SECOND AMENDMENT
TO
EXCLUSIVE LICENSE AND ROYALTY AGREEMENT
THIS SECOND AMENDMENT ("Amendment") to the Exclusive License and Royalty
Agreement ("Agreement") dated as of April 17, 1993, by and between XXXXX X.
XXXXXXXXX, residing at 0000 - 000xx Xxxx X.X., Xxxxxxx, Xxxxxxxxx (hereinafter
referred to as "Xxxxxxxxx"), and OXBORO OUTDOORS, INC., a Minnesota corporation,
having its principal place of business at 00000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxx 00000 (hereinafter referred to as the "Company"), is made effective
this 8th day of November, 1995.
WHEREAS, the Company desires to invest funds to engage in a major promotion
of the PRODUCTS (as defined in the Agreement) utilizing Xxxxxxxxx'x name and
picture if licensed to do so by Xxxxxxxxx upon the terms and conditions of this
Addendum; and
WHEREAS, Xxxxxxxxx desires to encourage Company to invest its funds in said
major promotion of the PRODUCTS which may result in increased sales of the
PRODUCTS and increased Royalties to Xxxxxxxxx pursuant to the Agreement; and
WHEREAS, the Company desires to obtain, and Xxxxxxxxx is willing to grant,
a perpetual, exclusive, worldwide and royalty-free license to the Company to use
the name "Xxxxx X. Xxxxxxxxx" and the picture of Xxxxxxxxx in connection with
the advertising, merchandising, promotion, manufacture, sale, and distribution
of the PRODUCTS and ADDITIONAL PRODUCTS upon the terms and conditions hereafter
set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, Company and Xxxxxxxxx do hereby respectively
agree to amend the Agreement to grant, covenant, and agree as follows:
1. Grant of License. Xxxxxxxxx grants to the Company a perpetual,
exclusive, worldwide and royalty-free license, with the right to grant
sublicenses to the Company's distributors, to use the name "Xxxxx X.
Xxxxxxxxx" and the picture of Xxxxxxxxx in connection with the
advertising, merchandising, promotion, manufacture, sale, and
distribution of the PRODUCTS and ADDITIONAL PRODUCTS (as both are
defined in the Agreement) until the expiration or cancellation of the
Agreement. Upon written notice to Xxxxxxxxx, and subject to the
provisions of Paragraph 6 hereof, the Company shall have the right to
extend the terms of the Agreement, as amended by this Addendum, to any
other outdoor products, not developed by Xxxxxxxxx, owned by or
licensed to the Company (hereinafter "NEW PRODUCTS").
2. Promotional Efforts by Company. Company will immediately proceed to
register the name "Xxxxx X. Xxxxxxxxx" and the picture of Xxxxxxxxx as
trademarks (the "MARKS") for the PRODUCTS, ADDITIONAL PRODUCTS and/or
NEW PRODUCTS (collectively "ALL PRODUCTS") and will immediately cause
said MARKS to be utilized on the packaging of and in connection with
the marketing of the PRODUCTS. At least three hundred thousand
(300,000) pieces of advertising and/or packaging bearing the MARKS
will be purchased and utilized by the Company in connection with the
distribution and sale of ALL PRODUCTS.
