SEPARATION AND DISTRIBUTION AGREEMENT
BY AND BETWEEN
DESERT HEALTH PRODUCTS, INC.
AND
ROYAL PHOENIX
DATED AS OF
October 18, 2000
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS 1
1.1 Action 1
1.2 Affiliate 1
1.3 Ancillary Agreements 1
1.4 Consents 2
1.5 Contingent Gain 2
1.6 Contingent Liability 2
1.7 Distribution Date 2
1.8 Form 10SB 2
1.9 Governmental Approvals 2
1.10 Governmental Authority 2
1.11 Interest 3
1.12 Liabilities 3
1.13 Person 3
1.14 Policies 3
1.15 Privileges 3
1.16 Privileged Information 3
1.17 Desert Health Business 4
1.18 DHPI Common Stock 4
1.19 DHPI Group 4
1.20 DHPI Policies 4
1.21 Record Date 4
1.22 Related Entity 4
1.23 Security Interest 4
1.24 RP Assets 4
1.25 RP Business 4
1.26 RP Group 4
1.27 RP Operating Assets 4
1.28 RP Policies 5
1.29 Subsidiary 5
ARTICLE 2
THE SEPARATION 5
2.1 Transfer of Assets and Assumption of Liabilities 5
2.2 RP Assets 6
2.3 RP Liabilities 6
2.4 Termination Of Agreements 8
2.5 Disclaimer Of Representations And Warranties 8
2.6 Governmental Approvals And Consents; Deferred Transfers 8
2.7 Assignment Of Assumed RP Liabilities 9
2.8 DHPI Consideration; 10
ARTICLE 3
THE DISTRIBUTION 10
3.1 The Distribution 10
3.2 Actions Prior To The Distribution 10
3.3 Conditions To Distribution 11
3.4 Fractional Shares 12
ARTICLE 4
INDEMNIFICATION 12
4.1 Indemnification By RP 12
4.2 Indemnification By DHPI 12
4.3Indemnification Obligations Net Of Insurance Proceeds And
Other Amounts 13
4.4 Procedures For Indemnification Of Third Party Claims 14
4.5 Additional Matters 15
4.6 Survival Of Indemnities 16
ARTICLE 5
CERTAIN COVENANTS AND OTHER AGREEMENTS OF THE PARTIES 16
5.1 Restriction on Employee Solicitation or Hiring 16
5.2 Competition 16
5.3 Management of Interests 16
5.4 Investment Company Act 16
ARTICLE 6
CONFIDENTIALITY 17
6.1 Confidentiality 17
6.2 Protective Arrangements 18
ARTICLE 7 ACCESS TO INFORMATION AND SERVICES 18
7.1 Provision of Corporate Records 18
7.2 Access to Information 19
7.3 Production of Witnesses 19
7.4 Reimbursement 19
7.5 Retention of Records 19
7.6 Privileged Matters 20
ARTICLE 8 INSURANCE 21
8.1 Policies and Rights Included Within the RP Assets21
8.2 Post-Distribution Date Claims 22
ARTICLE 9
ARBITRATION; DISPUTE RESOLUTION 22
9.1 Disputes 22
9.2 Alternative Dispute Resolution 22
9.3 Arbitration Procedure 23
9.4 Confidentiality 25
ARTICLE 10
FURTHER ASSURANCES 25
10.1 Further Assurances 25
ARTICLE 11
TERMINATION 26
11.1 Termination By Mutual Consent 26
ARTICLE 12
MISCELLANEOUS 26
12.1 Counterparts; Entire Agreement 26
12.2 Governing Law 27
12.3 Assignability 27
12.4 Third Party Beneficiaries 27
12.5 Notices 27
12.6 Severability 28
12.7 Publicity 28
12.8 Expenses 28
12.9 Headings 28
12.10 Survival Of Covenants 28
12.11 Waivers Of Default 28
12.12 Specific Performance 29
12.13 Amendments 29
12.14 Interpretation 29
12.15 Legal Counsel 29
SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT (including all exhibits and
schedules hereto, the "Agreement"), dated as of October 18, 2000, is by and
between DESERT HEALTH PRODUCTS, INC. ("DHPI") and ROYAL PHOENIX ("RP").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in Article 1 hereof.
WHEREAS, the Board of Directors of DHPI has determined that it is in the
best interests of DHPI and its stockholders to transfer the RP Assets to RP
and to cause RP to assume the RP Liabilities, all as more fully described in
this Agreement and the Ancillary Agreements (the "Separation");
WHEREAS, the Board of Directors of DHPI has further determined that it
is appropriate and desirable, on the terms and conditions contemplated
hereby, for DHPI to distribute to holders of shares of DHPI Common Stock all
of the outstanding shares of common stock, $0.001 par value (the "RP Common
Stock"), owned directly or indirectly by DHPI (the "Distribution"); and
WHEREAS, it is appropriate and desirable to set forth the principal
corporate transactions required to effect the Separation and the Distribution
and certain other agreements that will govern certain matters relating to the
Separation and the Distribution and the relationship of DHPI and RP following
the Distribution.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
1.1 ACTION means any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state, local,
foreign or international Governmental Authority or any arbitration or
mediation tribunal.
1.2 AFFILIATE of any Person means a Person that controls, is controlled
by, or is under common control with such Person. As used herein, "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or otherwise.
1.3 ANCILLARY AGREEMENTS means the License, Manufacture and Distribution
Agreement entered into between RP and DHPI pertaining to DHPI's intention to
provide manufacturing, shipping, credit card processing and, any amendments
and/or assignments related thereto.
1.4 CONSENTS means any consents, waivers or approvals from, or
notification requirements to, any third parties.
1.5 CONTINGENT GAIN means any claim or other right of DHPI or RP or any
of their respective Affiliates, whenever arising, against any Person other
than DHPI, RP or any of their respective Affiliates, if and to the extent
that (i) such claim or right has accrued as of the Distribution Date (based
on then existing law) and (ii) the existence or scope of the obligation of
such other Person as of the Distribution Date was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty as
of the Distribution Date or as a result of the failure of such claim or other
right to have been discovered or asserted as of the Distribution Date. A
claim or right meeting the foregoing definition shall be considered a
Contingent Gain regardless of whether there was any Action pending,
threatened or contemplated as of the Distribution Date with respect thereto.
1.6 CONTINGENT LIABILITY means any Liability, other than Liabilities for
Taxes, of DHPI, RP or any of their respective Affiliates, whenever arising,
to any Person other than DHPI, RP or any of their respective Affiliates, if
and to the extent that (i) such Liability has accrued as of the Distribution
Date (based on then existing law) and (ii) the existence or scope of the
obligation of DHPI, RP or any of their respective Affiliates as of the
Distribution Date with respect to such Liability was not acknowledged, fixed
or determined in any material respect, due to a dispute or other uncertainty
as of the Distribution Date or as a result of the failure of such Liability
to have been discovered or asserted as of the Distribution Date (it being
understood that the existence of a litigation or other reserve with respect
to any Liability shall not be sufficient for such Liability to be considered
acknowledged, fixed or determined).
1.7 DISTRIBUTION DATE means the date on which the Distribution to the
DHPI stockholders is effective.
1.8 FORM 10SB means the Registration Statement on Form 10SB to be filed
by RP with the Securities and Exchange Commission (the "Commission") relating
to the RP Common Stock.
1.9 GOVERNMENTAL APPROVALS means any notices, reports or other filings
to be made, or any consents, registrations, approvals, permits or
authorizations to be obtained from, any Governmental Authority.
1.10 GOVERNMENTAL AUTHORITY shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
1.11 INTEREST in any Person, as used in Sections 5.1, 5.4 and 5.7 only,
means any loan or advance in excess of $10,000, in aggregate, to such Person,
any purchase or other acquisition of a material portion of the assets of such
Person or of a business unit of such Person, or any purchase or other
acquisition of any capital stock or other ownership or profit interest,
warrants, rights, options, obligations or other securities of such Person,
any capital contribution to such Person or any other investment in such
Person, including, without limitation, any arrangements pursuant to which a
Person guarantees, directly or indirectly in any manner, any indebtedness in
excess of $10,000, in aggregate, of such Person.
1.12 LIABILITIES means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments,
costs and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising
under any law, rule, regulation, Action, threatened or contemplated Action
(including the costs and expenses of demands, assessments, judgments,
settlements and compromises relating thereto and attorneys' fees and any and
all costs and expenses (including allocated costs of in-house counsel and
other personnel), whatsoever reasonably incurred in investigating, preparing
or defending against any such Actions or threatened or contemplated Actions),
order or consent decree of any Governmental Authority or any award of any
arbitrator or mediator of any kind, and those arising under any contract,
commitment or undertaking, including those arising under this Agreement or
any Ancillary Agreement, in each case, whether or not recorded or reflected
or required to be recorded or reflected on the books and records or financial
statements of any Person.
