possible confusion in the mind of the public as to Franchisee's non-affiliation with Company, including but not limited to, repainting the Franchised Business premises and fixtures in a color scheme dissimilar to that of Company's, removal of signage, advertising, exterior building treatments and neon strips, and other fixtures and furnishings that might tend to cause the public to associate Franchisee with Company or its franchisees or the System; (iii) immediately return the Operations Manual and all other manuals, bulletins, instruction sheets, and supplements and copies thereof to Company; (iv) cause the telephone numbers and all related telephone directory listings to be assigned to Company, or its designee, or terminate all such telephone numbers and listings, as we required by Company pursuant to 12.4 below (v) return all unused Proprietary Products, upon receipt of which Company shall repurchase same from Franchisee at Franchisee's actual cost therefore, subject to Company's right of set-off for any amounts any which remain due but unpaid to Franchisee to Company; and (vi) not thereafter use, in any manner, or for any purpose, directly or indirectly, any of Company's trade secrets, trade dress, recipes, procedures, techniques, or materials acquired by Franchisee by virtue of the relationship established by this Agreement, including, without limiting the generality of the foregoing, (a) all manuals, bulletins, instruction sheets, and supplements thereto, (b) all forms, advertising matter, marks, devices, insignia, slogans and designs used from time to time in connection with the Franchised Business (c) all Product lists, specifications or standards, and (d) all Trademarks or trade names now or hereafter applied for or granted in connection therewith.

12.2 Termination Without Prejudice

The expiration or termination of this Agreement shall be without prejudice to the rights of Company against Franchisee and such expiration or termination shall not relieve Franchisee of any of its obligations to Company existing at the time of expiration or termination or terminate those obligations of Franchisee which, by their nature, survive the expiration or termination of this Agreement. It is expressly understood and agreed that the promises and agreements of Franchisee contained in this Agreement, are also for the benefit of Company's subsidiaries, affiliates and designees, and any of them may, in their own names, exercise all rights and remedies necessary or desirable to protect or enforce their respective interest, including, without limitation, obtaining injunctive relief to enforce the obligations of Franchisee set forth in this Agreement.

12.3 Telephone Numbers

Franchisee acknowledges that there will be substantial confusion in the mind of the public if, after the expiration or termination of this Agreement, Franchisee continues to use the telephone number listed in the yellow pages of the phone directory under the name "SANJIU E-TECH CORPORATION," or any other name confusingly similar thereto. Therefore, Franchisee agrees that within seven (7) days after the expiration or termination of this Agreement for any reason whatsoever, Franchisee shall upon Company's request execute all documents necessary or proper in Company's judgment to transfer the right to use and control the telephone number(s) pertaining to the Franchised Business to Company or its designee and will direct the telephone company servicing the Franchised Business to transfer the telephone number(s) listed for the Franchised Business in the then-current yellow pages and white pages of the telephone directory, to Company or to such person and at such location as Company shall direct. If Franchisee shall not promptly so direct the telephone company, Franchisee hereby irrevocably appoints Company as his Attorney-in-fact to do so on his behalf and in his name, and hereby expressly authorizes the telephone company to make such transfer and agrees to hold the telephone company harmless on account of any such transfer.

XIII. ARBITRATION

13.1 General

Any controversy or claim arising out of or relating to this Agreement, or any breach thereof, including, without limitation, any claim that said Agreement, or any part thereof, is invalid, illegal or otherwise voidable or void, or the enforcement of any right or obligation which by its nature survives the expiration or termination hereof, shall be submitted to arbitration before and in accordance with the Commercial Rules of Arbitration of the American Arbitration Association and judgment upon the award may be entered in any court having jurisdiction thereof; provided, however, that this clause shall not be construed to limit Company from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief as Company deems to be necessary or appropriate to compel Franchisee to comply with his obligations hereunder or to protect the Trademarks. Such arbitration shall take place in . This arbitration provision shall be deemed to be self-executing, and in the event that either party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such party notwithstanding said failure to appear.