3. No Additional Royalties. Xxxxxxxxx expressly agrees that the
promotional efforts agreed to by Company, pursuant to Paragraph 2 of
this Addendum, constitutes sufficient consideration for this Addendum
to the Agreement and that the royalties provided by the Agreement will
remain unchanged with no additional royalties being required for
license of the name "Xxxxx X. Xxxxxxxxx" and picture of Xxxxxxxxx and
the other amendments to the Agreement provided by this Addendum,
except that Subsection 4.1(b) and Section 4.2 shall be deleted in
their entirety and restated as follows, and said Agreement shall be
interpreted and effected as if the following restated provisions had
been present since April 17, 1993;
4.1 (b) The Company will pay Xxxxxxxxx percentage royalties (the
"Percentage Royalties"), as set forth in the following
table, on the cumulative NET SALES PRICE OF PRODUCTS AND
ADDITIONAL PRODUCTS sold by the Company:
Cumulative
NET SALES PRICE OF ALL PRODUCTS Royalty Percentage
$0 to $1,000,000 8%
Over $1,000,000 9%
4.2 Within fifteen (15) days after the close of each fiscal
quarter from and after July 1, 1993, the Company will pay
Xxxxxxxxx the Royalties due on all PRODUCTS and ADDITIONAL
PRODUCTS sold during the preceding quarter. For purposes of
calculating the Royalties due to Xxxxxxxxx, any Advance
Royalties paid to Xxxxxxxxx will be deducted from the
Percentage Royalties payable to Xxxxxxxxx. No Percentage
Royalties shall be paid to Xxxxxxxxx until the product of
the Net Sales Price of all PRODUCTS and ADDITIONAL PRODUCTS
(sold) times the (applicable) Royalty Percentage exceeds the
sum of all paid Royalty Advances.
4. Licenses for ADDITIONAL PRODUCTS. During the term of the Agreement, as
amended by this Addendum, Xxxxxxxxx agrees not to enter into any
licensing agreements authorizing the use of the name "Xxxxx X.
Xxxxxxxxx" or the picture of Xxxxxxxxx with respect to any outdoor
recreational products manufactured, distributed or sold by any other
business, person or entity, which products are within the same
category as or similar to ALL PRODUCTS the Company has acquired under
the Agreement. If additional outdoor PRODUCTS, concepts and ideas are
developed by Xxxxxxxxx, which are not already subject to the
Agreement, he shall first offer the exclusive rights to the sale or
disposition of such PRODUCTS, concepts and ideas to the Company
pursuant to Paragraph 3.2 of the Agreement. In clarification of the
Agreement, the Company shall have thirty (30) days to accept or reject
the offer. If the Company accepts such outdoor recreational PRODUCTS
as ADDITIONAL PRODUCTS (as defined by the Agreement), pursuant to
Paragraph 3.2 of the Agreement, such ADDITIONAL PRODUCTS shall be
subject to all of the provisions of the Agreement, and Company shall
be able to use the name "Xxxxx X. Xxxxxxxxx" and the picture of
Xxxxxxxxx in connection with such ADDITIONAL PRODUCTS. If the Company
rejects or fails to accept the offer within said thirty (30) day
period, then Xxxxxxxxx shall be entitled to enter into an agreement
regarding said ADDITIONAL PRODUCTS with any third party on any terms;
however, if the Company responds to the offer with a counter-offer
which is rejected by Xxxxxxxxx, then Xxxxxxxxx shall not enter into an
agreement regarding said ADDITIONAL PRODUCTS with any third party on
terms more favorable to such third party or Xxxxxxxxx than the terms
counter-offered by the Company for such ADDITIONAL PRODUCTS.
5. Licenses for Other PRODUCTS. If PRODUCTS, concepts and ideas are
developed by Xxxxxxxxx during the terms of this Agreement which are
outside of the scope of "the same category as or similar to the
PRODUCTS, ADDITIONAL PRODUCTS or NEW PRODUCTS of the Company" ("Other
PRODUCTS"), then Xxxxxxxxx shall first offer the exclusive rights to
the sale or disposition of such Other PRODUCTS to the Company in
writing, which offer shall include "arms length market (royalty or
license) rate" terms, and which terms shall be outside of Article 4 of
the Agreement. The Company shall have thirty (30) days to accept or
reject the offer in writing according to its stated terms. If the
Company rejects or fails to accept the offer within said thirty (30)
day period, then Xxxxxxxxx shall be entitled to enter into an
agreement regarding said Other PRODUCTS with any third party on any
terms; however, if the Company responds to the offer with a
counter-offer which is rejected by Xxxxxxxxx, then Xxxxxxxxx shall not
enter into an agreement regarding said Other PRODUCTS with any third
party on terms more favorable to such third party or Xxxxxxxxx than
the terms counter-offered by the Company for such Other PRODUCTS.
