DISTRIBUTOR AGREEMENT

This Agreement is entered into as of , 2008, by and between Sottera,

Inc. a corporation organized and existing under the laws of the State of Nevada dba
NJOY (hereinafter referred to as “Supplier”), located at 15455 N. Greenway-Hayden
Loop Rd., Ste C-15, Scottsdale, AZ 85260 U.S.A., and (Company/Individual Name)
located at (address) , (City) , (State)

(Zip Code) , (Business License Number/EIN/Social Security Number) (hereinafter

referred to as “Distributor” ).

WHEREAS, Supplier is the owner and developer of simulated cigarette/cigar-

alternative products known as NJOY (hereinafter defined with more particularity and
referred to collectively as the "Products") and is engaged in the manufacture and sale
of the Products; and

WHEREAS, Distributor desires to sell and distribute the Products; and

WHEREAS, Supplier desires to sell the Products to Distributor, and Distributor desires
to purchase the Products from Supplier for resale and distribution to existing and
potential customers of Distributor, upon the terms and conditions set forth in this
Agreement, including, but not limited to, conditions that will insure (i) the
acknowledgement by Distributor of the exclusive proprietary interest of Supplier in and
to the Products and any and all information concerning the Products or Supplier now
possessed, or which may hereafter come into the possession of Distributor or any other
recipient of such information from, or though, Distributor; and (ii) the non-disclosure and
non-use of any and all such information by Distributor or any such recipient, for any
purpose, except as specifically provided herein;

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions

herein contained and for the purpose of protecting Supplier from the unauthorized
disclosure or use of the Confidential Information, the parties hereto agree as follows:

1. Recitals. The foregoing Recitals are incorporated in and made a part of

this Agreement.

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2. Grant; Appointment; Territory; Corporate Sales. Supplier grants to
Distributor, and Distributor accepts from Supplier, the exclusive right, license and
obligation to purchase, inventory, promote, resell and distribute the Products for retail
consumption through all of ______________ (the “Territory”) for the period set forth in
Paragraph 14 of this Agreement (the "Term"); and Distributor appoints Supplier as its
exclusive supplier of the Products for the duration of the Term and agrees not to carry,
sell or distribute any product similar or related to the Products during the Term and
thereafter as set forth in this Agreement. Distributor shall not, directly or indirectly, sell
any of the Products outside of the Territory without the prior written consent of Supplier.

All sales to corporate accounts owning or operating more than five (5) retail outlets shall
be subject to review by Supplier and Distributor on an account by account basis. Any
price discount deemed necessary to obtain any such account shall be borne by
Distributor.

3. Products. As used in this Agreement, the term “Products” shall mean and
include the Products, related service, parts and accessories heretofore or hereafter
manufactured and/or sold by SUPPLIER as follows: NJOY cigarettes, cigars, pipes,
hookas, cartridges, batteries, battery chargers, protector tips, literature and other
accessories.

4. Listed Products; Orders. All orders shall be from the list of Products provided
by Supplier to Distributor from time to time, and shall be submitted to Supplier on a
purchase order form satisfactory to the parties. Each order shall contain Distributor's
sales tax exemption number and purchase order number. Supplier will advise Distributor
of the time frame required for delivery, but, in making the order, Distributor should
anticipate lead times upward to eight (8) weeks, depending upon size of the order and
availability of supply and shipping destination. All orders are subject to acceptance and
confirmation by Supplier. While Supplier will use its best efforts to complete each order,
it reserves the right to allot available inventories among all distributors at its discretion,
and, to the extent possible, will advise Distributor in advance of any inability to make full
and timely delivery of any order. All accepted orders, regardless of whether delivery
dates are specified therein, shall be subject to delays or failures in manufacture or in
delivery due to any cause beyond Supplier’s control, including, without limitation, fire,
embargo, strike, customs or failure to secure materials from usual sources of supply.

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5. Forecasts. In order to assist Supplier in
maintaining adequate levels of stock for Distributor’s orders, Distributor shall keep
Supplier advised of its inventory of the Products on a monthly basis. In addition,
Distributor shall furnish Supplier at the beginning of each month with a forecast of its
requirements for such month on Supplier’s “sales forecast template.”

