EXHIBIT 10.51
THIRD AMENDMENT TO
OPEN-ENDED PRODUCT AGREEMENT
This Superceding Amendment to Open-Ended Product Agreement is entered
into this 15th day of March, 2000 by and between Xxxx Xxxx Financial Corporation
a Nevada Corporation and or its assigns (collectively, "WCFC"), and Xxxx X. Xxxx
a married individual ("Xxxx"), (collectively, the "Parties").
Recitals
A. WCFC and Xxxx enter into an Open-Ended Product Agreement dated March 20, 1998
(the "Product Agreement") pursuant to which Xxxx granted WCFC a non-exclusive
worldwide license to all intellectual property described in Exhibit A of the
Product Agreement.
B. WCFC and Xxxx entered into an Amendment to Open-Ended Product Agreement dated
May 7, 1999 (the "First Amendment") pursuant to which Xxxx amended his royalty
rate of ten percent (10%) of all gross sales for Products licensed under the
Product Agreement to a yearly royalty that is greater of $5,000,000 or five
percent (5%) of gross sales revenue received from sales of such Products.
X. Xxxx is a substantial shareholder in WCFC and as such, has a vested interest
in the continuing profitability of WCFC.
AGREEMENT
In consideration of the foregoing recitals and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1. Amendment. The Parties agree that the first paragraph of Section 5
of the Product Agreement, as amended by and set forth in the First
Amendment, shall be deleted in its entirety and replaced with the
following:
WCFC shall pay Xxxx a minimum annual royalty that is the lesser of
Five Million and No/100ths Dollars ($5,000,000.00) or based on 3.5% of
gross sales revenue received from sales of products listed hereunder
minus refunds, returns and sales taxes collected, if any ("Gross Sales
Revenue"). No royalties shall be due on Products given away for free.
Royalties shall be paid quarterly on or before May 1, August 1,
November 1, and February 1 for all Gross Sales Revenue received in the
quarter ending the previous March 31, June 30, September 30, and
December 31 respectively. Xxxx shall be entitle to take draws against
royalties up to a maximum of $1,250,000.00 per quarters.
2. Effective Date. The effective date of this Third Amendment shall be
January 1, 2000.
3. Capitalized Terms. Any capitalized terms not defined herein shall
have the same meaning ascribed to such terms in the Product Agreement.
4. Counterparts. This Third Amendment and any other document or
instrument related to the Product Agreement to be executed by the parties
may be executed in counterparts, each of which shall constitute an
original.
5. Remaining Terms Unchanged. All other terms of the Product Agreement
and The First Amendment remain binding and in effect.
Executed as of the date first written above.
Xxxx Xxxx Financial Financial Corporation
a Washington corporation
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By: Xxxxxxx X. Xxxxxxx
Its: Chief Financial Officer
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Xxxx X. Xxxx
