Exhibit 10.10
[CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT AND FILED SEPARATELY
WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.]
LICENSE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and effective as of this 12th
day of March, 1999 by and between CNS, Inc., a Delaware corporation
("Licensee"), and WinEase, L.L.C., a Minnesota limited liability company
("Licensor").
RECITALS
WHEREAS, Licensor is now and has been engaged in developing certain
technology related to animal care and specifically has developed products and
methods directed to the support of nasal passages for animals, including the
"Products" (as defined in Paragraph 1.1 below);
WHEREAS, Licensor owns certain patents, pending patent applications and
Know-how (as defined in Paragraph 1.4) related to the Products and methods,
these patents and pending applications listed in the attached Schedule 1.5, and
Licensor is willing to license such patents, pending applications and Know-how
to Licensee exclusively and in accordance with the terms of this Agreement;
WHEREAS, Licensor has also developed certain trademarks related to the
Products and owns certain trademark registrations and pending trademark
applications as listed in the attached Schedule 1.6, and Licensor is willing to
license such trademarks including the trademark registrations and pending
applications in accordance with the terms of the Trademark License Agreement
attached hereto as Exhibit A;
WHEREAS, Licensee desires to obtain an exclusive, worldwide,
royalty-bearing license from Licensor under all of those certain patents, patent
applications, Know-how, Product Improvements (as defined in Paragraph 1.3),
trademarks, and trademark applications relating to the development, manufacture,
sale and use of the Products and Licensed Methods (as defined in Paragraph 1.2).
NOW, THEREFORE, in consideration of these premises, and the mutual
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. GENERAL DEFINITIONS. As used herein, the following terms shall be
defined in the manner set forth below:
1.1 Products. The term "Products" shall mean the nasal support devices
for animals and parts and components thereof and related thereto and any other
products similar in function and purpose developed by Licensor or any of its
employees, consultants, agents or representatives prior to or during the term of
this Agreement based upon or using the Know-how or any claim within Patent
Rights. The term Products also specifically includes any product that is made by
a Licensed Method or is intended to be used in accordance with a Licensed
Method.
1.2 Licensed Methods. The term "Licensed Methods" shall mean any
methods or techniques developed by Licensor of making or using the nasal support
devices for animals and parts and components thereof and related thereto and any
other products similar in function and purpose developed by Licensor or any of
its employees, consultants, agents or representatives prior to or during the
term of this Agreement based upon or using the Know-how or any claim within the
Patent Rights.
1.3 Product Improvements. The term "Product Improvements" shall mean
any improvement or enhancement to the Products or any similar product conceived
of by Licensor or any of its officers, employees, consultants, agents or
representatives after the effective date of this Agreement which utilize any of
the Know-how, Patent Rights or Licensed Methods.
1.4 Know-how. The term "Know-how" shall mean any and all of the
information of any description directly relating to the Products and Licensed
Methods developed by or for Licensor at any time prior to or after the effective
date of this Agreement and connected or associated with the Patent Rights,
including, but not limited to, any and all tangible and intangible information,
technology, documents and materials in the possession and control of Licensor
(prior to the term of this Agreement), necessary or desirable in order to enable
Licensee to utilize fully the rights granted by Licensor to Licensee hereunder
and shall include, without limiting the foregoing, the ideas, concepts,
confidential information, trade secrets and techniques, as well as all the
materials, documents, manuals, schematics, blueprints, specifications, patterns,
art work, bills of materials and technical specifications and other information
owned or controlled by Licensor relating to the Products, Patent Rights and
Licensed Methods.