6. Terms of Sale. All sales of Products to Distributor shall be made pursuant to

this Agreement at such prices and on such terms as SUPPLIER shall establish from
time to time on at least thirty (30) days notice, provided that, unless otherwise specified,
a deposit of fifty percent (50%) shall be paid with each order, and the balance shall be
due and payable, in full, not later than the date preceding the date scheduled for pickup
or delivery of the order to the shipper. Supplier shall give Distributor at least twenty-four
(24) hours’ notice of the scheduled pickup date and due date for payment of the balance
of the purchase price for each order. All prices are FOB SUPPLIER's plant, and
Distributor shall be responsible for any freight and other shipping costs, duties, taxes
and insurance unless otherwise agreed to in advance of pickup. Whenever Supplier
shall deliver to a common carrier any Products ordered by Distributor, regardless of
whether such carrier shall have been designated in Distributor’s shipping or routing
instructions, such carrier shall be Distributor’s agent and risk of loss due to damage,
destruction or other cause shall pass to, and be borne by, Distributor. In the case of
Products designated for shipment, the shipper will be selected by Supplier if not
specified by Distributor. Supplier will prepare all Products for shipment in accordance
with its usual and customary procedures unless otherwise agreed in writing.

See Exhibit A for pricing and volume purchasing requirement.

7. Distributor as Independent Contractor; General Duties; Representations to

Customers. Supplier and Distributor acknowledge that the relationship between
Supplier and Distributor is that of vendor and vendee and that Distributor is an
independent contractor with full control over its sales efforts and the products that
Distributor elects to handle. However, Distributor agrees to use its best efforts to sell
and market the Products and to provide all necessary and appropriate warranty and
customer service. Such efforts shall include, without limitation:

A. Maintaining adequate inventories of the Products;

B. In connection with the sale and marketing of the Products, (i) following up
on any leads to Supplier’s customers provided by Supplier from time to time; (ii)

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researching and contacting potential outlets for the Products, including, without
limitation, cafes, bars, restaurants, hotels, resorts, theme parks, colleges, universities
and other institutional accounts; (iii) setting up a procedure for weekly telephone calls to
customers to solicit orders and for visits to customer locations to introduce the Products
and to maintain customer relations; and (iv) conducting demonstrations and providing
Product samples to potential customers as and when appropriate. Distributor shall bear
all costs of conducting its business, including all promotional product and other costs
associated with the marketing.

C. Conducting all marketing and sales efforts in conformity with marketing

policies and programs established by Supplier from time to time;

D. Hiring and training such sales personnel and representatives as may be

necessary or appropriate to carry out its obligations under this Agreement. Such training
shall be in accordance with any training manual that may be provided by Supplier from
time to time, but, in any event, shall include specific instructions to the effect that (i)
NJOY must be represented simply to be an alternative smoking device to cigarettes and
cigars, (ii) NJOY is to be marketed and sold ONLY to adult smokers twenty one (21)
years of age or older, (iii) no representation is to be made that NJOY is, in any way, a
smoking cessation device or device that will reduce or eliminate a smoking habit or
addiction; (v) no express or implied health claims are to be made, including any claim
that NJOY is a “healthful” or “more healthful” alternative to cigarettes; and (v) no
warranty or representation is to be made that exceeds the terms of the limited warranty
from Supplier to the original consumer.

E. In order to enable Supplier to accumulate marketing data for NJOY

products, to forecast production and manufacturing requirements, and to act as a
resource to field customer inquiries and for the conduct of in-store demonstrations,
Distributor shall provide Supplier on a monthly basis with the contact information and
orders of each NJOY customer.

8. Claim for Defects. All orders are final and all Products shall be deemed
accepted by Distributor, unless a timely claim is made in accordance with the
provisionsof this paragraph. Claims must be in writing, must contain a list of the
allegedly defective items, and a description of the alleged defect or defects. All

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allegedly defective items must be set aside for inspection by Supplier and returned to
Supplier (at Supplier's expense) if so requested by Supplier. Supplier will be responsible
only for defects in Products or packaging. In the event that any Product is established to
Supplier’s satisfaction to have been defective at time of sale to Distributor, the sole
responsibility of Supplier will be to replace the Product it deems to be defective. No
monetary credit will be issued. In no event will Supplier be responsible for incidental or
consequential damages.

