Exhibit 10.22
AGREEMENT
This Agreement, effective as of April 1,2003 (the "Effective Date"), is made by
and between Xxxx Xxx Global Finance, L.L.C., a Delaware limited liability
company having offices at 204F Xxxxxx Building, 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as "Licensor"), and
ChampionLyte, Inc., a Florida corporation having offices at 0000 X.X. Xxxx Xxxxx
Xxxxxxxxx, Xxxxx X-00, Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Licensee").
WHEREAS, Licensor is the owner of the Licensed Xxxx, as hereinafter defined,
which trademark has been used and registered on the United States Principal
Register of Trademarks in connection with sugar-free sports drinks and
sugar-free non-carbonated soft drink;
WHEREAS, Licensor is willing to grant Licensee the right to use the Licensed
Xxxx under the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
As used herein the term(s):
1.1 "Affiliate" of Licensor or Licensee, as the case may be, shall
mean any person or business entity with which Licensor or
Licensee, as applicable, is or may hereafter be associated by
direct or indirect common ownership, control, or management.
1.2 "Contract Year" means each twelve (12) month period commencing
on January 1 of one year and ending on December 31 of the same
year; provided, however, that the First Contract Year
hereunder shall commence as of the effective date of this
License Agreement and continue through March 31, 2004, and
that the Second Contract Year hereunder shall commence as of
January 1,2004 and continue though December 31, 2004. The
parties agree that the First Contract Year and the Second
Contract Year shall overlap during the period January 1, 2004
through March 31, 2004.
1.3 "Distribution Channels" shall mean the means and channels of
distributing Licensed Products, specifically excluding [To be
discussed], all of which specific, individual accounts shall
be approved in writing by Licensor prior to any shipment by
Licensee of Licensed Products to such individual account.
1.4 "Effective Date" means April 1, 2003.
1.5 "First Renewal Term" shall have the definition set forth in
Section 9.2 hereof, and shall extend from January 1, 2008
through and including December 31, 2012, provided the
conditions and provisions of Seaion 9.2 are met.
1.6 "Guaranteed Minimum Royalties" shall have the definition set
forth in Section 10.3 hereof.
Page 1
1.7 "Guidelines" shall mean the Xxxx Xxx Corporation Supplier
Selection Guidelines and the Xxxx Xxx Corporation Global
Operating Principles, copies of which have been provided to
Licensee.
1.8 "Initial Term" shall have the definition set forth in Section
9.1 hereof.
1.9 "Intellectual Property Rights"" shall mean the Licensed Xxxx
together with any copyrights, registered or unregistered
designs, trade dress, or any applications or rights to apply
for any of the: foregoing which are used by or on behalf of
Licensed in connection with the Licensed Xxxx
1.10 "Invoice Price" shall mean the total monetary amount invoiced
by Licensee for sales of the Licensed Products to its
customers, excluding transportation expenses, freight expenses
(including loading and unloading expenses), packing expenses,
insurance, sales taxes, excise taxes, and value added taxes
(VAT). No deduction shall be made for trade discounts,
allowances, rebates, refunds, uncollectible accounts, or bad
debts. If Licensee accepts goods or services bartered as
consideration for sales of Licensed Products, the value of
such sales by barter should be deemed to be the net realizable
value of the goods or services received in consideration
therefore. The Invoice Price for sales made by Licensee to any
retail outlet owned or controlled, wholly or in part, by
Licensee or any of it Affiliates shall be Licensee's regular
full wholesale list price of such Licensed Products to
unaffiliated retailers ("Full Wholesale"), or where Licensee
does not have a Full Wholesale price for a Licensed Product
(e.g., the Licensed Product is made available by Licensee only
to affiliated retailers), an equivalent amount ("Full
Wholesale Equivalent") calculated upon the greater of: (i) the
regular full wholesale list price for a product sold to
unaffiliated retailers which most nearly approximates the
Licensed Product in terms of materials, manufacture and price,
or (ii) the price charged by the affiliated retailer's
"normal" retail xxxx-up for that Licensed Product. Discounts,
allowances, rebates or refunds permitted as deductions herein
shall, when actually made to an affiliated retailer, not
exceed the rate or amount in good faith made or given by
Licensee to an unaffiliated retail customer. Licensee will be
obligated to demonstrate to the reasonable satisfaction of
Licensor that any Full Wholesale or Full Wholesale Equivalent
and any permitted deductions made by Licensee is appropriate.
1.11 "Licensed Xxxx" means the CHAMPIONLYTE trademark.
1.12 "Licensed Products" means Products that are manufactured by or
on behalf of Licensee and are sold or distributed by Licensee
and that bear the Licensed xxxx as authorized herein by
Licensor.
1.13 "Minimum Sales" shall have the definition set forth in Section
10.4 hereof.
1.14 "Products" means sugar-free sports drinks and sugar-free
non-carbonated soft drinks.
1.15 "Renewal Sales Minimum" shall have the definition set forth in
Section 9.2 hereof.
1.16 "Second Renewal Term" shall have the definition set forth in
Section 9.2 hereof, and shall extend from from January 1, 2013
through and including December 31, 2017, provided the
conditions and provisions of Section 9.2 are met.
Page 2
1.17 "Specifications" shall have the definition set forth in
Section 7.3 hereof.
1.18 "Sub-Contractor" shall mean any sub-contract manufacturer used
by Licensee and approved by Licensor as set forth in Section 7
hereof.
1.19 "Territory" means the United States of America, including its
territories and possessions, Canada, and Mexico.
2. GRANT OF LICENSE
2.1 Upon the terms and conditions hereinafter set forth, Licensor
grants to Licensee the exclusive, non-transferable license to
use the Licensed Xxxx in the Territory on and in connection
with the manufacture, marketing, sale and distribution of the
Products, solely through the Distribution Channels.
2.2 Licensee shall not sell or distribute Licensed Products to any
individual account or customer until such time as Licensor has
provided its written approval for inclusion of that account of
customer in the definition of Distribution Channels.
3. INTELLECTUAL PROPERTY RIGHTS
3.1 Licensee acknowledges the validity and Licensor's ownership of
the Intellectual Property Rights and shall not at any time
during the term of this Agreement or thereafter directly or
indirectly, by itself or through its directors, officers,
employees, agents or Affiliates, consent to or assist any
other person or entity in contesting the validity of the
Intellectual Property Rights or the right, title and interest
of the Licensor to the Intellectual Property Rights. Licensee
further agrees that it will not attack the validity of this
License. This provision shall survive the expiration or
termination of this Agreement.
