Licensing Agreement

1. INTRODUCTION


The Company wishes to acquire and Exerciting wishes to grant to the Company the exclusive rights (subject to Licensor's retained rights as defined in Section 3.1 herein) to use and otherwise exploit all of Exerciting's rights in respect to the Licensed Patents and Company desires such a license, all in accordance with the terms and conditions set forth below.


2. DEFINITIONS


"Buns Technology" shall mean Exerciting's portable gym with elastomer resistance and heel cup which is covered under U.S. patents #5,558,609 and U.S.#5,695,437 and any Improvements and may be marketed under the trademark name Better Buns r U.S Reg. #2,279,957.


"Effective Date" shall mean the date set forth in the preamble.


"Gross Revenues" shall mean all cash consideration actually received by Company as payment of the Selling Price for Royalty Products.


"Improvements" shall mean any modifications or enhancements to, or derivative works based upon, any Licensed Patents.


"Licensed Patent(s)" shall mean all current and future United States and foreign patents and patent applications related to the Buns Technology which are owned by Exerciting, including without limitation those set forth in Appendix A, together with any and all continuations, patent extensions, divisional and re-issue applications, reexaminations, and continuation-in-part applications thereof.


"Licensed Product" shall mean any product which is covered under the Licensed Patent(s) or by any claim being prosecuted in any pending and un-abandoned application included within the definition of Licensed Patent.


"Patent Applications" shall mean the patent applications set forth in Appendix A.


"Person" means any individual, corporation, association, partnership, limited liability company, estate, trust or any other entity or organization.


"Royalty Patents" shall mean any patents issued pursuant to the Patent Applications.


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"Royalty Product" shall mean any product which is sold or licensed by Company in the ordinary course of business and either: (i) which, but for the licenses granted herein, infringes a Valid Royalty Claim contained in a Royalty Patent; or (ii) which is covered by any allowed claims being prosecuted in any pending and un-abandoned Patent Application. For purposes of this Agreement, a product shall be considered sold or licensed upon Company's actual receipt of cash consideration payable to Company in respect of such sale or license as specified in accordance with the terms of the agreement relating to such license or sale.


"Selling Price" for purposes of computing royalties for any Royalty Product under this Agreement shall mean Company's invoice price for such Royalty Product (a) after deduction of any regular trade, quantity discounts, or cash discounts, and (b) excluding, any taxes, duties, shipping charges, packing costs, and interest charged to customers.


"Valid Claim" shall mean a claim of an issued, unexpired Licensed Patent which shall be presumed to be valid unless and until it has been held to be invalid by a final judgment of a court of competent jurisdiction from which no appeal can be or is taken.


"Valid Royalty Claim" shall mean a claim of an issued, unexpired Royalty Patent which shall be presumed to be valid unless and until it has been held to be invalid by a final judgment of a court of competent jurisdiction from which no appeal can be or is taken. 3. GRANT OF RIGHTS


3.1 License Grant. Exerciting hereby grants and Company accepts, subject to the terms and conditions of this Agreement, a worldwide, exclusive license under the Licensed Patents to (a) make, have made, use, sell, have sold, offer to sell, transfer, market, reproduce and distribute any Licensed Products; (b) develop Improvements; (c) otherwise use, commercialize and exploit the Licensed Patents; and (d) sublicense part or all of the rights granted in this Section 3.1 to one or more third parties. Notwithstanding anything to the contrary contained in this Paragraph 3.1, Licensor shall retain the exclusive royalty free right to use the Licensed Patents and Improvements solely in connection with Licensor or its sublicensee's manufacturing, marketing and distribution of Licensed Product in connection with the marketing of Licensor's abdominal products. Therefore, Licensor shall have no obligation to pay Licensee any payment or royalty from such sales of these Licensed Products.


3.2 Improvements. In the event that Company discovers or develops an Improvement or an Improvement is created on Company's behalf, Licensor shall own all right, title and interest in such Improvement.


3.3 Disclaimer of Obligation to Exploit. Exerciting hereby acknowledges and agrees that Company shall not have any obligation to use, market or otherwise exploit the Licensed Patents. Nothing in this Agreement or in the relationship between the parties shall be construed to impose such an obligation on Company.


4. PATENT PROSECUTION AND ENFORCEMENT


4.1 Prosecution and Maintenance. Exerciting shall have the right and obligation, consistent with sound and reasonable business practices and judgment, (a) to file, prosecute, and maintain


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all of the Licensed Patents in any and all jurisdictions and (b) to determine whether or not to abandon the prosecution of any patent application for Buns Technology or to discontinue the maintenance of any Licensed Patent. However, in the event that Exerciting elects not to file or continue prosecution of a patent application for any Buns Technology in any jurisdiction, or to maintain any Licensed Patent in any jurisdiction, it will promptly notify Company in writing, and Company shall have the right, but not the obligation, to file and prosecute any such patent application, and/or to maintain any such Licensed Patent, and Exerciting will provide all reasonable assistance with such prosecution and maintenance. Company shall have the right to deduct all expenses it may incur hereunder in connection with filing and prosecuting any patent application, and/or maintaining any Licensed Patent from amounts due to Exerciting in accordance with Section 5.1.


4.2 Enforcement. Company and Exerciting shall each provide prompt written notice to the other party of any alleged infringement or misappropriation by a third party of the Licensed Patents and provide such other party with any avai ...