1.13 PERSON means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government or
any political subdivision or agency thereof.
1.14 POLICIES means insurance policies and insurance contracts of any
kind relating to the RP Business or the DHPI Business as conducted prior to
the Distribution Date, including without limitation primary and excess
policies, comprehensive general liability policies, automobile and workers'
compensation insurance policies, and self-insurance and captive insurance
company arrangements, together with the rights, benefits and privileges
thereunder.
1.15 PRIVILEGES means all privileges that may be asserted under
applicable law, including, without limitation, privileges arising under or
relating to the attorney-client relationship (including but not limited to
the attorney-client and work product privileges), the accountant-client
privilege, and privileges relating to internal evaluative processes.
1.16 PRIVILEGED INFORMATION means all Information as to which DHPI, RP
or any of their Subsidiaries are entitled to assert the protection of a
Privilege.
1.17 DHPI BUSINESS means the collective business of DHPI, excluding the
RP Business.
1.18 DHPI COMMON STOCK means the Common Stock, $0.0001 par value per
share, of DHPI.
1.19 DHPI GROUP means DHPI and each Person (other than any member of the
RP Group) that is an Affiliate of DHPI immediately after the Distribution
Date.
1.20 DHPI POLICIES means all Policies, current or past, which are owned
or maintained by or on behalf of DHPI (or any of its predecessors) which
relate to the DHPI Business but do not relate to the RP Business.
1.21 RECORD DATE means the close of business on the date to be
determined by the DHPI Board of Directors as the record date for determining
stockholders of DHPI entitled to receive shares of RP Common Stock in the
Distribution.
1.22 RELATED ENTITY means any Person (i) in which RP, directly or
indirectly through one or more intermediaries, holds an interest of ten
percent (10%) or more of the aggregate issued and outstanding ownership
interests of such Person, (ii) that RP or an Affiliate of RP, by means of a
reseller agreement, management contract, debt financing agreement or
otherwise, has the ability to substantially influence the management and
control of such Person, or (iii) that is an Affiliate of RP.
1.23 SECURITY INTEREST means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
1.24 RP ASSETS has the definition set forth in Section 2.2.
1.25 RP BUSINESS means the business of operating RP Operating Assets.
1.26 RP GROUP means RP and each Person (other than any member of the
DHPI Group) that is an Affiliate of RP immediately after the Distribution
Date
1.27 RP OPERATING ASSETS means all of DHPI's right, title and interest
in and to; the License, Manufacture and Distribution Agreement entered into
between RP and DHPI pertaining to DHPI's intention to provide manufacturing,
shipping, credit card processing and, any amendments and/or assignments
related thereto.
1.28 RP POLICIES means all Policies, current or past, which are owned or
maintained by or on behalf of DHPI or any of its Affiliates or predecessors,
which relate to the RP Business but do not relate to the DHPI Business and
which Policies are either maintained by the DHPI Group or assignable to the
RP Group.
1.29 SUBSIDIARY of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a
majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries; provided, however that no Person that is not directly or
indirectly wholly owned by any other Person shall be a Subsidiary of such
other Person unless such other Person controls, or has the right, power or
ability to control, that Person.
ARTICLE 2
THE SEPARATION
2.1 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES.
(a) DHPI hereby assigns, transfers, conveys and delivers to RP,
and agrees to cause its applicable Subsidiaries to assign, transfer, convey
and deliver to RP, and RP hereby accepts from DHPI and its respective
Subsidiaries, all of DHPI's and its applicable Subsidiaries' respective
right, title and interest in and to the RP Assets (as defined in Section 2.2
below).
(b) RP hereby assumes and agrees to faithfully perform and fulfill
all RP Liabilities (as defined in Section 2.3), in accordance with their
respective terms. Notwithstanding the foregoing, RP shall not assume any
Liability attributable to the failure of DHPI or its officers, directors,
employees, agents, Subsidiaries or Affiliates to perform DHPI's obligations
to RP pursuant to this Agreement or the Ancillary Agreements.
(c) In the event that at any time or from time to time (whether
prior to or after the Distribution Date) any party hereto (or any member of
the DHPI Group or RP Group, as applicable), shall receive or otherwise
possess an asset that is allocated to any other Person pursuant to this
Agreement or any Ancillary Agreement, such party shall promptly transfer or
cause to be transferred, such asset to such Person so entitled thereto. Prior
to such transfer, the Person receiving or possessing such Asset shall hold
such Asset in trust for such other Person. In the event that at any time or
from time to time (whether prior to or after the Distribution Date) any party
hereto or any member of the DHPI Group or RP Group, as applicable, shall hold
or otherwise possess any information or otherwise be required to cooperate to
allow a Person to avoid a Liability assumed pursuant to this Agreement or any
Ancillary Agreement, such Person shall, to the extent reasonable, promptly
provide such information and/or cooperation and/or cause such information or
cooperation to be provided to the Person so entitled thereto.
(d) In furtherance of the assignment, transfer and conveyance of
RP Assets and the assumption of RP Liabilities set forth in Section 2.1 (a)
and (b), simultaneously with the execution and delivery hereof or as promptly
as practicable thereafter, (i) DHPI shall execute and deliver, and shall
cause its Subsidiaries to execute and deliver, such bills of sale, stock
powers, certificates of title, assignments of contracts and other instruments
of transfer, conveyance and assignment as and to the extent necessary to
evidence the transfer, conveyance and assignment of all of DHPI's and its
respective Subsidiaries' right, title and interest in and to the RP Assets to
RP and (ii) RP shall execute and deliver, to DHPI and its respective
Subsidiaries such bills of sale, stock powers, certificates of title,
assumptions of contracts, indemnity agreements and other instruments of
assumption as and to the extent necessary to evidence the valid and effective
assumption of the RP Liabilities by RP.
2.2 RP ASSETS.
(a) For the purpose of this Agreement, "RP Assets" shall mean (i) the name
Royal Phoenix and the vitamin formualtions set forth in the License,
Manufacture and Distribution Agreement dated October 18, 2000; and (ii) any
and all Contingent Gains primarily relating to the RP Business or expressly
assigned to RP pursuant to this Agreement or any Ancillary Agreement.
Notwithstanding the foregoing, RP Assets shall not include any of the
following assets (the "Excluded Assets"):
(i) any and all assets of DHPI except as may be expressly
transferred to RP pursuant to this Agreement or the Ancillary Agreements (or
the Schedules or Exhibits hereto or thereto).
2.3 RP LIABILITIES.
(a) For the purposes of this Agreement, "RP Liabilities" shall mean:
(i) the Liabilities listed on Schedules B-1 hereto;
(ii) any and all Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the schedules hereto or
thereto) as Liabilities to be assumed by RP, and all agreements, obligations
and Liabilities of any member of the RP Group under this Agreement or any of
the Ancillary Agreements;
(iii) all Liabilities (other than Taxes based on, or measured
by reference to, net income, and liabilities expressly retained by DHPI
pursuant to this Agreement and/or the Ancillary Agreements), including any
employee-related Liabilities and any Liabilities relating to environmental
laws, rules and regulations of any jurisdiction ("Environmental Laws") (such
Liabilities, "Environmental Liabilities"), relating to, arising out of or
resulting from:
(1) the operation of the RP Business, as conducted at any
time after the Distribution (including any Liability relating to, arising out
of or resulting from any act or failure to act by any director, officer,
employee, agent or representative (whether or not such act or failure to act
is or was within such Person's authority);
(2) the operation of any business conducted by any member of
the RP Group at any time after the Distribution (including any Liability
relating to, arising out of or resulting from any act or failure to act by
any director, officer, employee, agent or representative (whether or not such
act or failure to act is or was within such Person's authority); or
(3) any RP Asset(s) to the extent the Liability arises after
the Distribution; or
(4) any agreements or understandings, whether oral or
written, relating to future business, equity participation, employment or
similar arrangements with respect to Pro Golf, whether or not such agreements
or understandings were entered into prior to, on or after the Distribution
Date;
(iv) any and all Contingent Liabilities primarily relating to the
RP Business or expressly assumed by RP pursuant to this Agreement or any
Ancillary Agreement; and
(v) all other Liabilities of RP relating to, arising out of or
resulting from RP's performance or obligations under any Ancillary Agreement
or this Agreement.
Notwithstanding the foregoing, the RP Liabilities shall not include the
following Liabilities (the "Excluded Liabilities"): (i) Liabilities based
upon or relating to the Distribution, except for those Liabilities set forth
in Section 4.1(d) and Liabilities arising out of or attributable to actions
or inaction of RP; (ii) Liabilities based upon or relating to Actions against
employees of DHPI who become employees of RP as of or following the
Separation, to the extent such Actions are based upon or relate to actions or
conduct of such employees in their capacities as employees prior to October
18, 2000; (iii) any and all Contingent Liabilities not primarily relating to
the RP Business or that are expressly assumed by RP pursuant to this
Agreement or any Ancillary Agreement.
