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LICENSE AND ROYALTY AGREEMENT
This agreement is entered into this 2nd day of January, 1998 by and
between Showtime Partners, Xxxxx Xxxx trusts 1 thru 21 inclusively and
Xxxxx Xxxx, parties of the first part hereafter referred to as the
"Licensing Group" and/or "Licensor" and Canyon Fitness Center Inc., a
California Corporation, party of the second part, hereafter referred to
as the "Licensee" and/or "Royalty Obligor".
RECITALS
A. Licensing Group desires to license Canyon Fitness Center
for the worldwide manufacturing and marketing rights to a
list of products and product/concepts, referred to in
Exhibit A., attached hereto and made a part hereof.
B. Licensee is desirous of obtaining manufacturing and
marketing rights to said product and/or product concept,
on an exclusive and worldwide basis.
C. Licensee agrees to pay Licensor consideration for said
license and pay a royalty fee on each product and/or
product concept manufactured or sold.
D. The parties desire to formalize their purchase agreement.
NOW THEREFORE, IN CONSIDERATION OF THEIR MUTUAL PROMISES AND COVENANTS
SET FORTH HEREINAFTER, THE PARTIES AGREE AS FOLLOWS:
1 Right of Licensee - (A) Licensee will have the exclusive
worldwide right to manufacture its products and/or product
concepts referred to in Exhibit A. Licensee will also have the
right to subcontract the manufacture of any of the product
and/or product concepts by others, however, subcontract
manufacture's will provide standard product liability naming the
Licensing Group as additional insured.
(B)Licensee will have the exclusive
worldwide marketing rights to those products and/or product concepts
referred to in Exhibit A on an indirect or direct basis and/or have the
ability to appoint additional marketing firms.
2 Licensee will agree to pay a royalty of 2% (.00625) of net
sales (exclusive of returns and allowances) of each product
and/or product concept when sold. The royalty will then become
due and payable on a quarterly basis. There will then become a
minimum annual royalty paid of $25,000 per year, if the royalty
payments are higher than the 25,000 the minimum will be
considered paid.
3 As an incentive for the Licensee to enter into this contract and
to aggressively market the products, or product concepts, in
Exhibit "A", Licensor grants Lessee a prepaid deposit of
$200,000. The quarterly royalty amount calculated based on net
sale of products sold will be applied against the prepaid
deposit, until such time as the deposit is fully distributed.
4 Default - In the event any party defaults in performing any of
its duties or obligations under this Agreement, the party
responsible for such default shall pay all costs incurred by the
other party in enforcing its right under this Agreement or in
obtaining damages for such fees, whether incurred through legal
action or otherwise and whether incurred before or after
judgement.
5 Notices - Any notice or correspondence required or permitted to
be given under this Agreement may be given personally to an
individual party or to an officer or registered agent of a
corporate party or may
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be given by depositing such notice or correspondence in the U.S. mail,
postage prepaid, certified or registered, return receipt requested,
addressed to the party at the following addresses:
Licensing Group
00000 Xxxxxx Xxxxx
Xxxxx 0X
Xxxx Xxxxxxxx, XX 00000
Nova Pharmaceutical Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Any notice given by mail shall be deemed to be delivered on the date
such notice is deposited in the U.S. mail. Any party may change its
address for purpose of this Agreement by giving written notice to the
other parties as provided above.
6 Binding - This Agreement shall be binding upon the parties
hereto and upon their respective heirs, representatives,
successors and assigns.
7 Governing Law - This Agreement shall be governed by and
construed under the laws of the State of Nevada.
8 Authority - The officers executing this Agreement on behalf of
corporate parties represent that they have been authorized to
execute this Agreement pursuant to resolutions of the Board of
Directors of their respective corporations.
9 Accounting - Licensee will furnish quarterly accounting reports
specifically accounting for the net sales figure and the basis
of the fee.
10 Term - the term of the License and Royalty Agreement shall be
Ten (10) years and will be renewable for an additional ten years
at the option of the Licensor and will include a cost of living
adjustment.
11 Signatures - The License and Royalty Agreement may be signed in
counterparts.
IN WITNESS WHEREOF, the parties have executed this License and Royalty
Agreement as of the day and year first written above.
CANYON FITNESS CENTER, INC. LICENSING GROUP:
______________________ _______________________________
Xxxxx Xxxx, President Showtime Partners, Xxxx Xxxx Trustee
________________________________
Xxxxx Xxxx Trusts 1 - 21 (inclusively)
_________________________________
Xxxxx Xxxx, individual
SCHEDULE A
LICENSE AND ROYALTY AGREEMENT
Product and product concepts for which the license and royalty
agreement apply include:
NxTrim - Dietary Supplement, Formerly Phentrim
