**Exhibit 10.6**

 

**Private Label Agreement**

 

 

**Between**

 

 

***Ahoy Network Association Ltd***

 

 

**And**

 

 

***Aquaair Inc***

 

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**PRIVATE LABEL DISTRIBUTOR AGREEMENT**

 

THIS Agreement, enteredinto this 20th**day of November 2004.

 

BETWEEN:

 

**AhoyNetwork Association Ltd**with offices at:

2509 CedarwoodAve, Suite 3,

Bellingham, Wa98225

 

(“Principal”)

 

AND

 

 

**AquairInc,**with offices at:

17751 MitchellAvenue

Irvine, CA 92614

 

(“Distributor”)

(Collectively the “Parties”)

 

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**TABLE OF CONTENTS**

 
| 1.0    | THE AGREEMENT                                        |   |
|--------|------------------------------------------------------|--------|
|   |                                                 |   |
| 2.0    | THE APPOINTMENT                                      |   |
|   |                                                 |   |
| 3.0    | SALES  POLICIES                                      |   |
|   |                                                 |   |
| 4.0    | TRADE  MARKS, COPYRIGHT LICENSES AND TRADE SECRET    |   |
|   |                                                 |   |
| 5.0    | NON-DISCLOSURE  AGREEMENT & INDEMNIFICATION |   |
|   |                                                 |   |
| 6.0    | INDEPENDENT  CONTRACTOR                              |   |
|   |                                                 |   |
| 7.0    | TERMS AND  TERMINATION                               |   |
|   |                                                 |   |
| 8.0    | PRICING POLICY                                       |   |
|   |                                                 |   |
| 9.0    | NON-ASSIGNABILITY                                    |   |
|   |                                                 |   |
| 10.0   | WAIVER OF DEFAULT                                    |   |
|   |                                                 |   |
| 11.0   | MODIFICATION                                         |   |
|   |                                                 |   |
| 12.0   | ARBITRATION                                          |   |
|   |                                                 |   |
| 13.0   | SCOPE OF AGREEMENT                                   |   |
|   |                                                 |   |
| 14.0   | GOVERNING LAW                                        |   |
|   |                                                 |   |
| 15.0   | IMPRACTICABILITY  OF PERFORMANCE                     |   |
|   |                                                 |   |
| 16.0   | NOTICES                                              |   |
|   |                                                 |   |
| 17.0   | TIME AND PLURALITY                                   |   |
|   |                                                 |   |
| 18.0   | WARRANTY OF  AUTHORITY                               |   |

 

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**SECTION I - THE AGREEMENT**

 

1.1           ThePrincipal markets and/or manufactures several different proprietary models of AtmosphericWater Generators (the “Product”) under Patent or Patent Pending.

1.2           Theparties hereto are desirous of entering into this Agreement whereby theDistributor wishes to receive their own brand of private labeled product fromthe Principal, to be sold in the country of: United States of Americahereinafter referred to as the (“Territory”). This product may not be sold inany other country without the express written consent of the Principal. The Productsupplied to the Distributor by the Principal shall bear the brand name of theDistributor. The Distributor shall choose and inform the Principal in writingas to the name and labels or logos to be used to identify this brand. ThePrincipal cannot sell any product using the labels or logos of the Distributorto any other parties without the consent of the Distributor in writing.

 

**SECTION II - THE APPOINTMENT**

 

2.1           Subject tothe terms and conditions in this Agreement, the Principal appoints the Distributorthe sole rights to their own brand of (Atmospheric Water Generators)hereinafter referred to as the (Product). The Principal will build the productto the Distributors specifications. The Distributor will decide on the brandname for the product. The exterior design of the product will be sufficientlydifferent from the Principal’s own brand of product and any other brand ofPrivate Labeled product the Principal markets in the same territory unless thePrincipal grants an exception to use a similar design. The Distributor will beresponsible for any molding or tooling costs needed for the creation of anyproduct built specifically for them unless otherwise agreed to by the Principalin writing. The Distributor may use the existing E10 product of the Principaluntil a new model is built to Distributors specifications. Any design changesmade to the current E-10 machine, requested by the Distributor and approved bythe Principal so that it will make the machine significantly different inappearance from the original E-10 will remain the exclusive property of theDistributor and any other party including the Principal cannot use these newdesigns. The Distributor will be responsible for any molding or tooling costsneeded for the creation of any design changes built specifically for themunless otherwise agreed to by the Principal in writing.