2.4 TERMINATION OF AGREEMENTS. Except with respect to this Agreement
and the Ancillary Agreements (and agreements expressly contemplated herein or
therein to survive by their terms), RP and DHPI (on their own behalf and on
behalf of the members of the RP Group and DHPI Group, respectively) hereby
terminate, except to the extent the same are in writing and do not by their
written terms terminate as a result of the Separation or Distribution, any
and all written or oral agreements, arrangements, commitments or
understandings, between or among them, effective as of the Distribution Date;
and each party shall, at the reasonable request of any other party, take, or
cause to be taken, such other actions as may be necessary to effect the
foregoing.
2.5 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. (a) Each of DHPI (on
behalf of itself and each member of the DHPI Group) and RP (on behalf of
itself and each member of the RP Group) understands and agrees that, except
as expressly set forth herein or in any Ancillary Agreement, no party to this
Agreement, any Ancillary Agreement or any other agreement or document
contemplated by this Agreement, any Ancillary Agreement or otherwise, is
representing or warranting in any way as to the assets, businesses or
Liabilities transferred or assumed as contemplated hereby or thereby, as to
any consents or approvals required in connection therewith, as to the value
or freedom from any Security Interests of, or any other matter concerning,
any assets of such party, or as to the absence of any defenses or right of
setoff or freedom from counterclaim with respect to any claim or other asset,
including any accounts receivable, of any party, or as to the legal
sufficiency of any assignment, document or instrument delivered hereunder to
convey title to any asset or thing of value upon the execution, delivery and
filing hereof or thereof. Except as may expressly be set forth herein or in
any Ancillary Agreement, all such assets are being transferred on an "as is,"
"where is" basis and the respective transferees shall bear the economic and
legal risks that any conveyance shall prove to be insufficient to vest in the
transferee good and marketable title, free and clear of any Security
Interest.
2.6 GOVERNMENTAL APPROVALS AND CONSENTS; DEFERRED TRANSFERS
(a) To the extent that the Separation requires any Governmental
Approvals or Consents, the parties will use commercially reasonable efforts
to obtain any such Governmental Approvals and Consents.
(b) If and to the extent that the valid, complete and perfected
transfer or assignment (or novation of any government contract) to RP of any
RP Assets would be a violation of applicable laws or require any Consent or
Governmental Approval in connection with the Separation or the Distribution,
then, unless DHPI shall otherwise determine, the transfer or assignment to or
from the RP Group, as the case may be, of such RP Assets or non-RP Assets,
respectively, shall be automatically deemed deferred and any such purported
transfer or assignment shall be null and void until such time as all legal
impediments are removed and/or each of such Consents or Governmental
Approvals have been obtained. Notwithstanding the foregoing, such asset shall
be deemed a RP Asset for purposes of determining whether any Liability is an
RP Liability.
(c) If the transfer or assignment of any assets intended to be
transferred or assigned hereunder is not consummated prior to or at the
Distribution Date, whether as a result of the provisions of Section 2.6(b) or
for any other reason, then the Person retaining such asset shall thereafter
hold such asset for the use and benefit, insofar as reasonably possible, of
the Person entitled thereto (at the expense of the Person entitled thereto).
(d) If and when the Consents and/or Governmental Approvals, or any
other impediments to transfer, the absence of which caused the deferral of
transfer of any asset pursuant to Section 2.6(b) or otherwise, are obtained
or removed (as appropriate), the transfer of the applicable asset shall be
effected in accordance with the terms of this Agreement and/or the applicable
Ancillary Agreement.
(e) The Person retaining an asset due to the deferral of the
transfer of such asset shall take such actions with respect to such asset as
may be reasonably requested by the Person entitled to the asset, provided
that such person retaining an asset shall not be obligated, in connection
with the foregoing, to expend any money unless the necessary funds are
advanced by the Person entitled to the asset, other than reasonable out-of-
pocket expenses, attorneys' fees and recording or similar fees, all of which
shall be promptly reimbursed by the Person entitled to such asset.
2.7 ASSIGNMENT OF ASSUMED RP LIABILITIES.
(a) Each of DHPI and RP, at the request of the other, shall use
its commercially reasonable efforts to obtain, or to cause to be obtained,
any consent, substitution, approval or amendment required to assign all
obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute RP Liabilities.
(b) If DHPI or RP is unable to obtain, or to cause to be obtained,
any such required consent, approval, substitution or amendment, the
applicable member of the DHPI Group shall continue to be bound by such
agreements, leases, licenses and other obligations and, unless not permitted
by law or the terms thereof, RP shall, as agent or subcontractor for DHPI or
such other Person, as the case may be, pay, perform and discharge fully all
the obligations or other Liabilities of DHPI or such other Person, as the
case may be, thereunder from and after the date hereof. DHPI shall, without
further consideration, pay and remit, or cause to be paid or remitted, to RP
promptly all money, rights and other consideration received by it or any
member of the DHPI Group in respect of such performance (unless any such
consideration is an Excluded Asset). If and when any such consent, approval,
release, substitution or amendment shall be obtained or such agreement,
lease, license or other rights or obligations shall otherwise become
assignable, DHPI shall thereafter assign, or cause to be assigned, all its
rights, obligations and other Liabilities thereunder or any rights or
obligations of any member of the DHPI Group to RP without payment of further
consideration and RP shall, without the payment of any further consideration,
assume such rights and obligations.
2.8 DHPI CONSIDERATION; In consideration of the transfer of the RP
Assets by DHPI to RP, and DHPI's other obligations pursuant hereto and
pursuant to the Ancillary Agreements, in addition to the other consideration
described herein (including, without limitation, RP's obligations pursuant
hereto and pursuant to the Ancillary Agreements), RP shall issue, grant or
transfer to DHPI, as appropriate, prior to the Distribution Date, (i) shares
of RP Common Stock necessary to effect the Distribution.
ARTICLE 3
THE DISTRIBUTION
3.1 THE DISTRIBUTION.
(a) Subject to Section 3.3 hereof, on or prior to the Distribution
Date, DHPI will deliver to the distribution agent selected by DHPI (the
"Agent"), for the benefit of and distribution to holders of record of DHPI
Common Stock on the Record Date, stock certificates, endorsed by DHPI in
blank, representing all of the outstanding shares of RP Common Stock then
owned by DHPI or any member of the DHPI Group, and shall instruct the Agent
to distribute on the Distribution Date the appropriate number of such shares
of RP Common Stock to each such holder or designated transferee or
transferees of such holder.
(b) Subject to Section 3.4, each holder of DHPI Common Stock on
the Record Date (or such holder's designated transferee or transferees) will
be entitled to receive in the Distribution ten (10) shares of RP Common
Stock.
(c) RP and DHPI, as the case may be, will provide to the Agent all
share certificates and any information required in order to complete the
Distribution on the basis specified above.
3.2 ACTIONS PRIOR TO THE DISTRIBUTION.
(a) Concurrent with the Distribution, DHPI and RP shall prepare
and mail to the holders of DHPI Common Stock, such information concerning RP,
its business, operations and management, the Distribution and such other
matters as DHPI shall reasonably determine and as may be required by law. RP
will prepare, and RP will, to the extent required under applicable law, file
with the Commission the Form 10SB and any such other documentation which DHPI
determines are necessary or desirable to effectuate the Distribution and DHPI
and RP shall each use its commercially reasonable efforts to obtain all
necessary approvals from the Commission with respect thereto as soon as
practicable.
(b) DHPI and RP shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of the United States (and
any comparable laws under any foreign jurisdiction) in connection with the
Distribution.
(c) DHPI and RP shall take all reasonable steps necessary and
appropriate to cause the conditions set forth in Section 3.3 to be satisfied
and to effect the Distribution on the Distribution Date.
(d) RP shall prepare and file, and shall use its commercially
reasonable efforts to have approved, an application for the inclusion of the
RP Common Stock to be distributed in the Distribution on the Nasdaq National
Market, or at a very minimum, the Over the Counter Bulletin Board within 18
months of the Distribution Date.
(e) DHPI and RP shall enter into all Ancillary Agreements.
(f) DHPI and RP shall cooperate to change the name of any entity
that is part of the RP Group or the RP Operating Assets so that the word
"DHPI" or derivations thereof is not included in any such name.
