LICENSE AGREEMENT

1.1  

Licensor is desirous that the Licensed Patents and its related know how be developed and utilized to the fullest extent, and is willing to grant an exclusive license thereunder.

1.2  

To induce Licensor to enter into this Agreement, Licensee has represented to Licensor that Licensee is experienced in the development, production, manufacture, marketing and sale of products similar to the "Licensed Product(s)" (as later defined herein), and that it will commit itself to utilizing Licensor*s Licensed Patents and Licensed Technology commercially so that public benefit and royalty income to Licensor shall result therefrom.

1.3  

To induce Licensee to enter into this Agreement. Licensor has represented that it has pending U.S. and foreign patent applications and know-how relating to a proprietary suture removal technology "Licensed Technology" (as later defined herein) that is the subject of this Agreement.

1.4  

Licensee desires to obtain a license upon the terms and conditions hereinafter set forth.

2.1  

"Affiliate(s)" of a party means any entity which, directly or indirectly, controls such party, is controlled by such party, or is under common Control with such party; "control" for these purposes being defined as the actual, present capacity to elect a majority of the directors of such Affiliate, or if not, the capacity to elect at least half of the members that control at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors. Each reference to Licensee herein shall be meant to include its Affiliate(s).

2.2  

"Licensed Patent(s)" means the pending United States and foreign patent applications enumerated   in Exhibit A, attached to this Agreement. Licensed Patents shall include improvement parents obtained by Licensor or Licensee, continuations-in-part applications, patents and certificates of addition and utility models and patents which may issue thereupon related to said satire removal technology.

2.3  

"Licensed Technology” means the technology presently embodied in prototypes and/or   described orally or in writing produced by Licensor and delivered to Licensee relating to suture removal technology including all improvements disclosed to Licensee.

2.4  

"Licensed Product(s)" shall mean any and all products and methods which:

     (a)  

are covered in whole or in part by an issued, unexpired claim or a pending claim contained in Licensed Patents in the Territory,

     (b)  

which employ or are produced by the practice of the Licensed Technology, and/or contain any improvements which Bovie has developed which derive from said applications or Licensed Technology; and or,

     (c)  

employ or are produced by the practice of the invention claimed in Licensed Patents whose manufacture, use or sale would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any claim in Licensed Patents, and/or,

     (d)  

are required to practice or use the Licensed Products including, without limitation, EMI’s proprietary power chargers or functional equivalent for use with the suture technology or removal kit.

2.5  

“Net Revenue” as used in this Agreement to compute royalties shall mean Licensee*s billings (including but not limited to sales. leasing. advertising fees) related to Licensed Products produced or used hereunder, less the sum of the following:

     (a)  

discounts allowed in amounts customary in the trade:

     (b)  

  sales taxes. customs and tariff duties. and/or use taxes which are directly imposed and are with reference to particular sales:

     (c)  

outbound transportation prepaid or allowed: and

     (d)  

amounts allowed ot credited on returns or rebates.

2.6  

“Net Selling Price" as used in this Agreement for the purpose of computing royalties shall mean gross invoice price received by Licensee from the sale. lease or other use of the Licensed Products. less the deductions under section 2.5. above.

2.7  

"Territory": Worldwide.

2.8  

“Improvements” shall mean any enhancement. upgrade, modification or variation of or to the Licensed Patents. Licensed Technology or Licensed Products.

3.1  

Bovie shall develop and design the product in accordance with specifications provided by EMI.

3.2  

Bovie shall develop a maximum of 200 prototypes necessary for evaluation by an independent medical organization

3.3  

The prototypes shall be completed within 45 days of the execution of this contract and costs associated with the development shall be borne by Bovie.

3.4  

Upon the successful completion of the evaluation, and FDA clearance to market, Bovie shall commence marketing within eight (8) months.

3.5  

EMI shall provide reasonable assistance in the development, design, testing and marketing of the product.

3.6  

Bovie shall be responsible for the 510K application of the product and all costs associated therewith.

3.7  

Improvements and Developments by Bovie . Bovie is free to make improvements and to use the Licensed Technology and the Licensed Patents in research and development of new products. Bovie shall assume and pay all Improvement, development and manufacturing costs incurred by Bovie throughout the term of this Agreement. Bovie shall promptly disclose any Improvement made by or for it to EMI together with appropriate documentation and if Bovie incorporates said Improvements into a suture removal product, then such suture removal product shall be deemed a Licensed Product under this Agreement subject to royalties as set forth herein. In the event that Bovie shall not incorporate such Improvements into a suture removal product then EMI shall have a royalty-free, perpetual, irrevocable, exclusive license, with the right to grant sublicenses, to use such Improvements. EMI shall, at the request of Bovie, provide reasonable assistance and/or information in connection with any effort by Bovie to make Improvements or further developments of said Licensed Product.

3.8  

Improvements by EMI . EMI shall have no obligation to make any Improvements; however, if during the term of this Agreement any Improvement is made by EMI or for EMI on terms which do not prevent EMI from disclosure thereof, then EMI may, at its sole discretion disclose the same to Bovie or its assignees together with appropriate documentation. Any Improvements by EMI relating to the suture removal technology shall be deemed a Licensed Product under this Agreement.

4.1  

Subject to the terms of this Agreement, Licensor hereby grants to the Licensee a nontransferable, exclusive, royalty-bearing license under Licensed Patents and Licensed Technology to make, have made, use, lease, and sell the Licensed Products in the Territory, for the term set forth under Article 10. unless sooner terminated according to the terms hereof.

4.2  

No rights to sublicense are granted under this Agreement.