3.2 Licensee recognizes the great value of the good will
associated with the Licensed Xxxx and acknowledges that the
Licensed Xxxx and all rights therein, and good will pertaining
thereto, belong exclusively to Licensor. Licensee further
acknowledges that all use of the Licensed Xxxx by Licensee
shall inure to the benefit of Licensor.
3.3 Licensee shall not at any time atempt to register or use, or
to aid any third party in attempting to register or to use,
any trademark in any country of the world which may be, in
Licensor's opinion, confusingly similar to the Licensed Xxxx
or confusingly similar to the CHAMPION trademark or
confusingly similar to the CHAMPION Logo trademark (as
illustrated, for example and not for limitation purposes, by
U.S. Registration No. 1,323,337). This covenant shall survive
the expiration or termination of this Agreement and shall
continue in full force and effect in perpetuity.
3.4 Except as provided in this Agreement, Licensee shall not use
or register at any time, whether during the continuance of
this Agreement or thereafter, any business or trade name,
licensor name, trademark or labeling or packaging design which
incorporates or which incorporates or which is substantially
identical with or deceptively or confusingly similar to the
Page 3
Licensed Xxxx or other Intellectual Property Rights. Licensor
specifically reserves all rights in and to the trade name
"Champion" and to any trade name incorporating the designation
"Champion," and Licensee acknowledges that, except as
specifically provided herein, Licensee has no rights
whatsoever to the use of any trade name containing the
designation "Champion," nor shall Licensee, itself or through
any third party within its control or with whom Licensee has a
contractual relationship, do or permit any act or thing that
will, in any way, impair the rights of Licensor in and to the
trade name "Champion" or any trade name incorporating the
designation "Champion" or which will affect the validity
thereof.
3.5 Any and all trademarks, copyrights or other intellectual
property rights which may exist or come into being, including
without limitation sub-brand names, collection names, slogans,
and tag lines, and which are used on stationery, signage,
labeling, packaging, advertising or promotional material in
connection with the Licensed Products shall be the exclusive
property of Licensor, as Licensor may direct. To the extent
any rights in and to any such trademarks, copyrights or other
intellectual property rights are deemed to accrue to Licensee,
Licensee hereby assigns to Licensor any and all such rights,
at such time as they may be deemed to accrue, and Licensee
shall execute at such time any further documents required to
effect such assignment.
3.6 Licensee shall not supplement or interfere with or obliterate
the Licensed Xxxx applied to the Products.
3.7 Licensee shall take due care not to do or cause to be done any
act or thing which affects the validity of the Intellectual
Property Rights or Licensor's ownership thereof or jeopardizes
the maintenance thereof, either during the continuance of this
Agreement or thereafter, and will immediately cease
distribution of the Licensed Products in the Territory in the
event that the Licensed Xxxx or other Intellectual Property
Rights are in jeopardy.
4. RELATIONSHIP OF PARTIES
4.1 Licensee is a "related company" pursuant to 15 U.S.C. Sec.
1127. Neither party is an agent or employee of the other, nor
shall either party in any event be liable for the other's acts
or omissions. This Agreement does not and shall not be deemed
to make any party hereto the agent, partner, joint venturer or
legal representative of any other party for any purpose
whatsoever, Neither Licensor nor Licensee shall have the right
or authority to assume or create any obligations or
responsibility whatsoever, express or implied, on behalf of or
in the name of the other, or to bind the other in any respect
whatsoever, except as may be herein provided.
5. BUSINESS OPPORTUNITY
5.1 Licensee recognizes that there are many uncertainties in the
business contemplated by this Agreement. Licensee agrees and
acknowledges that other that those representations explicitly
contained in this Agreement, if any, no representations,
warranties or guarantees of any kind have been made to
Licensee, either by Licensor or its Affiliates, or by anyone
acting on their behalf. Without limitation, no
Page 4
representations concerning the value of the Licensed Products
or the prospects for the level of their sales or profits have
been made, and Licensee has made its own independent business
evaluation in deciding to manufacture and distribute the
Licensed Products on the terms set forth herein. Neither
Licensee nor any of its Affiliates shall be entitled to
compensation from Licensor or any of Licensor's Affiliates for
any direct or indirect damages or loss of profits suffered by
Licensee as the result of the manufacturing, promotion and
sale of the Licensed Products.
6. USE OF THE LICENSED XXXX
6.1 Licensee agrees to use the Licensed Xxxx only in the form
approved by Licensor. All use of the Licensed Xxxx on the
Licensed Products and on stationery, signage, labels,
packaging, in advertising and otherwise must faithfully
reproduce the form approved by Licensor. Approval of the form
of use of the Licensed Xxxx, once given, shall be continuing
until Licensee receives written notice on the contrary from
Licensor. In the event Licensee receives such written notice,
all uses of the Licensed Xxxx to which such notice applies
shall immediately cease, except that for up to (6) months
after receipt of such notice Licensee shall have the right to
sell and distribute finished Licensed Products in inventory at
the time of such notice that bear the Licensed Xxxx in such
form that is no longer approved by Licensor.
6.2 Licensee shall comply with all notice and marking requirements
of any law or regulation applicable or necessary for the
protection of the Licensed Xxxx, including those that
Licensor, in its sole judgment, may deem appropriate. Licensee
shall not, at any time, do or permit any third party within
its control or with whom Licensee has a contractual
relationship to do any act or thing that will, in any way,
impair the rights of Licensor in and to the Licensed Xxxx or
which will affect the validity thereof.
6.3 Licensee agrees that its use of the Licensed Xxxx shall be in
a commercially acceptable and responsible manner, and that no
use of the Licensed Xxxx shall reflect adversely upon the good
name of Licensor.
6.4 Excluding Licensed Products sold by Licensee to Licensor,
Licensee will not sell or cause or permit to be sold any
Licensed Products outside of the Territory, nor will Licensee,
directly or indirectly, sell or cause or permit to be sold
Licensed Products within the Territory where, to its
knowledge, such Licensed Products are intended for re-sale or
distribution outside of the Territory. In particular, Licensee
shall not engage in advertising in any way involving or
referring to the Licensed Marks that is aimed at any place
outside the Territory or use any branch or distribution depot
outside the Territory for the sale or marketing of the
Licensed Products. Licensee will use its best efforts lawfully
to prevent any person from distributing or selling the
Licensed Products from the Territory to locations outside the
Territory. Licensee acknowledges that a violation of this
Section 6.4 may result in immediate termination of this
Agreement and Licensor may take advantage of any and all
remedies available at law to address any damages to Licensor
based on Licensee's violation.