1.5 Patent Rights. The term "Patent Rights" shall mean the following:
(i) the United States and foreign patent(s) and patent application(s) listed on
the attached Schedule 1.5 relating to the Products and Licensed Methods; (ii)
all future United States or foreign patent applications related to the Products,
Product Improvements and Licensed Methods and any patents arising therefrom;
(iii) the rights, patents and patent applications, if any, in any country or
jurisdiction in the world corresponding to the United States patents or patent
applications; and (iv) any division, continuation, continuation-in-part,
divisional, re-examined, reissued or extended letters patent, applications and
xxxxx patents, utility models, utility model conversions, inventor's
certificates relating to the inventions claimed in any of the foregoing United
States patents and patents pending and foreign patent rights, which may be
developed, acquired or controlled by Licensor during the term of this Agreement
and with respect to which Licensor has or shall have the right to grant the
license hereinafter provided.
1.6 Trademark Rights. The term "Trademark Rights" shall mean those
trademarks procured by Licensor and listed on the attached Schedule 1.6 for use
in connection with Products and Licensed Methods, including all current and
future registrations and pending trademark applications in the United States and
foreign countries that are related to those trademarks listed in Schedule 1.6.
The term Trademark Rights also includes any new trademarks that may be developed
by Licensor for application to the Products or the Licensed Methods.
1.7 Contract Year and Quarter. The term "Contract Year" shall mean each
period of twelve (12) consecutive months commencing on the first day of the
first month of the Contract Quarter following the date Licensee elects, in its
sole discretion, to commercially introduce the Products (the "Product Acceptance
Date"); provided, however, the Product Acceptance Date shall in no event be
later than September 1, 1999 unless otherwise agreed by both parties. The term
"Contract Quarter" shall mean each period of three (3) consecutive months
commencing on the first day of (i) July, 1999 in the event that the Product
Acceptance Date occurs on or before August 15, 1999; or (ii) October, 1999 in
the event that the Product Acceptance Date occurs after August 15, 1999.
1.8 Net Sales The term "Net Sales" shall mean the total amount
collected by Licensee or any sublicensee for sales of the Products to third
parties after a deduction of any: (i) sales, use or excise taxes; (ii) freight
or shipping charges; (iii) duty or insurance included therein; (iv) credits or
prepayments due to rejections; (v) defects or returns; and (vi) amounts for
trade and quantity discounts actually allowed and taken.
1.9 Earned Royalty. The term "Earned Royalty" shall mean the royalty
payable to Licensor on the Net Sales from the sale of the Products.
2. LICENSING AND COMMERCIALIZATION.
2.1 Patent Rights and Know-how License. Licensor hereby grants to
Licensee a sole and exclusive, worldwide, royalty-bearing license, subject to
Paragraph 2.3 below, to manufacture, have others manufacture for it, use, sell,
distribute, export, or otherwise dispose of the Products and to practice the
Licensed Methods to make or use the Products under the Patent Rights and the
Know-how of Licensor.
2.2 Confidentiality of Know-how. Except as required by law or by a
governmental agency or as may otherwise be necessary or desirable for Licensee
to fully utilize the rights granted under this Agreement, Licensee agrees that
it will not, directly or indirectly, disseminate, disclose or otherwise make
available to any third party Know-how without the prior consent of Licensor and
will take all steps reasonably necessary to carry out this obligation so long as
Licensor has a reversionary right to such Know- how by the terms of this
Agreement, or unless such Know-how is already known to Licensee or until such
Know-how is, or becomes, generally known to the public or is subsequently
received by Licensee in good faith and without any restrictions as to disclosure
from a third party which has the right to make such disclosure. Notwithstanding
the foregoing, Licensee may disclose any Know-how to its directors, officers,
employees, representatives and agents who may need to know such information.
2.3 Sublicenses. Except as may be otherwise necessary or desirable to
manufacture or have manufactured the Products or any components therefore,
Licensee may not sublicense to any third party, including affiliates of
Licensee, any rights granted by Licensor to Licensee hereunder in the United
States. Licensee may, however, sublicense any such rights to a third party or
affiliates outside the United States for selling the Products outside the United
States and without the right to import the Products into the United States. In
the event of any sublicense granted under this Paragraph 2.3, Licensee shall (1)
retain all rights and be responsible for all obligations under this Agreement,
and (2) enter into a written agreement with any such sublicensee (x) with a term
no greater than the term of this Agreement, (y) with rights granted to any such
sublicensee which are no greater than the terms of this Agreement, and (z)
pursuant to which Licensee shall use reasonable business efforts to impose upon
such sublicensees similar obligations as Licensor has imposed upon Licensee
under this Agreement.
