Exhibit 10.1
ROYALTY WAIVER AGREEMENT
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This Royalty Waiver Agreement (hereinafter called the "Waiver Agreement")
is entered into by and among Retractable Technologies, Inc., a Texas corporation
(hereinafter called "RTI"), and Xxxxxx X. Xxxx and his wife, Xxxxxxx X. August
(hereinafter collectively called "Xxxx"), which are hereinafter collectively
referred to as the "Parties."
RECITALS
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WHEREAS, the Parties entered into a Technology License Agreement
(hereinafter called the "License Agreement") dated June 23, 1995; and
WHEREAS, under the License Agreement, Xxxx is to be paid certain
consideration in the form of a Five Percent (5%) royalty (the "Royalties") of
gross sales of "Licensed Products" (as defined in the License Agreement) after
returns; and
WHEREAS, Xxxx, a shareholder of RTI, wishes to make a contribution to RTI
in the form of a waiver of his entitlement to unpaid Royalties accrued through
the second quarter of 2002 in the amount of Five Hundred Thousand Dollars
($500,000.00);
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing recitals, the agreements
set forth below, and other good and valuable consideration, the receipt,
sufficiency, and adequacy of which are hereby acknowledged, the Parties agree as
follows:
1. The foregoing recitals are true and correct, they constitute the basis
for this Waiver Agreement, and they are incorporated into this Waiver Agreement
for all purposes.
2. Xxxx hereby irrevocably waives payment of and releases any and all claim
to accrued and unpaid Royalties through the second quarter of 2002 in the amount
of Five Hundred Thousand Dollars ($500,000.00) (hereinafter the "Waived 2002
Royalties"), payable by RTI for sales of "Licensed Products" pursuant to the
terms of the License Agreement.
3. It is expressly understood and agreed by the Parties that, with the
exception of the Waived 2002 Royalties, nothing in this Waiver Agreement shall
be construed to modify or amend the rights of the Parties as set forth in the
License Agreement.
4. It is also understood and agreed that this Waiver Agreement and the
License Agreement contain the entire agreement between the Parties and supersede
any and all prior agreements, arrangements, or understandings between the
Parties relating to the subject matter hereof.
5. RTI hereby agrees to indemnify Xxxx for any incremental increase in his
2002 federal income tax liability (including penalties and interest) which may
arise from the Waived 2002 Royalties. RTI reserves the right to contest such
additional tax liability on Xx. Xxxx'x behalf at its own expense. Should
additional tax related to this transaction be due, RTI shall pay such tax,
penalties, and interest, on a "grossed-up" basis, within ten days of the final
assessment of the amount owed, if any, by Xxxx.
6. It is understood and agreed that, in making this Waiver Agreement, the
Parties expressly acknowledge that they have not relied upon any statement or
representation pertaining to this matter made by either Party or by any person
or persons representing them and that no representations, warranties, or
promises of any kind,
nature, or character whatsoever have been made, directly or indirectly, to
induce them or any of them to execute and carry out the terms of this Waiver
Agreement.
7. THIS WAIVER AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCLUDING ANY CONFLICTS-OF-LAW
RULE OR PRINCIPLE OF TEXAS LAW THAT MIGHT REFER THE GOVERNANCE, CONSTRUCTION, OR
INTERPRETATION OF THIS WAIVER AGREEMENT TO THE LAWS OF ANOTHER STATE).
8. This Waiver Agreement, and all of the provisions hereof, shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.
9. In the event that any one or more of the terms, provisions, or
agreements that are contained in this Waiver Agreement shall be held by a Court
of competent jurisdiction to be invalid, illegal, or unenforceable in any
respect for any reason, the invalid, illegal, or unenforceable term, provision,
or agreement shall not affect any other term, provision, or agreement of this
Waiver Agreement and this Waiver Agreement shall be construed as if the invalid,
illegal, or unenforceable term, provision, or agreement had never been contained
herein.
10. It is understood and the Parties further state that each of them has
carefully read this Waiver Agreement and knows the contents hereof and has
signed the same as his or its own free act.
IN WITNESS WHEREOF, the Parties have executed this Waiver Agreement
effective as of June 21, 2002.
RETRACTABLE TECHNOLOGIES, INC.
BY: /s/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
EXECUTIVE VICE PRESIDENT,
ENGINEERING AND PRODUCTION
/s/ XXXXXX X. XXXX
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XXXXXX X. XXXX
INDIVIDUALLY
/s/ XXXXXXX X. AUGUST
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XXXXXXX X. AUGUST
INDIVIDUALLY