6. Promotional Activities by Xxxxxxxxx. Xxxxxxxxx will cooperate in all
advertising, promotion, and publicity of the PRODUCTS, ADDITIONAL
PRODUCTS, NEW PRODUCTS and the MARKS, will permit the use of the name
"Xxxxx X. Xxxxxxxxx," will furnish a recording of and permit the use
of Xxxxxxxxx'x voice, and will furnish and permit the use of
photographs, cuts, drawings and slides of Xxxxxxxxx and a specimen or
reproduction of Xxxxxxxxx'x signature for use in connection with the
foregoing and also for use with endorsements and testimonials by
Xxxxxxxxx, exclusively for the Company with respect to the
advertising, merchandising, promotion, sale, or distribution of the
PRODUCTS, ADDITIONAL PRODUCTS and NEW PRODUCTS, subject to the
Agreement, as amended by this Addendum. Xxxxxxxxx will cooperate in
sales, merchandising, promotional advertising, and publicity campaigns
related to the PRODUCTS, ADDITIONAL PRODUCTS and NEW PRODUCTS. During
the time that Xxxxxxxxx is employed by Company or its parent, Oxboro
Medical International, Inc., all of the foregoing duties and
obligations shall be done by Xxxxxxxxx at no additional cost to
Company, except that during such employment and after termination of
such employment all actual costs reasonably incurred by Xxxxxxxxx in
performing said duties and obligations hereunder shall be reimbursed
to Xxxxxxxxx by the Company. After termination of such employment, the
reasonable traveling, food, and lodging expenses incurred by Xxxxxxxxx
for himself and one assistant selected by Xxxxxxxxx shall be deemed to
be costs reasonably incurred by Xxxxxxxxx. Xxxxxxxxx shall not be
required to spend more than sixteen (16) hours per week in performing
such duties and obligations during such employment. Xxxxxxxxx shall
comply with the reasonable requirements established by the Company for
verification and reimbursement of costs and expenses. Xxxxxxxxx
expressly authorizes the Company to send out sales and promotion
literature and advertisements under the name of "Xxxxx X. Xxxxxxxxx"
and to use a Minnesota or other return address and to receive any and
all mail in response thereto. After the termination of Xxxxxxxxx'x
employment relationship with the Company and subject to services to be
performed under the Consulting Agreement between Xxxxxxxxx and Oxboro
Medical International, Inc.which shall be deemed to take priority over
availability of Xxxxxxxxx under this Agreement, Xxxxxxxxx shall
receive compensation on a per diem basis of $1,750 per day for the
first five days and $2,500 per day for any days in excess of five days
during each year of this Agreement following the termination of
Xxxxxxxxx'x employment with the Company (or its parent, Oxboro Medical
International, Inc.) for any services performed by Xxxxxxxxx pursuant
to this Paragraph 6. Xxxxxxxxx shall not be deemed to be in default
under this Agreement if he is unavailable due to services he is
providing to or through Oxboro Medical International, Inc. under said
Consulting Agreement. Xxxxxxxxx, if requested by the Company, shall
provide a minimum of fifteen (15) days per such year, including
traveling time, and shall be entitled to at least five (5) days prior
notice for providing services hereunder. A "day" shall be defined,
under the terms of this Agreement, as eight hours. The minimum pro
rata allocation for services shall be one-half (1/2) of a day.