5.1  

The royalty rate for the license that is the subject of this Agreement shall be in accordance with this Article 5.

5.2  

Royalties and fees due hereunder shall accrue and be paid to Licensor according to this Article 5 and the attached Exhibit B, which is incorporated herein.

5.3  

Except where Licensed Products are given to a prospective customer as an inducement to subsequently purchase and use Licensed Products, where Licensed Products are not sold, but are otherwise disposed of or used, the Net Revenue of such products and/or processes for the purposes of computing-royalties shall be the selling price at which products of similar kind and quality are sold in similar quantities or are currently being offered for sale by the Licensee and in no event shall Net Revenue be less than $1.50 per unit. Where power charges are given to customers in conjunction with a sale of a suture removal kit, no royalties shall be due on said power chargers. Where, however, the power charger is sold or otherwise disposed of in any fashion other than as an inducement to a customer to purchase the suture removal kit, then royalties as set forth herein shall be payable on such sale or disposition or use of the power chargers and Net Revenue for the power charger shall in no event be less than $1.50 per unit. In no event shall Bovie bundle Licensed Products with non-EMI products if to do so would cause the Net Revenue of Licensed Products to decrease.

5.4  

Under this Agreement, Licensed Products shall be considered to be sold when payment is received, or if not sold, when delivered for use or lease to a third party or affiliate or used by Licensee in a manner not excluded above.

5.5  

The Licensee shall pay to Licensor an earned royalty, as defined in the attached Exhibit B, on all Licensed Products made, sold leased or used by the Licensee.

5.6  

Earned royalties for Licensed Products sold under this Agreement in the Territory shall accrue to Licensor for the duration of this Agreement.

5.7  

Earned royalties accruing to Licensor shall be paid to Licensor by February 15, May 15, August 15, and November 15. Each payment to Licensor will be for any and all royalties which accrued to Licensor within the most recently completed calendar quarter.

5.8  

All monies due Licensor shall be payable in United States funds. When Licensed Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the country in which Licensed Products were sold and then converted into equivalent United States Funds. The exchange rate will be that established by the Bank of America in New York, New York, on the last business day of the reporting period.

6.1  

The Licensee, upon execution of this Agreement, shall diligently proceed with the development, manufacture and sale of Licensed Products and shall earnestly and diligently endeavor to market the same within a reasonable time after execution of this Agreement and in quantities sufficient to meet the market demands, and to comply with the minimum royalties specified in part C of Exhibit B.

6.2  

The Licensee shall demonstrate a continuing commercially reasonable effort to market the Licensed Products to meet market demand following the Licensee*s first offer of Licensed Products for sale.

6.3  

Licensor agrees to supply sufficiently detailed information relating to Licensed Technology upon payment of the sums specified in part A of Exhibit B, which information will not be used by Licensee except to manufacture and sell Licensed Product bearing royalties under this Agreement

7.1  

Prior to the first sale, lease or other disposition of Licensed Products. the Licensee shall submit a progress report covering the Licensee*s activities related to the development and testing of the Licensed Products. After the first such sale and/or commercial use, the Licensee shall submit quarterly royalty reports within 45 days after the end of each fiscal quarter of each calendar year for the most recently completed calendar quarter, giving such particulars of the business conducted by the Licensee under this Agreement as shall be pertinent to a royalty accounting hereunder. This information shall include at least the following:

     (a)  

Number of Licensed Products in each application manufactured, sold or otherwise disposed of subject to royalty payments under Article 5;

     (b)  

The gross sales, Net Revenues and Net Selling Price of Licensed Products sold by Licensee during the most recently completed calendar quarter:

     (c)  

The royalties, in U.S. dollars, payable hereunder with respect to such sales;

     (d)  

With each report submitted, the Licensee shall pay to Licensor the royalties due and payable under this Agreement. If no royalties are due, the Licensee shall still report sales.

7.2  

If no sale or use or other disposition of Licensed Products has been made during any reporting period, a statement to that effect will be required in the royalty report filed for that period.

8.1  

The Licensee shall keep books and records accurate by showing all Licensed Products developed manufactured, used, and/or leased and/or sold or otherwise disposed of under the terms of this Agreement. Such books and records shall be preserved for at least five (5) years from the date of the royalty payment to which they pertain and shall be open to inspection by representatives or agents of Licensor at all reasonable times, provided that reasonable notice is given.

8.2  

The fees and expenses incurred by Licensor*s representatives or agents to perform an examination of the royalty reports shall be borne by Licensor. However, if an error in royalties accounting of more than five percent (5%) of the total royalties due for any year is discovered, then the fees and expenses incurred by Licensor*s examination shall be borne by Licensee.

9.1  

This Agreement shall be governed by and construed in accordance with the laws of the state of Florida (other than its rules of conflicts of laws.)

9.2  

All claims and disputes between the parties arising out of this Agreement (each, a "Claim and, collectively, "Claims") shall be subject to this Section. Prior to submission of any Claim for resolution in accordance with this Section 9, both the Manufacturer and the Licensor will negotiate in good faith to resolve such Claim. If the parties cannot reach agreement within ten (10) business days of written notice by one party to the other that a Claim exists, the Claim may be submitted for resolution upon the filing by either party of a written demand, with notice to the other party, to and under the Commercial Arbitration Rules of the American Arbitration Association ("AAA") before a mutually acceptable arbitrator, to be determined within ten (10) business days of filing the written demand for arbitration. If the parties are unable to select a mutually acceptable arbitrator within this time period, the AAA shall select the arbitrator. Upon such Claim being submitted fo