2.4 Assignments. Licensee may assign, convey or transfer any and all of
its rights under this Agreement ("Transfer") to a successor in interest of
substantially all of the assets or capital stock of Licensee (the "Acquirer").
In the event of such a Transfer, any such Acquirer shall assume all of the
obligations of Licensee hereunder and this Agreement shall be binding upon and
inure to the benefit of such Acquirer. Except as otherwise set forth in or
contemplated by Paragraph 2.3 above, no other Transfer may be made by Licensee
or the Acquirer unless Licensee or the Acquirer grants Licensor an exclusive
right of first refusal to purchase all of the rights conferred under this
Agreement in accordance with the following procedure:
(a) First, Licensee or the Acquirer, as the case may be, shall
give Licensor written notification of its intention to enter
into a transaction which operates to effectuate a Transfer (a
"Transaction") and shall not enter into any such Transaction
without first disclosing all material information about the
proposed Transaction to Licensor and offering to enter into a
Transaction on substantially identical terms with Licensor;
and then
(b) Second, Licensor shall, unless otherwise waived in writing by
Licensor, have a period of thirty (30) days after receipt of
written notification of any proposed Transaction to exercise
its right of first refusal and enter into a Transaction on
substantially identical terms. The right of first refusal
procedure outlined in this Paragraph 2.4 shall be repeated
prior to entering into by Licensee or the Acquirer of any
Transaction that is (a) on terms less favorable in a material
respect to the Licensee or the Acquirer than specified in an
earlier written notice to Licensor, or (b) with a party other
than that specified in an earlier written notice.
2.5 Option for Product Improvements. Licensor shall own all of its
Product Improvements. Upon Licensor's conception and reduction to practice of
any Product Improvement, Licensor will disclose such Product Improvement to
Licensee in writing within a reasonable period of time, and subsequently,
Licensee shall have the first option to include any such Product Improvement
within the exclusive license granted above in Paragraph 2.1. Licensee shall make
its election under this option within thirty (30) days after disclosure from
Licensor.
2.6 Patent Procurement and Costs. Licensee shall be solely responsible
for and pay all patent costs and expenses (including reasonable attorneys' fees)
to be incurred during the term of this Agreement in obtaining, prosecuting, and
maintaining any of the Patent Rights issued or to be issued under the law of any
country or jurisdiction identified on Schedule 2.6, including filing,
prosecution, working and maintenance costs and taxes. Notwithstanding the above,
Licensor shall direct and control the procurement and maintenance of the Patent
Rights and shall select patent counsel for such procurement or maintenance
(which counsel is subject to the reasonable consent of Licensee); provided,
however, that Licensee shall have
the right to terminate such patent counsel if Licensee has a reasonable basis
for not being satisfied with such counsel's efforts or results, and in such
event Licensee shall select a new patent counsel (which counsel is subject to
the reasonable consent of Licensor). With respect to the procurement and
maintenance of any of the Patent Rights in countries not identified on Schedule
2.6, Licensor shall not be responsible for or required to pay any patent costs
or expenses unless it has given its prior written consent to the procurement of
such Patent Rights in any such country.
2.7 Trademark Licensing. The Trademark Rights are licensed pursuant to
the "Trademark License Agreement" that is attached to this Agreement as Exhibit
A and made a part hereof.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Licensor hereby warrants and represents to Licensee as follows:
(a) Licensor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Minnesota.