3.3 CONDITIONS TO DISTRIBUTION. DHPI and RP shall be obligated to
consummate the Distribution no later than December 15, 2000 unless extended
as the result of any Governmental Approvals, subject to the satisfaction, or
waiver by the DHPI Board of Directors in its sole discretion, of the
following conditions:
(a) any material Governmental Approvals and Consents necessary to
consummate the Distribution shall have been obtained and be in full force and
effect;
(b) no order, injunction or decree issued by any court or agency
of competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Distribution shall be in effect and no other event
outside the control of DHPI shall have occurred or failed to occur that
prevents the consummation of the Distribution;
(c) the Board of Directors of DHPI shall have (i) authorized and
approved the Distribution and not withdrawn such authorization and approval;
(d) All Ancillary Agreements shall have been entered into by the
respective parties thereto;
(e) no other events or developments shall have occurred that, in
the judgment of the Board of Directors of DHPI, would result in the
Distribution having a material adverse effect on DHPI or on the stockholders
of DHPI or not being in the best interest of DHPI and its stockholders.
The foregoing conditions are for the sole benefit of DHPI and shall not
give rise to or create any duty on the part of DHPI or the DHPI Board of
Directors to waive or not waive any such condition.
3.4 FRACTIONAL SHARES. DHPI and the Agent shall use their reasonable
efforts to aggregate the shares of DHPI Common Stock that may be held by any
beneficial owner thereof through more than one account in determining the
fractional share allocable to such beneficial owner.
ARTICLE 4
INDEMNIFICATION
4.1 INDEMNIFICATION BY RP. Except as provided in Section 4.3, RP shall
indemnify, defend and hold harmless DHPI, each member of the DHPI Group and
each of their respective directors and officers, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
"DHPI Indemnitees"), from and against any and all Liabilities of the DHPI
Indemnitees relating to, arising out of or resulting from any of the
following items:
(a) the failure of RP or any other member of the RP Group or any
other Person to pay, perform or otherwise promptly discharge any RP
Liabilities in accordance with their respective terms after the Distribution
Date;
(b) any RP Liability;
(c) any breach by RP of this Agreement or any of the Ancillary
Agreements; and
(d) any failure (or alleged failure) of RP to operate the RP
Business as described in the "Business" section of the Form 10SB.
4.2 INDEMNIFICATION BY DHPI. DHPI shall indemnify, defend and hold
harmless RP, each member of the RP Group and each of their respective
directors and officers, and each of the heirs, executors, successors and
assigns of any of the foregoing (collectively, the "RP Indemnitees"), from
and against any and all Liabilities of the RP Indemnitees relating to,
arising out of or resulting from any of the following items:
(a) the failure of DHPI or any other member of the DHPI Group or
any other Person to pay, perform or otherwise promptly discharge any
Liabilities of the DHPI Group other than the RP Liabilities after the
Distribution Date; provided, however, this Section 4.2(a) shall not apply to
any Liability arising out of or related to any agreement (such as an
equipment supply agreement, vendor finance agreement or capital contribution
agreement), other than an agreement specified in Section 4.2(d), between any
member of the DHPI Group, on the one hand, and any member of the RP Group and
any Person in which RP, directly or indirectly, holds an equity, debt or
other financial interest, on the other hand; provided further, however,
nothing in the immediately preceding proviso shall be construed as impairing
the rights of the subject parties under any such agreement;
(b) any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
with respect to all information contained in the Form 10 except with respect
to information described in Section 4.1(d) above;
(c) any Liability of the DHPI Group, other than the RP
Liabilities; and
(d) any breach by DHPI of this Agreement or any of the Ancillary
Agreements.
4.3 INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND OTHER
AMOUNTS.
(a) The parties intend that any Liability subject to
indemnification or reimbursement pursuant to this Article 4 or Article 5 will
be net of Insurance Proceeds that actually reduce the amount of the
Liability. Accordingly, the amount which any party (an "Indemnifying Party")
is required to pay to any Person entitled to indemnification hereunder (an
"Indemnitee") will be reduced by any Insurance Proceeds theretofore actually
recovered by or on behalf of the Indemnitee in reduction of the related
Liability. If an Indemnitee receives a payment (an "Indemnity Payment")
required by this Agreement from an Indemnifying Party in respect of any
Liability and subsequently receives Insurance Proceeds then the Indemnitee
will pay to the Indemnifying Party an amount equal to the excess of the
Indemnity Payment received over the amount of the Indemnity Payment that
would have been due if the Insurance Proceeds recovery had been received,
realized or recovered before the Indemnity Payment was made.
(b) In the case of any Contingent Liability, any Insurance
Proceeds recovered by either party in respect of the Contingent Liability
will be used to satisfy the Contingent Liability before the parties shall
seek relief under this Article 4.
(c) An insurer who would otherwise be obligated to pay any claim
shall not be relieved of the responsibility with respect thereto or, solely
by virtue of the indemnification provisions hereof, have any subrogation
rights with respect thereto, it being expressly understood and agreed that no
insurer or any other third party shall be entitled to a "windfall" (i.e., a
benefit they would not be entitled to receive in the absence of the
indemnification provisions) by virtue of the indemnification provisions
hereof. Notwithstanding the foregoing, each member of the DHPI Group and RP
Group shall be required to use commercially reasonable efforts to collect or
recover any available Insurance Proceeds.
4.4 PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
(a) If an Indemnitee shall receive notice or otherwise learn of
the assertion by a Person (including any Governmental Authority) who is not a
member of the DHPI Group or the RP Group of any claim or of the commencement
by any such Person of any Action (collectively, a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification to such Indemnitee pursuant to Section 4.1 or 4.2, or any
other Section of this Agreement or any Ancillary Agreement, such Indemnitee
shall give such Indemnifying Party and each party to this Agreement, written
notice thereof within twenty (20) days after becoming aware of such Third
Party Claim. Any such notice shall describe the Third Party Claim in
reasonable detail. If any Person shall receive notice or otherwise learn of
the assertion of a Third Party Claim which may reasonably be determined to be
a Shared Contingent Liability, such Person shall give each other party to
this Agreement written notice thereof within 20 days after becoming aware of
such Third Party Claim. Any such notice shall describe the Third Party Claim
in reasonable detail. Notwithstanding the foregoing, the failure of any
Indemnitee or other Person to give notice as provided in this Section 4.4(a)
shall not relieve the related Indemnifying Party of its obligations under
this Article 4, except to the extent that such Indemnifying Party is actually
prejudiced by such failure to give notice.
(b) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim; provided that if the
defendants in any such claim include both the Indemnifying Party and one or
more Indemnitees and in such Indemnitees' reasonable judgment a conflict of
interest between such Indemnitees and such Indemnifying Party exists in
respect of such claim, such Indemnitees shall have the right to employ
separate counsel and in that event the reasonable fees and expenses of such
separate counsel (but not more than one separate counsel reasonably
satisfactory to the Indemnifying Party) shall be paid by such Indemnifying
Party. Within 30 days after the receipt of notice from an Indemnitee in
accordance with Section 4.4(a) (or sooner, if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the Indemnitee of its
election whether the Indemnifying Party will assume responsibility for
defending such Third Party Claim, which election shall specify any
reservations or exceptions. After notice from an Indemnifying Party to an
Indemnitee of its election to assume the defense of a Third Party Claim, such
Indemnitee shall have the right to employ separate counsel and to participate
in (but not control) the defense, compromise, or settlement thereof, but the
fees and expenses of such counsel shall be the expense of such Indemnitee
except as set forth in the next sentence. In the event that the Indemnifying
Party has elected to assume the defense of the Third Party Claim but has
specified, and continues to assert, any reservations or exceptions in such
notice, then, in any such case, the reasonable fees and expenses of one
separate counsel for all Indemnitees shall be borne by the Indemnifying
Party.
(c) If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in Section 4.4(b), such Indemnitee may defend such Third
Party Claim at the cost and expense (not including allocated costs of in-
house counsel and other in-house personnel) of the Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the defense
of the Third Party Claim in accordance with the terms of this Agreement, no
Indemnitee may settle or compromise any Third Party Claim without the consent
of the Indemnifying Party.
(e) No Indemnifying Party shall consent to entry of any judgment
or enter into any settlement of the Third Party Claim without the consent of
the Indemnitee if the effect thereof is to permit any injunction, declaratory
judgment, other similar order or other similar nonmonetary relief to be
entered, directly or indirectly, against any Indemnitee.
4.5 ADDITIONAL MATTERS.
(a) Any claim on account of a Liability which does not result from
a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall
have a period of 30 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 30-
day period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party does not respond
within such 30-day period or rejects such claim in whole or in part, such
Indemnitee shall be free to pursue such remedies as may be available to such
party as contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any Indemnifying
Party to any Indemnitee in connection with any Third Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or
against any other person. Such Indemnitee shall cooperate with such
Indemnifying Party in a reasonable manner, and at the cost and expense
(including allocated costs of in-house counsel and other personnel) of such
Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party is
not a named defendant, if the Indemnifying Party shall so request, the
parties shall endeavor to substitute the Indemnifying Party for the named
defendant, add the Indemnifying Party as a named defendant if at all
practicable. If such substitution or addition cannot be achieved for any
reason or is not requested, the named defendant shall allow the Indemnifying
Party to manage the Action as set forth in this section and subject to
Section 4.4 with respect to Contingent Liabilities, the Indemnifying Party
shall fully indemnify the named defendant against all costs of defending the
Action (including court costs, sanctions imposed by a court, attorneys' fees,
experts' fees and all other external expenses, and the allocated costs of in-
house counsel and other personnel), the costs of any judgment or settlement,
and the cost of any interest or penalties relating to any judgment or
settlement.
