UFOC

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TABLE OF CONTENTS

ITEM PAGE

1 THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES....................................................1

2 BUSINESS EXPERIENCE..................................................................................................................3

3 LITIGATION........................................................................................................................................3

4 BANKRUPTCY...................................................................................................................................3

5 INITIAL FRANCHISE FEE................................................................................................................3

6 OTHER FEES.......................................................................................................................................5

7 INITIAL INVESTMENT.....................................................................................................................9

8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES.............................................11

9 FRANCHISEE'S OBLIGATIONS....................................................................................................15

10 FINANCING......................................................................................................................................16

11 FRANCHISOR'S OBLIGATIONS....................................................................................................16

12 TERRITORY......................................................................................................................................27

13 TRADEMARKS.................................................................................................................................29

14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION.............................................31

15 OBLIGATION TO PARTICIPATE IN THE

ACTUAL OPERATION OF THE FRANCHISE BUSINESS...........................................................32

16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL.....................................................33

17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION................................34

18 PUBLIC FIGURES.............................................................................................................................36

19 EARNINGS CLAIMS........................................................................................................................36

20 INFORMATION REGARDING FRANCHISES OF THE FRANCHISOR......................................37

21 FINANCIAL STATEMENTS............................................................................................................38

22 CONTRACTS.....................................................................................................................................40

23 RECEIPTS

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EXHIBITS

Exhibit

Exhi

Exhibit

ibit

A Financial Statements

B Form of Franchise Agreement (including attachments and state amendments)

C Confidential Operations Manual Table of Contents

D List of Franchisees

E Agents for Service of Process

F State Administrators

G Powers of Attorney (Internet, Taxes and Telephone)

H PASSageware Software License Agreement

I Sample Form of General Release

APPLICABLE STATE LAW MAY REQUIRE ADDITIONAL DISCLOSURES RELATED TO THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR. THESE ADDITIONAL DISCLOSURES, IF ANY, APPEAR IN STATE SPECIFIC DISCLOSURE ADDENDA.

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Iteml

THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES

Franchisor

Passport Health, Inc. (referred to in this Offering Circular as "Passport Health," "Franchisor," "we," "us," or "our") is a Maryland corporation that maintains its principal place of business at 921 East Fort Avenue, Southside Market Place, Baltimore, Maryland 21230. We do business under the names "Passport Health, Inc." and "Passport Health," and other service marks, trademarks and trade names that we may develop (the "Marks," as further described in Item 13). We were incorporated in Maryland on December 19, 1995 and are a closely-held corporation.

We offer and sell franchises to establish and operate health travel and immunization businesses under the name Passport Health (the "Health Travel and Immunization Business") and the other Marks. We have not offered licenses or franchises in any other line of business. We have operated one Health Travel and Immunization Business since 2000. Our President, Frances Lessans, has also managed a Health Travel and Immunization Business from June 1994 to July 2000 for Maryland General Hospital. That business was a Passport Health franchisee from July 1997 to July 2000 (see Items 2 and 20). We first began offering franchises in May 1997. We have no predecessors and no affiliates that are required to be disclosed in this Offering Circular. Currently, we conduct no other business activities.

The person or legal entity that will sign the Franchise Agreement (defined below) is referred to in this Offering Circular as "you," "your" or "Franchisee." We have written the Offering Circular in "plain English" in order to comply with legal requirements. Any differences in the language in this Offering Circular describing the terms, conditions or obligations under the Franchise Agreement or any other agreements is not intended to alter in any way the rights or obligations of the parties under the particular agreement. Our agents for service of process are listed in Exhibit E.

Description of Franchise

We offer qualified persons the opportunity to establish and operate a Health Travel and Immunization Business (or "Franchised Business") under a comprehensive and unique system and to use and display the Marks in the operation of the Franchised Business. The "System" includes, the confidential, proprietary system for operating Health Travel and Immunization Businesses that, among other things, dispense a variety of vaccines, provide travel immunizations and information, sell related products and supplies, and, subject to state law, provide skilled nursing services associated with the dispensing of vaccines and immunizations to persons traveling to foreign countries. The System was developed and is owned by us. The System also includes: (i) certain uniform standards, specifications and procedures for dispensing vaccines and providing travel immunizations to your patients; (ii) certain methods and procedures for gathering and imparting health, risk and other related information to your patients; (iii) certain inventory and equipment requirements and controls; and (iv) certain distinctive and unique training, marketing and management methods, procedures and materials.

The Franchised Business will be operated from a number of "Franchise Sites" within the "Assigned Area" (as defined in Items 11 and 12). The Assigned Area may range in size from part of a major city, a city, a county or to a multi-county area, depending on the population and

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demographics of that population (see Item 12). Ideally, the Franchised Business will be operated from existing outpatient care facilities. The Franchised Business will generally have at least one main office. The Franchised Business may also be operated from other satellite facilities within the Assigned Area approved by us, such as, home offices, stand alone locations, churches, corporate health centers, or other acceptable facilities. The services offered by the Franchised Business will also be provided at the customer's facilities, such as corporate business centers, schools, churches and the facilities of other businesses and groups that have frequent travelers to foreign countries.

The form of "Franchise Agreement" you will execute is attached as Exhibit B to this Offering Circular. The Franchisee may be an individual, corporation, partnership or other form of legal entity. Under the Franchise Agreement, certain parties are characterized as Franchisee's Principals (referred to in this Offering Circular as "your Principals"). The Franchise Agreement is signed by us, by you, and by those of your Principals whom we designate as Controlling Principals. In most instances, we will designate your principal equity owners and executive officers, and certain affiliated entities as Controlling Principals. By signing the Franchise Agreement, your Controlling Principals agree to be bound by certain obligations in the Franchise Agreement, including covenants concerning confidentiality and noncompetition. Also, we may require your Controlling Principals to guarantee your performance under the Franchise Agreement (see Item 15). We also may require your Principals who are not designated as Controlling Principals to sign confidentiality and noncompetition agreements.

