This LICENSE, MANUFACTURE AND DISTRIBUTION AGREEMENT ("Agreement") is made by
and between;
Desert Health Products, Inc.
7825 East Gelding Drive, Suite 101
Scottsdale Arizona
(602) 951-1941, Fax No. (602) 661-7163.
E-mail: deserthealth@att.net
a Arizona Corporation (hereinafter referred to as "DHPI"), and;
Royal Phoenix
1601 Flamingo Rd. Suite 18A
Las Vegas, Nevada 89118
(702) 866-5835
E-mail: first@firstimpressions.com
a Nevada Corporation (hereinafter referred to as "Royal Phoenix").
Collectively, DHPI and Royal Phoenix are hereinafter referred to as "the
Parties".
WITNESSETH
WHEREAS, DHPI a Publicly Traded Company that private labels various beauty
and health care products, including substantial formulations of vitamins,
which DHPI has developed over a period of several years, and
WHEREAS, Royal Phoenix desires an agreement for the manufacture and
distribution for a line of vitamins currently produced by DHPI as described
in Exhibit A, and DHPI is willing to enter into such an agreement.
WHEREAS, Royal Phoenix was a spin off company from DHPI for the purpose of
marketing independent of DHPI a line of vitamins primarily in the domestic
market. products and related products primarily through direct market media
such as the Internet, and
WHEREAS, Royal Phoenix desires to obtain an agreement for purposes of
licensing, distributing, selling, and marketing, and using the Royal Phoenix
Vitamin Group described in Exhibit A, (the "Royal Phoenix Vitamin Group"), on
an exclusive basis.
THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, it is agreed as follows.
DEFINITIONS AND INTERPRETATIONS
Captions and Section Numbers.
The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended
to interpret, define or limit the scope, extent or intent of this Agreement
or any provisions thereof.
Extended Meanings.
The words "hereof", "herein", "hereunder", "hereto" and similar expressions
used in any clause. Paragraph or section of this Agreement and any Addendum
and/or Exhibit attached to this Agreement shall relate to the whole of this
Agreement including any attached Addendum and/or Exhibit and not to that
clause, paragraph or section only, unless otherwise expressly provided.
Number and Gender.
In this Agreement words importing the masculine gender include the feminine
or neuter gender and words in the singular include the plural, and vice
versa.
Section References and Schedules.
Any reference to a particular "article", "section", "paragraph" or other
subdivision of this Agreement and any reference to a schedule, addendum or
exhibit by name, number and/or letter shall mean the appropriate schedule,
addendum or exhibit attached to this Agreement and by such reference is
incorporated into and made part of this Agreement.
"Royal Phoenix Vitamin Group" shall mean all confidential or proprietary
information, trade secrets and know how relating to the Royal Phoenix Vitamin
Group as such technology is further described on Exhibit A to this Agreement.
The Royal Phoenix Vitamin Group is sometimes referred to herein as the
"Licensed Technology").
"Licensed Rights" means all rights under any, copyright, confidential or
proprietary information, trade secrets and know-how relating to the Royal
Phoenix Vitamin Group, and includes the Licensed Technology.
"Licensed Tool(s)" shall include coding systems, proprietary manufacturing
systems, development methodologies, and documentation that encompass or
incorporate or are based on any of the Royal Phoenix Vitamin Group, but do
not include products, and services that result from "Authorized Use" of the
Licensed Tools. Licensed Tools specifically excludes Royal Phoenix marketing
implementations of the Royal Phoenix Vitamin Group.
"Authorized Use" refers to those activities and Licensed Rights granted by
Licensee under this Agreement to everyone who purchases or sub-licenses a
Licensed Tool.
"Net Sales" means the gross amounts received by Licensee worldwide, from the
sales, license or disposal of Licensed Tools, less commissions, credit for
returns, customary trade discounts, deductions for transportation charges,
and taxes and duties directly imposed on the sale. Except for customary
trade discounts, should Licensee sell, rent or dispose of any Licensed Tool
in a non arm's-length transaction, the Net Sales shall be computed based on
proceeds from sales of a similar product in an arms-length transaction.
"Reasonable Effort" means a reasonable program of supporting technology
improvements and marketing that expands industry adoptions, installed base,
and commercial use of the Royal Phoenix Vitamin Group.