(b) This Agreement has been duly authorized, executed and
delivered by Licensor and constitutes a valid and binding obligation of
Licensor, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except
as and to the extent that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. The execution, delivery and performance of this
Agreement and the agreements attached hereto by Licensor and the
consummation of the transactions contemplated thereby have been
authorized by all necessary corporate action and do not and will not
conflict with or result in any material breach of any of the provisions
of, or constitute a material default under, or result in a material
violation of, or require any authorization, consent or approval, under
the provisions of any organizational charter, articles, bylaw, member
control, operating or other agreement, contract or instrument to which
Licensor is bound or affected, or any law, statute, rule, regulation,
judgment order or decree to which Licensor is subject.
(c) Licensor is the sole and exclusive owner of all the rights
of Xxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxx and all other employees, agents,
consultants or representatives of Licensor with respect to the
Products, Licensed Methods, Patent Rights, Know-how and Trademark
Rights.
(d) Licensor has been allowed and the issue fee has been paid
for the United States patent(s) as listed on Schedule 1.5 covering the
Products or Licensed Methods. Additional United States and
international patent applications that are directed to the Products and
Licensed Methods are currently pending as set forth on Schedule 1.5.
Licensor has no knowledge of information that would render any of the
listed patent applications (or patents granted therefrom) invalid or
unenforceable.
(e) Licensor has good and marketable title to the Trademark
Rights, Patent Rights and Know-how, free and clear of any and all
liens, pledges, claims, licenses, assignments, conditional sales
contracts, agreements or encumbrances of any kind that would impair
Licensor's ability to grant the licenses under this Agreement or the
Trademark License Agreement.
(f) Licensor has no knowledge that any of the Trademark
Rights, Products, Licensed Methods, Patent Right or Know-how infringes
on any patent, copyright, trademark, trade secret, trade dress or any
other intellectual property right of any third party.
(g) None of Licensor's undertakings or activities in
connection with the development, manufacture and sale of the Products
involve the wrongful use of the proprietary rights or assets of any
third party or give rise to any claim by any third party of ownership
or rights in the Trademark Rights, Patent Rights, Licensed Methods or
Know-how.
(h) Licensor has not received notice of any claims, actions,
suits or proceedings pending or threatened effecting Licensor, the
Trademark Rights, the Patent Rights, the Licensed Methods or the
Know-how, which, if adversely determined, would have a material adverse
effect upon Licensee's ability to manufacture, have manufactured, use
or sell the Products or otherwise practice the rights and technology
licensed to Licensee by Licensor under this Agreement and, to
Licensor's knowledge, there is no reasonable basis for anyone to bring
such claims, actions, suits or proceedings.
(i) Licensor has not received any claim from any third-party
proceedings relating to the Trademark Rights, Licensed Methods, Patent
Rights or Know-how, or that the Products are based upon infringement of
any patent or misappropriation or misuse of trade secrets or any other
intellectual property right.
3.2 Licensee hereby warrants and represents to Licensor as follows:
(a) Licensee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) This Agreement has been duly authorized, executed and
delivered by Licensee and constitutes a valid and binding obligation of
Licensee, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles. The execution, delivery and performance of this Agreement
and the agreements attached hereto by Licensee and the consummation of
the transactions contemplated thereby do not and will not conflict with
or result in any material breach of any of the provisions of, or
constitute a material default under, or result in a material violation
of, or require any authorization, consent or approval, under the
provisions of Licensee's Certificate of Incorporation or Bylaws or
other agreement, contract or instrument to which Licensee is bound or
affected, or any law, statute, rule, regulation, judgment order or
decree to which Licensee is subject.
4. PAYMENTS, ROYALTIES AND REPORTS.
4.1 Initial License Fee. On the date hereof, Licensee will pay to
Licensor the sum of $[CONFIDENTIAL TREATMENT REQUESTED] as an initial license
fee.