XIV. GENERAL CONDITIONS AND PROVISIONS

14.1 Relationship of Franchisee to Company

It is expressly agreed that the parties intend by this Agreement to establish between Company and Franchisee the relationship of franchisor and franchisee. It is further agreed that Franchisee has no authority to create or assume in Company's name or on behalf of Company, any obligation, express or implied, or to act or purport to act as agent or representative on behalf of Company for any purpose whatsoever. Neither Company nor Franchisee is the employer, employee, agent, partner or co-venturer of or with the other, each being independent. Franchisee agrees that he will not hold himself out as the agent, employee, partner or co-venturer of Company. All employees hired by or working for Franchisee shall be the employees of Franchisee and shall not, for any purpose, be deemed employees of Company or subject to Company control. Each of the parties agrees to file its own tax, regulatory and payroll reports with respect to its respective employees and operations, saving and indemnifying the other party hereto of and from any liability of any nature whatsoever by virtue thereof.

14.2 Indemnity by Franchisee

Franchisee hereby agrees to protect, defend and indemnify Company, and all of its part, present and future shareholders, direct and indirect parent companies, subsidiaries, affiliates, officers, directors, employees, attorneys and designees and hold them harmless from and against any and all costs and expenses, including attorneys' fees, court costs, losses, liabilities, damages, claims and demands of every kind or nature on account of any actual or alleged loss, injury or damage to any person, firm or corporation or to any property arising out of or in connection with Franchisee's operation of the Franchised Business pursuant hereto.

14.3 Company's Right To Cure Defaults

In addition to all other remedies herein granted if Franchisee shall default in the performance of any of its obligations or breach any term or condition of this Agreement or any related agreement, Company may, at its election, immediately or at any time thereafter, without waiving any claim for breach hereunder and without notice to Franchisee, cure such default for the account and on behalf of Franchisee, and the cost to Company thereof shall be due and payable on demand and shall be deemed to be additional compensation due to Company hereunder and shall be added to the amount of compensation next accruing hereunder, at the election of Company.

14.4 Waiver and Delay

No waiver by Company of any breach or series of breaches or defaults in performance by Franchisee, and no failure, refusal or neglect of Company to exercise any right, power or option given to it hereunder or under any other franchise agreement between Company and Franchisee, whether entered into before, after or contemporaneously with the execution hereof (and whether or not related to the Sanjiu TCM Medical Centre) or to insist upon strict compliance with or performance of Franchisee's obligations under this Agreement, any other franchise agreement between Company and Franchisee, whether entered into before, after or contemporaneously with the execution hereof (and whether or not related to the Sanjiu TCM Medical Centre) or the Operations Manual, shall constitute a waiver of the provisions of this Agreement or the Operations Manual with respect to any subsequent breach thereof or a waiver by Company of its right at any time thereafter to require exact and strict compliance with the provisions thereof.

14.5 Survival of Covenants

The covenants contained in this Agreement which, by their terms, require performance by the parties after the expiration or termination of this Agreement, shall be enforceable notwithstanding said expiration or other termination of this Agreement for any reason whatsoever.

14.6 Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Company and shall be binding upon and inure to the benefit of Franchisee and his or their respective heirs, executors, administrators, successors and assigns, subject to the restrictions on assignment contained herein.

14.7 Joint and Several Liability

If Franchisee consists of more than one person or entity, or a combination thereof, the obligations and liabilities of each such person or entity to Company are joint and several.

14.8 Governing Law

This Agreement shall be construed in accordance with the laws of the state of .

14.9 Entire Agreement

This Agreement contains all of the terms and conditions agreed upon by the parties hereto with reference to the subject matter hereof. No other agreements oral or otherwise shall be deemed to exist or to bind any of the parties hereto and all prior agreements, understandings and representations are merged herein and superseded hereby. Franchisee represents that there are no contemporaneous agreements or understandings between the parties that are not contained herein. No officer or employee or agent of Company has any authority to make any representation or promise not contained in this Agreement or in any Offering Circular for prospective franchisees required by applicable law, and Franchisee agrees that he has executed this Agreement without reliance upon any such representation or promise. This Agreement cannot be modified or changed except by written instrument signed by all of the parties hereto.

