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Management and Cost Restitution Agreement

This Agreement is made and entered into on ______,

between

____

(hereinafter referred to as “PA?).

and

____________.

PA will restitute the following costs

1.1. Personal costs

1.2. Selling costs

1.3. Travel expenses

1.4. Office expences

1.5. Other sundry expenses

The cost will be restituted on the following basis:

Management services on the basis of an average of 20 hours a week at a rate of € 75 per hour. Secretarial services on the basis of an average of 20 hours a week at a rate of € 40 per hour. Selling costs and travel expenses on the basis of 3% of the turnover.

Office expenses at a monthly flat rate of € 400 per month.

Other sundry expenses at costs.

Other costs or extraordinary costs will be invoiced separately.

Invoices will be issued on a monthly or quarterly basis.

This contact is valid from the 1st, April 2003 until any of the parties notify the other in two months before the end of the contract.

Our agreement as of April Ist 2003 for the cost restitution is based on an average of 20hours a week for management services as well as for secretarial services. After having analysed the time used for the German Permanent Establishment of . In 2003 we found out, that the average of hours used for management services as well as for secretarial services did not exceed 15 hours a week.

We therefore credit you with the amount of € 14.512,50 calculated on the basis of 5 hours weekly/4,3 weeks a month/9 months duration of agreement/rate € 75,00 per hour and an additional amount of € 7.740 on the basis of 5 hours weekly/ 4,3 weeks a month/ 9 months duration of agreement/rate € 40,00 per hour.

Starting with January 1st 2004 the average of 15 hours a week will be the basis for Management and Secretarial services agreed upon in the Cost Restitution Agreement.

On the other side in the monthly invoices selling costs and travel expenses on the basis of 3% of the turnover, were based on a monthly turnover of € 80.000,-.

You were charged until now with 3% on € 80.000,00 times 9, i.e. on 720.000 3%= € 21.600,-. The real turnover is € 1.451.392,46, 3% thereof is € 43.541,77. We therefore debit you with the difference of € 21.942.

Best regards

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