4.2 Additional License Fees. Unless this Agreement is earlier
terminated or notice of termination is furnished in accordance with Paragraph
7.3 hereof, Licensee will pay to Licensor additional license fees in accordance
with the following:
(a) the sum of $[CONFIDENTIAL TREATMENT REQUESTED] on the
Product Acceptance Date;
(b) the sum of $[CONFIDENTIAL TREATMENT REQUESTED] on the
earlier of: (i) six (6) months after the Product Acceptance Date; or
(ii) Net Sales from the sales of Products equal or exceed
$[CONFIDENTIAL TREATMENT REQUESTED] in the aggregate; and
(c) the sum of $[CONFIDENTIAL TREATMENT REQUESTED] on the
earlier of: (i) twelve (12) months after the Product Acceptance Date;
or (ii) aggregate Net Sales from the sales of Products equal or exceed
$[CONFIDENTIAL TREATMENT REQUESTED] U.S. in the aggregate.
4.3 Royalties on Account of Net Sales.
(a) Licensee agrees to pay to Licensor royalties as follows
based on the annual Net Sales from the sale of Products which are
manufactured, used, sold or imported into a jurisdiction in which
Licensor owns or controls an unexpired granted patent of Patent Rights
containing a valid claim covering such manufacture, use, sale or
importation: (a) [CONFIDENTIAL TREATMENT REQUESTED]% of Net Sales until
royalties have been paid on a total of $[CONFIDENTIAL TREATMENT
REQUESTED] U.S., then (b) [CONFIDENTIAL TREATMENT REQUESTED]% of Net
Sales until royalties have been paid on a total of $[CONFIDENTIAL
TREATMENT REQUESTED] U.S., then (c) [CONFIDENTIAL TREATMENT REQUESTED]%
of Net Sales until royalties have been paid on a total of
$[CONFIDENTIAL TREATMENT REQUESTED] U.S., and then (d) [CONFIDENTIAL
TREATMENT REQUESTED]% of all Net Sales in excess of a total of
$[CONFIDENTIAL TREATMENT REQUESTED] U.S.
(b) The royalty percentages provided for in Paragraph 4.3(a)
above shall be reduced by [CONFIDENTIAL TREATMENT REQUESTED]
([CONFIDENTIAL TREATMENT REQUESTED]) on account of Net Sales of
Products which are manufactured, used, sold or imported into a
jurisdiction in which Licensor does not own or control an unexpired
granted patent of Patent Rights containing a valid claim covering such
manufacture, use, sale or importation.
(c) In the event that any third party sells or markets a nasal
support device that competes with the Products in a particular
jurisdiction and Licensee is unable to prohibit such competitor from
marketing or selling such a competitive product in the particular
jurisdiction through patent proceedings or other measures set forth in
or contemplated by Section 6, the royalties provided for hereunder
shall be proportionately reduced such that the royalty percentages then
in effect under either Paragraphs 4.3(a) and 4.3(b) above shall be
multiplied by the market share held by Licensee in the particular
jurisdiction as determined by Licensee every six (6) months in a good
faith analysis of the relevant markets and the competitive effect of
such products on Net Sales.
(d) It is further understood and agreed by the parties that a
Product sold and subject to royalty under this Agreement shall not be
subject to more than one royalty payment and that the royalties
provided for under this Agreement shall in no event be reduced to less
than [CONFIDENTIAL TREATMENT REQUESTED]% of Net Sales.
4.4 Quarterly Payments. All royalties due Licensor from Licensee
hereunder shall be payable on a Contract Quarterly basis. Within thirty (30)
days after the end of each Contract Quarter during the term of this Agreement,
Licensee shall pay to Licensor the royalty due Licensor under Paragraph 4.3
through the end of the preceding Contract Quarter and shall furnish Licensor
with a written statement setting forth the number of Products sold and the Net
Sales received during such Contract Quarter, and the resulting amount of the
royalty due Licensor under Paragraph 4.3.
4.5 Minimum Royalties. To maintain its rights hereunder, Licensee shall
pay to Licensor minimum royalties after the Product Acceptance Date in
accordance with Paragraph 4.4 and the following:
Minimum Royalty Payment Minimum Royalty Payment
Contract Year* Per Contract Year Per Contract Quarter
-------------- ----------------- --------------------
Year 1 $[CONFIDENTIAL TREATMENT REQUESTED] $[CONFIDENTIAL TREATMENT REQUESTED]
Year 2** [CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
*Twelve-month periods beginning on the Contract Year.
