LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is entered into as of this 21st day of
December, 1999, by and between Desert West Marketing, Inc., a Nevada corporation
("Licensee"), and Dr. Robert Milne ("Licensor").
RECITALS
A. The Licensor has developed a natural anti-cholesterol encapsulated
health supplement derived from fermented rice and Peruvian plant products.
B. Licensee desires to acquire, and the Licensor desires to grant to
Licensee, the exclusive right to the use of the above described health
supplement together with all improvements thereto, as well as all patents,
trademarks, service marks, copyrights, trade names, and other incidents of
ownership of the product (collectively, the "Product"), on the terms and subject
to the conditions specified in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I
GRANT OF LICENSE
1.1 Grant of Exclusive License. The Licensor hereby grants, and Licensee
hereby accepts, the sole and exclusive right to use, sublicense and otherwise
exploit the Product in any manner anywhere in the world Licensee determines, in
its sole and absolute discretion, to be appropriate. ARTICLE II PAYMENT
2.1 Licensing Fees. Licensee shall pay to the Licensor, on a monthly basis
and within fifteen days of the end of each calendar month during the License
Period
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(hereinafter defined), a licensing fee in the amount of Ten Cents ($0.10) per
each 100 capsules of Product sold.
2.2 Sublicensing Fees. In the event that the Licensee sublicenses the
Product during the License Period, Licensee shall pay to the Licensor, on a
monthly basis and within fifteen days of the end of each calendar month during
the License Period, a sublicensing fee in the amount of Five Cents ($0.05) per
each 100 capsules of Product sold by any sublicensee of the Licensee.
2.3 Sales Reports. Licensee shall provide the Licensor with a written
report of all Product sales in detail satisfactory to the Licensor at the time
Licensee pays its monthly licensing fees. The Licensor shall have the right to
request additional, reasonable detail or information, which Licensee shall
promptly provide, pertaining to any such report.
2.4 Payment of Taxes. Licensee shall pay all taxes that may be assessed on
the Product or any item derived therefrom by Licensee or its use or
distribution, including sales taxes.
2.5 Inspection of Books and Records. Licensee shall keep complete, true and
correct books and records specifying the sales and other data, in detail
satisfactory to the Licensor to calculate the licensing fees payable pursuant to
this Agreement. The Licensor shall have the right to inspect all financial
books, records, reports and statements of Licensee at Licensee's premises or
wherever the same may be maintained, during normal business hours. The Licensor
right to inspect shall apply to its duly authorized attorney, accountant,
representative, agent or advisor.
ARTICLE III
PROPERTY RIGHTS
3.1 Title to Product. Title to the Product is reserved to the Licensor. The
Licensor is and shall remain the sole and exclusive owner of the Product, to the
exclusion of all others. Licensee shall take no acts inconsistent with the
foregoing.
3.2 Infringement or Litigation. The Licensee shall promptly notify the
Licensor of any infringement of the licensed Product and any litigation
instituted by any person, firm, corporation, or governmental entity against the
Licensee or Licensor involving the licensed Product or the ownership thereof. In
the event the Licensor undertakes the defense or prosecution of any litigation
relating to the licensed Product, the Licensee shall
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execute any and all documents and do any such act or thing as may, in the
opinion of counsel for the Licensor, be necessary to carry out such defense or
prosecution.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LICENSOR
The Licensor hereby represents and warrants to Licensee as follows:
4.1 Warranty of Title. The Licensor has good title to the Product and the
right to license its use to Licensee free of any proprietary rights of any other
party or any other encumbrance whatsoever.
4.2 Full Power and Authority. The Licensor has full power and authority to
grant to Licensee the license specified in Section 1.1 of this Agreement and the
Licensor has not done or omitted to do and will not do or omit to do any act or
thing by license, grant or otherwise, which will or may impair or encumber any
of the rights granted in this Agreement or interfere with Licensee's full
enjoyment of said rights. The Licensor is not aware of any claims or litigation
pending or threatened, which will or might adversely affect any of the rights
granted to Licensee.