4.6 SURVIVAL OF INDEMNITIES. The rights and obligations of each of DHPI
and RP and their respective Indemnitees under this Article 4 shall survive
the sale or other transfer by any party of any Assets or businesses or the
assignment by it of any Liabilities.
ARTICLE 5
CERTAIN COVENANTS AND OTHER AGREEMENTS OF THE PARTIES
5.1 RESTRICTION ON EMPLOYEE SOLICITATION OR HIRING. RP (on behalf of
itself, its Affiliates and any Related Entity, if any, that is utilized to
execute the business activities described in the section of the Form agrees
that for a period of one (1) year following the date of the Distribution, it
will not solicit or induce any employee of DHPI or any other member of the
DHPI Group to terminate or breach an employment, contractual or other
relationship with DHPI nor will RP (or its Affiliates) hire or otherwise
employ any employee of DHPI or any other member of the DHPI Group or any
individual that was employed by DHPI or any other member of the DHPI Group
within the previous six months, unless such person has approached RP
independently without solicitation by RP and RP first consults with DHPI and
obtains DHPI's prior written approval. DHPI (on behalf of itself and its
Affiliates) agrees that for a period of one (1) year following the date of
the Distribution, it will not solicit or induce any employee of RP to
terminate or breach an employment, contractual or other relationship with RP
nor will DHPI (or its Affiliates) hire or otherwise employ any employee of RP
or any member of the RP Group or any individual that was employed by RP or
any member of the RP Group within the previous six months, unless such person
has approached DHPI independently without solicitation by DHPI and DHPI first
consults with RP and obtains RP's prior written approval.
5.2 COMPETITION. Expect as may be set forth in this Agreement or any of
the Ancillary Agreements, no member of either the DHPI Group or the RP Group
shall have any duty to refrain from (i) engaging in the same or similar
activities or lines of business as any member of the other Group, (ii) doing
business with any potential or actual supplier or customer of any member of
the other Group, (iii) engaging in, or refraining from, any other activities
whatsoever relating to any of the potential or actual suppliers or customers
of any member of the other Group, or (iv) acquiring a joint venture or equity
interest in any operating company or any other entity in the United States or
any other country, other than RP shall be specifically prevented from
competing in any way which would violate the rights of DHPI pursuant to its
existing claims of RP ownership.
5.3 MANAGEMENT OF INTERESTS. RP covenants and agrees that following the
Distribution Date it shall take an active management role in its RP Operating
Assets and any other operating company in which it acquires a joint venture
or equity interest, consistent with its own business needs and applicable
laws, contractual arrangements and other requirements of RP.
5.4 INVESTMENT COMPANY ACT. Following the Distribution Date, RP shall
use commercially reasonable efforts, including without limitation by
monitoring and adjusting the nature and extent of its Interests, to ensure
that RP does not become or remain an "investment company" as defined in the
Investment Company Act. Without limiting the foregoing, and notwithstanding
the receipt by the DHPI Board of Directors of the Investment Company Opinion,
as soon as practicable following the Distribution, RP shall use commercially
reasonable efforts to obtain an exemptive order from the Commission finding
and declaring RP to be engaged in a business other than investing,
reinvesting, owning, holding or trading in securities, either directly,
through majority-owned subsidiaries or through controlled companies
conducting similar types of businesses.
ARTICLE 6
CONFIDENTIALITY
6.1 CONFIDENTIALITY.
(a) Subject to Section 6.2, each of DHPI and RP agrees to hold,
and to cause its respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives to hold, in
strict confidence, with at least the same degree of care that applies to
DHPI's confidential and proprietary information pursuant to policies in
effect as of the Distribution Date, all Information concerning the other that
is either in its possession as of the Distribution Date or furnished by the
other or its respective directors, officers, employees, agents, accountants,
counsel and other advisors and representatives at any time pursuant to this
Agreement, any Ancillary Agreement or otherwise, and shall not use any such
Information other than for such purposes as shall be expressly permitted
hereunder or thereunder, except, in each case, to the extent that such
Information has been (i) in the public domain through no fault of such party
or any member of the DHPI Group or the RP Group, as applicable, or any of
their respective directors, officers, employees, agents, accountants, counsel
and other advisors and representatives, (ii) later lawfully acquired from
other sources by such party (or any member of the DHPI Group or the RP Group,
as applicable) which sources are not themselves bound by a confidentiality
obligation), or (iii) independently generated without reference to any
proprietary or confidential Information of the other party. For purposes of
this Agreement, "Information" shall mean information, whether or not
patentable or copyrightable, in written, oral, electronic or other tangible
or intangible forms, stored in any medium, including studies, reports,
records, books, contracts, instruments, surveys, discoveries, ideas,
concepts, know-how, techniques, designs, specifications, drawings,
blueprints, diagrams, models, prototypes, samples, flow charts, data,
computer data, disks, diskettes, tapes, computer programs or other software,
marketing plans, customer names, communications by or to attorneys (including
attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information or
data.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other
advisors and representatives who need to know such Information (who shall be
advised of their obligations hereunder with respect to such Information),
except in compliance with Section 6.2. Without limiting the foregoing, when
any Information is no longer needed for the purposes contemplated by this
Agreement or any Ancillary Agreement, each party will promptly after request
of the other party either return to the other party all Information in a
tangible form (including all copies thereof and all notes, extracts or
summaries based thereon) or certify to the other party that it has destroyed
such Information (and such copies thereof and such notes, extracts or
summaries based thereon).
6.2 PROTECTIVE ARRANGEMENTS. In the event that either party or any
other respective member of the DHPI Group or the RP Group, as applicable,
either (i) determines on the advice of its counsel that it is required to
disclose any Information pursuant to applicable law or (ii) receives any
demand under lawful process or from any Governmental Authority to disclose or
provide Information of the other party (or any other member of the DHPI Group
or the RP Group, as applicable) that is subject to the confidentiality
provisions hereof, such party shall notify the other party prior to
disclosing or providing such Information and shall cooperate at the expense
of the requesting party in seeking any reasonable protective arrangements
requested by such other party. Subject to the foregoing, the Person that
received such request may thereafter disclose or provide Information to the
extent required by such law (as so advised by counsel) or by lawful process
or such Governmental Authority.
ARTICLE 7
ACCESS TO INFORMATION AND SERVICES
7.1 PROVISION OF CORPORATE RECORDS.
(a) Except as may otherwise be provided in any Ancillary
Agreement, DHPI shall arrange as soon as practicable following the
Distribution Date for the transportation (at RP's cost) to RP of the books
and records relating exclusively to the RP Business (the "RP Books and
Records") in its possession, except to the extent such items are already in
the possession of RP or a RP Subsidiary. The RP Books and Records shall be
the property of RP, but shall be available to DHPI for review and duplication
until DHPI shall notify RP in writing that such records are no longer of
use to DHPI.
(b) Except as otherwise provided in any Ancillary Agreement, RP
shall arrange as soon as practicable following the Distribution Date for the
transportation (at DHPI's cost) to DHPI of the books and records relating
exclusively to the DHPI Business (the "DHPI Books and Records") in its
possession, except to the extent such items are already in the possession of
DHPI. The DHPI Books and Records shall be the property of DHPI, but shall be
available to RP for review and duplication (except that DHPI shall have the
right to withhold DHPI Books and Records to the extent DHPI reasonably
determines such DHPI Books and Records do not relate in any material way to
the RP Business) until RP shall notify DHPI in writing that such records are
no longer of use to RP.
(c) With respect to books and records that relate to both the RP
Business and the DHPI Business ("Combined Books and Records"), (i) the
parties shall use good faith efforts to divide such Combined Books and
Records into RP Books and Records and DHPI Books and Records, as appropriate,
and (ii) to the extent such Combined Books and Records are not so divided,
the parties shall each keep and maintain copies of such Combined Books and
Records as reasonably appropriate under the circumstances, subject to
applicable confidentiality provisions hereof and of any Ancillary Agreement.
