EXHIBIT 10.10
FIRST AMENDMENT TO AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT (the "Amendment") relates to a certain
Agreement dated October 30, 1991 (the "Agreement"), between ACORN LABORATORIES,
INC., a Florida corporation ("Acorn") and OCUREST LABORATORIES, INC., a Florida
corporation ("Ocurest")
1. Section 2 of the Agreement is hereby amended in its entirety to read as
follows:
2.a) For the license and exclusive right granted to Ocurest by Acorn pursuant
to Section I hereof, subject to the provisions of Section 2.b) hereof,
Ocurest hereby agrees to pay Acorn and Acorn hereby agrees to accept the
following:
(i) $200,000 to be paid on or before September 30, 1995 (the "Initial
Payment").
(ii) royalties of four percent (4%) of net sales of eye drop
preparations sold by Ocurest in dispensers covered by the patent
properties and/or in conjunction with the trademark properties (the
"Eye Drop Products"). As used herein, the term "net sales" shall
mean (a) the proceeds of gross sales actually received by Ocurest,
less returns, discounts and allowances; (ii) royalties actually
received by Ocurest with respect to sales by others of Prescription
Products, as that term is hereinafter defined; and (iii) the
proceeds of any licensing or similar arrangements actually received
by Ocurest with respect to Eye Drop Products, the retail sale of
which would require a prescription of a duly licensed health care
practitioner either in the United States or in the country where
such products are sold or intended to be sold ("Prescription
Products"). All payments required to be made to Ocurest pursuant
to this Subsection 2.a) (ii) shall become due and payable 45 days
subsequent to the end of each calendar quarter and shall be
accompanied by sales
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reports with respect to such calendar quarter. Acorn shall have the
right to inspect the records of Ocurest at the office of Ocurest at
reasonable times during normal business hours to the extent
necessary to verify the information contained in any sales report
required to be furnished by Ocurest to Acorn pursuant to the
provisions of this Subsection 2.a)(ii).
(iii) royalties of twenty five percent (25%) of (a) royalties actually
received by Ocurest with respect to sales by others of Eye Drop
Products other than Prescription Products (such other products
hereinafter being referred to as "Non-Prescription Products") and
(b) the proceeds of any licensing or similar arrangements actually
received by Ocurest with respect to Non-Prescription Products. All
payments required to he made to Ocurest Pursuant to this Subsection
2.a) (iii) shall become due and payable 45 days subsequent to the
end of each calendar quarter and shall be accompanied by sales
reports with respect to such calendar quarter. Acorn shall have the
right to inspect the records of Ocurest at the office of Ocurest
at reasonable times during normal business hours to the extent
necessary to verify the information contained in any sales report
required to be furnished by Ocurest to Acorn pursuant to the
provisions of this Subsection 2.a)(iii).
(iv) in the event that Ocurest sells or transfers all or substantially
all of its business in connection with the production and sale of
the Eye Drop Products, other than through one or more licenses, the
proceeds of such sale or transfer shall be paid or assigned by
Ocurest to Acorn.
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b) Notwithstanding anything herein to the contrary:
(i) Any payment, other than a payment resulting from the license by
Ocurest of all or substantially all of its rights with respect
to the Eye Drop Products, which would otherwise be required to
be made by Ocurest to Acorn pursuant to the provisions of
Section 2.a)(ii) or 2.(a).(iii) hereof (each such payment being
hereinafter referred to as a "Royalty Payment") shall be accrued
and deferred and shall not be required to be made unless Ocurest
realizes net income to the extent set forth in the following
table:
FIRST FOUR CONSECUTIVE PORTION OF ACCRUED AND
CALENDAR QUARTERS DURING DEFERRED ROYALTY PAYMENTS
WHICH NET-INCOME OF OCUREST REQUlRED TO BE PAID (2)
IS: (1), (2)
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At least $1,000,000 and 33.3%
less than $3,000,000
At least $3,000,000 and 66.7%
less than $5,000,OOO
At least $5,000,000 100%
(1) No accrued and deferred Royalty Payments shall be required to
be made by Ocurest prior to the first time that Ocurest has net
income of at least $1,000,000 during any four consecutive calendar
quarters.
(2) Only one Royalty Payment shall be required to be made by
Ocurest with respect to each level of not income under $5,000,000
set forth in the above table. For example, if the net income of
Ocurest at the end of four consecutive calendar quarters is
$2,500,000, the Royalty Payment required to be made by Ocurest
would be 33.3% of the then accrued, deferred and unpaid Royalty
Payments less the Advances (as such term in hereinafter defined)
theretofore paid by Ocurest, and, in such event, Ocurest would not
be required to make any subsequent Royalty Payment until its not
income during any subsequent four consecutive calendar quarters
is at least $3,900,000. By way of further examples, if the net
income of Ocurest at the and of four consecutive calendar quarters
is $3,500,000, the Royalty Payment required to be made by
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Ocurest would be 66.7% of the then accrued, deferred and unpaid
Royalty Payments less the Advances (as such term is hereinafter
defined) theretofore paid by Ocurest, and, in such event, Ocurest
would not be required to make any subsequent Royalty Payments until
its not income during any subsequent four consecutive calendar
quarters is at least $5,000,000.