7. Approval by Xxxxxxxxx. All PRODUCTS, ADDITIONAL PRODUCTS, and NEW
PRODUCTS to be associated by Company with Xxxxxxxxx'x name and image
as well as any advertising and promotional materials utilizing
Xxxxxxxxx'x name and image, which may be used by the Company
including, but not by way of limitation, all product "tie-in"
advertising and promotional campaigns, shall be submitted by the
Company to Xxxxxxxxx for Xxxxxxxxx'x approval prior to any release
thereof by the Company. All pictures and illustrations of Xxxxxxxxx or
reproductions of Xxxxxxxxx'x voice or direct quotations attributed to
Xxxxxxxxx shall likewise be subject to approval of Xxxxxxxxx. If
disapproval is not received by the Company within thirty (30) days
after receipt of such PRODUCTS, materials or matters by Xxxxxxxxx,
such right of approval shall be deemed waived and such PRODUCTS,
materials or matters shall be considered approved. Such approvals by
Xxxxxxxxx shall not be unreasonably withheld, and once such approvals
have been obtained further approval need not be obtained for future or
repeat use. No promotion or advertising copy shall be unflattering or
detrimental to Xxxxxxxxx. If the parties hereto disagree regarding
whether a promotion or advertising copy is unflattering or detrimental
to Xxxxxxxxx or disagree as to whether a right of approval for such
PRODUCTS, materials or matters should be granted, the promotion or
advertising or the PRODUCTS, materials or matters subject to approval
shall not be used or distributed until the issue is decided by a court
of competent jurisdiction or in some other manner mutually agreeable
to the parties.
8. Control by the Company of Business. Subject to the provisions of
Paragraph 7 above, the Company shall have the sole authority to
determine the mode and method of advertising, merchandising,
promoting, manufacturing, selling, and distributing of all PRODUCTS,
ADDITIONAL PRODUCTS and NEW PRODUCTS subject to the Agreement, as
amended by this Addendum, and the sole authority to fix the prices,
discounts, and terms of sale to all purchasers, whether consumers,
dealers or distributors. The Company, in its discretion, can decide at
any time to discontinue the use of the name "Xxxxx X. Xxxxxxxxx" and
the picture of Xxxxxxxxx in connection with the PRODUCTS, ADDITIONAL
PRODUCTS and NEW PRODUCTS and, in its discretion, can decide to cease
the advertising, merchandising, promoting, manufacturing, selling and
distributing of some or all of the PRODUCTS, ADDITIONAL PRODUCTS and
NEW PRODUCTS entirely, without violation of the Agreement, as amended
by this Addendum; provided, however, that (a) if the Company elects to
replace any PRODUCTS, ADDITIONAL PRODUCTS and/or NEW PRODUCTS bearing
the name "Xxxxx X. Xxxxxxxxx" and the picture of Xxxxxxxxx with a
competitive product which does not provide royalties to Xxxxxxxxx or
(b) if the Company elects to discontinue the sale of PRODUCTS,
ADDITIONAL PRODUCTS and/or NEW PRODUCTS which in the aggregate
represented in royalties to Xxxxxxxxx pursuant to the Agreement of
more than 25% of the total amount of royalties paid to Xxxxxxxxx
pursuant to the Agreement during the preceding calendar year, without
the express permission of Xxxxxxxxx, all rights with respect to such
PRODUCTS, and ADDITIONAL PRODUCTS and/or rights pertaining to the use
of Xxxxxxxxx'x name and picture with respect to NEW PRODUCTS shall be
thereupon terminated and shall revert to Xxxxxxxxx subject to the
rights set forth in Paragraph 10 hereof. If the Company decides to
discontinue the use of the name and picture of Xxxxxxxxx with respect
to PRODUCTS, ADDITIONAL PRODUCTS, and NEW PRODUCTS without the express
permission of Xxxxxxxxx, all rights to use said name and picture and
the rights and obligations under this Addendum with respect to said
name and picture shall revert to Xxxxxxxxx subject to the rights set
forth in Paragraph 10 of this Addendum. If the parties disagree
whether permission has been unreasonably withheld, all rights to use
said name and the rights and obligations of this Addendum shall cease,
subject to the provisions of Paragraph 10 hereof, until the issue is
decided by a court of competent jurisdiction.