7.2 ACCESS TO INFORMATION. Except as otherwise provided in an Ancillary
Agreement, from and after the Distribution Date, DHPI shall afford to RP and
its authorized accountants, counsel and other designated representatives
reasonable access (including using reasonable efforts to give access to
persons or firms possessing information) and duplicating rights during normal
business hours to all records, books, contracts, instruments, computer data
and other data and information relating to pre-Distribution operations of the
RP Business (collectively, "Operations Data") within DHPI's possession
insofar as such access is reasonably required by RP for the conduct of the RP
Business, subject to appropriate restrictions for classified or Privileged
Information. Similarly, except as otherwise provided in an Ancillary
Agreement, RP shall afford to DHPI and its authorized accountants, counsel
and other designated representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Operations Data within
RP's possession, insofar as such access is reasonably required by DHPI for
the conduct of the DHPI Business, subject to appropriate restrictions for
classified or Privileged Information. Operations Data may be requested under
this Article 8 for the legitimate business purposes of either party,
including, without limitation, audit, accounting, claims (including claims
for indemnification hereunder), litigation and tax purposes, as well as for
purposes of fulfilling disclosure and reporting obligations and for
performing under this Agreement and the transactions contemplated hereby.
7.3 PRODUCTION OF WITNESSES. At all times from and after the
Distribution Date, each of RP and DHPI shall use reasonable efforts to make
available to the other, upon written request, its and its Subsidiaries'
officers, directors, employees and agents as witnesses to the extent that
such persons may reasonably be required in connection with any Action.
7.4 REIMBURSEMENT. Except to the extent otherwise contemplated in any
Ancillary Agreement, a party providing Operations Data or witness services to
the other party under this Article 8 shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments of such
amounts, relating to supplies, disbursements and other out-of-pocket expenses
(at cost) and direct and indirect expenses of employees who are witnesses or
otherwise furnish assistance (at cost), as may be reasonably incurred in
providing such Operations Data or witness services.
7.5 RETENTION OF RECORDS. Except as otherwise required by law or agreed
to in an Ancillary Agreement or otherwise in writing, each of DHPI and RP may
destroy or otherwise dispose of any of the Operations Data, which is material
Operations Data and is not contained in other Operations Data retained by
DHPI or RP, as the case may be, at any time after the tenth anniversary of
this Agreement, provided that, prior to such destruction or disposal, (a) it
shall provide no less than 90 or more than 120 days prior written notice to
the other, specifying in reasonable detail the Operations Data proposed to be
destroyed or disposed of and (b) if a recipient of such notice shall request
in writing prior to the scheduled date for such destruction or disposal that
any of the Operations Data proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the Operations
Data as was requested at the expense of the party requesting such Operations
Data.
7.6 PRIVILEGED MATTERS. To allocate the interests of each party with
respect to Privileged Information, the parties agree as follows:
(a) DHPI shall be entitled, in perpetuity, to control the
assertion or waiver of all Privileges in connection with Privileged
Information which relates solely to the DHPI Business, whether or not the
Privileged Information is in the possession of or under the control of DHPI
or RP. DHPI shall also be entitled, in perpetuity, to control the assertion
or waiver of all Privileges in connection with Privileged Information that
relates solely to the subject matter of any claims constituting Liabilities
of the DHPI Group, now pending or which may be asserted in the future, in any
lawsuits or other Actions initiated against or by DHPI, whether or not the
Privileged Information is in the possession of or under the control of DHPI
or RP.
(b) RP shall be entitled, in perpetuity, to control the assertion
or waiver of all Privileges in connection with Privileged Information which
relates solely to the RP Business, whether or not the Privileged Information
is in the possession of or under the control of DHPI or RP. RP shall also be
entitled, in perpetuity, to control the assertion or waiver of all Privileges
in connection with Privileged Information which relates solely to the subject
matter of any claims constituting RP Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other Actions initiated against or
by RP, whether or not the Privileged Information is in the possession of RP
or under the control of DHPI or RP.
(c) DHPI and RP agree that they shall have a shared Privilege,
with equal right to assert or waive, subject to the restrictions of this
Section 7.6, with respect to all Privileges not allocated pursuant to the
terms of Sections 7.6(a) and (b). All Privileges relating to any claims,
proceedings, litigation, disputes or other matters which involve both DHPI
and RP in respect of which DHPI and RP retain any responsibility or liability
under this Agreement shall be subject to a shared Privilege.
(d) No party may waive any Privilege which could be asserted under
any applicable law, and in which the other party has a shared Privilege,
without the consent of the other party, except to the extent reasonably
required in connection with any litigation with third parties or as provided
in Section 7.6(e) below. Such consent shall be in writing, or shall be deemed
to be granted unless written objection is made within 20 days after notice
upon the other party requesting such consent.
(e) In the event of any litigation or dispute between a member of
the DHPI Group and a member of the RP Group, either party may waive a
Privilege in which the other party has a shared Privilege, without obtaining
the consent of the other party, provided that such waiver of a shared
Privilege shall be effective only as to the use of information with respect
to the litigation or dispute between the DHPI Group and the RP Group, and
shall not operate as a waiver of the shared Privilege with respect to third-
parties.
(f) If a dispute arises between the parties regarding whether a
Privilege should be waived to protect or advance the interest of either
party, each party agrees that it shall negotiate in good faith, shall
endeavor to minimize any prejudice to the rights of the other party, and
shall not unreasonably withhold consent to any request for waiver by the
other party. Each party specifically agrees that it will not withhold consent
to waiver for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party of any subpoena, discovery or other
request which arguably calls for the production or disclosure of information
subject to a shared Privilege or as to which the other party has the sole
right hereunder to assert a Privilege, or if any party obtains knowledge that
any of its current or former directors, officers, agents or employees has
received any subpoena, discovery or other request which arguably calls for
the production or disclosure of such Privileged Information, such party shall
promptly notify the other party of the existence of the request and shall
provide the other party a reasonable opportunity to review the information
and to assert any rights it may have under this Section 7.6 or otherwise to
prevent the production or disclosure of such Privileged Information.
(h) The transfer of the RP Books and Records and the DHPI Books
and Records and other Information between the DHPI Group and the RP Group is
made in reliance on the agreement of DHPI and RP, as set forth in Sections
7.5 and 7.6 and elsewhere in this Agreement, to maintain the confidentiality
of Privileged Information and to assert and maintain applicable Privileges.
The access to information being granted pursuant to Sections 7.1 and 7.2, the
agreement to provide witnesses and individuals pursuant to Section 7.3 and
the transfer of Privileged Information between the DHPI Group and the RP
Group pursuant to this Agreement shall not be deemed a waiver of any
Privilege that has been or may be asserted under this Agreement or otherwise.
ARTICLE 8
INSURANCE
8.1 POLICIES AND RIGHTS INCLUDED WITHIN THE RP ASSETS. Without limiting
the generality of the definition of the RP Assets, the RP Assets shall
include (a) any and all rights of an insured party under each of the Shared
Policies, specifically including rights of indemnity and the right to be
defended by or at the expense of the insurer, with respect to all injuries,
losses, liabilities, damages and expenses incurred or claimed to have been
incurred on or prior to the Distribution Date by any party in or in
connection with the conduct of the RP Business (provided DHPI shall have
equal rights with respect to indemnity and the right to be defended to the
extent practical and appropriate) or, to the extent any claim is made against
RP or any of its Subsidiaries, the DHPI Business, and which injuries, losses,
liabilities, damages and expenses may arise out of insured or insurable
occurrences or events under one or more of the Shared Policies provided,
however, that nothing in this Section 8.1 shall be deemed to constitute (or
to reflect) the assignment of the Shared Policies, or any of them, to RP; and
(b) the RP Policies.
8.2 POST-DISTRIBUTION DATE CLAIMS. If, subsequent to the Distribution
Date, any Person shall assert a claim against RP or any RP Subsidiary with
respect to any injury, loss, liability, damage or expense incurred or claimed
to have been incurred on or prior to the Distribution Date in or in
connection with the Distribution or the conduct of the RP Business or, to the
extent any claim is made against RP or any of its Subsidiaries, the DHPI
Business, and which injury, loss, liability, damage or expense may arise out
of insured or insurable occurrences or events under one or more of the Shared
Policies, DHPI shall at the time such claim is asserted (except to the extent
inconsistent with Section 8.1) be deemed to assign, without need of further
documentation, to RP any and all rights of an insured party under the
applicable Shared Policy with respect to such asserted claim, specifically
including rights of indemnity and the right to be defended by or at the
expense of the insurer, provided, however, that nothing in this Section 8.2
shall be deemed to constitute (or to reflect) the assignment of the Shared
Policies, or any of them, to RP.
ARTICLE 9
ARBITRATION; DISPUTE RESOLUTION
9.1 DISPUTES. DHPI and RP recognize that disputes as to certain matters
may from time to time arise during the effectiveness of this Agreement and/or
the Ancillary Agreements (collectively with this Agreement, the "RP
Agreements") which relate to either party's rights and/or obligations
hereunder or thereunder. It is the objective of the parties to establish
procedures to facilitate the resolution of disputes arising under any of the
RP Agreements in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the parties agree to follow the
procedures set forth in this Article 9 if and when a dispute arises under any
of the RP Agreements. In the event of a dispute between the parties, any
party may, by written notice to the other, have such dispute referred to
their respective chief executive officers for attempted resolution by good
faith negotiations within fourteen (14) days after such notice is received.