9. Product Warranty Policies. Supplier shall provide to Distributor information

with respect to SUPPLIER's limited warranty extended to the original consumer of the
Products. Supplier makes no warranty to Distributor with respect to the Products, either
express or implied, including, without limitation, any implied warranty of merchantability
or fitness for a particular purpose.

10. Indemnification. Distributor hereby indemnifies and holds harmless

Supplier from and against any and all loss, liability and expense, including, but not
limited to, fees, fines, attorney’s fees and expenses, and loss of business and other
consequential damages arising out of, or relating to (i) any unauthorized or unapproved
representations or claims concerning the Products made by Distributor or any of its
sales personnel, independent distributors or representatives whether referred to in
paragraph 7 of this Agreement or otherwise, (ii) breach of its obligations under
paragraph 12 of this Agreement and (iii) the negligence of Distributor, its sales
personnel, independent distributors or representatives in the installation, use, sale or
servicing of Supplier’s Products.

11. Vendor’s Lien. Supplier shall retain a lien on all Products in the possession
of Distributor until such time as Distributor has satisfied all financial obligations to
Supplier. Should Distributor fail to satisfy all such financial obligations within 10 days
following the due date of invoice, Distributor shall not attempt to distribute, sell or
otherwise dispose of the Products in its possession until such time as all such financial
obligations are satisfied. Should Distributor fail to satisfy all financial obligations to
Supplier within 15 days following the due date of invoice, Distributor shall return to
Distributor all Products in its possession, with all return charges borne by Distributor.

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12. Proprietary and Confidential Information and Intellectual Property of
Supplier.

A. The parties acknowledge and agree (i) that Supplier is providing the
Products to Distributor under this Agreement solely for resale to retail customers in the
ordinary course of Distributor's business, and for no other use or purpose; (ii) that
Supplier is the owner of valuable proprietary and confidential information concerning the
Products, including, but not limited to, pending patent applications, designs, product
specifications, processes, systems, financial, pricing, point-of-sale, photographs, unique
product names and other marketing information, properties, operations, know how,
customer and vendor information, business opportunities and strategies, technical,
artistic and other information, concepts and data, in written, oral, magnetic,
photographic, digital, videographic, and/or other forms (the "Confidential Information");
(iii) that any and all variations or modifications of Products or other Confidential
Information supplied by Supplier hereunder, whether or not developed at the request or
in conjunction with the efforts of, Distributor shall, at all times be, and remain, the
property and Confidential Information of Supplier; and (iv) that the disclosure of
Confidential Information to third parties would cause irreparable harm to Supplier and to
Supplier's business.

B. Distributor agrees that it will not, directly or indirectly, through its officers,
directors, contractors, employees, consultants, attorneys accountants, servants, agents,
affiliates, or otherwise, disclose, cause or permit to be disclosed, or use, Supplier's
Confidential Information for any purpose other than as expressly set forth in this
Agreement. Without limiting the foregoing, Distributor shall not disclose to any third
party the pricing, terms, or any other provisions of this Agreement, and shall not furnish
to third parties samples of any of the Products supplied by Supplier hereunder for
duplication or any other purpose, any packaging or information contained thereon, or
any other information provided by Supplier to Distributor in confidence. As used herein,
an “affiliate” shall be deemed to include, without limitation, (i) any individual or entity
who, directly, or through one or more entities, owns twenty-five percent (25%) or more
of the equity interests of Distributor, (ii) any member of the immediate family (spouse,
parent or child) of Distributor, of any officer or director of Distributor, or of any individual
described in (i) above, and (iii) any individual or entity controlling, controlled by, or under
common control with, Distributor or any individual or entity described in (i) or (ii) above.

