Master Franchise Agreement

Ecomat Letterhead]


January 26, 1996


Astrid Hindemith, Esq. c/o Palatin A.G. Beethovenstrasse 43 Postfach 4913 CH-8022 Zurich


Re: Master Franchise Agreement


Dear Ms. Hindemith:


We are entering into this Master Franchise Agreement, as Ecofranchising, Inc. ("ecomat"). We have discussed with you the development of ecomat laundry and cleaning facilities in the countries described in Exhibit A to this letter ("Territory"). ecomat has agreed for you to be licensed, as a master franchisee of ecomat, to use ecomat's trademarks and service marks ("Marks") and its franchise system, to develop retail laundry and cleaning facilities ("Cleaning Facilities") in the Territory.


This letter sets forth our understanding of the major and important terms of this Master Franchise Agreement.


1. Parties Territory; and Rights to be Granted. ecomat and you ("Master Franchisee") are entering into a Master Franchise Agreement ("Agreement"). ecomat has prepared this Agreement which grants the Master Franchisee the right in the Territory to (a) establish and operate Cleaning Facilities, through affiliates of the Master Franchisee ("Affiliated Franchisees"), and (b) license other unaffiliated parties ("Unaffiliated Franchisees") to establish and operate Cleaning Facilities. (Affiliated Franchisees and Unaffiliated Franchisees are referred to as "FRANCHISEES".) Master Franchisee also has the right to enter into a Development Agreement with Franchisees to develop a Cluster of Cleaning Facilities in an entire country or portion of a country, according to a development schedule. ecomat reserves the right to approve each Franchisee or Developer, and such approval will not be unreasonably withheld. An affiliate is any legal entity controlling, controlled by, or under common control with, the Master Franchisee. Terms of the Franchise Agreement and Development Agreement will be based on ecomat's U.S. Agreements.


2. Manual: Training: Site Selection. ecomat will loan to the Master Franchisee, the ecomat Manual used in the United States; Master Franchisee will translate and adapt the Manual for use in the Territory. ecomat will furnish training for up to six (6) employees of Master Franchisee in the United States, and such employees of Affiliated Franchisees as ecomat designates, at no charge.


Training of any additional employees of Master Franchisee or any affiliated Franchisee shall be at the then-current rate established for such training in the Manual. ecomat shall require training of Master Franchisee's employees in the United States until ecomat is satisfied that Master Franchisee can furnish all such training. The Master Franchisee and franchisee will bear all expenses related to the training of their employees in the United States. ecomat reserves the right to approve the site for each Cleaning Facility, based on such information as Master Franchisee furnishes to ecomat at its request, and reserves the right to inspect each site prior to such approval.


3. ecomat In-country Assistance. Within the first 6 months after the date of the Agreement, ecomat will furnish to Master Franchisee in-country assistance for a minimum of 30 days, which may not be consecutive, at Master Franchisee's sole cost and expense. After the first 6 months from the Agreement, and for each subsequent twelve month period thereafter (upon Master Franchisee's request), ecomat will furnish a management person at least 5 work-days at Master Franchisee's expense. Any such additional assistance provided thereafter will be at the rate described in the ecomat operations manual ("Manual") plus expenses. ecomat will pay the salary and Master Franchisee will pay the reasonable living and travel expenses of ecomat's employees as described above.


4. Territory: Development Schedule/Term/Exclusivity. The Territory will consist of the countries of Austria, Switzerland and Germany, which shall be the "Core Countries" and all other countries in ...