Page 5
7. QUALITY CONTROL
7.1 Licensee acknowledges that the Licensed Xxxx has established
prestige and good will and is well recognized in the minds of
the public, and that it is of great importance to Licensor
that the high standards and reputation that Licensor has
established be maintained in the manufacture and sale of the
Licensed Products. Toward that end, Licensee shall comply with
any direction made by Licensor relating to the quality of the
Licensed Products or any related promotional or advertising
material.
7.2 Licensor has the right to exercise quality control over
Licensee's use of the Licensed Xxxx on and in connection with
the Licensed Products so as to maintain the validity of the
Licensed Xxxx and to protect the good will associated
therewith.
7.3 At least two (2) months prior to the first marketing of each
proposed new Licensed Product, and immediately for each
current Licensed Product, Licensee shall submit to Licensor
for approval samples of each such Licensed Product, in each
size and/or quantity in which the same are intended to be
marketed, together with a complete and accurate written
summary in relation to the quality and properties of each such
Licensed Product and copies of such testing results and other
data as Licensor may consider necessary or desirable to
establish the quality of the Licensed Products concerned.
Licensee shall also submit to Licensor one full set of final
shipment samples of each of the Licensed Products which have
been approved hereunder and which are intended to be marketed,
prior to the first sale of the Licensed Products concerned.
Licensee shall ensure that the Licensed Products are
manufactured in full and complete conformity with such
specifications, standards and quality of materials and
workmanship as may from time to time be required by Licensor
for the manufacture of the Licensed Products and that the
Licensed Products, and all labeling, packaging, or promotional
materials therefor, comply with all applicable ordinances,
laws, and statutes governing the manufacture, packaging,
promotion, and sale of such products. Whenever reasonably
requested so to do, Licensee shall submit to Licensor, at
Licensee's own Expense, samples of the Licensed Products. In
addition, Licensee shall submit to Licensor, at least once
each Contract Year, one (1) case of each stock-keeping unit of
Licensed Products. Licensee shall also ensure that Licensor
shall have access to the premises where the Licensed Products
are manufactured, packaged or stored in order to inspect and
test any of the Licensed Products and methods of manufacture,
packaging and storing of the same.
7.4 Licensee represents and warrants to Licensor that: (i) the
Products to which the Licensed Xxxx is affixed shall be of
high quality and shall comply in all respects with the
specifications for the Licensed Products; (ii) the Licensed
Products shall be stored, cooked, and/or processed according
to the specifications approved by Licensor; (iii) the Licensed
Products and all food packaging and labeling materials shall
be, at the time of shipment or delivery, manufactured in
accordance with good manufacturing practices; (iv) the
Licensed Products and all food packaging and labeling
materials shall comply with all federal, state, and local
laws, ordinances, rules and regulations (including without
limitation all USDA and FDA laws, rules and regulations)
(collectively, "Laws"), and shall not be adulterated or
misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act (the "Act"), as amended and including its food
and color additive amendments, or within the meaning of any
applicable state or local law in which the definitions of
"adulteration" and "misbranding" are substantially
Page 6
the same as those contained in the Act, as the Act and such
Laws are constituted and effective at the time of such
shipment or delivery; (v) the Licensed Products and all food
packaging and labeling materials shall not be articles which
may not, under the provisions of Section 404 or 505 of the
Act, be introduced into interstate commerce; and (vi) the
Licensed Products and all food packaging and labeling
materials shall not be in violation of the requirements
imposed upon Licensee by the California Safe Drinking Water
and Toxic Enforcement Act of 1986 ("California Proposition
65"), and any other state or local laws imposing requirements
on Licensee which are substantially the same as California
Proposition 65.
7.5 Licensee shall store and transport the Licensed Product in
conditions that will preserve the Licensed Products in good
condition and shall comply with any reasonable requests from
Licensor in such regard.
7.6 If Licensor notifies Licensee in writing at any time that any
samples of Licensed Products do not conform with preapproved
specifications, standards, and/or quality, or are otherwise
unacceptable, then Licensee will immediately cease
distribution of the unacceptable Licensed Products until such
time as Licensor gives Licensee, written approval to resume
distribution. In addition, Licensee will immediately recall
and destroy all such unacceptable Licensed Products.
7.7 In order to verify and maintain quality control standards,
Licensor shall have the right to inspect Licensee's
manufacturing facilities for the Licensed Products, including
without limitation the facilities of third-party manufacturers
with whom Licensee contracts, up to two times per Contract
Year. Any such inspection will occur during business hours and
only after giving Licensee at least five (5) days written
notice of such inspection. Should Licensor find deficiencies
in such manufacturing facilities, it will have thirty (30)
days in which to notify Licensee of such deficiencies. Upon
notification by Licensor, Licensee will immediately take such
steps as are necessary to rectify the deficiency or
deficiencies. If after ninety (90) days the deficiency or
deficiencies are not corrected by Licensee, Licensor will have
the right to terminate this Agreement.
7.8 Licensee may not sell damaged Licensed Products bearing the
Licensed Xxxx unless it obtains Licensor's prior written
consent.
7.9 Licensee will handle all customer and consumer complaints
pertaining to the Licensed Products in commercially reasonable
fashion. Licensee will keep a record of all such complaints
for each Contract Year and provide this record to Licensor
within thirty (30) days following the conclusion of each
Contract Year.
7.10 The provisions of this Section 7 shall apply with equal force
and effect to any third-party manufacturers used by Licensee
for the production of Licensed Products or components of
Licensed Products, and Licensee shall ensure that all such
third-party manufacturers abide by all provisions of this
Agreement, including but not limited to this Section 7 and to
Section 19 hereof.
Page 7
8. MARKETING, ADVERTISING, PROMOTION AND PACKAGING
8.1 Licensee shall consult with Licensor prior to the commencement
of each Contract Year concerning its strategy for the
marketing, sales, advertising and promotional programs for the
Licensed Products for such Contract Year, and shall submit to
Licensor for approval a marketing plan covering its strategy.