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 C. Distributor agrees to take all reasonable steps as may be required or
appropriate to ensure the non-disclosure and non-use of the Confidential Information
except and only to the extent permitted by this Agreement, and to require its officers,
directors, contractors, employees, consultants, attorneys, accountants, servants, agents
and affiliates who may be given access to or receive disclosure of any of the
Confidential Information to maintain such Confidential Information in the strictest
confidence and not to disclose or use any of such Confidential Information contrary to
the requirements of this Agreement; and to be responsible in damages for the actions of
any such person in contravention of the terms of this Paragraph 12.
D. In the event that Distributor becomes aware of any unauthorized
disclosure or use of Confidential Information, Distributor shall notify Supplier
immediately and make every effort to recover the same from the unauthorized party.
E. All Confidential Information provided by Supplier or its representatives to
Distributor, and all copies thereof, shall be returned to Supplier at Distributor's request
or upon termination of this Agreement and, except for the limited purpose and time
necessary to carry out the provisions of subparagraphs B and C of paragraph 15 hereof,
if applicable, shall, in all events, cease to be disclosed or used by Distributor for any
purpose upon termination of this Agreement.
F. Distributor understands and agrees that, due to the unique nature of the
Confidential Information, the unauthorized disclosure or use thereof may allow
Distributor, its affiliates, or third parties to unfairly compete with Supplier, resulting in
irreparable harm to Supplier, and that monetary damages or other remedies at law will
not be sufficient to preclude, or compensate for, such unauthorized use or disclosure
and, therefore, consents to the issuance of an injunction and such other equitable relief
as may be appropriate in addition to such remedies as may be available to Supplier at
law to prevent or restrain any actual or threatened disclosure or use of Confidential
Information in contravention of the provisions of this paragraph 12.
G.) The provisions of this Paragraph 12 shall survive the termination of this
Agreement.

13. Suggested Resale Price. Distributor recognizes that in order to compete

effectively with other similar products, the resale price of the Products to retailers must
be competitive with the prices to retailers of such other products. Distributor recognizes
that Supplier has carefully considered the price charged to retailers for products similar
to the Products, and has determined that the highest price that can be currently charged
to retailers consistent with the maintenance of effective competition for the Products is

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US $99.95 for the NJOY Cigar Starter Kit and $109.95 for the NJOY Cigarette Starter
Kit, and US $24.95 per NJOY 5-pack of cartridges. The suggested resale price will be
subject to review by Supplier as conditions require.

14. Term and Termination. The term of this Agreement shall be for a trial
period of six (6) months], commencing on the date hereof. If the parties agree to
continue this Agreement after the initial six (6) month trial period, the term of this
Agreement shall be extended for a period of one (1) year commencing on the date
following the expiration of the trial period, and shall be deemed automatically renewed
at the end of the each one (1) year term for an additional one (1) year unless terminated
by written notice by the terminating party to the other party at least sixty (60) days prior
to the expiration of the applicable one (1) year period; provided that this Agreement may
be terminated by Supplier at any time upon written notice to Distributor in the event that
Distributor (i) fails to make payments as and when due, (ii) breaches its obligations
under Paragraph 12 of this Agreement, (ii) makes an assignment or attempted
assignment in contravention of the provisions of paragraph 17 of this Agreement, or (iii)
intentionally fails or refuses to perform its obligations under this Agreement. Until the
effective date of any termination of this Agreement, Distributor shall continue to
purchase its requirements for the Products from Supplier in the usual and normal
course of its business, and Supplier shall continue to fulfill Distributor's orders received
prior to the end of such term. Notwithstanding the giving of notice of termination by
either party, Distributor shall continue to pay all unpaid balances as and when due and
perform all of its obligations under this Agreement until the effective date of such
termination; provided that any balance owing to Supplier not previously paid, shall be
due and payable in full in all events at the effective date of termination. No termination
of this Agreement by either party shall be deemed to deprive such party of any rights it
may have against the other party arising out of the breach of this Agreement by such
other party.