The market for the services offered by the Passport Health Travel and Immunization Business includes public and privately held companies, churches and other organizations (as well as individuals) that have international travel needs. Competition for these services is fragmented and comes from individual doctors, physician practice groups and hospitals.

Industry Regulations

There are laws, regulations and ordinances applicable to businesses generally, such as the Americans with Disabilities Act, Federal Wage and Hour Laws, and the Occupational Safety and Health Act. In addition to these, you are required to have a registered nurse on staff and a licensed physician must be available for consultation. You and each of your employees must obtain all of the professional licenses, permits and certifications necessary for the operation of the Franchised Business (including a Yellow Fever certificate, and all other required physician and nursing licenses and permits). You are also required to have a valid driver's license in order to operate a motor vehicle. You will need to understand and comply with those laws in operating the Health Travel and Immunization Business.

Item 2

BUSINESS EXPERIENCE

Frances L. Lessans President Director

Ms. Lessans has been our President and a Director of the Franchisor since our incorporation. She currently is a registered nurse. She was employed by Maryland General Care, Inc. from June 1994 to July 1, 2000 as Executive Director of the Baltimore Area Passport Health. Since Julyl, 2000, she continues this role for the Baltimore Area Passport Health, which the Franchisor acquired form Maryland General Care, Inc. From February 1984 to June

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1994, she was the Director of Student Health Services for the University of Baltimore. Ms. Lessans was appointed to the faculty of the University of Maryland in May 1996, and has been appointed to the Travel Medicine Advisory Board for Merck Vaccine Division.

Martin B. Lessans Secretary and Treasurer, Director

Mr. Lessans has been our Secretary and Treasurer and a Director of the Franchisor since our incorporation. In January 1996, he became a principal of the law firm of Lessans, Praley & McCormick, P.A. and currently practices law with that firm in Glen Burnie, Maryland. Since

1987, Mr. Lessans has been Secretary/Treasurer and a director and member of the executive committee of Crofton Convalescent Center, Inc., a nursing home and rehabilitation center located in Crofton, Maryland.

Peter V. Savage Vice President, Director

Mr. Savage has been our Vice President and a Director of the Franchisor since March 1997. Since 1972, Mr. Savage has been the President of Capital Trading International which provides international consulting, and he authored the "Safe Travel Book", first published in

1988. From 1968 to 1980, he was employed by the United States Government and posted in the countries of Brazil and Argentina. Since January 1989, Mr. Savage also has served as a commercial real estate consultant for Herbert Davis Associates in Baltimore, Maryland.

Item 3

LITIGATION

No litigation must be disclosed in this Offering Circular.

Item 4

BANKRUPTCY

No person previously identified in Items 1 or 2 of this Offering Circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code that must be disclosed in this Item.

Item 5

INITIAL FRANCHISE FEE

The initial franchise fee will generally range from $25,000 to $100,000 per Assigned Area, depending upon demographic information, including the population and income level in the Assigned Area. The initial franchise fee for each individual franchise agreement is payable by you on execution of the Franchise Agreement. The initial franchise fee is deemed fully earned and non-refundable when paid. In instances where a prospective franchisee operates an existing travel health facility, we have discounted the initial franchise fee. As a result, during our past fiscal year, initial franchise fee ranged from $15,000 to $25,000. We do not accept any deposits to hold a territory before you sign the Franchise Agreement, and we remain free to entertain proposals from and negotiate with third parties until a Franchise Agreement is signed

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and payment is received. Except as described above, the initial franchise fee is uniformly imposed.

Site Selection and Approval. You must acquire the first Franchise Site no later than 90 days following the date you sign the Franchise Agreement. You are solely responsible for locating and negotiating the acquisition of each Franchise Site. We have the right to inspect and approve each Franchise Site. We reserve the right to reject any proposed Franchise Site in our discretion (see Item 11). We also reserve the right to charge you a reasonable fee to reimburse us for time and expenses we incur because of any site inspections we must perform for any site other than the first proposed Franchise Site. Currently, that fee would be up to a maximum of $500 per day, plus our reasonable expenses (which include our actual cost for travel, lodging, meals and wages). We may waive that fee in our discretion.

Training Program. After you sign the Franchise Agreement and before the opening of the Franchised Business, we will provide through our Training Program (as defined in Item 11) basic training in the organization and operation of the Franchised Business to your "Nurse Manager" and "Administrative Assistant" (see Items 11 and 15). Your Nurse Manager must attend and complete the Training Program to our satisfaction before the opening of the Franchised Business. If you have not appointed an Administrative Assistant before opening the first Franchise Site, your Administrative Assistant must attend training before beginning work. If either the Nurse Manager or Administrative Assistant fail to complete the Training Program to our satisfaction, you must replace them with another Nurse Manager or Administrative Assistant who must attend and complete the Training Program to our satisfaction. In addition, any other of your employees that you may choose may attend the Training Program, subject to space availability and payment of our then-current training fee. Our current fee to send additional persons to our Training Program is a maximum of $3,000 per person. We may waive that fee in our discretion.

Except for your Nurse Manager and Administrative Assistant, we may require you to pay our then-current reasonable training fee for each of your employees, including any replacement or successor Nurse Managers and Administrative Assistants, who enroll in the Training Program or any other mandatory or optional training course we offer. You must also pay all expenses, including the cost of travel, lodging, meals and wages, for your Nurse Manager, Administrative Assistant and other employees attending training.

