Exhibit 10.3
Purchase Agreement
Elite Fitness Systems Inc.
Nutek Inc.
00000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxxx XX. 00000
Tel: (000) 000-0000 Fax: (000) 000-0000
Table of Contents
Table of Contents............................................ 2
Confidentiality Statement ................................... 3
Existing Corporation ........................................ 3
Elite Fitness Systems ....................................... 3
Purchase Agreement with Nutek Inc............................ 3
RECITALS .................................................... 3
PAYMENT...................................................... 4
CONSIDERATIONS............................................... 4
CONFIDENTIALITY.............................................. 5
WARRANTIES................................................... 5
INTEGRATION.................................................. 6
CONSTRUCTION AND JURISDICTION................................ 6
ATTORNEY'S FEES.............................................. 6
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Confidentiality Statement
The information embodied in this Purchase Agreement is strictly confidential
and is supplied on the understanding that it will be held confidentially and
not disclosed to third parties without the prior written consent of Nutek,
Inc.
Existing Corporation
Elite Fitness Systems
The existing Corporation Elite Fitness Systems, Inc. is a Nevada Corporation
doing business in California.
Currently, the products in existence in Elite Fitness Systems Inc. are 3 series
of exercise videos, the first being the Ultimate Aerobic Workout, Total Body
Workout and Ab Blast, the second series is 11 minute Lower Body Workout and
11 minute Upper Body Workout, and finally the third series is the ISO
Workouts, Stamina and Strength videos. The company also has it's own website at
xxxxxxxxxxxx.xxx.
Purchase Agreement with Nutek Inc.
Agreement entered into this ____ day of October 1999 by and between Elite
Fitness Systems Inc "SELLER" and Xxxxxxx X. Xxxxxxxxxx (President) of 0000 Xxx
Xxxxxx, Xxxxxxxxx, XX 00000 hereinafter, referred to as "SELLER" and Nutek
Inc. of 00000 Xxxxxxxxx Xxxx. Xxxxx 000 Xxxx Xxxxxx XX 00000 hereinafter
"PURCHASER".
RECITALS
WHEREAS, PURCHASER is engaged in the business of acquiring, controlling and
managing various companies and corporations, Xxxxxxx X. Xxxxxxxxxx has
created and/or holds copyrights to certain video products.
WHEREAS, PURCHASER and SELLER have agreed to enter into this Agreement
whereby PURCHASER will acquire SELLER by purchasing all issued and/or
outstanding shares of SELLER.
WHEREAS, Xxxxxxx X. Xxxxxxxxxx has created the various exercise workout
videos, hereinafter referred to as the "product", and
WHEREAS, PURCHASER seeks to acquire this corporation, Elite Fitness Systems,
Inc. which holds all exclusive rights, title and interest to the product
and all future related video exercise products produced by Xxxxxxx X.
Xxxxxxxxxx; and
WHEREAS, PURCHASER has an interest and is in the business of developing,
marketing, and the management, promotion, and financing of companies and
products, and has the management knowledge and expertise to promote and
market the product; and
WHEREAS, PURCHASER is willing provide SELLER, the services of financing,
management, promotion and marketing of Product to date and in the future,
in television and all other mediums pursuant to the following terms and
conditions:
Upon execution of this Agreement PURCHASER will acquire SELLER as a wholly
owned subsidiary of Nutek and serves to confirm the arrangement made
between PURCHASER and SELLER as of April 7, 1999.
NOW, THEREFORE, in consideration of these premises and those other terms
and conditions set forth hereinafter, the parties agree as follows:
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1. PAYMENT.
1. Xxxxxxx X. Xxxxxxxxxx, President of SELLER shall receive Twenty Five
Thousand ($25,000.00) dollars in cash within 30 days maximum of
signing this Agreement. PURCHASER is to sell stock issued to
Xxxxxxx X. Xxxxxxxxxx within this 30 day period.
2. Xxxxxxx X. Xxxxxxxxxx is to receive a "Royalty Payment" of Twenty
(20%) percent of Net Gross revenues on the sales of existing
products to existing vendors.
3. Xxxxxxx X. Xxxxxxxxxx is to receive a "Royalty Payment" of Fifteen
(15%) percent of Net Gross revenues on the sales of products to new
vendors.
4. Xxxxxxx X. Xxxxxxxxxx is to receive a "Royalty Payment" of Ten (10%)
percent on all additional revenue generated exclusive of the
existing Product.
5. Royalty Payments to be made monthly no later then the 10th day of
each month following the previous months sales.
6. Xxxxxxx X. Xxxxxxxxxx is to receive a monthly salary of Three
Thousand Five Hundred ($3,500.00) dollars with an annual increase of
Ten (10%) percent.
7. Xxxxxxx X. Xxxxxxxxxx is to receive One Hundred and Twenty Five
Thousand (125,000) shares of Nutek Restricted stock under Rule 144
which is Restricted from sale for a period of 0ne (1) year from day
of issue. This stock is to be issued within 10 days of signing this
Agreement.