14.10 Titles For Convenience

Article and paragraph titles used in this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants, or conditions of this Agreement.

14.11 Gender

All terms used in any one number or gender shall extend to mean and include any other number and gender as the facts, context, or sense of this Agreement or any article or paragraph hereof may require.

14.12 Severability

Nothing contained in this Agreement shall be construed as requiring the commission of any act contrary to law. Whenever there is any conflict between any provisions of this Agreement or the Operations Manual and any present or future statute, law, ordinance or regulation contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event the provisions of this Agreement or the Operations Manual thus affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. In the event that any part, article, paragraph, sentence or clause of this Agreement or the Operations Manual shall be held to be indefinite, invalid or otherwise unenforceable, the indefinite, invalid or unenforceable provision shall be deemed deleted, and the remaining part of this Agreement shall continue in full force and effect.

14.13 Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

14.14 Fees and Expenses

Should any party hereto commence any action or proceeding for the purpose of enforcing, or preventing the breach of, any provision hereof, whether by arbitration, judicial or quasi-judicial action or otherwise, or for damages for any alleged breach of any provision hereof, or for a declaration of such party's rights or obligations hereunder, then the prevailing party shall be reimbursed by the losing party for all costs and expenses incurred in connection therewith, including, but not limited to, reasonable attorneys' fees for the services rendered to such prevailing party. All sums which are due but unpaid to Company or Franchisee shall bear interest from the date due at the highest rate permissible by applicable law.

14.15 Notices

Except as otherwise expressly provided herein, all written notices and reports permitted or required to be delivered by the parties pursuant hereto shall be deemed so delivered at the time delivered by hand, one (1) business day after transmission by facsimile or other electronic system, or three (3) business days after placement in the Canada or United States Mail by Registered or Certified Mail, Return Receipt Requested, postage prepaid and addressed as follows:

To COMPANY: SANJIU E-TECH CORPORATION.
3570 Victoria Park Ave,
North York, Ontario,
Canada

Facsimile No. 416-497-6339

To FRANCHISEE: _________________________
________________________________________
_________________________________________

Facsimile No. ___________


Any party may change his or its address by giving ten (10) days prior written notice of such change to all other parties.

XV. SUBMISSION OF AGREEMENT

15.1 General

The submission of this Agreement does not constitute an offer and this Agreement shall become effective only upon the execution thereof by Company and Franchisee. THIS AGREEMENT SHALL NOT BE BINDING ON COMPANY UNLESS AND UNTIL IT SHALL HAVE BEEN ACCEPTED AND SIGNED BY THE PRESIDENT OF COMPANY. THIS AGREEMENT SHALL NOT BECOME EFFECTIVE UNTIL AND UNLESS FRANCHISEE SHALL HAVE BEEN FURNISHED BY COMPANY WITH ALL DISCLOSURE DOCUMENTS, IN WRITTEN FORM, AS MAY BE REQUIRED UNDER OR PURSUANT TO APPLICABLE LAW, FOR REQUISITE TIME PERIODS.


XVI. ACKNOWLEDGMENT

16.1 General

Franchisee, and its shareholders and partners, as applicable, jointly and severally acknowledge that they have carefully read this Agreement and all other related documents to be executed concurrently or in conjunction with the execution hereof, that they have obtained the advice of counsel in connection with entering into this Agreement, that they understand the nature of this Agreement, and that they intend to comply herewith and be bound hereby.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the first date set forth above.


ACCEPTED on this____________________________ day of
____________________, 20. ___________


COMPANY:
SANJIU E-TECH CORPORATION, INC.,
a ______________________________________________corporation
By ________________________________________________
Its __________________________________________________

FRANCHISEE:
_____________________________________________________
By __________________________________________________
Its ___________________________________________________
____________________________________________________

an Individual
____________________________________________________
an Individual
____________________________________________________
an Individual

 

 

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