Licensee shall also consult with Licensor concerning the
format, content and design of all packaging, stationery,
signage, labeling, packaging, advertising and promotional
materials to be used by Licensee in connection with the
Licensed Products. No stationery, signage, labeling,
packaging, advertising or promotional materials shall be used
by Licensee in connection with the Licensed Products without
the prior written approval of Licensor.
8.2 Licensee agrees that each Contract Year it will spend not less
than three percent (3%) of the higher of: (a) the actual Net
Sales for such Contract Year or (b) the Minimum Sales (as
defined in Section 10.4) for such Contract Year, on
advertising, marketing, and promotional materials in
connection with the sale of Licensed Products, exclusive of
cooperative and trade advertising. Within thirty (30) days
following the end of each Contract Year, Licensee shall submit
to Licensor, certified as true and correct by an officer of
Licensee, a statement detailing the amounts spent on
advertising, marketing, and promotional materials, broken down
by category and demonstrating how the money was spent. Any
breach of this section 8.2 shall be considered a material
breach 8.2 of this Agreement.
8.3 Any and all trademarks, copyrights or other intellectual
property rights which may exist or come into being, including
without limitation sub-brand names, and which are used on
stationary, signage, labeling, packaging, advertising,
marketing, or promotional material for `the Licensed Products,
shall be the exclusive property of Licensor. To the extent any
rights in and to any such trademarks, copyrights or other
intellectual property rights are deemed to accrue to Licensee,
Licensee hereby assigns to Licensor any and all such rights,
at such time as they may be deemed to accrue.
8.4 In consideration of the License granted herein, in the event
Licensor (directly or through any licensee, franchisee or
Affiliate in the Territory) elects to offer Licensed Products
for sale in stores owned by Licensor or its licensee,
franchisee or Affiliate, Licensee shall sell and timely ship
Licensed Products to such stores, to the extent of their
requirements, at a price equal to thirty percent (30%) less
than the regular wholesale price therefor. All such sales
shall be separately reported by Licensee in its accounting
statements pursuant to paragraph 10.3 hereof, and such sales
shall not be subject to the advertising obligations set forth
herein, but shall be subject to the royalty obligations set
forth herein.
9. TERM AND RENEWAL
9.1 This Agreement shall remain in full force and effect for
fifty-seven (57) months following the effective date of this
Agreement, through and including December 31, 2007 (the
"Initial Term"), subject to the termination provisions hereof.
9.2 Licensee shall have the option to renew this Agreement for
additional five-year renewal periods following the Initial
Term, on the same terms and at the same royalty rates, up
Page 8
to a maximum of two (2) renewal periods (i.e. a total
additional period of ten (10) years, hereafter the "First
Renewal Term" and the "second Renewal Term" respectively);
provided however, that (i) Licensee gives written notice to
Licensor of Licensee's intent to exercise each such option no
later than three (3) or sooner than six (6) months prior to
the expiration of the Initial term or the First Renewal Term,
as applicable, and furthe rprovided that (ii) licensee may not
exercise any such option to renew unless the following net
sales targets (the "Renewal Sales Minimums") are met;
First Renewal Term Renewal Sales Minimum (2008-2012);
Net Sales in Years 2005, 2006, and 2007 must average at
least $1,500,000 per year.
Second Renewal Term Renewal Sales Minimum (2013-2017);
Net Sales in Years 2010, 2011, and 2012 must average at
least $5,000,000 per year.
9.3 In addition, no later than three (3) or sooner than six (6)
months prior to the expiration of the Second Renewal term
(i.e. between October 1, 2017 and December 31, 2017), the
parties shall meet to discuss whether to extend this license
agreement for up to two (2) additional 5- year renewals,
provided that the parties are able to negotiate in good faith
the terms for Minimum Sales, Guaranteed Minimum Royalties, and
a royalty rate during such additional renewal terms. If
Licensor and Licensee are unable to agree upon Minimum Sales,
Guearanteed Minimum Royalties, and a royalty rate for the
additional renewal terms, then this Agreement shall expire as
of December 31, 2017.
9.4 Neither Licensor or Licensee shall have any expectation of the
other, or any obligation to the other, to renew this Agreement
or extend the term hereof for any period following the
expiration of the Term and/or the First Renewal Term, (if
applicable) and/or the Second renewal term (if applicable).
Neither shall Licensor nor Licensee have any financial or
other liability or obligation to the other arising from (i)
non-renewal, or (ii) early termination of this Agreement
according to its terms. It is expressly understood that under
no circumstances shall Licensee be entitled, directly or
indirectly, to any form of compensation or indemnity from
Licensor as a sequence of the termination or expiration of
this Agreement, whether as a result of the passage of time, or
as a result of any other cause of termination referred to in
this Agreement. Without limiting the generality of the
foregoing, by its execution of the present Agreement, Licensee
hereby waives any claim which it has or which it may have in
the future against Licensor arising from any alleged goodwill
created by Licensee for the benefit of Licensor or from the
alleged creation or increase of a market for Licensed
Products.
10. ROYALTY AND MINIMUM SALES
10.1 Licensee will pay to Licensor a royalty equal to: (a) three
percent (3%) of the Invoice Price of Licensed Products sold or
otherwise transferred by Licensee up to total sales of
$10,000,000 in any Contract Year; (b) five percent (5%) of the
Invoice Price of Licensed Products sold or otherwise
transferred by Licensee, based on total sales between
$10,000,000 and $15,000,000 in any Contract Year, and (c) six
percent (6%) of the Invoice Price of Licensed Products sold or
otherwise transferred by Licensee, based on total sales in any
Contract Year exceeding $15,000,000. The royalty rate will be
Page 9
applied to all sales of Licensed Products, and all such sales
will be based on Invoice Price.
10.2 Except for the Guaranteed Minimum Royalty payments required in
advance hereunder, Licensee shall make its royalty payments to
Licensor on a quarterly basis, together with a statement
setting forth the quarterly sales of the Licensed Products,
said payments and statement being due no later than thirty
(30) days following the end of each Contract Year quarter. All
royalty payments shall be made in U.S. Dollars. Such sales and
royalty statements are due quarterly regardless of whether any
quarterly payments are due.