4.3 Indemnification. The Licensor will, at its expense and at Licensee's
request defend any claim or action brought against Licensee to the extent it is
based on a claim that the Property infringes or violates any patent, copyright,
trademark, trade secret or other proprietary right of a third party, and the
Licensor will indemnify and hold Licensee harmless from and against any
liability, loss, damages, costs, fees or expenses, incurred by Licensee,
including, but not limited to, fees of attorneys and other professionals;
provided the Licensor is notified promptly in writing, and is given all
necessary information and the authority required for the defense and settlement
of any such suit or proceeding. The Licensor will not settle or compromise any
claim or action on Licensee's behalf without Licensee's written permission and
in the event Licensee and the Licensor agrees to settle a claim or action, the
Licensor agrees not to disclose the settlement nor to permit the party claiming
infringement to disclose the settle without first obtaining Licensee's written
permission.
ARTICLE V
TERM AND TERMINATION
5.1 License Period. The licenses granted in this Agreement shall remain in
force for a period of five (5) years from the date of this Agreement, unless
terminated prior to
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that time as provided in Section 5.3 of this Agreement ("License Period"). The
term of this Agreement shall be renewed automatically for succeeding periods of
three (3) years each unless either party gives to the other party notice, at
least one hundred eighty (180) days prior to the expiration of any term, of the
noticing party's intention not to renew the term of this Agreement.
5.2 Expiration of License Period. Upon expiration of License Period, or
other termination pursuant to this Agreement, Licensee shall immediately cease
all activities with regard to the Product and all right, title and interest of
Licensee in and to the Product shall terminate and vest in the name of the
Licensor.
5.3 Cause for Termination. The licenses granted in this Agreement shall be
terminated automatically and without further notice upon the occurrence of any
of the following:
(a) Expiration of the term specified in Section 5.1, or of any
optional renewal term in the absence of a subsequent renewal in accordance
with the terms of this Agreement;
(b) Refusal by Licensee to pay any periodic license fee therein
provided for in this Agreement;
(c) Cessation of business by Licensee or any successor or assign to
whom the licenses granted in this Agreement have been legitimately
transferred; and,
(d) Commission by Licensee of an event of default as specified in
Section 5.4.
5.4 Events of Default. Licensee shall have committed an event of default,
and this Agreement and the licenses granted hereunder shall terminate, if any of
the following occur:
(a) Licensee attempts to use the Product in any manner contrary to the
terms of this Agreement;
(b) Licensee fails or neglects to perform or observe any of its
existing or future obligations under this Agreement, including, without
limitation, the timely payment of any sums due the Licensor within thirty
(30) days after notice that the payment is delinquent;
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(c) Licensee makes an assignment of Licensee's business for the
benefit of creditors;
(d) A petition in bankruptcy is filed by or against Licensee;
(e) A receiver, trustee in bankruptcy, or similar officer is appointed
to take charge of all or part of Licensee's property; and,
(f) Licensee is adjudicated a bankrupt.
