FOURTH AMENDMENT TO
EXCLUSIVE LICENSE AND ROYALTY AGREEMENT
THIS FOURTH AMENDMENT ("Amendment") to the Exclusive License and Royalty
Agreement ("Royalty Agreement") dated as of April 17, 1993, by and between
XXXXX X. XXXXXXXXX, residing at 0000 - 000xx Xxxx Xxxxxxxxx, 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 as of the 1st day of September, 1998.
RECITALS
WHEREAS, and Xxxxxxxxx entered into the Third Amendment to the Royalty
Agreement effective as of February 25, 1998;
WHEREAS, the Third Amendment reduced the Royalties payable to Xxxxxxxxx
under the Royalty Agreement for a period of time and caused the Parent of the
Company to issue on behalf of the Company shares of stock of the Parent to
Xxxxxxxxx in escrow.
WHEREAS, the Company and Xxxxxxxxx desire to rescind the Third Amendment
to the Royalty Agreement in its entirety and to effect certain other
amendments to the Royalty Agreement pursuant to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the recitals set forth above and in
further consideration of the terms and conditions set forth below, Xxxxxxxxx,
Company and Parent agree to amend the Agreement as follows:
1. RESCISSION OF THIRD AMENDMENT TO EXCLUSIVE LICENSE AND ROYALTY
AGREEMENT. The Third Amendment to the Exclusive License and Royalty
Agreement effective the 25th day of February, 1998, is hereby rescinded
in its entirety. The 150,000 shares issued to Xxxxxxxxx (Certificate of
Common Stock of Oxboro Medical International, Inc. No. __) shall be and
are hereby returned to Oxboro Medical International, Inc. duly endorsed
by Xxxxxxxxx or with an attached Assignment Separate From Certificate.
2. AMENDMENT TO SUBSECTION 4.1. Section 4.1 of the Royalty
Agreement is hereby amended in its entirety as follows:
4.1 The Company will pay to Xxxxxxxxx Royalties in the amount
set forth below on the NET SALES PRICE of all PRODUCTS sold by the
Company during the revised term of this Royalty Agreement:
(a) The Company will pay Xxxxxxxxx Royalties in the
amount of eight percent (8%) up to One Million Dollars of NET
SALES PRICE of PRODUCTS and nine percent (9%) for all net
sales in excess of One Million Dollars until Royalty advances
(currently in the approximate amount of Eighty Thousand and
No/100 Dollars ($80,000.00)) are consumed; thereafter
Royalties shall be paid pursuant to subparagraph b;
(b) Royalties shall be paid as set forth in the
following table on the cumulative NET SALES PRICE of PRODUCTS
sold by the Company for each fiscal year:
--------------------------------------------------------------
Cumulative NET SALES ROYALTY
PRICE OF PRODUCTS PERCENTAGE
--------------------------------------------------------------
$0 to $1,000,000 4%
--------------------------------------------------------------
$1,000,000 to $2,000,000 6%
--------------------------------------------------------------
Over $2,000,000 8%
--------------------------------------------------------------
3. AMENDMENT TO SECTION 8. Section 8 of the Royalty Agreement
entitled Duration and Termination is hereby amended in its entirety as
follows:
8. DURATION AND TERMINATION.
(a) This Contract shall terminate at 11:59 p.m. on
August 31, 2001. Upon termination, Xxxxxxxxx shall have no
further rights with respect to the PRODUCTS or Additional
Products being sold at that time or to PRODUCTS and Additional
Products which have not previously reverted to Xxxxxxxxx.
(b) Prior thereto, this Contract may be terminated by
either party in the event of a breach under or default in the
performance of any material provision, term or condition of
this Contract and the giving of written notice specifying the
alleged breach or default, if the party in breach or default
fails to cure the alleged breach or default within thirty (30)
days of receipt of notice, or fails to commence actions to
cure the breach or default within such thirty (30) days period
and thereafter diligently prosecute and pursue such cure to
completion.
(c) In the event of termination of this Contract as a
result of a default by the Company, the Company will
immediately lose all rights to manufacture, produce and sell
the PRODUCTS and the Additional Products, which rights shall
immediately revert to Xxxxxxxxx; provided, however, that the
Company will have the right to sell its inventory of any
completed PRODUCTS and Additional Products manufactured or
produced as of the date of such termination for a period of
ninety (90) days from the date of such termination. The
Company will also immediately lose all rights to use the
KNOW-HOW, will cease using the KNOW-HOW in all respects, and
will transfer all rights pertaining to the KNOW-
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HOW back to Xxxxxxxxx. The Company will continue to pay
Royalties as provided in this Contract based on the NET SALES
PRICE of PRODUCTS or Additional Products sold by the Company
following the termination of this Contract. The Company will
assign to Xxxxxxxxx all patents, trademark registrations,
copyrights and similar intellectual property rights, as well
as all applications therefore, which relate to or are derived
from the PRODUCTS, the Additional Products or the KNOW-HOW;
and Xxxxxxxxx will have the right to utilize the KNOW-HOW and
to manufacture and sell the PRODUCTS and the Additional
Products, either on his own account or through such other
persons or entities as he may select.
4. ARBITRATION. Any controversy or dispute arising under the
terms of this Agreement shall be determined by arbitration in
Minneapolis, Minnesota, according to the then current Rules and
Regulations of the American Arbitration Association and the decision of
the arbitrator or arbitrators shall be final and binding upon all
parties and may be entered as a final judgment in any court of competent
jurisdiction. The costs and arbitrators fees of the prevailing party
shall be paid by the non-prevailing party.
5. NOTICES. All notices required under this Agreement shall be
given in writing and shall be sufficiently given if delivered to the
addressee in person or, if mailed, by certified mail, return receipt
requested, and addressed as follows:
If to Parent: President
Oxboro Medical International, Inc.
00000 Xxxxxxx Xxxxxx XX
Xxx Xxxx, Xxxxxxxxx 00000
If to Company: Oxboro Outdoors, Inc.
c/o The Board of Directors
Oxboro Medical International, Inc.
00000 Xxxxxxx Xxxxxx XX
Xxx Xxxx, Xxxxxxxxx 00000
If to Xxxxxxxxx: Xxxxx X. Xxxxxxxxx
0000 - 000xx Xxxx X.X.
Xxxxxxx, XX 00000
Any notice shall be deemed effective (i) when delivered if
delivered personally and (ii) five (5) days after deposit in the mail,
return receipt requested.
All other terms and conditions of the Royalty Agreement, as amended,
shall remain unchanged, subject to future amendment by written agreement of
the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY: XXXXXXXXX:
OXBORO OUTDOORS, INC.
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxxx
----------------------------- -----------------------------
Its: Chairman of the Board Xxxxx X. Xxxxxxxxx
------------------------
PARENT:
Consented and Agreed to this 21st day of _______,1998.
OXBORO MEDICAL INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Its: Chairman of the Board
-------------------------
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