In the event the chief executive officers are not able to resolve such
dispute, either party may at any time after the fourteen (14) day period seek
to resolve the dispute through the other means provided in Section 9.2.
9.2 ALTERNATIVE DISPUTE RESOLUTION. Any dispute, controversy or claim
arising out of or relating to any of the RP Agreements, including, without
limitation, disputes relating to alleged breach or to termination of any of
such agreements, shall be settled by binding Alternative Dispute Resolution
("ADR") in the manner described below. If a party intends to begin an
ADR to resolve a dispute, such party shall provide written notice (the "ADR
Request") to the other party informing such other party of such intention and
the issues to be resolved. Within fifteen (15) business days after receipt of
the ADR Request, the other party may, by written notice to counsel for the
party initiating ADR, add additional issues to be resolved.
9.3 ARBITRATION PROCEDURE. The ADR shall be conducted pursuant to the
Commercial Arbitration Rules of the American Arbitration Association for
Large, Complex Cases then in effect. Notwithstanding those rules, the
following provisions shall apply to the ADR hereunder.
(a) ARBITRATOR. The arbitration shall be carried out by a single
arbitrator, who shall be a retired United States judge or justice or
magistrate and shall be selected by the parties within thirty (30) days of
receipt of the ADR request in accordance with the procedure described below.
(i) The parties shall select an arbitrator as described in
subsection (ii) below, which arbitrator may but need not be selected from a
list of arbitrators such as the CPR Panel of Distinguished Neutrals of the
Center for Public Resources, subject to: (1) his/her availability and
willingness to serve, (2) his/her availability to commence the arbitration
within a reasonable period of time, (3) his/her agreement to charge fees and
expenses that are reasonable under the circumstances, and (4) his/her
commitment to render his/her award within the time periods provided in this
Article 9.
(ii) Each party will exchange a list of ten (10) qualified
arbitrators and in the event that both parties agree to a single common name
that person shall be the arbitrator. In submitting the ten names, each party
shall prioritize from one to ten the persons on their respective lists. In
the event that there is more than one common name on the parties' lists, the
person having the lowest combined priority number shall be the selected
arbitrator. The combined priority number shall be the sum of the order
numbers assigned to that person by the parties. Thus, if one person was RP's
number two priority and DHPI's number three priority, and another person was
RP's number two priority and DHPI's number four priority, the former would be
appointed. If more than one person has the lowest combined priority number,
the person for whom there is less difference between the order numbers
assigned by the parties shall be appointed. Thus, if one person was RP's
number one priority and DHPI's number four priority, and another person was
RP's number two priority and DHPI's number three priority, the latter person
would be appointed. If this method does not produce a sole arbitrator or if
there are no common names, the parties shall alternatively strike from the
combined list until one name remains, which shall be the selected arbitrator.
The party to strike first shall be determined by the toss of a coin.
(iii) In the event the arbitrator is unable to meet the
requirements set forth in subsection (a) above, then, in the event the first
selected arbitrator was common to both lists and there was more than one
common name on the parties' lists, the arbitrator having the next lowest
combined priority number who is able and willing to serve pursuant to these
requirements shall be selected. If there is no such individual, then the
parties shall use the alternate strike method set forth above. In the event
an arbitrator selected by the alternate strike methodology is unable or
unwilling to serve consistent with the requirements set forth above, then the
alternate striking procedure shall be retraced in reverse order until an
arbitrator is selected.
The arbitrator shall be neutral, disinterested, impartial, and
independent of the parties and others having any known interest in the
outcome, and shall abide by the AAA/ABA Code of Ethics for Arbitrators in
Commercial Disputes. There shall be no ex parte communications with the
arbitrator either before or during the arbitration, relating to the dispute
or issues involved in the dispute or the arbitrator's views on any such
issue.
(b) INTERIM REVIEW. Either party may apply to any court having
jurisdiction hereof and seek preliminary injunctive relief until such time as
the arbitration award is rendered or the controversy is otherwise resolved.
(c) LOCATION. Any arbitration under Section 9.2 shall be conducted
in San Diego, California.
(d) DISCOVERY PROCEEDINGS AND HEARINGS. The parties shall have the
right to undertake such limited discovery as is expressly authorized by the
arbitrator upon a determination that such discovery is reasonably necessary
to enable the requesting party to prepare and present its claims and/or
defenses at the hearing. Discovery shall be conducted pursuant to Rules 26-37
of the Federal Rules of Civil Procedure (with references to "court" in those
Rules being considered references to the "arbitrator") except as they may be
modified by the arbitrator. In addition:
(i) The arbitrator will determine the specific location
within the State of Nevada and the date and time of the arbitration hearing,
which will commence no later than ninety (90) days after the date of the
appointment of the arbitrator. The arbitrator will provide reasonable notice
of the hearing date and time.
(ii) The arbitrator will ordinarily conduct the arbitration
hearing in the manner set forth in this Section 9.3 except that the Federal
Rules of Evidence shall apply. The arbitrator shall render its decision in
writing. If the AAA rules and the rules of this subsection (d) conflict in
any manner, the rules of this subsection (d) shall prevail. The arbitrator
must hold an oral hearing, but may impose reasonable time limits on each
phase of the proceeding and may limit testimony to exclude evidence that
would be immaterial or unduly repetitive, provided that all parties are
afforded the opportunity to present material and relevant evidence and that
each party is given at least an approximately equal amount of time for
presentation of its case.
(iii) The arbitrator will require witnesses to testify
under oath if requested by any party.
(iv) Any party desiring a stenographic record may secure a
court reporter to attend the proceedings.
(v) The arbitrator will determine the order of proof, which
will generally be similar to that of a court trial, including opening and
closing statements.
(vi) When the arbitrator determines that all relevant and
material evidence and arguments have been presented, the arbitrator will
declare the hearing closed. The arbitrator may defer the closing of the
hearing for up to ten (10) days to permit the parties to submit post-hearing
briefs and or to make closing arguments, as the arbitrator deems appropriate,
before rendering an award.
(vii) The arbitrator will render the award and its
decisions within thirty (30) days after the date of the closing of the
hearing or, if an arbitration hearing has been waived, within thirty (30)
days after the date of the arbitrator's receiving all materials specified by
the parties. The decision and award of the arbitrator will constitute the
arbitration award and will be binding on the parties.
(viii) The arbitrator shall, in rendering its decision and
award, apply the substantive law of the State of Nevada, without regard to
its conflict of laws provisions, except that the interpretation of and
enforcement of this Article shall be governed by the Federal Arbitration Act.
The costs of the winning party and its reasonable attorneys fees shall be
paid by the losing party which shall be designated by the arbitrator. If the
arbitrator is unable to designate a losing party, it shall so state and each
party shall bear its own costs and attorneys fees.
(e) AWARD. The arbitrator is empowered to award any remedy allowed
by law, including money damages, prejudgment interest and attorneys' fees,
and to grant final, complete, interim, or interlocutory relief, including
injunctive relief. Notwithstanding the foregoing, punitive or multiple
damages may not be awarded. Judgment upon any arbitration award hereunder may
be entered and enforced in any court having jurisdiction thereof.
(f) ARBITRATION FEES. The fees of the arbitrator shall be split
equally between the parties.
9.4 CONFIDENTIALITY. The ADR proceeding shall be confidential and the
arbitrator shall issue appropriate protective orders to safeguard each
party's confidential Information. Except as required by law, no party shall
make (or instruct the arbitrator to make) any public announcement with
respect to the proceedings or decision of the arbitrator without prior
written consent of each other party. The existence of any dispute submitted
to ADR, and the award, shall be kept in confidence by the parties and the
arbitrator, except as required in connection with the enforcement of such
award or as otherwise required by applicable law.
