EXHIBIT 10.13
ROYALTY AGREEMENT
This Royalty Agreement is entered into as of July 28, 2000 by and between
MED ENCLOSURES, LLC, a Nevada limited liability company ("XXX"), and CTM GROUP,
INC., a Nevada corporation ("CTM"), with reference to the following facts and on
the following terms and conditions:
R E C I T A L
CPC of America, Inc., a Nevada corporation and majority owner of XXX,
wishes to grant CTM a bonus pursuant to CPC's obligations under its Consulting
Agreement with CTM dated April 1, 1999, all upon the terms and conditions set
forth below.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
A G R E E M E N T
1. Royalty Payment. XXX shall pay CTM, or its assigns, the following:
(a) a royalty equal to 0.75% of the Net Sales (as defined herein) of
XXX from the sale of any product that would, except for this agreement, infringe
a claim in the First Xxxxx Patent, either directly or contributorily, or which
would induce infringement of the First Xxxxx Patent. For purposes of this
Section 1(a), the term "First Xxxxx Patent" shall refer to the U.S. Patent No.
5,486,195.
(b) a royalty equal to 0.75% of the Net Sales of XXX from the sale of
any product that would, except for this agreement, infringe a claim in the
Second Xxxxx Patent, either directly or contributorily, or which would induce
infringement of the Second Xxxxx Patent. For purposes of this Section 1(b), the
term "Second Xxxxx Patent" shall refer to the U.S. Patent No. 5,941,897.
(c) For purposes of this Agreement, the term "Net Sales" shall mean
gross receipts actually collected by XXX less deductions for any and all
allowances given such as advertising, return allowance, quantity and cash
discounts and all sales and excise taxes, duties, transport and handling charges
actually paid out.
2. Time of Payment. Payments shall be made by XXX to CTM, or its assigns,
within forty-five (45) days of the end of each calendar quarter commencing with
the first full calendar quarter following execution of this Royalty Agreement.
Each payment shall include a written report from XXX indicating the basis upon
which the royalty was computed.
3. Place of Payments. Royalty payments shall be tendered by XXX to CTM at
the following address: CTM Group, Inc., 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxx 00000, or at such other address as CTM or its assigns may provide
XXX in writing from time to time.
4. Audit Rights. XXX shall keep true and sufficient records to determine
payments due pursuant to this Agreement. These records shall be maintained and
open to inspection at CTM's expense at reasonable intervals by an independent
auditor during regular business hours of XXX for a period of three years
following each accounting report filed hereunder. XXX shall provide all
reasonable assistance to the auditor for the purpose of conducting the audit.
CTM shall select the independent auditor, and shall instruct each such auditor
to exert his or her best efforts to avoid disruption of MEL's business in the
conduct of the audit. In the event the audit determines that the amount paid by
XXX to CTM for any quarterly accounting period was less than 95% of the amount
found to be due by the independent auditor for the same period, then the cost of
the audit shall be paid, together with any unpaid royalty payments and interest
thereon, by XXX.
5. Trade or Business Debt. XXX acknowledges that the obligations as
evidenced by this Royalty Agreement to tender payments to CTM based upon certain
revenues generated by XXX, constitutes a trade or business obligation.
6. Termination. This Agreement shall terminate only upon the written
agreement of all parties.
7. Miscellaneous.
7.1 Notices. All notices, requests, demands, and other
communications given, or required to be given pursuant to the terms of this
Royalty Agreement shall be in writing and may be delivered in person (by hand,
messenger, or other confirmable form of delivery), or be sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows,
or by FedEx or other nationally recognized overnight courier service, addressed
as follows, or by facsimile transmission, to the following respective numbers,
followed by a copy being delivered in person, by mail, or by overnight courier
as specified herein:
If to XXX: 0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
If to CTM: CTM Group, Inc.
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Either party may, by written notice to the other, specify a different address or
numbers for notice purposes. Any notice sent to the party to whom it is
addressed in accordance with this Section will be deemed to have been given (i)
when received, if personally delivered; (ii) if sent by registered or certified
mail, return receipt requested, upon the date of delivery shown on the receipt
card, or if no date is shown, the postmark thereon; (iii) if sent via FedEx or
other nationally recognized overnight courier, one (1) business day after
deposit with such overnight courier; or (iv) if sent by facsimile transmission,
on the day on which it is sent, if receipt of transmission is confirmed by
telephone. If notice is received on a Saturday, Sunday or legal holiday, it will
be deemed to have been given and received on the next following business day.
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7.2 No Agent. This Royalty Agreement does not constitute XXX as the
agent or legal representative of CTM for any purpose whatsoever. XXX shall not
have the right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf or in the name of CTM or to bind
CTM in any manner.
7.3 Severability. If any clause or provision of this Royalty
Agreement should, under any applicable laws, be held to be illegal, void or
unenforceable, such clause or provision shall be considered separately and
renegotiated in good faith between the parties, taking into consideration the
spirit of this Royalty Agreement, so as to agree on any other alternate clause
or provision, it being understood that in any case the remaining portion of this
Royalty Agreement shall continue in full force and effect.
7.4 Waivers. No delay or failure by either party to this Royalty
Agreement to exercise any right, power or remedy with regard to any breach or
default by the other party shall impair any right, power or remedy of the former
party, and shall not be construed to be a waiver of any breach or default of the
same or any other provision of this Royalty Agreement.
7.5 Headings and Gender. The section headings used in this Royalty
Agreement are intended solely for convenience of reference and shall not in any
way or manner amplify, limit, modify or otherwise be used in the interpretation
of any of the provisions of this Royalty Agreement, and the masculine, feminine
or neuter gender and the singular or plural number shall be deemed to include
the others whenever the context so indicates or requires.
7.6 Successors. The covenants, agreements, terms and conditions
contained in this Royalty Agreement shall be binding upon and inure to the
benefit of the successors, assigns, receivers and trustees of the parties
hereto. Except as otherwise expressly provided herein, this Agreement and any of
the rights, interests or obligations hereunder may not be assigned by any of the
parties hereto. All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective permitted successors and assigns of the parties hereto whether so
expressed or not.
7.7 Entire Agreement. This Royalty Agreement sets forth the entire
agreement between the parties hereto and fully supersedes any and all prior
agreements or understandings between the parties hereto pertaining to the
subject matter hereof. No change in, modification of or addition, amendment or
supplement to this Royalty Agreement shall be valid unless set forth in writing
and signed and dated by each of the parties hereto subsequent to the execution
of this Royalty Agreement.
7.8 Counterparts. This Royalty Agreement may be executed in two
counterparts both of which shall constitute only one agreement.
7.9 Choice of Law. This Royalty Agreement executed and delivered or
to be executed and delivered in connection herewith and the rights and
obligations of the parties hereto and thereto shall be governed by and construed
in accordance with the laws of the State of Florida.
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IN WITNESS WHEREOF, the parties hereto have executed this Nonexclusive
License Agreement as of the day and year first above written.
CTM GROUP, INC., MED ENCLOSURES, LLC,
a Nevada corporation a Nevada limited liability company
/s/ Xxxxxxx Shabty /s/ Xxx X. Xxxxxxx
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Signature Signature
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