Insurance. You must procure, before acquiring the Franchise Site, and must maintain in full force and effect at all times during the term of the Franchise Agreement, an insurance policy or policies protecting you and us and our affiliates and certain identified persons, against any demand or claim for bodily injury, death, or property damage, or any loss, liability, or expense whatsoever arising out of your operation of the Franchised Business and the condition, use, or occupancy of the Franchise Site. Should you, for any reason, fail to procure or maintain the insurance required by the Franchise Agreement, as those requirements may be revised by us in the Manual or otherwise in writing, we have the right and authority immediately to obtain the insurance and to charge you for the costs to obtain that insurance, and the reasonable expenses (which includes our actual costs for travel, lodging, meals and wages) that we incur in obtaining the insurance (see Item 8).

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Item 6

OTHER FEES

Name of Fee¹	Amount	Due Date	Remarks
Royalty Fee²	7% of monthly Gross Revenues for the preceding month. For annual Gross Revenues in excess of $1,000,000, the Royalty Fee will be 5%.	Payable on or before the 10th day of each calendar month	A statement of Gross Revenues is due at the same time. It must be submitted in a form and contain the information we require.
Grand Opening Promotion	Minimum of $3,000	As incurred	You must spend at least this amount in implementing a grand opening advertising and promotional program, which may consist of your initial purchase of promotional and advertising materials and products, direct mail advertising or other activities we determine. Any amount you spend in excess of $3,000 is within your discretion.
Local Advertising	1.5% of Gross Revenues (we may increase this amount to no more than 3% of Gross Revenues)	As incurred	If we establish an Advertising Fund, we may reduce the amount you are required to spend on Local Advertising based on the amount you contribute to the Fund. You must obtain our approval of plans and materials that we have not prepared or approved within 1 year before you use them. We may require you to purchase Yellow Pages or other business listing advertising.
Advertising Fund	Up to a total of 2% of Gross Revenues for the preceding month.	Payable on or before the 10th day of each calendar month	We have the right to establish an Advertising Fund. All franchisees must contribute. You must also submit at the same time all reports and statements we or the Fund may require. We are not currently charging this fee.

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Name of Fee¹	Amount	Due Date	Remarks
Cooperative Advertising	1.5% of Gross Revenues (we may increase this amount to no more than 3% of Gross Revenues)	As determined by Cooperative	If a Cooperative is established for your Assigned Area, you must contribute. Any payments to a Cooperative, may be credited against your Local Advertising expenditure requirement. Currently, there are no Cooperatives.
Training	Then-current reasonable fee plus all expenses (including travel, lodging, meals and wages). Current fee, will not exceed $3,000. Additional training, current per diem is $500 per day, plus expenses.	30 days after billing	This fee applies to each employee, except your initial Nurse Manager and Administrative Assistant who we will train at no additional charge. For all additional training, we may require you to pay our expenses and then-current fee for that training. We may waive this fee.⁵
Transfer of Franchise	The greater of $3,000 or our actual expenses in processing the transfer (which include, reasonable attorney's and accounting fees, travel, lodging, meals and wages).	Before completion of transfer	You and the transferee must comply with our transfer requirements.
Renewal of franchise agreement	The greater of $3,000 or our actual expenses in processing the renewal (which include, reasonable attorney's and accounting fees, travel, lodging, meals and wages).	On signing then-current franchise agreement	You must give us written notice not less than 7 nor more than 12 months before renewal.
Audit	Cost of inspection or audit.	10 days after our request	Payable if you understate Gross Revenues by 2% or more in any report, or if you fail to furnish reports or records as required.
Site Selection Fee Inspection	Currently, $500 per day plus our actual expenses for travel, lodging and meals.	On receipt of invoice	This fee applies to site inspections we must perform other than the inspections for the first Franchise Site. We may waive this fee in our discretion.

Name of Fee¹	Amount	Due Date	Remarks
Extension Fee	Not to exceed $3,000.	When extension requested	If you are unable to acquire a Franchise Site within the required period of time, you may request an extension for which we may charge a fee.
Software License	$1.00	On signing of Software License Agreement
Insurance	Cost of the insurance, plus our actual reasonable expenses in obtaining the insurance (which include travel, lodging, meals and wages).	Immediately on notice	If you fail to procure or maintain insurance as required by Franchise Agreement, we may procure it for you.
Inspection Fee	Our actual expenses in correcting the deficiencies noted in the inspection (which include travel, lodging, meals and wages).	Immediately on demand	If you fail to correct deficiencies identified during an inspection, we have the right to correct them and charge you a reasonable fee.
Interest	Not to exceed greater of 1 % per month or prime rate plus 4%.	Due with the overdue amount	Accrues on all overdue amounts payable to us and our affiliates.
Confidential Operations Manual	$500	30 days after billing	Cost of replacement copy.
Costs and Attorneys' Fees	Will vary under circumstances.	As incurred	Payable if you fail to comply with certain provisions of the franchise agreement.
Indemnification	Will vary under circumstances.	As incurred	You must indemnify us from all claims and liabilities connected with your operation of the Franchised Business.

All fees and expenses described in this Item 6 are non-refundable. Except as otherwise indicated in the chart above, we impose all the fees and expenses listed, and they are payable to us. Except as specifically stated above, the amounts given may be subject to increases based on changes in market conditions, our cost of providing services and future policy changes. At the present time, we have no plans to increase payments over which we have control.

The royalty is uniform as to all persons currently acquiring a franchise. Payment is due for the preceding month.