2.2           TheProduct supplied to the Distributor by the Principal shall bear the brand nameof the Distributor or such other trademarks, names, or logos as the Distributormay change from time to time. If the Distributor wishes to purchase the samemodels that the Principal markets and the Principal is in agreement, then thePrincipals Brand will remain on the product although the Distributor will beallowed to add their own brand name on any units they purchase.

2.3           During theterm of this Agreement and for a period of no less than two years after the terminationof this Agreement, the Distributor (Including Directors and any Major Shareholdersowning more than 20% of the company) shall refrain from selling, manufacturing,or collaborating in the sale of any product competing directly or indirectly withthe Products of the Principal or substituting for, or in the same class ofgoods; unless the products are complementary and must be agreeable in writingto the Principal before proceeding with the sale or offer of sale.

 

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2.4           For theduration of this agreement and for a period of no less than two years after thetermination or the expiration of this agreement, under no circumstances what soever shall the Distributor (Including Directors and any Major Shareholdersowning more than 20% of the company) directly or indirectly or through theintermediary of any third party sell, distribute, manufacture or promote anyproduct similar too or competitive with the Principal’s product line.

 

2.5           **Duties, Obligations and Responsibilities of thePrincipal.**

 

**The Principal agrees to:**

 

a)     Advise theDistributor regularly with regard to Product information, specifications, performance,price lists, delivery, Product and service information and immediately notify theDistributor of price updates for the Product.

b)    Keep confidentialany pricing terms or arrangements with the Distributor and shall not revealsuch terms or arrangements to any retailers or distributors of the Distributor.

c)     Provide up-datedspecifications and instructions with respect to the Product and its use to theDistributor, at reasonable intervals.

d)    Ensure Product isdelivered and system performance is up to specifications.

e)     Provide a fullone-year manufactures parts replacement warranty on the Product.

f)     Ensure allneeded technical support is available to the Distributor when warranty work is performed.

g)    Fulfill itswarranty obligations by carrying out, in a reasonable manner and at its option,the repair or replacement of any defective parts of the Product, provided thatthe Product is used in conformity with the Principal’s instructions.

h)    Have trainingmaterial available to the technicians and salesmen of the Distributor that fullyexplain all details of the Product.

i)      Keep theDistributor harmless and relieve the Distributor of any responsibility for reasonablecosts and direct damages relating to claims made against the Distributor relatingto patent and or copyright infringements.

j)      AdviseDistributor about any delivery delays, product related issues, manufacturingissues, performance issues, etc. and to work diligently with the Distributor toresolve any issues in a manner acceptable to both parties.

k)     AdviseDistributor of any legal action commenced against the Principal, within the territoryof the Distributor.

 

2.6           **Duties, Obligations and Responsibilities of theDistributor.**

 

**TheDistributor shall at its own cost and expense and without entitlement to anyreimbursement from the Principal:**

 

a)     Keep thePrincipal harmless and relieve the Principal of any responsibility to theDistributor for any costs, damages, loss of profit, loss of trade or claimsincluding late delivery, made by or against the Distributor due to failure todeliver the Product or other events beyond the Principal’s control. Shippingcosts and insurance shall be at the sole responsibility of the Distributorunless agreed in writing by the Principal.

b)    Provide thePrincipal at the beginning of each year, based on quarterly requirements, a reasonableestimate of the Product required by the Distributor, for such year.

