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EXHIBIT 10.4
ROYALTY AGREEMENT
This Royalty Agreement (the "Agreement") is entered into on this 15th
day of March, 1997, by and among Xxxxxxx Xxxxxxx, an individual ("Licensor")
and Karts International Incorporated, a Nevada corporation ("Licensee").
W I T N E S S E T H
WHEREAS, Xxxxxxx'x Thunder Karts, Inc., a Louisiana corporation
("Xxxxxxx'x") is a wholly owned subsidiary of Licensee;
WHEREAS, Licensor and Xxxxxxx'x entered into that certain License
Agreement effective March 15, 1996 (the "License Agreement"), which was amended
and assigned to Licensee on March 15, 1997, by that certain Addendum "A" to
License Agreement ("Addendum A") (the License Agreement and Addendum A will
hereinafter collectively be referred to as the "License Agreement");
WHEREAS, the License Agreement granted to Licensee a license to
utilize United States Patent Number 5,477,940, issued December 26, 1995, for
"Acceleration Pedal Override Apparatus for Self-Propelled Motorized Cart with
Aligned Brake and Accelerator Pushrod Type Operator Pedals" (the "Pedal
Override Apparatus");
WHEREAS, Licensor and Licensee desire to set forth the royalties which
Licensee will pay to Licensor specifically for the license relating to the
Pedal Override Apparatus; and
WHEREAS, the License Agreement is incorporated herein by this
reference and, unless otherwise defined, all defined terms contained herein
shall have the same meanings assigned to them in the License Agreement.
NOW THEREFORE, in consideration of the sum of ten dollars ($10.00) and
other good and valuable consideration, the receipt of which is hereby
irrevocably acknowledged, the parties hereto hereby agree as follows:
1. License. Licensee and any of its affiliates or subsidiaries
are granted, during the term of this Agreement, an exclusive license to the
Pedal Override Apparatus.
2. Term. The term of this Agreement shall be for a period of
three years commencing on the Effective Date.
3. Royalty. With regard to the licensing of the Pedal Override
Apparatus as set forth in Section 1 hereof, Licensee hereby agrees to pay to
Licensor royalties as follows: (i) a royalty of $1.00 for each of the Licensed
Products sold by Licensee or any of its affiliates or subsidiaries containing
or utilizing the Pedal Override Apparatus during the period beginning March 15,
1997 and ending December 31, 1997, (ii) a royalty equal to $1.00 for each of
the Licensed Products sold by Licensee or any of its affiliates or subsidiaries
containing or utilizing
ROYALTY AGREEMENT - Page 1
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the Pedal Override Apparatus during the period beginning January 1, 1998 and
ending December 31, 1998, however, in the event that the number of Licensed
Products sold by Licensee and any of its affiliates or subsidiaries does not
exceed 20,000 for such period, Licensee agrees to pay Licensor a royalty
payment of $20,000 for said period, (iii) a royalty equal to $1.00 for each of
the Licensed Products sold by Licensee or any of its affiliates or subsidiaries
containing or utilizing the Pedal Override Apparatus during the period
beginning January 1, 1999 and ending December 31, 1999, however, in the event
the number of Licensed Products sold by Licensee and any of its affiliates or
subsidiaries does not exceed 20,000 for such period, Licensee agrees to pay
Licensor a royalty payment of $20,000 for said period, and (iv) a royalty of
$1.00 for each of the Licensed Products sold by Licensee or any of its
affiliates or subsidiaries containing or utilizing the Pedal Override Apparatus
during the period beginning January 1, 2000 and ending March 14, 2000.
Licensee shall remit payment of accrued royalties on June 30 and December 31 of
each year during the term of this Agreement with any remaining accrued
royalties due on termination of this Agreement.
4. Miscellaneous. The parties hereto acknowledge and incorporate
herein by reference those provisions in Section 7 of the License Agreement.
IN WITNESS WHEREOF, the parties have caused this Addendum to be
effective as of March 15, 1997 (the "Effective Date").
XXXXXXX XXXXXXX KARTS INTERNATIONAL
INCORPORATED
/s/ XXXXXXX XXXXXXX By: /s/ V. XXXX XXXXXXX
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V. Xxxx Xxxxxxxx, President
ROYALTY AGREEMENT - Page 2