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"Gross Revenues" is defined in Section 1 of the Franchise Agreement to mean all revenue from the sale of immunizations, and related information, products and services, whether the sales are made for cash or on credit and regardless of collection in the case of credit sales. Gross Revenues will not include the amount of any sales taxes that you collect and remit to the proper taxing authorities or any amounts that you refund to your patients.

We have not currently established any Cooperative (see Item 11). We have the right to designate any geographic area in which 2 or more Franchised Businesses are located as a region for purposes of establishing an advertising Cooperative. All members of the Cooperative must contribute equally to the Cooperative. If at the time you sign the Franchise Agreement a Cooperative has been established for a geographic area that encompasses the Franchised Business, or if any Cooperative is established during the term of the Franchise Agreement, you must sign the documents we require immediately on our request and become a member of the Cooperative. Any amounts you pay to a Cooperative may be credited toward your local advertising requirement.

We have the right to require you to pay for training of any replacement or successor Nurse Manager, Administrative Assistants, or additional personnel trained, and for any additional or remedial training (see Item 5). You are also required to pay the expenses of your Nurse Manager and Administrative Assistant while attending training.

You must sign our software license agreement (the "PASSageware License Agreement"), which licenses to you the right to use our PASSageware Software, as defined below. See Item 11.

Item 7

INITIAL INVESTMENT

Expenditures	Estimated Amount or Estimated Low-High Range	When Payable	Method of Payment	To Whom Paid
Initial Franchise Fee (1)	$25,000-5100,000	On Signing	Lump Sum	Us
Computer Hardware & Software packages(2)	$3,500 - $4,500	Before Opening	Lump Sum	Vendors
Refrigerator, GBC, TV/VCR (3)	$500-$1,000	Before Opening	Lump Sum	Vendors
Office Furnishings (4)	$1,500-$2,500	Before Opening	Lump Sum	Vendors
Initial Print and Promotion Package and Opening Advertising (5)	$4,000 - $6,000	Before Opening	Lump Sum	Vendors
Initial Office Suppliers (6)	$250 - $500	Before Opening	Lump Sum	Vendors
Vaccine & Supply Inventory (7)	$2,000-$3,000	Before Opening	Lump Sum	Vendors
Telephone System (8)	$600-$1,000	Before Opening	Lump Sum	Vendors
Insurance for 12 months (9)	$8,000-$10,000	Before Opening	Lump Sum	Insurance Co.
Rent & Utility Deposits (10)	$1,000-$1,500	Before Opening	Lump Sum	Landlord/Utility Co.
Accounting (11)	$0 -$500	Before Opening	Lump Sum	Accountant
Legal (12)	$2,000-$10,000	Before Opening	Lump Sum	Attorney
Credit Card System (13)	$200-$1,000	Before Opening	Lump Sum	Bank

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Expenditures

Estimated Amount

or Estimated Low-High Range

When Payable

Method of Payment

To Whom Paid

Additional Funds for 3 months (14)

$15,000 -$25,000

Before Opening

Lump Sum

Not Applicable

TOTAL ESTIMATED INITIAL INVESTMENT

$63,550-$166,500

Explanatory Notes

Note 1: The initial franchise fee is payable by you on execution of the Franchise Agreement, and is non-refundable when paid (see Item 5).

Note 2: If you do not already have a computer system meeting the requirements stated in Item 11, you must obtain a Pentium computer and laser printer. You also must obtain the required software, including Microsoft Office and QuickBooks Pro (see Item 11).

Note 3: If you do not have a refrigerator in your facilities, you must obtain a refrigerator in which to store the vaccines. The refrigerator may be small dorm type refrigerator/freezer or a regular size unit. You will need a GBC binding machine to bind the travel information booklets. The GBC machine may vary in size (may be small or the 2000 Image Maker). You will also need a 13 inch television with a built in VCR for showing videos to customers.

Note 4: Most existing facilities will have sufficient office furnishings. However, if you do not, you will need a desk, chairs, open filing system and a storage cabinet capable of being locked.

Note 5: The Franchise Agreement requires you to spend a minimum of $3,000 for opening advertising for the Franchised Business. We anticipate the majority of that amount will be spent on an initial supply of print materials, consisting of 2 color brochures, recall post cards, book markers, Rolodex cards, business cards, stickers, announcements, letterhead, and envelopes, and an initial supply of promotional items, including, imprinted globe paperweights. You may spend more depending on the market in which your Franchised Business is located. You also may receive contributions from suppliers toward opening advertising and promotional activities that promote their product.

Note 6: If you do not already have a fully supplied office, you will need to purchase initial inventory of office supplies, including, paper, GBC binding fronts and backs, charts, labels, pens, clip boards, handing folders, desk accessories, paper clips, appointment books, etc.

Note 7: You must purchase your initial supply of vaccines and travel related supplies for resale.

Note 8: If you do not already have a telephone system, you must either purchase or lease one. It may be a basic 2 line system or a more elaborate system with voice mail. You must maintain at least 2 lines that are dedicated to the Franchised Business.

Note 9: You must have the insurance required by the Franchise Agreement. If you do not already maintain similar insurance, you must obtain the required insurance, including nursing malpractice insurance if you are not affiliated with a health system which has a blanket policy (see Item 8). The estimate shown above is based on the cost of annual premiums for the required insurance, and assumes you have no existing insurance meeting coverage requirements.

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Note 10: If you do not have existing facilities from which to operate the Franchised Business, you must obtain appropriate space from which to operate the business. We do not recommend that you incur the expense of renting a facility solely for the operation of the Franchised Business. The figures included in the chart above are an estimate of the costs to rent space in an existing medical practice for your first Franchise Site.

Note 11: You may use QuickBooks or similar accounting software and prepare the initial books for the Franchised Business yourself or you may hire an accountant to do it for you.