 

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c)     Respect andfulfill the terms and conditions of any warranty, if requested by thePrincipal, at the Principal’s expense, within reason.

d)    Service, maintainand repair the Product beyond the Principals responsibility as outlined in (2.5e) above, within reason.

e)     Protect thegoodwill associated with the Product and promptly advise the Principal of any knownor threatened infringement of or challenge to the Principal’s proprietaryrights and upon request, support the Principal in securing and protecting suchproprietary rights and in opposing unfair competition of other firms, at theexpense of the Principal.

f)     The Distributoror its distributors shall at all times maintain reasonable and current inventoriesof a complete range of the Product including a floating stock of spare parts andconsumables. For the purposes hereof, the Distributor shall have a minimuminventory of spare parts presumed to be necessary to properly service theequivalent to 15% of the aggregate of the largest quarterly order of Productdelivered in any given time period. This is not a cumulative amount and anyparts still on hand at the end of a quarter will be deducted from the nextquarter’s requirements.

g)    Immediatelyadvise the Principal if the Distributor has any knowledge of the commencementor threat of any legal proceeding or claim based on any alleged defect of anyProduct.

h)    Comply with alllocal laws, licensing regulations and rulings of governmental bodies havingjurisdiction over the Distributor’s business in respect of the sale of theProduct.

i)      At all timesact in the best interests of the Principal. The Distributor shall actdiligently and prudently. In this regard the Distributor shall not act nor doanything that would tarnish the reputation of the Principal.

 

**SECTION III-****SALES POLICIES, PRICING AND TERMS OF PURCHASE**

 

3.1           All pricesand payments shall be in United States of America funds unless otherwise agreedupon by the Principal.

3.2           Nopurchase order from the Distributor to the Principal shall be binding upon thePrincipal unless the Principal has accepted it in writing.

3.3           ThePrincipal shall accept purchase orders that use its documents and follow itsguidelines in written form and may not refuse a purchase order without justcause.

3.4           TheDistributor shall pay the Principal by check, bank transfer or by letter ofcredit; the mode of payment shall be mutually agreed in writing and specifiedin the Purchase Order.

 

**SECTION IV- TRADE MARKS, COPYRIGHT LICENSES AND TRADE SECRET**

 

4.1           TheDistributor shall use its own Trademarks, only in connection with the Product purchasedby the Distributor from the Principal.

4.2           TheDistributor shall not obtain or register any corporate or business name, whichincludes any Trademarks of the Principal.

4.3           TheDistributor shall not adopt or use any mark similar to the Trademarks of thePrincipal, without the express written consent of the Principal.

4.4           If thePrincipal allows the usage and the Distributor uses the Trademarks in anymanner, then the Distributor shall clearly indicate the Principal’s ownershipof the Trademarks.

4.5           TheDistributor shall deliver to the Principal at the Principal’s address firstnoted above, a sample of all labels, packaging, signs and advertising materials(collectively the

 

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“AdvertisingMaterials”) proposed to be used by the Distributor in marketing the Product, forapproval by the Principal prior to use by the Distributor.

4.6           If thePrincipal considers the Advertising Materials to be detrimental to the rightsof the Principal with respect to the Trademarks, or offensive or harmful to theinterests of the Principal, then the Principal shall notify the Distributorwithin 30 days of the receipt of the Advertising Materials, and the Distributorshall take the necessary steps to revise the Advertising Materials prior touse.

4.7           TheDistributor shall allow the Principal’s authorized agents during regularbusiness hours to enter any premises (to the extent that the Distributor isable to grant such access, i.e. a Public Warehouse or a Distributor’s location)where the Distributor is marketing the Product, and to inspect materials beingused in connection with such marketing.

4.8           TheDistributor shall produce the Advertising Materials to be used in connectionwith marketing the Products under the Distributor’s own trademarks or tradenames, the Trademarks and the Principal’s name shall not be mentioned anywhereon such materials.

4.9           TheDistributor agrees not to use any materials copyrighted by the Principal inmarketing the Product, without the express written permission of the Principal.