ARTICLE 10
FURTHER ASSURANCES
10.1 FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere
in this Agreement, each of the parties hereto shall use its commercially
reasonable efforts, prior to, on and after the Distribution Date, to take, or
cause to be taken, all actions, and to do, or cause to be done, all things,
reasonably necessary, proper or advisable under applicable laws, regulations
and agreements to consummate and make effective the transactions contemplated
by this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the
Distribution Date, each party hereto shall cooperate with the other parties,
and without any further consideration, but at the expense of the requesting
party, to execute and deliver, or use its commercially reasonable efforts to
cause to be executed and delivered, all instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with, and to
obtain all consents, approvals or authorizations of, any Governmental
Authority or any other Person under any permit, license, agreement, indenture
or other instrument (including any Consents or Governmental Approvals), and
to take all such other actions as such party may reasonably be requested to
take by any other party hereto from time to time, consistent with the terms
of this Agreement and the Ancillary Agreements, in order to effectuate the
provisions and purposes of this Agreement and the Ancillary Agreements and
the transfers of the RP Assets and the assignment and assumption of the RP
Liabilities and the other transactions contemplated hereby and thereby
(c) DHPI and RP, and each of the members of their respective
Groups, waive (and agree not to assert against any of the others) any claim
or demand that any of them may have against any of the others for any
Liabilities or other claims relating to or arising out of: (i) the failure of
RP or any member of the RP Group, on the one hand, or of DHPI or any member
of the DHPI Group, on the other hand, to provide any notification or
disclosure required under any state Environmental Law in connection with the
Separation or the other transactions contemplated by this Agreement,
including the transfer by any member of any Group to any member of any other
Group of ownership or operational control of any Assets not previously owned
or operated by such transferee; or (ii) any inadequate, incorrect or
incomplete notification or disclosure under any such state Environmental Law
by the applicable transferor. To the extent any Liability to any Governmental
Authority or any third Person arises out of any action or inaction described
in clause (i) or (ii) above, the transferee of the applicable Asset hereby
assumes and agrees to pay any such Liability.
ARTICLE 11
TERMINATION
11.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated at
any time prior to the Distribution Date by the mutual consent of DHPI and RP
and upon such termination neither party shall have any Liability or further
obligation to the other party. The previsions hereof shall remain in full
force and effect and shall survive the Distribution Date, including without
limitation the indemnification provisions set forth in Article 4, and the
covenants and other agreements of the parties set forth in Article 5, except
to the extent otherwise agreed by the parties in writing.
ARTICLE 12
MISCELLANEOUS
12.1 COUNTERPARTS; ENTIRE AGREEMENT.
(a) This Agreement and each Ancillary Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party.
(b) This Agreement, and the Ancillary Agreements and the exhibits,
schedules and appendices hereto and thereto contain the entire agreement
between the parties with respect to the subject matter hereof, supersede all
previous agreements, negotiations, discussions, writings, understandings,
commitments and conversations with respect to such subject matter and there
are no agreements or understandings between the parties other than those set
forth or referred to herein or therein.
12.2 GOVERNING LAW. This Agreement, except as expressly provided herein,
and, unless expressly provided therein, each Ancillary Agreement, shall be
governed by and construed and interpreted in accordance with the laws of the
State of Nevada, irrespective of the choice of laws principles of the State
of Nevada as to all matters, including matters of validity, construction,
effect, enforceability, performance and remedies.
12.3 ASSIGNABILITY. Except as set forth in any Ancillary Agreement, this
Agreement and each Ancillary Agreement shall be binding upon and inure to the
benefit of the parties hereto and thereto, respectively, and their respective
successors and assigns; provided, however, that no party hereto or thereto
may assign its respective rights or delegate its respective obligations under
this Agreement or any Ancillary Agreement without the express prior written
consent of the other parties hereto or thereto.
12.4 THIRD PARTY BENEFICIARIES. Except for the indemnification rights
under this Agreement of any DHPI Indemnitee or RP Indemnitee in their
respective capacities as such, (a) the provisions of this Agreement and each
Ancillary Agreement are solely for the benefit of the parties and are not
intended to confer upon any Person except the parties any rights or remedies
hereunder, and (b) there are no third party beneficiaries of this Agreement
or any Ancillary Agreement and neither this Agreement nor any Ancillary
Agreement shall provide any third person with any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement or any Ancillary Agreement.
12.5 NOTICES. All notices or other communications under this Agreement
or any Ancillary Agreement shall be in writing and shall be deemed to be duly
given when (a) delivered in person or (b) deposited in the United States mail
or private express mail, postage prepaid, addressed as follows:
If to DHPI, to: DESERT HEALTH PRODUCTS, INC.
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Attn: President
If to RP, to: ROYAL PHOENIX
0000 X. Xxxxxxxx Xx. Xxxxx 00X
Xxx Xxxxx, Xxxxxx 00000
Attn: President
With a copy to General Counsel at the same address.
Either party may, by notice to the other party, change the address to
which such notices are to be given.
12.6 SEVERABILITY. If any provision of this Agreement or any Ancillary
Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application
of such provision to Persons or circumstances or in jurisdictions other than
those as to which it has been held invalid or unenforceable, shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby or thereby, as the case may be, is not
affected in any manner adverse to any party. Upon such determination, the
parties shall negotiate in good faith in an effort to agree upon such a
suitable and equitable provision to effect the original intent of the
parties.
12.7 PUBLICITY. Prior to the Distribution, each of RP and DHPI shall
consult with each other prior to issuing any press releases or otherwise
making public statements with respect to the Distribution or any of the other
transactions contemplated hereby and prior to making any filings with any
Governmental Authority with respect thereto.
12.8 EXPENSES. Except as expressly set forth in this Agreement or in any
Ancillary Agreement, whether or not the Distribution is consummated, all
third party fees, costs and expenses paid or incurred in connection with the
Distribution will be paid by DHPI.
12.9 HEADINGS. The article, section and paragraph headings contained in
this Agreement and in the Ancillary Agreements are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or any Ancillary Agreement.
12.10 SURVIVAL OF COVENANTS. Except as expressly set forth in any
Ancillary Agreement, the covenants, representations and warranties contained
in this Agreement and each Ancillary Agreement, and liability for the breach
of any obligations contained herein, shall survive each of the Separation and
the Distribution.
12.11 WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement or any Ancillary Agreement
shall not be deemed a waiver by the waiving party of any subsequent or other
default, nor shall it prejudice the rights of the other party.
12.12 SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement or any Ancillary Agreement, the party or parties who are or are to
be thereby aggrieved shall have the right to specific performance and
injunctive or other equitable relief of its rights under this Agreement or
such Ancillary Agreement, in addition to any and all other rights and
remedies at law or in equity, and all such rights and remedies shall be
cumulative. The parties agree that the remedies at law for any breach or
threatened breach, including monetary damages, are inadequate compensation
for any loss and that any defense in any action for specific performance that
a remedy at law would be adequate is waived. Any requirements for the
securing or posting of any bond with such remedy are waived.
12.13 AMENDMENTS.
(a) This Agreement and all Ancillary Agreements except to the
extent as may otherwise be set forth therein, may be amended by the written
agreement of DHPI and RP. No provisions of this Agreement or any Ancillary
Agreement shall be deemed waived, amended, supplemented or modified by any
party, unless such waiver, amendment, supplement or modification is in
writing and signed by the authorized representative of the party against whom
it is sought to enforce such waiver, amendment, supplement or modification.
(b) Without limiting the foregoing, the parties anticipate that,
prior to the Distribution Date, some or all of the Schedules to this
Agreement may be amended or supplemented and, in such event, such amended or
supplemented Schedules shall be attached hereto in lieu of the original
Schedules.
12.14 INTERPRETATION. Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include
the other genders as the context requires. The terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Ancillary Agreement)
as a whole (including all of the schedules, exhibits and appendices hereto
and thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices
to this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean "including,
without limitation," unless the context otherwise requires or unless
otherwise specified. The word "or" shall not be exclusive.
12.15 LEGAL COUNSEL. DHPI has utilized the services of Xxxxxx X.
Xxxxxxxxxx as legal counsel to DHPI and RP in connection with the
Distribution, the preparation of this Agreement and the other RP Agreements
and the transactions contemplated hereby and thereby Xx. Xxxxxxxxxx has not
been engaged to protect or represent the independent interests of DHPI with
respect to the preparation of this Agreement, any other Agreement or the
transactions contemplated hereby or thereby. DHPI and RP have carefully
considered the foregoing and hereby acknowledges that Xx. Xxxxxxxxxx
represent RP; and that such legal fees shall be borne by RP. DHPI and RP
further:
(a) acknowledges that actual or potential conflicts of interest
exist between DHPI and RP, that their interests will not be represented by
legal counsel unless DHPI and RP engages counsel on its own behalf, and that
they have been afforded the opportunity to engage and seek the advice of its
own legal counsel before entering into this Agreement; and (b) agrees that,
in the event of any disputes between RP and DHPI, Xx. Xxxxxxxxxx will not
represent DHPI or RP.
IN WITNESS WHEREOF, the parties have caused this Separation and
Distribution Agreement to be executed by their duly authorized
representatives.
DESERT HEALTH PRODUCTS, INC.:
By:
Name:
Title:
ROYAL PHOENIX:
By:
Name:
Title:
EXHIBIT A
Assets
The assets being transferred as a result of this Separation and Distribution
Agreement consist of the Name "Royal Phoenix" and the rights and privileges
as set forth in the License, Manufacture, and Distribution Agreement.
EXHIBIT B
Liabilities
There exist no liabilities in Royal Phoenix.