2. CONSIDERATIONS.
1. Failure of PURCHASER to pay SELLER a minimum of 50% of initial
payment as set out in paragraph 1, section 1 above within the 30 day
period and the balance within 45 days will be at SELLER's sole
discretion to cancel this Agreement and retain all funds and stock
issued to SELLER as liquidated damages.
2. SELLER guarantees a minimum sales revenue of Two Hundred Thousand
($200,000.00) per year from existing catalogs and clients, failing
which the "Royalty Payments" will be reduced by Two and One half
(2.5%) percent, effective from date of signing of contract.
3. PURCHASER also agrees to place an additional Twenty Thousand
($20,000.00) dollars into the SELLER's business as a loan account
from PURCHASER to fund operations. This will include a minimum of
Three Thousand Five Hundred ($3,500.00) dollars per month to fund
print media advertising. The revenue sharing is to be increased by
Five (5%) percent until loan is paid back from this additional Five
(5%) Percent. In addition to this, if media rollout of exercise
video campaign returns a rate greater then 2:1, Nutek will forward
additional funding to Elite Fitness Systems to continue promoting
commercial. This amount to be a minimum of One Hundred Thousand
($100,000.00) dollars.
4. PURCHASER will also assist in raising additional funding for SELLER
for the construction of outdoor rock climbing gym and sports area.
5. Net Gross Revenues as referred to in this agreement is sales
revenues less returns, and excludes shipping costs.
6. Xxxxxxx X. Xxxxxxxxxx is to submit all contracts submitted to or
issued from SELLER to PURCHASER for approval.
7. PURCHASER to receive from SELLER Fifty (50%) of all net monthly
proceeds after deduction of salary and royalty payments.
8. PURCHASER is to receive all operating books of account of SELLER and
to be responsible for the day to day administration of Elite Fitness
Systems Inc, which is to include all invoicing, accounts receivable
processing and general day to day management of books of record.
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3. CONFIDENTIALITY.
SELLER and Xxxxxxx X. Xxxxxxxxxx agrees to hold all information that SELLER
and Xxxxxxx X. Xxxxxxxxxx obtains as confidential for the purposes of this
agreement. SELLER and Xxxxxxx X. Xxxxxxxxxx agree not to use or disclose
confidential information to any person or entity, except as necessary under
this Agreement. Nothing herein above written shall prevent the parties from
making any disclosure which is required by law, government regulation, or
rule, or which disclosure is ordered or otherwise required by a court of
competent jurisdiction through its subpoena power or otherwise or by a state or
federal regulatory or other governmental agency.
4. WARRANTIES.
SELLER hereby represents and warrants to PURCHASER the following:
SELLER is a corporation duly incorporated, validly existing and in good
standing under the laws of the State Nevada.
The execution, delivery and performance of this Agreement is within SELLER's
powers and does not contravene any law or contractual restriction binding
on or affecting SELLER.
This Agreement is a legal, valid and binding obligation of SELLER
enforceable against SELLER in accordance with its respective terms.
SELLER has full right, title and ownership of the Product.
PURCHASER hereby represents and warrants to SELLER the following:
PURCHASER is a corporation duly incorporated, validly existing and in good
standing under the laws of the State Nevada.
The execution, delivery and performance by PURCHASER of this Agreement is
within PURCHASER's corporate powers, has been duly authorized by all necessary
corporate or stockholder action on its part, does not contravene restriction
binding on or affecting PURCHASER or any of its properties, and do not result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties.
This Agreement is a legal, valid and binding obligation of PURCHASER
enforceable against PURCHASER in accordance with its respective terms.
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5. INTEGRATION.
This Agreement together with all exhibits amendments and supplements represents
the complete and entire Agreement between the parties hereto. This Agreement
either embodies or supersedes all prior, contemporaneous or subsequent oral
agreements, representations, understandings, and all written notations,
memoranda or correspondence of any party hereto, their agents, employees or
other related persons, related to the work contemplated in this Agreement.
6. CONSTRUCTION AND JURISDICTION.
This Agreement shall be construed and enforced pursuant to the laws of the
State of California. By affixing their signatures to this agreement, the
parties hereby submit themselves to the courts of the State of California, for
the judicial resolution of any disputes arising under the terms, interpretation
or performance of this agreement. If any one or more paragraphs in this
Agreement is found to be unenforceable or invalid, the parties agreement on
all other paragraphs shall remain valid. Non enforcement of any section of this
Agreement by either party does not constitute a waiver or consent and both
parties reserve the right to enforce this Agreement at their discretion.
7. ATTORNEY'S FEES.
In the event either party is required to retain counsel to enforce the
provisions of this Agreement or to bring legal action to enforce the provisions
of this Agreement or remedy any breaches of this Agreement, the prevailing
party in such action shall be entitled to its costs and attorney's fees
incurred in such action or procedure, whether or not an action is ultimately
filed in a court of proper agreed jurisdiction.
WHEREFORE, the parties have affixed their signatures to this Agreement the date
first above stated. Furthermore, by signing this Agreement all signature
parties acknowledge they fully understand and agree to all the terms and
conditions of this Agreement.
PURCHASER SELLER
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------- ---------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxxxx
President/CEO President
Nutek Inc. Elite Fitness
Systems, Inc.
Date: October 4, 1999 Date: October 4, 1999
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