4.10         TheDistributor acknowledges that the Trademarks and the Principal’s copyrighted materialsare the property of the Principal.

4.11         TheDistributor shall not assert nor acquire, nor attempt to acquire, any rights orinterest in or to any of the Principals; Patents, Trademarks or Copyrights inany country, unless given permission in writing by the Principal.

4.12         TheDistributor shall not contest nor assist others to contest such rights of thePrincipal in Patents, Trademarks or the Principal’s copyrights.

4.13         This “privatelabel” granted by the Principal to the Distributor under the terms of this Agreementshall terminate immediately upon termination of this Agreement.

4.14         Upontermination of this Agreement, the Distributor shall immediately cease all useof the Trademarks and the Principal’s copyrights.

4.15         TheDistributor shall not have the right to grant sub-licenses but shall have rightto grant exclusive distribution rights for any defined territory and shall beable to set up distributors as it deems necessary.

4.16         ThePrincipal will allow the Distributor to use, copy and distribute marketingmaterial that may be provided from time to time by the Principal in hard copyor electronic form.

 

**SECTION V - NON-DISCLOSUREAGREEMENT AND INDEMNIFICATION**

 

5.1           Any andall knowledge and information of a confidential or proprietary nature relatedto the Principal, its equipment designs, manufacturing techniques and formulas,product development know-how, sales and distribution confidential data or itsoperations in general which the Distributor may acquire from the Principal, itsemployees, consultants or representatives, are deemed to be a trade secret andshall not be disclosed by the Distributor its employees and agents, to anyindividual, firm or corporation of any nature or for any reason, without theexpress written consent of Principal for a period of 5 consecutive years aftertermination of the Agreement.

5.2           For thepurpose of this section all information not publicly known shall beconsidered to be confidential.

5.3           TheDistributor shall indemnify the Principal of its losses, damages, expenses,actions, causes of action, costs and attorney’s fees that the Principal mayincur by reason of any

 

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such claims,losses, expenses, damages, actions or causes of action made or brought againstthe Principal arising out of any breach or alleged breach by the Distributor ofsub-paragraph 5.1 and 5.2 of this Agreement.

 

**SECTION VI*-*INDEPENDENT CONTRACTOR**

 

6.1           TheParties agree that the Distributor is an independent contractor in accordancewith the terms and conditions of this Agreement, and not an employee, legalrepresentative, agent or partner of the Principal for any purpose whatsoever.

6.2           TheParties agree that the Distributor has no right or authority to enter into anycontract or assume or create any obligation of any kind, express or implied, onbehalf of the Principal, or to bind the Principal in any respect whatsoever.

6.3           TheDistributor shall hold the Principal harmless and safe from any claim, summons,loss, cost, damage, action lawsuit or proceeding arising from his activityunder this Agreement.

6.4           TheDistributor hereby indemnifies and holds the Principal free and harmless fromany and all claims, demands, actions, damages, or losses, arising from or inconnection with the activities of the Distributor.

6.5           TheDistributor hereby indemnifies and holds the Principal free and harmless fromany and all claims, demands, actions, damages, or losses, arising from or inconnection with the Distributor’s employees and the operation of theDistributor’s business, equipment, motor vehicles, and other properties, inconnection with the solicitation or servicing of customers and anyrepresentation not authorized in writing by the Principal.

 

**SECTION VII- TERMS AND TERMINATION**

 

7.1           The termof this Agreement shall continue in full force and effect for two years fromthe date of its execution, and shall be automatically renewed from year to yearunless canceled by either Party in writing as provided herein.

7.2           EitherParty may terminate this Agreement at any time upon 30 days written notice tothe other Party pursuant to paragraphs 7.3, 7.4, and 7.5.

7.3           The Principalreserves the right to terminate this Agreement without notice in any of the followingcircumstances:

i.      Ifthe Distributor becomes insolvent.