10.3 On or before the 15th day of each month (except the first
month) during the term of this Agreement, Licensee shall
submit to Licensor a report in English, in a form satisfactory
to Licensor, which shall set forth, with respect to the
previous month and with respect to each product line of
Licensed Products handled by licensee, the Invoice Price of
the Licensed Products, the number of units of Licensed
Products sold, the number of units of Licensed Products
remaining in inventory at the end of such month, and a
comparison of Licensee's Invoice Price with the projections in
its annual marketing plan with respect to the Licensed
Products.
10.4 Licensee agrees to pay, at a minimum, the following Guaranteed
Minimum Royalties to Licensor during the Initial Term:
Contract Year 1: $15,000.00
Contract Year 2: $22,500.00
Contract Year 3: $30,000.00
Contract Year 4: $37,500.00
Contract Year 5: $45,000.00
If at the end of the First Contract Year Licensee's royalty
payments to Licensor fail to reach or exceed the Guaranteed
Minimum Royalties for the First Contract Year (i.e.
$15,000.00), Licensee will pay to Licensor an amount equal to
the shortfall. Such payment shall be due within thirty (30)
days following the conclusion of the First Contract Year.
Beginning with the Second Contract Year, and continuing
thereafter throughout the Initial Term and, if applicable, the
First Renewal Term and the Second Renewal Term, Licensee shall
pay to Licensor the Guaranteed Minimum Royalty for each
Contract Year within thirty (30) days of the beginning of that
Contract Year, The Guaranteed Minimum Royalty for a Contract
Year shall be credited against the actual royalties due for
that Contract Year until such time as actual royalties due
exceed the Guaranteed Minimum Royalty. Licensee may not
carryover from one Contract Year to another Contract Year the
Guaranteed Minimum Royalties paid in one Contract Year.
If Licensee effectively renews this Agreement pursuant to
Section 9.2 hereof for the First Renewal Term, then Licensee
agrees to pay, at a minimum, the following Guaranteed Minimum
Royalties to Licensor during the First Renewal Term:
Contract Year 6: $60,000,00
Contract Year 7: $75,000.00
Contract Year 8: $90,000.00
Contract Year 9: $105,000.00
Contract Year 10: $120,000.00
Page 10
If Licensee effectively renews this Agreement pursuant to
Section 9.2 hereof for the Second Renewal Term, then Licensee
agrees to pay, at a minimum, of the following Guaranteed
Minimum Royalties to Licensor during the Second Renewal Term:
Contract Year 11: $150,000.00
Contract Year 12: $180,000.00
Contract Year 13: $210,000.00
Contract Year 14: $240,000.00
Contract Year 15: $270,000.00
10.5 Licensee agrees that it shall maintain the following minimum
sales (hereinafter "Minimum Sales"), based on the Invoice
Price, for each Contract Year during the Initial Term:
Contract Year 1: $500,000.00
Contract Year 2: $750,000.00
Contract Year 3: $1,000,000.00
Contract Year 4: $1,250,000.00
Contract Year 5: $1,500,000.00
If Licensee effectively renew this Agreement pursuant to
section 9.2 hereof for the First Renewal Term, then Licensee
agrees that it shall maintain the following Minimum Sales,
based on the Invoice Price, for each Contract Year during the
First Renewal Term:
Contract Year 6: $2,000,000.00
Contract Year 7: $2,500,000.00
Contract Year 8: $3,000,000.00
Contract Year 9: $3,500,000.00
Contract Year 10: $4,000,000.00
If Licensee Effectively renews this Agreement pursuant to
Section 9.2 hereof for the Second Renewal Term, then Licensee
agrees that it shall maintain the following Minimum Sales,
based on Invoice Price, for each Contract Year during the
Second Renewal Term:
Contract Year 11: $5,000,000.00
Contract Year 12: $6,000,000.00
Contract Year 13: $7,000,000.00
Contract Year 14: $8,000,000.00
Contract year 15: $9,000,000.00
10.6 The amount of royalties to be paid to Licensor by Licensee
hereunder has been determined on the understanding that
Licensee will be entitled to deduct any required withholding
taxes and Licensor will be entitled to a tax credit for United
States federal income tax purposes equal to the amount of any
tax imposed in the Territory upon Licensor's royalties,
whether imposed by withholding or otherwise. Licensee shall
provide such documentation as may be necessary to reflect all
taxes paid on Licensor's behalf. In the event that any such
tax is not available as a credit for United States federal
income tax purposes for the period when paid the royalty to be
paid hereunder shall be recalculated to reflect the actual
loss of revenue to Licensor.
Page 11
10.7 All payments due under this Agreement shall be sent as
instructed by Licensor from time to the time.
10.8 All references to dollars in this Agreement shall mean U.S.
dollars. All royalties and Minimum Royalties due hereunder
shall be paid in U.S. dollars, and the currency conversion to
U.S. dollars for each quarter shall be made at the prevailing
spot conversion rate published in the Wall Street Journal (New
York City Edition) for the last day of the month for each
quarter.
11. BOOKS AND RECORDS
11.1 Licensee shall keep and maintain at its regular place of
business, or at such off-site documents storage facility as
Licensee shall use from time to time for the retention of its
business records generally, complete and accurate records and
accounts in accordance with Generally Accepted Accounting
Principles showing the business transacted in connection with
the Licensed Products Manufactured and sold pursuant to this
Agreement, including without limitation records and accounts
relating to sales, shipments and orders for Licensed Products
for at least six(6) years following the creation of the record
or account.
11.2 Within thirty (30) days following the end of each Contract
Year, and within thirty (30) days after the termination of
this Agreement, Licensee shall deliver to Licensor a statement
signed by an authorized officer of Licensee reporting actual
sales of the Licensed Products (based on Invoice Price),
royalties due and royalties paid during the preceding Contract
Year. In the case of termination of this Agreement, such
information shall be provided for the period ending at
termination.
11.3 Licensor, or its duly authorized agents or representatives,
shall have access to and the right to examine all records and
accounts that Licensee is required to maintain pursuant to
this Section 11 at Licensee's premises, or at such off-site
documents storage facility as Licensee shall use from time to
time for the retention of its business records generally. Any
such examination will be at Licensor's expense and will be
conducted during normal business hours upon reasonable prior
notice, which shall be no less than three (3) business days.