ARTICLE VI
NON-DISCLOSURE OF PROPRIETARY INFORMATION
6.1 Non-Disclosure of Proprietary and Confidential Information By Licensee.
In consideration and recognition of the fact that during the License Period,
Licensee may have access to Proprietary Information (as used in this Article VI,
"Proprietary Information" shall mean and include, without limitation, any and
all data concerning the Licensor's research, Product, manufacturing processes,
inventions, improvements, discoveries (whether or not patentable), "know-how",
training and techniques, and any other information of a similar nature disclosed
to Licensee or otherwise made known to Licensee as a consequence of or through
this Agreement during the term hereof. The term Proprietary Information shall
not include any information that (i) at the time of the disclosure or thereafter
is or becomes generally available to and known by the public, other than as a
result of a disclosure by Licensee or any agent or representative of Licensee in
violation of this Agreement, or (ii) was available to Licensee on a
non-confidential basis from a source other than the Licensor, or any of the
Licensor's officers, directors, employees, agents or other representatives) or
other information and data of a secret and proprietary nature which the Licensor
desires to keep confidential, and that the Licensor has furnished, or during the
term will furnish such information to Licensee, Licensee agrees and acknowledges
(as used in this Article VI, Licensee shall mean and include, Licensee and any
subsidiaries, affiliates, related entities, officers, agents, shareholders,
partners, principals and/or employees) that the Licensor has exclusive
proprietary rights to all Proprietary Information, and Licensee hereby assigns
to the Licensor all rights that it might otherwise possess in any Proprietary
Information. Except as required in the performance of Licensee's duties to the
Licensor, and only after obtaining the express written permission of Licensor,
the Licensee will not at any time during or after the term hereof, directly or
indirectly use, communicate, disclose, disseminate, lecture upon, publish
articles or otherwise put in the public domain, any Proprietary Information
relating to the Licensor or the Licensor's products, including the
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Product. Licensee shall deliver to the Licensor any and all copies of
Proprietary Information in the possession or control of Licensee upon the
expiration or termination of this Agreement, or at any other time upon request
by the Licensor. The provisions of this section shall survive the termination of
this Agreement.
ARTICLE VII
INDEPENDENT CONTRACTOR STATUS
7.1 Status of Licensee. Licensee is not an employee of the Licensor for any
purpose whatsoever, but is an independent contractor. The Licensor is interested
only in the results obtained by Licensee, who shall have the sole control of the
manner and means of performing under this Agreement. The Licensor shall not have
the right to require Licensee to do anything which would jeopardize the
relationship of independent contractor between Licensee and the Licensor.
Licensee does not have, nor shall it hold itself out as having, any right, power
or authority to create any contract or obligation, either express or implied, on
behalf of, in the name of, or obligating the Licensor, or to pledge the
Licensor's credit, or to extend credit in the Licensor's name unless the
Licensor shall consent thereto in advance in writing. The Licensee shall have
the right to appoint or otherwise designate suitable representatives (herein
collectively referred to as "Licensee's Representatives"). Licensee shall be
solely responsible for Licensee's representatives and their acts. Licensee's
Representatives shall be at Licensee's own risk, expense, and supervision, and
Licensee's Representatives shall not have any claim against the Licensor for
salaries, commissions, items of cost, or other form of compensation or
reimbursement, and Licensee represents, warrants, and covenants that Licensee's
Representatives shall be subordinate to Licensee and subject to each and all of
the terms, provisions and conditions applying to Licensee hereunder.
ARTICLE VIII
GENERAL TERMS AND CONDITIONS
8.1 Notices. All written notices or other written communications required
under this Agreement shall be deemed properly given when provided to the parties
entitled thereto by personal delivery (including delivery by commercial services
such as messengers and airfreight forwarders), by electronic means (such as by
electronic mail, telex or facsimile transmission) or by mail sent registered or
certified mail, postage prepaid at the following addresses (or to such other
address of a party designated in writing by such party to the others):
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If to the Licensor: Dr. Robert Milne
2432 [ILLEGIBLE]
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[ILLEGIBLE], Nevada
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Fax: 702-456-9777
If to the Licensee: Desert West Marketing, Inc.
2505 Rancho Bel Air
Las Vegas, Nevada 89107
Fax: [ILLEGIBLE]
All notices given by electronic means shall be confirmed by delivering to the
party entitled thereto a copy of said notice by certified or registered mail,
postage prepaid, return receipt requested. All written notices shall be deemed
delivered and properly received upon the earlier of two (2) days after mailing
the confirmation notice or upon actual receipt of the notice provided by
personal delivery or electronic means.
8.2 Assignment of Contract. Licensee may assign or otherwise transfer its
rights pursuant to this Agreement, including the license granted hereunder, with
the prior written consent of the Licensor. Any attempt to make such an
assignment without the Licensor's consent shall be void. The Licensor's consent
shall not be unreasonably withheld.
8.3 Amendments. The Licensor and Licensee agree that this Agreement shall
be modified only by a written agreement duly executed by persons authorized to
execute agreements on their behalf.