Note 12: The figures are an estimate of your cost to hire an attorney to review the Franchise Agreement and set up a legal entity from which you will operate the Franchised Business. They also include the cost of the legal opinion described in Item 11.

Note 13: You must have a credit card processing system. The figures in the chart are an estimate of the range of the costs to purchase a manual machine or a computerized system that verifies the account.

Note 14: The following is an estimate of 3 months' working capital necessary to operate the Franchised Business, including, renting space in an existing medical practice, utilities, telephone and salary for a nurse and an administrative assistant. These figures are estimates and we cannot assure you that you will not have additional expenses starting the Franchised Business. Your ongoing product and supply inventory for the 3-month period will be determined by your sales levels. These costs listed in the chart above are generally offset to some extent by the revenues generated from the operation of the Franchised Business. You, however, will need to have initial working capital to operate the Franchised Business, and particularly so during this initial phase. Working capital needs will vary. Your actual costs will depend on factors such as: your management skill, experience and business acumen; local economic conditions; the local market for products; the prevailing wage rate; competition: and the sales level reached during the startup phase. These amounts do not include any estimates for debt service. These amounts are based on our management's experience in the health travel and immunization business. This estimate does not include any amounts for owners' or management salaries or draw.

The initial investment figures shown above do not include any costs for a vehicle for your nurses to travel between Franchise Sites or to and from accounts. We assume, as in our experience, these individuals will have their own vehicles. None of the payments you make to us are refundable. We cannot predict what your costs will be to develop your Franchised Business. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing will depend on factors such as the availability of financing generally, your creditworthiness, collateral you may have and lending policies of financial institutions from which you may request a loan. You should review these figures carefully with a business advisor before making any decision to invest in the Franchised Business. Except as specifically stated above, the amounts given may be subject to increases based on changes in market conditions, our cost of providing services and future policy changes. At the present time, we have no plans to increase payments over which we have control.

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Item 8

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Within 45 days after you sign the Franchise Agreement and before you open for business, you must obtain a legal opinion, further described in Item 11, from an attorney we approve which addresses, among other things, applicable healthcare related law.

At all times during the term of the Franchise Agreement, you must operate the Franchised Business according to the Franchise Agreement and the standards, policies and procedures contained in the Manual. You must sell and provide all of the "Required Products and Services" (which includes, the vaccines, supplies, equipment, and services, that we have designated in the Manual as those products and services that must be sold or provided by the Franchised Business) and comply with our standards, policies and procedures. You must not offer or sell any unapproved products or services without our prior written consent, and discontinue offering the Required Products and Services that we disapprove in writing at any time. You must maintain an inventory of vaccines, supplies, and equipment that, under the circumstances, is adequate to fulfill your anticipated needs for those vaccines, supplies and equipment in the Assigned Area and that satisfies our standards and specifications for the vaccines, supplies and equipment as specified in the Manual.

You must comply with all of our standards and specifications relating to the purchase of all vaccines, supplies, products, materials, fixtures, furnishings, equipment (including computer hardware and software systems) and other products used or offered for sale at the Franchised Business. You must obtain those items from suppliers (including, us, manufacturers, distributors and other sources) who continue to demonstrate the ability to meet our then-current standards and specifications for vaccines, supplies, products, materials, fixtures, furnishings, equipment and other items used or offered for sale at the Franchised Business and who possess adequate quality controls and capacity to supply your needs promptly and reliably. Those suppliers must have been approved in writing by us before you can purchase from any supplier, unless we state otherwise in writing. We are not the only approved suppliers of any products or services. You must not purchase from any supplier who has been disapproved by us. If you desire to purchase, lease or use any products or other items from an unapproved supplier, you must submit to us a written request for the approval, or request the supplier itself to do so. You must not purchase or lease from any supplier until and unless the supplier has been approved in writing by us.

We have the right to require that our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be delivered, either to us or to an independent laboratory designated by us for testing. If we require, a charge not to exceed the reasonable cost of the inspection and the actual cost of the test must be paid by you or the supplier. We reserve the right, at our option, to re-inspect the facilities and products of any approved supplier and to revoke our approval on the supplier's failure to continue to meet any of our then-current criteria. We are not required to approve any particular supplier. We will respond to your requests for supplier approval within a reasonable time period, not to exceed 60 days. If we require you simply to purchase the supplies, products or equipment according to specifications, for certain of those items we may permit you to purchase from any suppliers carrying product meeting the specifications. We will advise you in writing of those circumstances.

We reserve the right to require you to install and maintain equipment according to our standards and specifications to permit (i) us to access and retrieve by telecommunication

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including a direct Internet connection with us, any information stored on computer hardware and software that we require you to utilize at the Franchise Business premises as specified in the Manuals, thereby permitting us to inspect and monitor electronically information concerning the Franchised Business, including, Gross Sales and such other information as may be contained or stored in such equipment and software, and (ii) you and us to communicate via the Internet, as such other electronic forms of communication which we specify. Accordingly, if we require, you must (x) install and maintain a telephone line and modem according to our specifications to permit us to access the computer hardware and software and to communicate via the Internet, and (y) maintain, at your expense, an Internet or other service contract, in the form and manner which we may specify with a service provider approved by us in writing.

We reserve the right to require you to use the software we develop, or have developed for us, for use in the Franchised Business. Such software will be made available to you at a reasonable cost. Prior to receiving the Software, you must execute a license agreement in the form prescribed by us, through which you will obtain under license from us certain proprietary software developed for use by us and by our Passport Health franchisees in connection with the operation of the Passport Health Franchised Businesses. We also may require you to execute a support agreement in the form prescribed by us, through which you will obtain training, maintenance and related support services with regard to the software. In addition to, or instead of, requiring you to obtain the software from us, we have the right to require you to obtain and use certain software developed by third parties. You must maintain any license agreements, and the support agreements in full force and effect at all times during the term of the Franchise Agreement for any third party software we require you to obtain and maintain. We have developed the PASSageware Software, as further described in Item 11.