Should an audit disclose that Licensee underpaid royalties for
any given year, Licensee shall forthwith and upon written
demand pay Licensor the amount owed, together with interest
thereon, at a rate of ten percent (10%) per annum calculated
from the due date of such royalties. Further, should an audit
disclose that Licensee overpaid royalties by a margin
exceeding five percent (5%) in any given year, or that
Licensee underpaid royalties for any given year, Licensee
shall pay for all costs relating to the audit.
11.4 Throughout the term of this Agreement, Licensee agrees to
provide to Licensor on an annual basis, a statement certified
by an independent public accounting firm to the effect that
Licensee's business is in sound financial condition.
Page 12
12. TERMINATION
12.1 In the event either party commits a material breach of this
Agreement, the other party may, upon thirty (30) days prior
written notice, terminate the Agreement, provided, however,
that the Agreement shall not be terminated if the breaching
party cures the breach within said thirty (30) days after
receipt of said notice.
12.2 Notwithstanding anything to the contrary in Section 12.1,
Licensor shall have the right to terminate this Agreement
immediately upon notice to Licensee if any of the following
events occur:
(a) More than once during any Contract Year, any
installment of royalty payments is not paid when due
and such default continues for more than five (5)
business days; or
(b) Licensee fails to pay Guaranteed Minimum Royalties
for any Contract Year within thirty (30) days of the
beginning of that Contract Year, as set forth in
Section 10.4 hereof; or
(c) Licensee fails to meet the Minimum Sales for a
Contract Year, as set out in Section 10.5 herein; or
(d) Licensee knowingly or negligently (or Licensee's
third-party manufacturers) fails to manufacture the
Licensed Products in accordance with the provisians
of this Agreement (including, but not limited to,
Section 7 or Section 19 of this Agreement); or
(e) Licensee fails to secure Licensor's approval as
required herein and/or breaches any provision of
Section 6 of this Agreement; or
(f) Licensee intentionally uses the Licensed Xxxx, or any
other xxxx belonging to Licensor, in a manner for
which rights therein have not been granted; or
(g) Licenser at any time directly or in directly contests
or assists any other person in contesting the
validity of any of the Intellectual Property Rights
or the right, title and interest of Licensor to the
Intellectual Property Rights anywhere in the world;
or
(h) Licensee commits any mated fraud upon Licensor in
connection with the performance of Licensee's
obligations hereunder; or
(i) Licensee makes an intentional or negligent written
material misrepresentation pertaining to sales of the
Licensed Products or pertaining to use of the
Licensed Xxxx or
(j) Licensee's present ownership or its manner of
conducting business is changed without Licensor's
prior written consent or
(k) Licensee attempts to assign this Agreement to any
apparel competitor of the Champion Athleticwear
division of Xxxx Xxx Corporation, including but not
Page 13
limited to Nike, Xxxxxxx, Gildan, Reebok, Adidas,
Umbro, Starter, Fruit of the Loom, Vanity Fair,
Warnaco, and any parent companies, subsidiaries, or
affiliates of these named brands or companies; or
(l) Licensee fails to make sales of any line of Products
bearing the Licensed Xxxx for a period of six (6)
months or more; or
(m) Licensee challenges the validity of this Agreement;
or
(n) Licensee challenges Licensor's rights in and to the
Champion and/or Champion Script Logo marks anywhere
in the world.
Upon termination of this Agreement pursuant to this Section
12.2, Licensee's right to use the Licensed Xxxx and all other
Intellectual Property Rights pursuant to this Agreement shall
immediately cease, and any remaining inventory of Licensed
Products shall be delivered, at Licensee's expense, to
Licensor. Licensor shall not be charged for, nor obligated to
pay any monies for such remaining inventory Upon termination
or expiration of this Agreement, Licensee shall not knowingly
do any act or thing that would have the effect of causing
another person to believe that Licensee is still associated or
connected with Licensor.
12.3 Notwithstanding anything to the contrary in Section 12.1 or
12.2, if Licensee files a petition in bankruptcy, or by an
equivalent proceeding is adjudicated a bankrupt, or if a
petition in bankruptcy is filed against Licensee, or if
Licensee becomes insolvent or makes an assignment for the
benefit of creditors or any arrangement pursuant to any
bankruptcy law, or if Licensee discontinues its business or if
a receiver is appointed for Licensee, this Agreement shall
automatically terminate without any notice whatsoever being
necessary, to the full extent allowed by applicable law. All
royalties on sales made prior to such act shall become
immediately due and payable. In the event this Agreement is
terminated pursuant to this section, Licensee, its receivers,
representatives, trustees, agents, administrators, successors
and/or assigns, shall have no right to sell any of the
Licensed Products covered by this Agreement except with the
special consent and written instructions of Licensor, which
instructions shall be followed. The non-assumption of this
Agreement by a trustee presiding over a bankruptcy proceeding
pursuant to any bankruptcy law where the Licensee is named as
a debtor shall operate to terminate this Agreement
automatically, without any notice whatsoever being necessary,
effective as of the date of the commencement of die bankruptcy
proceeding.
12.4 Upon expiration or termination of this Agreement, Licensee
shall cease using the Licensed Xxxx provided, however, that -
unless such termination is pursuant to Sections 12.2 or 12.3 -
Licensee may, for a period of no more than six (6) months
after expiration or termination, sell and distribute Licensed
Products existing in inventory on the date of expiration or
termination. Licensee remains liable for the payment of all
royalties based on those sales and must otherwise comply with
the terms of this Agreement. If at the end of said six (6)
month Licensee still possesses inventory of Licensed Products,
said remaining inventory shall be delivered, at Licensee's
expense, to Licensor, and Licensee's right to use the Licensed
Xxxx pursuant to this Agreement shall cease. Licensor shall
not be charged for, nor obligated to pay any monies for such
remaining inventory.
Page 14
12.5 Licensee acknowledges and confirms that damages may not be an
adequate remedy for breach of its obligations and undertakings
stated in Sections 3,6,7,8,12,14,16,17, or 19 of this
Agreement (including their subsections) and that accordingly,
without prejudice to any other right or remedy that Licensor
may have, Licensor shall be entitled to obtain an injunction,
including but not limited to an EX PARTE injunction, or other
equitable relief to prevent Licensee from acting in breach of
its said obligations and undertakings.