**Unless earlier terminated in accordance with Section 7 of this Agreement,
through the Contract Year of the expiration date of the last of the Patent
Rights.
4.7 Minimum Royalty Payment. Licensee shall pay Licensor within thirty
(30) days after the end of each Contract Quarter, an amount equal to (i) the
minimum royalties payable pursuant to the terms of Paragraph 4.5 for the
Contract Quarter then ended, less (ii): (a) the aggregate amount of Earned
Royalties actually paid to Licensor pursuant to the terms of Paragraphs 4.3 and
4.4 for the Contract Quarter then ended; and (b) any Earned Royalties paid to
Licensor during the prior Contract Quarters in the current Contract Year that
exceed the amount of cumulative minimum royalties payable for those Contract
Quarters. Licensee's failure to pay any and all amounts payable under the
preceding sentence within thirty (30) days after receipt of written notice from
Licensor that such amounts have not been timely paid shall render the licenses
granted hereunder void and thereupon, Licensee shall have no further rights or
interests of any kind or nature with respect to the Products, Patent Rights and
Know-how, and Licensee shall take any and all action that Licensor may
reasonably request to further document the provisions hereof. In the event that
any law, statute, regulation, rule, guideline, ruling, order or decision
prevents Licensee from marketing or offering the Products for sale, the minimum
royalty payment will be suspended until such time that Licensee is no longer
prevented from marketing or offering the Products for sale.
4.8 Late Payment. Licensee shall pay a late payment fee to Licensor for
any Contract Quarter when the royalty amount that is due and payable is not made
within thirty (30) days after the end of that Contract Quarter. The late payment
fee shall be calculated at a variable rate of two percent (2%) over the prime
per annum interest rate as set from time to time by Norwest Bank Minneapolis,
N.A., Minneapolis, Minnesota (the "Interest Rate"), on any and all amounts that
are at any time overdue and payable to Licensor under this Agreement, such
interest being calculated on each such overdue amount from the date when such
amount became due to the date of actual payment thereof. Such late payment fee
shall be in addition to and not in lieu of any and all other rights or remedies
that Licensor may have under this Agreement or law relating to a default by
Licensee under this Agreement.
4.9 Records. During the term of this Agreement and for three (3) years
after termination of this Agreement, Licensee shall at all times maintain
accurate and up-to-date records containing complete data from which amounts due
to Licensor under this Agreement may be readily calculated. Further, Licensee
shall preserve and permit examination of such records by Licensor's
representatives or independent auditors at reasonable intervals and under
reasonable conditions during the term of this Agreement and for three (3) years
thereafter and, upon request, shall supply to Licensor's representatives or
independent auditors all information reasonably requested that is useful in
making a proper audit and verification of Licensee's performance of its
obligations under this Agreement and of any sublicensee's performance in
accordance with the terms of this Agreement.
4.10 Underpayment. If Licensor determines by audit and inspection of
Licensee's books and records that Licensee has failed to pay all royalties due
under Paragraph 4.4, Licensee shall pay Licensor one hundred five percent (105%)
of such additional royalties as may be due in addition to the interest as
provided for in Paragraph 4.8 above. If the amount of underpayment exceeds 5% of
the royalties due under Paragraph 4.4, then Licensor shall, in addition to any
other remedies available to it, recover from Licensee the reasonable costs
incurred in making any such audit and inspection pursuant to Paragraph 4.9
hereof which revealed such shortfall.
5. INDEMNIFICATION.
5.1 Indemnification by Licensor. Licensor shall defend, indemnify and
hold Licensee and its shareholders, directors, officers, agents,
representatives, successors and assigns harmless from and against any and all
claims, damages, costs (including reasonable attorneys' fees), judgments, fines,
penalties, losses, diminution in value and liabilities of any kind or nature:
(a) arising out of the breach by Licensor of any of its warranties,
representations and covenants under this Agreement or the Trademark License
Agreement; (b) arising out of any misuse by Licensor of the patent process or
fraud by Licensor on the patent office.
