Exclusive Manufacturing Agreement

EXCLUSIVE MANUFACTURING AGREEMENT


This Manufacturing Agreement (this "Agreement") is made and entered into as of December 20, 1996, by and between STYLING TECHNOLOGY CORPORATION, a Delaware corporation with offices at 1146 South Cedar Ridge, Duncanville, Texas 75138 ("Styling") and AMOLE, INCORPORATED, an Ohio corporation with offices at 2425 West Dorothy Lane, Dayton, Ohio 45439 ("Amole").


RECITALS


Styling recently purchased the Body Drench division ("Body Drench") of Designs by Norvell, Inc. ("DBN") (the "Body Drench Acquisition").


Styling formulates and distributes a line of health, tanning, and beauty products through its Body Drench division.


Styling and Amole desire that Amole manufacture and package the items listed on Exhibit A hereto, which list may be amended by the mutual agreement of the parties hereto from time to time as agreed in writing by both parties (the "Products"), on behalf of Styling.


Amole supplied similar products for the Body Drench division of DBN prior to the Body Drench Acquisition.


AGREEMENT


NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:


1. APPOINTMENT OF MANUFACTURER. Subject to and in accordance with the terms and conditions of this Agreement, Styling hereby selects Amole as its exclusive manufacturer to manufacture and package all of Styling's requirements of Products for Styling for its Body Drench Division as listed on Exhibit A, subject to future modification under Section 3(b) herein.


2. TERM OF AGREEMENT; TERMINATION.


(a) The term of this Agreement shall commence as of the date first above written and shall continue until December 31, 1997 and from year to year thereafter unless terminated by either party giving written notice on or after September 30, 1997 to the other specifying a date of termination not less than one hundred eighty (180) days after such notice (i.e., the earliest date either party could terminate would be effective March 31, 1998, and Styling shall have no right to place, and Amole shall have no obligation to supply, an order placed after the date of termination except as provided in Section 2(b) herein).


(b) Styling acknowledges that with respect to products custom made specifically for Styling (with formulas belonging to either Amole or Styling) ("Specialty


2 Products") (i) that componentry, raw materials, corrugate, labels, and the like ("Custom Materials") must be ordered and/or created in certain minimum quantities consistent with good business practices; and (ii) that finished goods inventory must be created in certain minimum quantities consistent with good business practices. Therefore, Amole may stock reasonable quantities of Custom Materials for Specialty Products and finished goods inventory of Specialty Products for which Styling has not yet placed an order. In the event of a termination of this Agreement as set forth herein, Styling agrees to purchase from Amole such Custom Materials and finished goods as Amole reasonably had in stock. In addition, in the event Styling changes any packaging, labeling, componentry, or raw materials or terminates this Agreement as to a specific Product, Styling agrees to purchase from Amole such Custom Materials and finished goods inventory as may be affected. In either case, Styling agrees to pay Amole its cost for Custom Materials and the last price paid by Styling to Amole for all the finished inventory goods. Styling's maximum aggregate obligation under this Section 2(b) shall be limited to $250,000.


3. PRICE ADJUSTMENTS: TERMINATION AS TO SPECIFIC PRODUCTS.


(a) On or after September 30, 1997, Amole shall have the right to modify prices upon giving Styling one hundred twenty (120) days prior written notice of a price adjustment (the earliest effective date of a price adjustment would be February 28, 1998). The price adjustment shall not be effective for any orders placed by Styling prior to the end of such one hundred twenty (120) days. Notwithstanding the foregoing, however, if such order cannot reasonably be shipped within thirty (30) days following such one hundred twenty (120) day period then the price adjustment shall be applicable to the extent it cannot be shipped with such thirty (30) day period.


(b) Styling may terminate this Agreement as to specific Products, or reduce its commitment to purchase its entire requirements hereunder of any specific Product to a lesser percentage of such requirements, by giving one hundred eighty (180) days prior written notice thereof and the change shall become effective at the end of such one hundred eighty (180) day period. In the event of a termination of a Product hereunder, then the provisions of Section 2(b) above shall be applicable. Notwithstanding the foregoing, no reduction or modification hereunder shall be effective prior to March 31, 1998.


4. ORDERING PROCEDURES; PURCHASE PRICE.


(a) All orders for Products pursuant to this Agreement shall be subject to the terms and conditions set forth in this Agreement notwithstanding the terms specified in any purchase order, invoice, or terms of sale. Whenever Styling desires to purchase any Products, it shall give Amole a signed written purchase order specifying the quantities and number of units of each Product to be purchased and the requested reasonable shipping date. All Products ordered shall be shipped to the address that shall be expressly set forth on the purchase order (the "Designated Location"). The parties will cooperate with each other in a reasonable manner to accommodate each other's schedules, and Amole will use reasonable efforts to ship all Products on the dates requested by Styling as set forth in any purchase orders. All orders will be a minimum 2,500 pound per Product quantities for batching purposes.


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(b) The purchase price shall be computed on a price per SKU basis as set forth on Exhibit A. All such purchase prices are computed on a F.O.B. Dayton basis and are exclusive of ...