7.4           ThePrincipal reserves the right to terminate this Agreement upon 30 days writtennotice in any of the following circumstances:

i.      Ifthe Distributor violates the non-compete clause as set out in paragraph 1.6 above.

7.5           TheDistributor reserves the right to terminate this Agreement without notice:

i.      Ifthe Principal becomes insolvent.

7.6           If thisAgreement is terminated, then the Distributor shall immediately pay thePrincipal any outstanding monies owed to the Principal.

 

**SECTION VIII- PRICING POLICY**

 

8.1           ThePrincipal shall sell to the Distributor and the Distributor shall purchase thePrincipal’s Product under the following conditions:

 

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i.      The Principalshall establish wholesale prices in the published price pages, which thePrincipal shall provide to the Distributor from time to time.

ii.     The Principalreserves the right to modify prices upon not less than 30 days notice to theDistributor.

iii.    Pricing for anyProduct or Product parts not listed by the Principal in its published price pages orspecial modification to standard Products requires the prior approval of thePrincipal, and all special quotations are limited to 30 days acceptance by thePrincipal.

iv.    Orders acceptedby the Principal shall not be subject to price modifications, except asprovided in section 9.3 below.

v.     Principal agreesto constantly be making a “best effort” attempt to obtain price reductions i.e.for quantity purchases or milestone achievements (while still maintaining allquality, performance and delivery standards) and to pass a reasonable portionof such savings on to the Distributor.

8.2           Offers forsale of the Principal’s Product are binding only when accepted by the Principalas described in Section III above.

8.3           Allaccepted orders, whether or not delivery dates are specified, may be subject todelays for failures in manufacturing or in delivery due to any external,unforeseeable events beyond the control of Principal, however the Principalagrees to always make a best effort attempt to insure timely delivery.

 

**SECTION IX- NON-ASSIGNABILITY**

 

9.1           Neitherthis Agreement nor any rights, duties and obligations covered by this Agreementare transferable or assignable, without the written consent of the Principal,which consent shall not be unreasonably withheld. The Principal reserves theright to assign this agreement to another company.

 

**SECTION X- WAIVER OF DEFAULT**

 

10.1         The failureof either Party at any time to take action against the other Party, or thefailure of either Party to terminate this Agreement as provided above, shallnot affect either Party’s right to require the full performance of thisAgreement at any time thereafter.

10.2         The waiverby either Party of a breach of any provision of this Agreement shall not constitutethe waiver of any subsequent breach thereof or as a waiver of the provisionitself.

 

**SECTION XI- MODIFICATION**

 

11.1         No renewalor termination hereof, or modification or waiver of any of the provisions herein,or any future representation, shall be binding upon the Principal, unless madein writing by an authorized officer of the Principal.

11.2         A mereacknowledgment or acceptance of any order inconsistent with the terms of this Agreementor the making of deliveries pursuant thereto, shall not be deemed an acceptanceor approval of such inconsistent provisions.

 

**SECTION XII-ARBITRATION**

 

12.1         If theParties cannot settle any controversy or claim arising out of this Agreement,then the matter shall be settled by arbitration in accordance with thearbitration procedures set forth

 

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in the code of CivilProcedures of the State of Nevada, USA. Judgment upon the award may be enteredin any court of competent jurisdiction.

 

**SECTION XIII- SCOPE OFAGREEMENT**

 

13.1         ThisAgreement constitutes the entire Agreement between Principal and theDistributor and supersedes all prior and contemporaneous agreements between theParties.

13.2         Only aninstrument in writing signed by both Parties that expressly refers to this Agreementmay amend this Agreement.

13.3         Either Partyis not relying upon any warranties, representations or inducements not set forthin this Agreement.

 

**SECTION XIV- GOVERNING LAW**

 

14.1         ThisAgreement and all questions arising here under shall be governed andinterpreted by the laws of the State of Nevada, USA.

 

**SECTION XV- IMPRACTICABILITYOF PERFORMANCE**

 

15.1         The Partiesagree that this Agreement may be terminated at any time without liability ofone Party as against the other if the situation among nations renders theperformance impracticable or if currency controls make trade between the countriessubstantially impracticable.