The Manual will govern any and all matters relating to the maintenance and operation of your Franchised Business and the use of the Marks, including: (i) the types, models, brands, maintenance and replacement of equipment, fixtures and signs used in the operation of the Franchised Business; (ii) the Required Products and Services; (iii) the types, categories and brands of products and services offered for sale to patients, including our Private Label Supplies; (iv) minimum levels of inventory, product mix and displays to be maintained by your Franchised Business; and (v) physical inventory methods, frequency of physical inventories and other inventory requirements. We may revise the Manuals and the approved supplier lists at any time, and will advise you of any changes in the list.

We reserve the right to license certain third party suppliers to assemble and package certain products and supplies under the Marks (collectively, the "Private Label Supplies"). The Private Label Supplies will consist primarily of travel related supplies (e.g., insect repellent, water purification kits, first aid kits, syringe kits and other travel related supplies). The Private Label Supplies will be competitively priced and will be available for purchase from us or from our designees. Subject only to availability, you must purchase all of the Private Label Supplies necessary to satisfy the operating needs of your Franchised Business for those products and supplies. If you purchase Private Label Supplies from us on open account, the payment terms will be according to our standard commercial billing practices. We also reserve the right to require you to use the software we develop, or have developed for us, for use in the Franchised Business (if any is developed).

We will negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of the System and the Health Travel and Immunization Businesses operating under it. We receive various volume discounts and rebates based on purchases from a variety of suppliers. Those suppliers include pharmaceutical manufacturers, printers, sellers of

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medical evacuation insurance, mobile telephone service providers, and vendors of a variety of other products. If you wish to take advantage of the volume discounts we receive, you may purchase through those suppliers. To obtain certain of the discounts from particular pharmaceutical suppliers, our current arrangements with some of those suppliers require that you purchase on our accounts. The supplies will be shipped to you directly, and you must pay us for them when we send you the invoice. If you fail to pay us promptly, we may revoke your right to purchase under our accounts, which may result in your losing access to those volume discounts.

Generally, most discounts will be passed on to you and other franchisees if you purchase through us. However, we may receive rebates that are paid by suppliers for System-wide purchases (which include franchisee purchases). We may keep the rebates to partially reimburse us for our costs in the initial sourcing, approval and ongoing monitoring of compliance with our quality standards of our suppliers, and to compensate us for our administrative and accounting expenses in ordering products and supplies for the System, and permitting you to purchase on our accounts. Our current arrangement with Phoneworks, a mobile telephone service provider, provides that we will receive a commission of 15% of telephone fees. We do not anticipate receiving rebates from all of our designated or approved suppliers because in many cases we will instead negotiate proportional reductions in the invoice price of the products sold to you and us. We do not undertake any obligation to negotiate the proportional price reductions as each supplier has their own position on the granting (and tracking/accounting for) of price reductions vs. rebates.

All advertising and promotion by you in any medium must be conducted in a dignified manner and must conform to our standards and requirements as stated in the Manual or otherwise. You must obtain our prior approval of all advertising and promotional plans and materials that you desire to use and that have not been prepared or previously approved by us within 1 year of proposed use. You must submit the unapproved plans and materials to us, and we will approve or disapprove the plans and materials within 14 days from the date we receive the plans. You must use no plans or materials until they have been approved by us and must promptly discontinue use of any advertising or promotional plans or materials on notice from us.

We have the right to inspect and approve each Franchise Site, but not the obligation to do so. We also have the right, but not the obligation, to review and approve the form of any contract of purchase or lease agreement (or any amendments to them) for each Franchise Site before you execute them. If we request, you must provide us with a copy of any contract of purchase or lease. We reserve the right to reject any proposed Franchise Site in our sole discretion; however, we will not, without reasonable justification, reject any proposed Franchise Site that (i) satisfies the local zoning laws and ordinances and qualifies for all of the permits and certifications necessary to operate the Franchised Business, (ii) qualifies as Class A space or above (as determined by local standards), and (iii) conforms to the design plans and specifications for "Franchise Sites" set out in the Manual. If we reject any Franchise Site proposed by you, we may in our sole discretion extend the period within which you are hereunder required to acquire the first Franchise Site, as well as any of the other time frames established in the Development Schedule. We also may charge you a reasonable fee to reimburse us for time and expenses incurred with any site inspections we are required to perform for any site other than the first proposed Franchise Site. Currently, we may charge you up to $500 per day, plus our actual expenses (which include travel, lodging and meals).

If we elect to exercise our option to review and approve the form of lease for any of your Franchise Sites, as a condition to approving your lease, we may require your lease to contain provisions that satisfy the following requirements: (i) that the lessor agrees to furnish us with

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copies of any and all letters and notices sent to you pertaining to the lease and the Franchise Site, at the same time that the letters and notices are sent to you; (ii) that the lessor and you will not amend or otherwise modify the lease in any material respect without our written consent; and (iii) that the lessor and you will permit us to enter the premises without being guilty of any trespass or tort for purposes of modifying or removing any signs, products, equipment, supplies or materials related to the Franchised Business without requiring us to obtain any additional consent. Generally, we will not exercise these options in circumstances where the Franchised Business will be operated from existing space.