15. Further Provisions Applicable Upon Termination. Upon termination of

this Agreement:

A. At the option of Supplier, Distributor will resell and deliver to Supplier, free
and clear of liens and encumbrances, such of Suppliers Products and materials bearing

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 NJOY’s name as Supplier shall elect to repurchase, at a mutually agreed price,
but not in excess of Supplier's current price to distributors for such products and
materials, provided that Supplier shall not be obligated to pay Distributor for any item
originally provided free of charge;

B. Any Products remaining in the possession of Distributor after the

application of the foregoing subparagraph A may be sold by Distributor in the ordinary
course of its business;

C. Except to the limited extent necessary to dispose of remaining inventory

as set forth in the foregoing subparagraph B, and, in no event, later than thirty (30) days
following the effective date of termination of this Agreement, Distributor will remove and
not thereafter use any sign containing any trade name, logo or trademark of SUPPLIER
including, but not limited to, “NJOY” and will destroy all stationery, advertising matter
and other printed matter in its possession or under its control containing the name
“NJOY”, or any of SUPPLIER's trademarks, trade names or logos.

D. Distributor will immediately take all appropriate steps to remove and

cancel its listings in telephone books, and other directories, and public records, or
elsewhere that contain the NJOY name, logo or trademark. If Distributor fails to obtain
such removals or cancellations promptly, SUPPLIER may make application for such
removals or cancellations on behalf of Distributor at Distributor’s cost and in Distributor's
name and in such event Distributor will render all assistance necessary to accomplish
the removal and/or cancellations.

16. Waiver. No waiver or forbearance on the part of either party with respect to
any breach of this Agreement by the other party shall operate as a waiver or
forbearance with respect to any subsequent breach of the same or any other provision.

17. Assignment. No rights or obligations of Distributor under this Agreement

shall be assignable without the prior written consent of Supplier, which consent may be
withheld by Supplier in its absolute discretion. For purposes of this paragraph, any
change in ownership interest of Distributor in excess of twenty-five percent (25%) shall
be deemed to constitute an assignment by Distributor.

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18. Notices. All notices pursuant to this Agreement shall be in writing addressed
to the parties at the addresses set forth in this Agreement, except as otherwise specified
by written notice, and shall be deemed given upon personal delivery, 3 days after
mailing, postage prepaid, or, in the case of e-mail or Fax, upon receipt.

19. Governing Law; Legal Fees and Costs. This Agreement shall be
governed by the laws of the State of Arizona, and any action arising hereunder shall
brought in the superior court of Maricopa County, Arizona. In the event of any action or
proceeding to enforce or interpret any of the provisions of this Agreement, the prevailing
party shall be entitled to be reimbursed for the costs of such action, proceeding or
appeal, including legal costs and disbursements.

20. Invalid Provisions. In the event that any provision of this Agreement is
held to be illegal, invalid or unenforceable by a court of competent jurisdiction, such
provision shall be reformed to the extent legally permissible to render the same
enforceable, and, the remaining provisions hereof shall, in all events, remain in full force
and effect and in no way be impaired or invalidated.

21. Entire Agreement; Amendments; Inurement; Survival. This Agreement

embodies the entire agreement of the parties with respect to the subject matter of this
Agreement, superseding any and all prior agreements, whether oral or written, shall not
be amended or modified except by an instrument in writing signed by both parties, and
shall inure to the benefit of, and be binding upon, the successors and permitted assigns
of the respective parties. All provisions of this Agreement which, by their terms or
context, are intended to be performed or applicable following the termination of this
Agreement shall survive the termination of this Agreement.

22. Execution. A facsimile transmission or copy of the original of this Agreement

shall be as effective and enforceable as an original. This Agreement may be executed
by manual or facsimile signatures and in any number of counterparts, each of which
shall be deemed an original, and all of which, taken together, shall constitute one and
the same instrument.

23. Authorization. Each party represents that it has full power and authority to
enter into and execute this Agreement, and, in the case of any party which is an entity,
that the individual signing this Agreement on its behalf is duly authorized.

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IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the
date first above written.

Supplier:

Sottera, Inc. dba NJOY

By______________________________

______________________________
Print name and Title

Notices to:

Sottera, Inc. dba NJOY

Attn: Jack Leadbeater, President and CEO

15455 N Greenway-Hayden Loop Rd., Suite C-15
Scottsdale, Arizona 85260 USA
E-mail: [email protected]
Phone: 480-305-7950
Fax: 480-305-7955

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Distributor:

Name:
By:

Print Name and Title

Notices to:

Name:
Address:

City:
State Zip:
Phone Fax:
E-mail:

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