13. INDEMNIFICATION
13.1 Except as provided in Section 14 below, Licensee hereby agrees
to pay in cash on behalf of Licensor and to defend and hold
Licensor, its shareholders, directors, officers, employees,
agents and customers harmless from and against any and all
claims, suits, proceedings, fines, penalties, losses,
liabilities, causes of action, settlments, costs, damages, or
expenses, including reasonable attorney's fees and
disbursements, arising out of or incidental to Licensee's
manufacturer, packaging, sale, marketing or distribution of
the Licensed Products and/or arising out of or incidental to
the consumption of Licensed Products, including but not
limited to bodily injury to any person (including death) and
property damage. This indemnification provision shall survive
the termination of this Agreement.
14. TRADEMARK ENFORCEMENT
14.1 Licensee agrees to notify Licensor of any unauthorized use of
the Licensed Xxxx by others, promptly as it comes to
Licensee's attention. Licensor shall have the sole right and
discretion to bring infringement actions involving the
Licensed Xxxx, and any award received by Licensor in any such
action shall belong solely to Licensor.
14.2 In the event that a third party institutes a trademark
infringement action against Licensee arising from Licensee's
proper and authorized use of the Licensed Xxxx pursuant to
this Agreement, Licensee shall promptly notify Licensor and
Licensor shall defend, at its own expense, any such action.
Licensee shall cooperate in such defense as reasonably
requested by Licensor. Licensor shall pay any settlements,
costs, damages, or expenses, including reasonable attorneys'
fees, resulting from any such action. Any award received by
Licensor in such action shall belong solely to Licensor.
15. INSURANCE
15.1 Licensee shall obtain and maintain, at its own cost and
expense, Commercial General Liability insurance and Umbrella
liability insurance written on an occurrence basis with the
following coverage and limits:
Limits
------
General Aggregate Limit $5,000,000
Products/Completed
Operations Aggregate Limit $3,000,000
Personal and Advertising
Injury-Per Injury $3,000,000
Page 15
15.2 Licensor shall be named as an additional insured on the
Commercial General Liability policy. Licensee shall provide
Licensor with a certificate of insurance evidencing all of the
required coverage. The certificate shall also provide evidence
that the policy has been amended to afford at least thirty(30)
days advance written notice to Licensor of cancellation,
nonrenewal or material change of any of the required
coverages.
16. ASSIGNMENT OR SUBLICENSE
16.1 This Agreement and all its rights and duties hereunder are
personal to Licensee and shall not, without the prior, written
consent of Licensor (which shall not be unreasonably
withheld), be transferred, assigned, sublicensed or otherwise
encumbered by Licensee or by operation of law.
16.2 Licensor may assign any of its rights or delegate any of its
duties arising out of or under this Agreement.
16.3 Should ownership of the Licensed Xxxx be assigned by Licensor,
then, upon such assignment, Licensor shall assign all of its
rights and delegate all of its duties under this Agreement to
the assignee of the Licensed Marks and Licensee shall, with
effect from the date of such assignment, release and discharge
Licensor from all claims and demands whatsoever in respect of
this Agreement relating to the period after the date of the
assignment and shall, from the date of such assignment ,
accept the assignee as the owner of the Licensed Xxxx.
17. CONFIDENTIALITY
17.1 The terms of this Agreement and all merchandising know-how,
specifications, plans, patterns, outlines, designs, creations,
formulae, and other data and information of any kind obtained
by Licensee from Licensor or developed by Licensee or any
third party for use in connection with this Agreement shall be
kept confidential and shall not be disclosed or used for the
benefit of Licensee or any third party except in accordance
with the terms of this Agreement. Such confidential
information shall be revealed to employees of Licensee only to
the extent reasonably necessary to enable Licensee to exercise
the full rights granted hereunder, and Licensee agrees to bind
its officers and key employees, including but not limited to
those employees to whom such confidential information is
revealed.
18. MEDIA RELATIONS
18.1 Licensee agrees that all press releases and other public
announcements related in any way to this Agreement, or to
Licensee's or Licensor's operations hereunder, shall be
subject to approval by Licensor, and that each request for a
statement, release or other
Page 16
inquiry shall be sent in writing to the advertising/publicity
director of Licensor for response.
19. CODE OF CONDUCT: APPROVED FACILITIES
19.1 Licensor is committed to using manufacturing facilities that
operate under responsible, safe and humane conditions. To that
end, Licensor agrees that Licensee shall be entitled to
manufacture the Licensed Products in only those manufacturing
facilities (third-party or owned) for which Licensee has
obtained Licensor's prior written approval (and which approval
has not been subsequently revoked by Licensor). Licensor
hereby approves the use of the manufacturing facilities listed
on Exhibit 1 attached hereto. Licensee shall submit to
Licensor a request for approval to utilize any other
manufacturing facility (third-party or owned) in the form
attached hereto as Exhibit 2, which approval may be withheld,
conditioned or revoked in Licensor's sole discretion. Licensee
acknowledges that Licensor may require Licensee to provide, at
Licensee's expense, evidence of satisfactory working
conditions at the facility, including, but not limited to,
independent third-party audits. In the event that Licensee
uses a third party to manufacture the Licensed Products,
Licensee shall nevertheless remain primarily obligated under
all of the provisions of this Agreement. Licensee agrees to
advise Licensor promptly in writing of any violations of the
provisions of this Agreement by my such facility and of the
corrective actions taken by Licensee and the results thereof.
Licensee shall inform Licensor in writing if an approved
facility is sold and must receive Licensor's written approval
of the new entity before production may resume. The word
"sold" as used in the preceding sentence includes a change of
controlling interest.
19.2 Licensee has received a copy of Xxxx Xxx Corporation's Global
Business Standards and Supplier Selection Guidelines
(collectively the "Guidelines") and shall provide the
Guidelines to any and all vendors or manufacturers appointed
under this Agreement. Licensor shall provide Licensee with a
sufficient number of copies of the Guidelines at no cost to
Licensee in the local language(s) of the management and
employees producing the product. Licensee shall cause the
Guidelines to be posted at all times in all facilities where
Licensed Products are manufactured. Licensee hereby
represents, warrants and covenants that it (i) has reviewed
and understands the Guidelines and has or will verify that any
third party which manufacturers Licensed Products has reviewed
and understands the Guidelines and (ii) Licensee, as well as
any third party which manufactures Licensed Products is
presently in compliance and will remain in compliance with all
terms and provisions of the Guidelines for the term of this
Agreement. Licensee will notify Licensor immediately if it
becomes aware that a violation of the standards set forth in
the Guidelines has occurred.