Before you open the Franchised Business, you must obtain the type and amount of insurance coverage for the Franchised Business we specify in the Franchise Agreement and the Manuals, or otherwise in writing. You must obtain and maintain the specified insurance coverage during the term of the Franchise Agreement from a responsible carrier or carriers we find acceptable. The types of coverage include: (i) commercial general liability insurance policy ($1,000,000 combined single limit, $2,000,000 aggregate); (ii) all-risk property insurance policy, including theft; (iii) comprehensive automobile liability insurance, including, owned, non-owned, and hired vehicles ($1,000,000 combined single limit); (iv) professional liability coverage ($1,000,000 per claim); (v) worker's compensation insurance or similar insurance offering statutory coverage (not less than $100,000 per occurrence); and (vi) any insurance which may be required by statute or rule of the state or locality in which the Franchised Business will be operated.

You may, after obtaining our written consent, elect to have reasonable deductibles under the coverage required. Also, for any construction, renovation or remodeling of the Franchise Sites, you must maintain builder's risks insurance and performance and completion bonds in forms and amounts written by a carrier or carriers, satisfactory to us. All of the policies must name us, our affiliates and the respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional insureds and must include a waiver of subrogation in favor of all those parties.

During our 2005 fiscal year, we had total revenues of $4,542,993. Although we do not maintain separate accounting records of such sales, we estimate that, of that amount, less than $100,000 (or less than 1%) was derived from franchisees' purchases of Private Label Products, other supplies and rebates based on franchisee and customer purchases.

We can, and do, require you to purchase or lease virtually all goods and services necessary to establish and operate the Franchised Business from us or our designees, from suppliers approved by us, or according to our specifications. We estimate that the percentage of the costs to purchase and lease all equipment, inventory and other items and services that we require you to obtain from us or our affiliates, or from designated suppliers to range from 10% to 15% of the total cost to establish the Franchised Business and 10% to 15% of the total cost to operate the Franchised Business.

Other than as described above, we do not provide any material benefits to Franchisees based on their use of designated or approved suppliers. When determining whether to renew or grant new or additional franchises, we consider many factors, including whether you have complied with the requirements described above.

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Item 9

FRANCHISEE'S OBLIGATIONS

THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AGREEMENT. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THE FRANCHISE AGREEMENT AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

Obligation	Section in Agreement	Item in Offering Circular
A. Site selection and acquisition/lease	Section 4 of Franchise Agreement	Items 8 and 11
B. Pre-opening purchases/leases	Section 6 of Franchise Agreement	Items 5, 6, 7, 8 and 11
C. Site development and other pre-opening requirements	Section 4 of Franchise Agreement	Items 1, 8 and 11
D. Initial and ongoing training	Sections 10 and 12(c) of Franchise Agreement	Items 5, 6 and 11
E. Opening	Sections 6(a) and 15(a) of Franchise Agreement	Items 7 and 11
F. Fees	Sections 10(c) and 12 of Franchise Agreement	Items 5 and 6
G. Compliance with standards and policies/Manuals	Sections 9, 16 and 20(e) of Franchise Agreement	Items 11 and 14
H. Trademarks and proprietary information	Section 11 and Attachment B of Franchise Agreement	Items 11, Band 14
I. Restrictions on products/services offered	Section 7 of Franchise Agreement	Items 8 and 16
J. Warranty and customer service requirements	Section 7 of Franchise Agreement	Item 8
K. Territorial development and sales quotas	Section 5 of Franchise Agreement	Item 12
L. Ongoing product/service purchases	Sections 7(a)(i), (b), (f), (0, G), 9(b)(iii), (iv), (vii) and 22(b) of Franchise Agreement	Items 6 and 8
M. Maintenance, appearance and remodeling requirements	Sections 4(d) and (e) of Franchise Agreement	Items 8 and 11
N. Insurance	Section 13 of Franchise Agreement	Items 7 and 8
0. Advertising	Section 15 of Franchise Agreement	Items 6, 8 and 11
P. Indemnification	Section 23(c) of Franchise Agreement	Item 6
Q. Owner's participation/ mana gement/staffing	Sections 6(b), 7(a) and (f) of Franchise Agreement	Items 1, 11 and 15
R. Records and reports	Sections 4(d), 7(h), 9(b)(vi), 15(c)(iii), 17(a) and (d), and 20(a) of Franchise Agreement	Item 6

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Obligation	Section in Agreement	Item in Offering Circular
S. Inspections and audits	Sections 16 and 17 of Franchise Agreement	Items 6, 8 and 11
T. Transfer	Section 18 of Franchise Agreement	Items 6 and 17
U. Renewal or Extension of Rights	Section 3(b) of Franchise Agreement	Items 6 and 17
V. Post-termination obligations	Section 20 of Franchise Agreement	Items 6 and 17
W. Noncompetition covenants	Section 14 and Attachment B of Franchise Agreement	Item 17
X. Dispute resolution	Sections 23(e)-(h) of Franchise Agreement	Items 6 and 17

Item 10

FINANCING

We do not offer direct or indirect financing. We do not offer to guarantee your note, lease or obligation.

Item 11

FRANCHISOR'S OBLIGATIONS

Except as listed below, in this Item 11, we need not provide any assistance to you before or during the operation of the Franchised Business.