"Improvement(s)" shall mean inventions, modifications, adaptations or
improvements, which relate to or are based on the Royal Phoenix Vitamin
Group.
"Sublicensee" shall mean a person or entity to whom Licensee has granted the
right under the Licensed Technology to develop, manufacture, have
manufactured, use, market and/or sell the Licensed Tools.
"Sublicense Income" shall mean the gross amount (net of tax withholdings for
taxes which Licensee is obligated to pay) received by Licensee from
Sublicensees for or on account of sublicenses of any of the rights granted
Licensee hereunder and the sale of Licensed Tools, including royalties,
license fees, milestone payments, option fees and other amounts paid or other
non-monetary financial benefit provided to Licensee by Sublicensees.
Sublicensee Income shall not include amounts received by Licensee from a
Sublicensee for an equity investment in Licensee.
AGREEMENT
1. GRANT OF LICENSE
1.1. Exclusive License. DHPI hereby grants to Royal Phoenix, subject to the
conditions set forth in this Agreement, an exclusive non transferable license
under the Licensed Rights to make, have made, use, market, import, have
imported, lease, sell, distribute, offer for sale, or otherwise dispose of
Royal Phoenix Vitamin Group, as herein defined, utilizing Licensed Tools
throughout the world, including the right to make copies of, make derivative
works based on, and distribute any copyrighted works within the Royal Phoenix
Vitamin Group. The license is strictly limited to Royal Phoenix's right to
make, use, market, import, lease, sell, distribute, offer for sale, or
otherwise dispose of Royal Phoenix Vitamin Group, and such license may not be
utilized for any other purpose without permission of DHPI. Royal Phoenix
Vitamin Group is a proprietary product developed by DHPI utilizing Licensed
Tools. Royal Phoenix Vitamin Group is a line of specially formulated
vitamins.
1.2. Sublicense. Licensee shall have the right to grant sublicenses to third
parties, subject to the terms of this Agreement.
1.3. Reservation of Rights. DHPI expressly reserves all rights not granted
to Royal Phoenix in this Agreement for his own purposes.
5. Manufacture, Distribution, and Shipment. The Parties herein mutually agree
that DHPI shall be responsible for the manufacture, shipment, distribution,
labeling, and collection of payments, generally referred to herein as the
"Manufacture and Distribution Process").
6. Term. This Agreement shall begin ninety (90) days from the date DHPI is
prepared to make the first shipment of Product and shall continue until
December 31, 2010.
7. Price. Since the Parties are not now certain of the actual costs of
manufacturing, bottling, boxing, and charge card authorizations and shipping,
the price of the Product shall be DHPI's cost of production including a
reasonable alowance for overhead plus 30% of such cost and overhead. The cost
of production and the allowance for overhead shall be mutually determined by
the Parties, and if no agreement can be reached, an indendent accounting firm
selected by the Parties, using as a basis for overhead DHPI's books and
records for the prior two quarters.
Periodic Price Revisions. DHPI may, effective at the end of each six
month period, increase the price of the Product by giving Royal Phoenix at
least 15 days' prior written notice. Increase prices shall apply to any
products shipped after the expiration of such quarter unless DHPI shall have
received from Royal Phoenix, prior to the expiration of such quarter, written
notice that Royal Phoenix is unwilling to accept such increase, in which
event Royal Phoenix may terminate this agreement. In the event of
termination, then in that event, Royal Phoenix shall be entitled to continue
to utilize the Royal Phoenix Vitamin Group as defined herein, however, DHPI
will have no further responsibility to take orders, manufacture the Royal
Phoenix Vitamin Group, bottle the product, or ship the product.
8. Exclusive Dealings. DHPI represents that during the term of this
Agreement that DHPI will not sell, give away or otherwise transfer to any
other person during the term of this Agreement any of the Product, for the
uses permitted under this Agreement, without the prior written consent of
Royal Phoenix.
9. Delivery. DHPI shall deliver all goods to a carrier for transportation to
customers of Royal Phoenix's, as designated by Royal Phoenix, but all costs
of transportation shall be borne by Royal Phoenix and all risks of loss shall
pass to Royal Phoenix when the goods are delivered to the carrier. The
Parties agree that DHPI is handling the entire Manufacture and Distribution
Process and the price paid to DHPI will include coverage of payments for the
entire Manufacture and Distribution Process.