15.2         Rights andobligations of the Parties previously accrued under this Agreement shall not beeffected by termination under this section.

 

**SECTION XVI- NOTICES**

 

16.1         All noticesand other communications permitted or required by this Agreement shall be inwriting and shall be personally delivered, or sent through a governmentrecognized Postal Service, or any official successor thereto (or the nearestfunctional equivalent thereto outside North America), designated as registeredor certified mail, return receipt requested and addressed as provided below orsent by email, telegram, telex, telefax, telecopier or recognized courier; suchas Fed-Ex, UPS, DHL, etc.

16.2         Noticesdelivered in person shall be effective upon the date of delivery.

16.3         Noticesdelivered by mail shall be effective upon the receipt thereof by the addressee,but not later than 15 calendar days subsequent to the postmark date, whicheveris earlier.

16.4         Notices byemail, telegram, telex, telefax and telecopier shall be effective upon the dateof receipt.

16.5         Rejection orthe refusal to accept or the inability to deliver because of a change inaddress of which no notice was given shall be deemed to be receipt of thenotice sent by mail as of the 15th calendar day subsequent to the postmark date.

16.6         By giving tothe other Party at least 30 days’ notice, any Party shall have the right fromtime to time, and at any time while this Agreement is in effect, to changetheir respective addresses.

16.7         Each Party shallhave the right to specify as the address, any other address.

(i) Ifintended for Principal, to:

8027 WATKINSTERRACE, MISSION, B.C., CANADA, V4S-1E5

 

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(ii) Ifintended for Distributor, to:

**AquairInc,**17751 Mitchell Avenue, Irvine, CA 92614

 

**SECTION XVII-TIME AND PLURALITY**

 

17.1         Time is ofthe essence in this Agreement.

17.2         All uses ofthe singular include the plural and the use of the plural includes thesingular.

 

**SECTION XVIII-WARRANTY OF AUTHORITY**

 

18.1         Thesignatories below warrant on behalf of their respective corporation, that:

i.**     **Theyhave the right and power and are duly authorized to enter into this Agreement whichrights and power are supported by a Resolution of the Board of Directors of theirrespective Corporation; and

ii.     Upon theirexecution of this Agreement, the Agreement shall constitute a valid, bindingand enforceable Agreement of the Parties.

iii.    The partiesdeclare that they have requested that this agreement be in the English language.

 

**PatentInformation:**

 

This product isprotected by certain patents and or patents pending. Some of the patents areidentified with the following registration numbers: 10-2003-0069247, 10-2003-0072445,20-2003-0031337.

The product may becovered under additional patents and or patents pending.

 

**TheDistributor shall pay the Principal the total sum of $25,000 USD upon signing:**

 

Principal agreesto price the E-10 units at $550 USD, FOB, Korea

Distributor agreesto a payment of $25,000 USD signing, this payment will be used as partialpayment towards the purchase of their 11th container. If theDistributor does not purchase 11 containers then the $25,000 will be retainedby the Principal.

 
| ** ** | **Principal/Manufacturer:  Ahoy Network Association Ltd.** |
|------------|------------------------------------------------------------|
|       | *[Signatures]*                                             |
|       | ** **                                                 | **Per:** | /s/ R. Anderson |   |
|       |                                                       |   | **R.  Anderson** |
|       |                                                       | **Title:** | **President** |
|       |                                                       |   |   |
|       | **Distributor:  Aquair Inc**                               |
|       |                                                       | ** ** |   |
|       |                                                       | ** ** |   |
|       | *[Signatures]*                                             |
|       |                                                       | **Per:** | /s/ Louis L Knickerbocker |   |
|       | ** **                                                 | ** ** | **Louis  L Knickerbocker** |
|       | ** **                                                 | **Title:** | **President** |
|            |                                                            |  |  |  |  |

 

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