5.2 Indemnification by Licensee. Licensee shall defend, indemnify and
hold Licensor and its shareholders, directors, officers, agents,
representatives, successors and assigns harmless from and against any and all
claims, damages, costs (including reasonable attorneys' fees), judgments, fines,
penalties, losses, diminution in value and liabilities of any kind or nature
arising out of any act of Licensee including, but not limited to, those: (a)
arising out of the breach by Licensee of any of its warranties, representations
and covenants under this Agreement or the Trademark License Agreement; or (b)
arising out of any actual or alleged defect in a Product.
6. PROTECTION AGAINST INFRINGEMENT. In the event that Licensee becomes
aware of activity on the part of any third party which may constitute
infringement of the Patent Rights, or any other intellectual property rights
with respect to which Licensee is granted a license hereunder, Licensee shall
give Licensor written notice thereof. Licensee shall, at its sole discretion and
expense, have the first exclusive right to initiate and thereafter maintain
reasonable efforts to prevent and xxxxx such infringement, including the
initiation of an appropriate civil action for infringement and the taking of
such other action as may determine to be necessary or appropriate to enforce the
Patent Rights or other intellectual property rights with respect to which
Licensee is granted a license hereunder. In such event, (i) Licensor will permit
the use of its name in, and as a party to, all such suits and execute all
pleadings, documents and other papers necessary or appropriate in conjunction
therewith, and (ii) Licensee shall receive the full benefits of any action it
takes pursuant to this Paragraph, including retaining all sums recovered in any
such suit or in settlement thereof after paying Licensor the Earned Royalties
which shall be calculated from the amount of Net Sales, if any, asserted by
Licensee to support any award of compensatory damages (as opposed to
punitive or any other damages). In the event that Licensee fails or refuses to
take or cause to be taken any such measures against any third party after six
(6) months from the date of receipt of written notice to Licensee by Licensor of
such infringement, Licensor may take such legal action in its own name or in the
name of Licensee (if needed) and at its own expense upon giving fourteen (14)
days advance, written notice of its intention to do so. In this case, all
damages recovered as a result of such action by Licensor shall be and become the
property of Licensor. If either party litigates under this Section 6, the other
party may, at its option and its cost and expense, participate in meetings with
the litigating party and/or its counsel and receive all pleadings, documents and
other related papers useful for the purpose of keeping the other party informed
of the status of any proceedings commenced by the litigating party.
7. TERM AND TERMINATION.
7.1 Term. This Agreement and the Trademark License Agreement shall
commence on the effective date hereof and shall expire, unless earlier
terminated pursuant to Paragraphs 7.2 or 7.3 of this Agreement, upon the
expiration of the last of the Licensed Patents to expire.
7.2 Termination by Licensor. If Licensee is in material default of any
of its obligations under this Agreement, Licensor shall have the right to
terminate this Agreement by giving thirty (30) days' written notice of
termination specifying the reason for termination, provided that such notice
will be of no effect and termination will not occur if the specified default is
cured prior to the expiration of said thirty (30) day notice period.
7.3 Termination by Licensee.
(a) This Agreement and the Trademark License Agreement may be
terminated by Licensee at any time at will, with or without cause, by
the giving of at least ninety (90) days' prior written notice to
Licensor by Licensee in which event any license granted hereunder
shall, except as otherwise set forth in or contemplated by Paragraph
7.3(b) hereof, terminate upon the effective date of the termination
(the "Termination Date") stated in any such notice. In the event of the
termination of any such license, neither Licensor nor Licensee shall
have any further obligation to the other party hereunder except as
expressly provided in Paragraphs 7.3(b), 7.3(c) or 7.4 of this
Agreement below.