Guidance and Assistance Generally: We will furnish to you the guidance and assistance that we believe appropriate, related to the following:

(i) advice and written materials concerning methods, standards, and operating procedures that you should be using in the operation of your Franchised Business as they are developed by us, including new developments and improvements in product marketing and delivery of services (Franchise Agreement, Section 7(b)(1));

(ii) methods, standards, and operating procedures for you to follow in purchasing and selling approved goods and services, as those are developed and modified by us (Franchise Agreement, Section 7(b)(ii));

(iii) negotiation of supplier arrangements on behalf of the Passport Health system and franchisees conducting business thereunder, including system-wide discounts where available, and a list of approved suppliers from whom you may purchase (see Item 8) (Franchise Agreement, Section 7(b)(iii));

(iv) articles, information and sources of information for use in connection with the Health Travel and Immunization Business in preparing itineraries and advising travelers of health risks, as those materials are developed and improved by us (Franchise Agreement, Section 7(b)(iv));

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(v) formulation and implementation of advertising and promotional materials and programs for you and other franchisees to use in the operation and promotion of the Franchised Business in local advertising and promotion (as more fully described below in this Item 11) (Franchise Agreement, Sections 7(b)(v) and 15);

(vi) establishment and administration of an advertising fund and/or advertising cooperatives, if and when the cooperatives and funds are established (as more fully described below in this Item 11) (Franchise Agreement, Sections 7(b)(vi) and 15);

(vii) an initial training program for your Nurse Manager and Administrative Assistant (and other personnel) and other training programs (as described below in this Item 11) (Franchise Agreement, Sections 7(b)(vii) and 10);

(viii) on-site post-opening training at the first Franchise Site (as described below in this Item 11) (Franchise Agreement, Sections 7(b)(vii) and 10);

(ix) on loan, one copy of the Manual and other manuals and written materials that we have developed for use in the Franchised Business, as the same may be revised by us (as described below in this Item 11) (Franchise Agreement, Sections 7(b)(ix) and 9);

(x) administrative, bookkeeping, accounting, inventory control, and general operating and management procedures for the operation of your Franchised Business (Franchise Agreement, Section 7(b)(x));

(xi) certain computer software to be used in the operation of the Franchised Business which will be licensed to you by third parties. If we develop proprietary software, we will make it available to you at a reasonable cost, which is currently $400 per year (as described below in this Item 11) (Franchise Agreement, Sections 7(b)(xi) and 7(j));

(xii) visits to the Franchise Sites and evaluations of the products sold and services provided at the sites at your request and as reasonably determined by us, at a reasonable cost (see Item 6) (Franchise Agreement, Sections 7(b)(xii) and 16);

(xiii) solicit, negotiate and maintain corporate accounts on behalf of the Passport Health System, which will be made available to you to the extent customers are located within your Assigned Area (see Item 16) (Franchise Agreement, Sections 7(b)(xii) and 7(i));

(xiv) develop and make available to you Private Label Products for sale in the Franchised Business (see Item 8) (Franchise Agreement, Sections 7(b)(xiv) and 7(e)); and

(xv) develop and publish a periodic newsletter for use and distribution to franchisees and to your customers (see Item 11, Advertising below) (Franchise Agreement, Sections 7(b)(xv) and 15(i)).

The guidance will, in our discretion, be furnished in the form of our Manual, bulletins, and other written materials; national, regional, and other group meetings; and telephone consultations or consultations at our offices or at the Franchise Site. In addition, if requested by you and deemed appropriate by us, we will furnish additional guidance and assistance without charge (except as provided in Sections 4 and 9 of the Franchise Agreement). We have the right to require you to reimburse us for all out-of-pocket expenses reasonably incurred by us in furnishing additional guidance and assistance. (Franchise Agreement, Section 7(b))

Healthcare -Related Legal Review And Compliance: Within 45 days after you sign the Franchise Agreement and before you open for business, you must obtain from an attorney we approve, licensed to practice law in the Assigned Area, and deliver to us a written opinion (the "Opinion") addressing (a) whether your prospective operation of the Franchised Business in accordance with the terms of the Franchise Agreement complies with applicable law (including laws regarding the corporate practice of medicine, fee splitting and health care rules and regulations), and (b) the agreement and operational modifications necessary, if any, for compliance. The Opinion must also address other related issues we may designate periodically in the Manual or otherwise in writing. Immediately on our request, you must obtain from this attorney additional legal opinion or opinions we may request, regarding the above (these additional opinions are also referred to as the "Opinion"). If the Opinion concludes that it is impossible for you to operate the Franchised Business in compliance with applicable law, or if we conclude that the agreement and operational modifications necessary for compliance are impractical, we may terminate the Franchise Agreement immediately on written notice to you. If we conclude that the agreement and operational modifications necessary, if any, for compliance are practical, we will have the right to modify the Franchise Agreement and make operational modifications immediately on written notice to you.

Without limiting your obligations under the Franchise Agreement to comply with applicable law, you must ensure that your operation of the Franchised Business and your relationship with the Physician Consultant and all nurses and other medical professionals and the manner in which the Franchised Business provides services comply with all applicable rules, regulations, ordinances and standards of professional conduct. We have the right to require you to restructure your compensation arrangements with us, the Physician Consultant and all nurses and other medical professionals in order to comply with applicable law.

We may not and will not interfere with, supervise or assume any responsibility for you or your Physician Consultant's or other employees', contractors' or agents' exercise of their medical professional judgment with respect to the operation of the Franchised Business. All medical decisions, acts or omissions made by, or in connection with, any person in any way associated with the Franchised Business in the course of the Practice of Medicine or any other Practice of a Profession will be the decisions of the individual professionals involved and will not be affected by or attributed to us.

We will in no way be responsible for and you must indemnify us against any decisions, acts or omissions related to the medical treatment of, Practice of Medicine or any other Practice of a Profession in relation to, or violation of the private interests of any person in any way whatsoever associated with the Franchised Business. You must take all measures we prescribe in the Manual or otherwise in writing to inform all individuals associated with and potential customers of the Franchised Business that we have no control over or responsibility for any person's or persons' Practice of Medicine or any other Practice of a Profession.

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Download PDF: Passport Health UFOC 1

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UFOC

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