9. During the term of the Agreement, as amended by this Addendum, and for
a period of twelve (12) months following the termination of the
Agreement and Addendum, Xxxxxxxxx shall not compete, either directly
or indirectly, by using or allowing or licensing the use of his name
and/or face, with the Company in the manufacturing, marketing,
promotion or sale of PRODUCTS or products which compete with the
Company's products.
10. Cancellation of License. This Addendum and/or the Agreement shall not
be cancelable by either the Company or Xxxxxxxxx, except as expressly
provided by Paragraph 8 of the Agreement and Paragraph 8 of this
Addendum.
11. The Company's Right on Termination. For up to twelve months after the
termination of the Agreement and/or this Addendum, the Company and the
Company's distributors or dealers shall continue to have the right to
sell or otherwise dispose of their inventory of PRODUCTS, ADDITIONAL
PRODUCTS and NEW PRODUCTS, bearing the name of "Xxxxx X. Xxxxxxxxx"
and/or the picture of Xxxxxxxxx, subject to the terms of the
Agreement, including the obligation to continue to pay Xxxxxxxxx
royalties as provided by the Agreement based on sales of the PRODUCTS,
ADDITIONAL PRODUCTS and NEW PRODUCTS.
12. Disability or Death of Xxxxxxxxx. Upon the disability or death of
Xxxxxxxxx, the provisions of the Agreement, as amended by this
Addendum, related to any personal services to be performed by
Xxxxxxxxx shall be terminated. Upon the death of Xxxxxxxxx, if the
Company elects in writing to continue to use the name "Xxxxx X.
Xxxxxxxxx" and the picture of Xxxxxxxxx on PRODUCTS, ADDITIONAL
PRODUCTS and NEW PRODUCTS within ninety (90) days of notice of
Xxxxxxxxx'x death, the rights of Xxxxxxxxx pursuant to the Agreement,
as amended by this Addendum, shall be transferred and assigned to the
Estate of Xxxxxxxxx and his heirs and assigns. If the Company fails to
give notice of its election not to continue the use of the name and
image of Xxxxxxxxx within said ninety day period, the Company shall be
deemed to have agreed to continue the Agreement, as amended by this
Addendum with respect to Xxxxxxxxx'x name and picture, and Xxxxxxxxx'x
rights thereto shall be transferred and assigned to his Estate and his
heirs and assigns. In either event, all of Xxxxxxxxx'x rights to
Royalties as set forth in the Agreement and in this Addendum shall
continue pursuant to their terms.
13. Assignment. The Company shall have no right to assign the rights and
obligations of Xxxxxxxxx created under the Agreement or this Addendum
unless the assignee agrees to pay Xxxxxxxxx minimum royalties from the
sale of PRODUCTS, ADDITIONAL PRODUCTS and NEW PRODUCTS pursuant to the
Agreement in an aggregate amount of not less than $35,000 per calendar
year after the date of the Assignment or royalties from the sale of
PRODUCTS, ADDITIONAL PRODUCTS and NEW PRODUCTS, whichever amount is
greater.
14. Notices. Any notice required to be given hereunder shall be deemed
given if sent to the addresses provided by Paragraph 9 of the
Agreement, unless a change of address shall have previously been
designated in writing.
15. Construction. This Addendum shall be governed and construed in all
respects by the laws of the State of Minnesota.
16. Amendment. This Addendum and the Agreement may be changed only by a
written document signed by both parties.
IN WITNESS WHEREOF, Xxxxxxxxx and the Company have caused this Addendum to
the Agreement to be signed in their respective names, all as of the day and year
first above written.
COMPANY: XXXXXXXXX:
OXBORO OUTDOORS, INC.
By: /s/ Xxxxxx Xxxxx /s/ Xxxxx X. Xxxxxxxxx
Its: Director Xxxxx X. Xxxxxxxxx
By: /s/ Xxxx Xxxxxx
Its: Director