19.3 Licensee shall immediately, at its own expense, have each
facility (third-party and owned) it uses to produce Licensed
Products independently audited by a firm approved by Licensor,
for compliance with these or such similar Guidelines as Xxxx
Xxx may require from time to time. Audits to ensure compliance
to the Guidelines shall be conducted at least annually.
Licensee shall provide Licensor with a copy of the audit
report. If, in Licensor's discretion, the audit indicates the
need for improvement or change, such changes must be made
within thirty (30) days or the approval of such facility will
be terminated pursuant to Section 12.2 and Licensor shall have
the right to
Page 17
require Licensee to immediately cease production of the
Licensed Products at such facilities and/or, at Licensor's
sole discretion, this Agreement may be terminated in its
entirety.
19.4 Licensor retains the right, with or without prior notice, at
Licensor's expense, to conduct its own or independent
third-party inspection and audit of Licensee and any
third-party manufacturer which manufactures Licensed Products
for compliance with the Guidelines or such similar guidelines
as Licensor may establish from time to time. Licensee also
understands and agrees that Licensor may publicly disclose
information relating to Licensee's owned and subcontracted
facilities as Licensor sees fit.
20. MISCELLANEOUS
20.1 In the event that either party shall, at any time, waive any
of its rights under this Agreement, or the performance by the
other party of any of its obligations hereunder, such waiver
shall not be construed as a continuing waiver of the same
rights or obligations or a waiver of any other rights or
obligations.
20.2 This Agreement constitutes the entire agreement between the
parties as to the Licensed Xxxx and no modifications or
revisions thereof shall be of any force or effect unless the
same are in writing and executed by the patties hereto.
20.3 Any provisions of this Agreement which are, or shall be
determined to be, invalid shall be ineffective, but such
invalidity shall not affect the remaining provisions hereof.
The titles to the sections herein are for convenience only and
have no substantive effect.
20.4 This Agreement is binding upon the parties hereto, any parent,
subsidiary and affiliated companies and their successors and
assigns.
20.5 Licensee shall be responsible for compliance with the
requirements of all local laws in the countries where it
manufactures, markets, distributes or sells the Licensed
Products, except for obligations with respect to filing as
registered user or similar obligations where required under
applicable trademark law. It is understood that Licensor is
responsible for the costs and fees for, or incidental to,
obtaining trademark registrations.
20.6 This Agreement shall be construed in accordance with and
governed by the laws of the State of North Carolina,
applicable to contracts made and to be wholly performed
therein without regard to its conflicts of law rules. Any
action or proceeding arising out of or relating in any way to
this Agreement, shall be brought and enforced in the United
States District Court for the Middle District of North
Carolina or, if such courts do not have, or do not accept,
subject matter jurisdiction over the action or proceeding, in
the courts of the State of North Carolina and each party
hereby consents to the personal jurisdiction of each such
court in respect of any such action or proceeding. Each of the
parties hereby consents to service of process in any such
action or proceeding by the mailing of copies thereof by
Registered or Certified Mail, postage prepaid, return receipt
requested, to it at its address provided for notices
hereunder. The foregoing shall not limit the right of any of
the parties to serve process in any other manner permitted by
law or to obtain execution or enforcement of any judgment in
Page 18
any other jurisdiction. Each of the parties hereby waives (a)
any objection that it may now or hereafter have to the laying
of venue of any action or proceeding arising under or related
to the Agreement in a court located in the cities of
Winston-Salem or Greensboro, or a court located in Forsyth
County, North Carolina; (b) any claim that a court located in
Winston-Salem, Greensboro, or Forsyth County, North Carolina
is not a convenient forum for any such action or proceeding;
and (c) any claim that it is not subject to the personal
jurisdiction of the United States District Court for the
Middle District of North Carolina or of the courts of the
State of North Carolina located in Forsyth County, North
Carolina.
20.7 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same
Agreement.
20.8 All notices required hereunder shall be in writing and
dispatched by overnight courier addressed to Licensee or
Licensor as set forth below, and shall be effective upon
receipt;
Licensor: Xxxx Xxx Global Finance, L.L.C.
204F Xxxxxx Building
0000 Xxxxxxxxxx
Xxxxxxxxxx Xxxxxxxx 00000
Copies to: Vice President Marketing
Champion Athleticwear
0000 X. Xxxxx Xxxx Xxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
AND
Chief Counsel - Intellectual Property
Xxxx Xxx Corporation
0000 X. Xxxxx Xxxx Xxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Licensee: Championlyte, Inc.
0000 X.X. Xxxx Xxxxx Xxxxxxxxx, Xxxxx X-00
Xxxx Xxxxx, Xxxxxxx 00000
Copies to: __________________________
Page 19
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers.
Date: XXXX XXX GLOBAL FINANCE, L.L.C.
------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Date: CHAMPIONLYTE, INC.
------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Page 20
EXHIBIT 1
PRE-APPROVED MANUFACTURING FACILITIES
Licensee: ChampionLyte, Inc.
Name of Manufacturer(s):
Name of Manufacturing Facility(ies)
Location of Manufacturing Facility(ies):
Licensed Products: Sugar-free sports drinks and sugar-free
non-carbonated soft drinks bearing the CHAMPION XXXX xxxx
Subject to the terms and provisions set forth in the License Agreement
dated April 1,2003, between Xxxx Xxx Global Finance, L.L.C. ("Licensor") and
ChampionLyte, Inc. ("Licensee"), Licensor hereby consents to the manufacture of
the Licensed Products by the manufacture at the manufacturing facility(ies)
mentioned above upon the following if any, conditions:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Date:
--------------------------
Licensee warrants and covenants that the above-named facility(ies) currently,
and during the time the facility(ies) manufactures Licensed Products, adheres to
Xxxx Xxx Supplier Selection Guidelines.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Date:
--------------------------
Page 21
EXHIBIT 2
REQUEST FOR APPROVAL OF MANUFACTURING FACILITIES
Licensee: ChampionLyte, Inc.
Name of Manufacturer:
Name of Manufacturing Facility:
Location of Manufacturing Facility(ies):
Name of Third-Party Audit Firm:
Date Compliance Audit Completed:
Result of Audit:
Licensed Products: Sugar-free sports drinks and sugar-free non-carbonated
soft drinks bearing the CHAMPION XXXX xxxx
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Date:
--------------------------
Page 22