10. Acceptance. Upon each delivery of Product, Royal Phoenix customers shall
inspect the delivered Product to determine whether such Product is in
conformity with the specifications set out in Exhibit A hereto. If such
delivery of Product is not in conformity thereto, Royal Phoenix or the
customer shall notify DHPI of such non-conformity within seven days of such
delivery. If Royal Phoenix or its customers have not notified DHPI that
such delivery of Product is not in conformity within such time, Royal Phoenix
or its customers shall be deemed to have accepted the Product delivered. If
Royal Phoenix so notifies DHPI that the delivered Product is non-conforming,
DHPI shall replace the rejected Product within twenty days from the date of
rejection.
11. Billing and Payment. Products being ordered shall include payment by
charge card only from customers directly to DHPI, or check or charge card
from Royal Phoenix. A separate account shall be maintained by DHPI for
receipt of payments on orders. At the end of each quarter, a accounting shall
be prepared showing the volume of product, the percentage of costs to be paid
to DHPI and the balance of costs paid to Royal Phoenix.
12. Trade Secrets and Inventions.
Royal Phoenix shall treat as proprietary any and all information belonging to
DHPI, it's affiliates or any third parties disclosed to Royal Phoenix in the
course of the relationship between DHPI and Royal Phoenix.
13. Termination of Agreement.
This Agreement may not be terminated by either party prior to the expiration
of the term provided in paragraph 6 above, except as follows.
a. Upon the bankruptcy or liquidation of the other party, whether
voluntary or involuntary,
b. Upon the other party taking the benefit of any insolvency law,
c. Upon the other party having or applying for a receiver appointed for
either party,
d. For cause, and/or
e. As provided for in paragraph 14, immediately below.
14. Early Termination.
In the event Royal Phoenix fails or refuses to cooperate with DHPI, fails or
refuses to make timely payment of the compensation set forth in this
Agreement, DHPI shall have the right to terminate any further performance
under this Agreement. In such event, and upon notification thereof, all
invoicing shall become immediately due and payable and/or deliverable.
15. Notices.
All notices hereunder shall be in writing and addressed to the party at the
address herein set forth, or at such other address which notice pursuant to
this section may be given, and shall be given by either certified mail,
express mail or other overnight courier service. Notices shall be deemed
given upon the earlier of actual receipt or three (3) business days after
being mailed or delivered to such courier service. Any notices to be given
hereunder shall be effective if executed by and/or sent by the attorneys for
the Parties giving such notice and, in connection therewith, the Parties and
their respective counsel agree that in giving such notice such counsel may
communicate directly in writing with such party to the extent necessary to
give such notice.
16. Attorney Fees
In the event either party is in default of the terms or conditions of this
Agreement and legal action is initiated or suit be entered as a result of
such default, the prevailing party shall be entitled to recover all costs
incurred as a result of such default including reasonable attorney fees,
expenses and court costs through trial, appeal and to final disposition.
17. Return of Records.
Upon termination of this Agreement, Royal Phoenix shall deliver all records,
notes, data, memorandum, models and equipment of any nature that are in the
control of Royal Phoenix that are the property of or relate to the business
of DHPI, except that Royal Phoenix shall retain one copy of printed material
for retention in the Royal Phoenix library.
18. Ownership of Materials.
All right, title and interest in and to the Royal Phoenix Vitamin Group to be
produced by DHPI in connection with this Agreement shall be and remain the
sole and exclusive property of Royal Phoenix. Thus, upon termination, Royal
Phoenix has the right to continue the production of the product with a third
party manufacturer.
19. Agreement Not To Hire.
Royal Phoenix understands and appreciates that DHPI invests a tremendous
amount of time, energy, resources and expertise in the training and education
of its employees and subcontractors to be able to provide the very Product
Royal Phoenix requires. Further, Royal Phoenix understands that in the event
an employee or subcontractor of DHPI is enticed to leave, then DHPI shall be
damaged in an amount the Parties are not capable of calculating at the
present time. Therefore, Royal Phoenix agrees not to offer employment or
subcontractor status to any employee or subcontractor of DHPI, nor to allow
any employee, officer, director, shareholder or consultant of Royal Phoenix
to offer such employment or subcontractor status with Royal Phoenix or any
other company, concern, venture or entity with whom officers, directors or
consultants of Royal Phoenix are employed, associated or hold a financial
stake in, for a period of three (3) years from the date of expiration or
termination hereof.