8.4 Waivers. No waiver by either party, expressed or implied, of any breach
of any term, condition or obligation of this Agreement by the other party shall
be construed as a waiver of any subsequent breach of that term, condition,
obligation or of any term, condition or obligation of this Agreement of the same
or different nature.
8.5 Attorneys' Fees. If any legal action is necessary to enforce the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees in addition to any other relief to which that party may be
entitled. This provision shall be construed as applicable to the entire
Agreement.
8.6 Severability. If any part of this Agreement is adjudged by any court of
competent jurisdiction to be invalid, that judgment shall not affect or nullify
the remainder
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of this Agreement, and the effect shall be confined to the part immediately
involved in the controversy adjudged.
8.7 Governing Law. This Agreement shall be deemed to have been made in the
State of Nevada, and shall be construed pursuant to the laws of the State of
Nevada.
8.8 Complete Agreement. This Agreement sets forth the complete
understanding of the parties relating to the subject matter hereof and
supersedes all prior written and oral agreements and understandings. This
Agreement and any provision hereof may be amended, modified or waived only by an
instrument in writing signed by a duly authorized representative of the party
against whom such amendment, modification or waiver is sought to be enforced. In
the event of any conflict between the provisions of this Agreement and the
provisions of any document other than a modification hereof, this Agreement
shall prevail.
8.9 Disclaimer. The Licensee acknowledges that it has conducted an
independent investigation of the Agreement being offered to it by the Licensor
and recognizes that the business venture contemplated by this Agreement involves
certain business risk and that the success or failure of the Licensee will be
largely dependent upon the ability and resourcefulness of the Licensee as an
independent businessman. The Licensor expressly disclaims the making of, and the
Licensee hereby acknowledges that it has not received any warranty or guarantee
express or implied as to the potential volume, profits, or success of the
Licensee's sale and promotion of the Product. The Licensor shall not by virtue
of the approval or advice provided to the Licensee assume responsibility or
liability to the Licensee or to any third person or party for the success of or
failure of Licensee's business. The Licensee acknowledges that it received a
copy of this Agreement for his review at least three days prior to the date of
execution.
8.10 Subject Headings. The subject headings of the paragraphs of this
Agreement are included solely for purposes of convenience and reference only,
and shall not be deemed to explain, modify, limit, amplify or aid in the
meaning, construction or interpretation of any of the provisions of this
Agreement.
8.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.12 Interpretations and Definitions. In this Agreement whenever the
context so requires, the gender includes the neuter, feminine and masculine and
the number
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includes the singular and the plural and the words "person" and "party" include
individuals, corporations, partnerships, firms, trusts or associations. All
references to dollars shall mean U.S. dollars.
8.13 Custom. All parties to this Agreement shall have the right at all
times to enforce the provisions contained in this Agreement, and in all other
agreements and documents required or provided for herein, in strict accordance
with the terms thereof, notwithstanding any custom or practice in the area or
any conduct or continuing conduct on the part of any party hereto to the
contrary unless expressly agreed to in writing. The failure of any party hereto,
at any time or from time to time, to enforce any of its rights under any
provision herein, strictly in accordance with the same, shall not be construed
as varying the terms hereof, in any way or manner, contrary to the specific
provisions of this Agreement or be construed as modifying or waiving such
provision.
8.14 Force Majeure. No party shall be liable for any failure or delay in
performing its obligations hereunder due to any external cause beyond its
reasonable control, including without limitation, fire, accident, acts of the
public enemy, war, rebellion, labor dispute or unrest, insurrection, sabotage,
transportation delays, shortage of raw materials, energy or machinery, acts of
God, government or the judiciary, or other matters beyond the reasonable control
of a party.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed
on the date first written above.
LICENSEE
DESERT WEST MARKETING, INC.
By: /s/ Russell Seedborg
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Russell Seedborg
Its: President
LICENSOR
/s/ Robert Milne
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Dr. Robert Milne