For purposes hereof, "not income" shall mean net income
determined in accordance with generally accepted accounting
principles, consistently applied and the opinion with respect
thereto of Ocurest's independent certified public accountants
shall be bindinq on the parties hereto, provided however that
such accountants shall be reasonably acceptable to Acorn.
Acorn hereby acknowledges that Xxxxx Xxxxxxxx is acceptable to
Acorn. Any payments required to be made pursuant to the
provisions of this Subsection 2.b)(i) shall become due and
payable 45 days subsequent to the end of the respective
calendar quarter. The provisions of this Subsection 2.b) (i)
shall not limit the obligation of Ocurest set forth in
Subsection 2.b) (ii) hereof.
(ii) Commencing as of January 1, 1995 Ocurest shall pay to
Acorn a nonrefundable advance against accrued and deferred
royalties whether future or presents of $4,000 per month
other than with respect to a month in which a Royalty Payment
is made by Ocurest to Acorn (the "Advances"). Subject to the
provisions of the last sentence of this Section 2. b) (ii) ,
other than with respect to a month in which a Royalty Payment
is made by Ocurest to Acorn, the Advances shall be
unconditionally made irrespective of the amount of any accrued
and deferred Royalties. Advances for the months of January,
February and March 1995 shall be made on or before March 31,
1995 and all subsequent Advances shall become due and payable
on the last day of each calendar month commencing April 30#,
1995. No Advance shall be deemed to be delinquent if it is
paid within 45 days subsequent to the giving of notice of any
non-payment by Acorn. Each Advance paid by Ocurest to Acorn
shall be deducted from and constitute an offset against
present and future accrued and deferred Royalty Payments
otherwise payable to Acorn; and
(iii) The obligation of Ocurest to any payments to Acorn pursuant to
this section 2. shall terminate at such time as the aggregate
of all payments made to Acorn pursuant to this
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4 Section 2. equals $10,000,000 and upon payment of such
amount, neither Ocurest nor its successors or licensee shall
have any further monetary or other obligation to Acorn
pursuant to this Agreement.
(iv) In the event that Ocurest grants a license to one or more
third parties with respect to the Non-Prescription Products to
be sold in the United states, then, in such event, the
royalties payable to Acorn in connection with any license of
Prescription Products shall be increased to 25% of the
proceeds of such arrangement.
2. Acorn hereby acknowledges and confirms that Ocurest has (a) heretofore paid
$170,000 to Acorn pursuant to the provisions of Section 2.a)(i) of the Agreement
as amended hereby and (b) simultaneously with the execution hereof, Ocurest has
paid Acorn $12,000 representing the Advances for the months of January,
February and March, 1995.
3. Section 5 of the Agreement is hereby amended to read as follows:
5.a) The licenses granted hereunder shall terminate and/or Ocurest or its
successor or licensee shall reassign the patent and trademark properties
to Acorn:
(i) Prior to the payment to Acorn of an aggregate $10,000,000 pursuant
to the provisions of Section 2. hereof,, upon the (a) filing by
Ocurest of a voluntary petition of bankruptcy; (b) filing of an
involuntary petition of bankruptcy against Ocurest provided that
such petition is not discharged within 45 days of the filing
thereof; (c) appointment of a receiver or a trustee for all or
substantially all of the assets of Ocurest or (d) general
assignment by Ocurest of its assets for the benefit of its
creditors.
(ii) In the event that any payment due Acorn hereunder, other than (a)
the payment referred to in Section 2. a) (i) hereof and (b) the
Advances, are not paid within 120 days after any notice of
non-payment;
(iii) in the event that any Advance is not paid within 45 days
subsequent to the giving of notice of any non-payment by Acorn;
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iv) In the event that the payment referred to in Section 2. a) (i)
hereof is not paid on or before September 30, 1995; and
v) Upon the default by Ocurest or its successor or licensee in the
performance of any other material obligation under this Agreement
and such default is not cured within 120 days after notice of
default unless either at the time of such default or not later
than the and of such 120 day period Acorn has been paid an
aggregate of $10,000,000 pursuant to the provisions of Section 2.
hereof.