20. Exclusion With Respect To Partnership.
The Parties agree that in no way shall this Agreement be construed as being
an act of partnership between the Parties hereto and that no party hereto
shall have, as a result of the execution of this Agreement, any liability for
the commitments of any other party of any type, kind, son or variety.
21. Time Is Of The Essence.
Time is hereby expressly made of the essence of this Agreement with respect
to the performance by the Parties of their respective obligations hereunder.
22. Inurement.
This Agreement shall inure to the benefit of and be binding upon the Parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors, assigns and any addendum attached hereto.
23. Entire Agreement.
This Agreement contains the entire agreement of the Parties. It is declared
by the Parties that there are no other oral or written agreements or
understanding between them affecting this Agreement or relating to the
business of DHPI. This Agreement supersedes all previous agreements between
DHPI and Royal Phoenix.
24. Amendments
This Agreement may be modified or amended provided such modifications or
amendments are mutually agreed upon by and between the Parties hereto and
that said modifications or amendments are made only by an instrument in
writing signed by the Parties or an oral agreement to the extent that the
Parties carry it out.
25. Waivers.
No waiver of any provision or condition of this Agreement shall be valid
unless executed in writing and signed by the party to be bound thereby, and
then only to the extent specified in such waiver. No waiver of any provision
or condition of this Agreement shall be construed as a waiver of any other
provision or condition of this Agreement, and no present waiver of any
provision or condition of this Agreement shall be construed as a future
waiver of such provision or condition.
26. Non-waiver.
The failure of either party, at any time, to require any such performance by
any other party shall not be constructed as a waiver of such right to require
such performance, and shall in no way affect such party's right to require
such performance and shall in no way affect such party's right subsequently
to require a full performance hereunder.
27. Construction of Agreement.
Each party and its counsel have participated fully in the review and revision
of this Agreement. Any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not apply in the
interpretation of this Agreement.
28. Applicable Law.
THIS AGREEMENT IS EXECUTED PURSUANT TO AND SHALL BE INTERPRETED AND GOVERNED
FOR ALL PURPOSES BY THE LAWS OF THE STATE OF NEVADA FOR WHICH THE COURTS IN
CLARK COUNTY, NEVADA SHALL HAVE JURISDICTION WITHOUT GIVING EFFECT TO THE
CHOICE OR LAWS OR CONFLICT OF LAWS RULES THEREOF OR OF ANY STATE.
29. Severability.
If any provision of this Agreement shall be held to be contrary to law, void,
invalid or unenforceable for any reason, such provision shall be deemed
severed from this Consulting Agreement and the remaining provisions of this
Agreement shall continue to be valid and enforceable. If a Court finds that
any provision of this Agreement is contrary to law, void, invalid or
unenforceable and that by limiting such provision it would become valid and
enforceable, then such provision shall be deemed to be written, construed and
enforced as so limited.
30. Acceptance by DHPI.
This Agreement is not valid or binding upon DHPI unless and until executed by
its Chief Executive Officer, Chief Operating Officer duly authorized
executive officer of DHPI at its home office in Scottsdale, Arizona.
31. Execution In Counterpart: Telecopy-Fax.
This Agreement may be executed in counterparts, not withstanding the date or
dates upon which this Consulting Agreement is executed and delivered by any
of the Parties, and shall be deemed to be an original and all of which shall
constitute one and the ISNe Agreement effective as of the reference date
first written below. The fully executed telecopy (fax) version of this
Agreement shall be construed by all parties hereto as an original version of
said Agreement.
IN WITNESS WHEREOF, the Parties hereto have set forth their hands and
seal in execution of this Agreement made this 18th day of October 2000, by
and between;
For and in behalf of Royal Phoenix: For and in behalf of DHPI:
By:/s/JOSEPH SCOTT WILSON By:/s/JOHNNY SHANNON
Joseph Scott Wilson, President Johnny Shannon, President
Witnessed by:
Notary Public
EXHIBIT A
Description of Royal Phoenix Vitamin Group