(b) In the event that the licenses granted hereunder shall terminate or
the patent and trademark properties shall be reassigned in accordance
with the provisions of this Section 5, Ocurest shall be permitted to
dispose of its finished goods inventory and complete and dispose of
its work in process during the 180 day period commencing upon the day
of such termination or reassignment and Ocurest shall have no
obligation to deliver or assign to Acorn any of its inventory, work
product, materials, supplies or other items. At the end of such 180
day period, any items then owned by Ocurest which have been marked
with or otherwise incorporate the trademark properties licensed to
Ocurest hereunder, other than reasonable quantities of such items
which may be retained for file, reference or archive purposes, shall
be destroyed by Ocurest.
4. Acorn hereby waives and releases any rights it has or may have against
Ocurest prior to the execution of the Amendment (a) for any breaches or
alleged breaches of the Agreement or (b) to terminate the license granted
under the Agreement, or (c) to require Ocurest to turn over any materials and
products to Acorn.
5. Acorn hereby confirms and acknowledges that it is the intent of Acorn that
the licenses granted to Ocurest pursuant to the Agreement continue to remain
in full and affect and not be revoked or otherwise terminated or abridged
irrespective of any provision in the Agreement or otherwise. In order to
further assure the foregoing, upon the execution of this Amendment, Acorn
shall be deemed to have again granted such licenses to Ocurest as of the date
hereof.
6. The following provisions shall be applicable to the Agreement and the
Amendment;
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a. NO THIRD-PARTY BENEFICIARIES. The Agreement and Amendment shall not
confer any rights or remedies upon any person other than the parties and
their respective successors and permitted assigns.
b. ENTIRE AGREEMENT. This Agreement and Amendment (including the
documents referred to herein) constitute the entire agreement between
the parties and supersedes any prior understandings, agreements, or
representations by or between the parties, written or oral, to the
extent they relate in any way to the subject matter hereof.
c. SUCCESSION. The Agreement and Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
d. COUNTERPARTS. The Agreement and Amendment be executed in one or more
counterparts , each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
e. READINGS. The headings contained in the Agreement and Amendment are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement and Amendment.
f. NOTICES. All notices, requests, demands, claims, and other
communications hereunder must be in writing. Any notice, request demand,
claim, or other communication hereunder shall be deemed duly given if
(and then three business days after) it in sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed
to the intended recipient as set forth below or to such other address as
shall be designated in a notice to such effect given by either of the
parties to the other:
If to Acorn: Acorn Laboratories, Inc.
0000 00xx Xxxxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
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If to Ocurest: Ocurest Laboratories, Inc.
0000 XXX Xxxx., Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Associates, P.A.
Xxxxx 000
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually in received by the intended recipient. Any party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other
party notice in the manner herein set forth.
g. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of
Florida.
h. AMENDMENTS AND WAIVERS. No amendment of any provision of the Agreement
or Amendment shall be valid unless the same shall be in writing and
signed by Acorn and Ocurest. No waiver by any party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
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i. SEVERABILITY. Any term or provision of the Agreement and Amendment
that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms
and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
j. EXPENSES. Each of the parties shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with the
Agreement and Amendment.
k. CONSTRUCTION. The parties have participated jointly in the negotiation
and drafting of the Agreement and Amendment. In the event an ambiguity
or question of intent or interpretation arises, the Agreement and
Amendment shall be construed as it drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Agreement and Amendment. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder unless the context requires
otherwise. The word "including" shall mean including without limitations
1. INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and Schedules
identified in this Agreement and Amendment are incorporated herein by
reference and made a part hereof.
m. DISCLAIMER OF PARTNERSHIP AND AGENCY. This is an agreement between
separate entities and neither is the agent of the other for any purpose
whatsoever. The Agreement and Amendment shall not be construed as
constituting Ocurest and Acorn partners or to create any other form of
legal association which would impose liability upon one party for the
act or failure to act of the other.
n. SUBMISSION TO JURISDICTION. Each of the parties submits to the
jurisdiction of any state or federal court sitting in Palm Beach County,
Florida, in any action or proceeding
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arising out of or relating to the Agreement or Amendment and agrees that
all claims in respect of the action or proceeding may be heard and
determined in any such court. Each party also agrees not to bring any
action or proceeding arising out of or relating to the Agreement or
Amendment in any other court. Each of the parties hereby waives any
defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security
that might be required of any other party with respect thereto.
o. FURTHER ACTS. In case any further action is necessary or desirable to
carry out the purposes of the Agreement and Amendment, each of the
parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request.
7. Other than as expressly set forth herein, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Amendment has been executed this 31st day of
March, 1995.
WITNESS: ACORN LABORATORIES, INC.
/s/ illegible By: /s/ illegible
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WITNESS: OCUREST LABORATORIES, INC
/s/ illegible By: /s/ illegible
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