(b) Upon termination of any license granted hereunder or under
the Trademark License Agreement, Licensee may, after the effective date
of such termination, sell any of its (i) completed Products, (ii)
Products then in the process of manufacture, and (iii) Products with
respect to which manufacture has been committed at the time of
termination by reason of either (x) any contracts for the purchase of
materials to be used in the manufacture of such Products or (y) any
contract for the sale of such Products, and may, in its sole
discretion, utilize any of the rights granted by Licensor under the
Trademark License Agreement. All such sales and uses shall be subject
to the royalty provisions of Section 4 of this Agreement as though the
termination of this Agreement had not occurred.
(c) Except as expressly provided in Paragraph 7.3(b), after
termination of this Agreement, Licensee may not use develop, market or
sell the Products, Product Improvements, Licensed Methods, Patent
Rights and Know-how, in any way or manner that would violate any rights
of Licensor and Licensee shall take any and all steps reasonably
requested by Licensor to completely vest all rights licensed hereunder
to Licensee back to Licensor upon any such termination. Furthermore,
Licensee may not use any trademark of the Trademark Rights, and all
Trademark Rights shall remain the property of Licensor or will
thereafter be assigned to Licensor. Termination of this Agreement shall
operate to terminate the Trademark License Agreement.
(d) In the event that Licensee terminates this Agreement and
the Trademark License Agreement under this Section 7, Licensee shall,
upon written request of Licensor, deliver to Licensor copies of all
material scientific and marketing research documentation related to or
used in connection with the Products including, but not limited to,
manufacturing sources and technical specifications, reports, surveys,
know-how, trademarks (except the Breathe Right(R) trademark), customer
lists and other information prepared for or by Licensee with respect to
which Licensee shall have the right to deliver; provided, however, that
the delivery of any such information and materials will not impair any
trade secret relating to Licensee's other existing or contemplated
products or be deemed by Licensee to be otherwise confidential in
nature.
(e) In the event that Licensee terminates this Agreement under
this Section 7, Licensee shall grant to Licensor a limited,
non-exclusive, worldwide, non-royalty bearing license to any and all
improvements to the Products developed by Licensee or any of its
employees or consultants between the date hereof and Termination Date
which Licensee shall have the right to grant; provided, however, that
(i) nothing contained in this Paragraph 7(e) shall be in any way
construed to confer upon Licensor or any third party any rights to such
improvements which may be subject to the proprietary protection of a
party other than Licensee including, without limitation, the rights
granted to Licensee by Creative Integration & Design, Inc. and its
affiliates; (ii) the license granted shall be applicable to the
Products and limited for use in the area of nasal support devices for
animals and no other purpose.
7.4 Continued Obligations. Termination shall not relieve or release
either party from its obligations to make any payment which may be owing to the
other under the terms of this Agreement or from any other liability which either
party may have to the other arising out of the terms of this Agreement.
Additionally, notwithstanding anything contained herein to the contrary,
Sections 3, 5 and 9 shall survive termination of this Agreement and remain in
full force and effect.
8. LICENSEE'S UNDERTAKINGS.
8.1 Exploitation. Licensee hereby agrees that during the term of this
Agreement it will use its best efforts to manufacture, sell and market the
Products, and will exert its best efforts to create a demand for the Products in
appropriate worldwide markets, and to increase and extend its business in the
manufacture, sale and marketing of the Products in appropriate worldwide
markets.
8.2 Distribution. Licensee agrees to undertake and will use its best
efforts to investigate and, if determined by Licensee to be commercially
feasible, develop a direct distribution system whereby the Products may be
marketed directly to the end user.
8.3 Marking. Licensee agrees to apply appropriate patent notices to the
Products and to any product advertisements and packaging.
8.4 Additional Consent or License. In the event that Licensee believes
it to be necessary or desirable to obtain the consent or a license from Creative
Integration & Design, Inc. to practice some or all of the Patent Rights under
this Agreement, the fees paid by Licensee for any such consent or license shall
not affect the royalties set forth in this Agreement. In addition, Licensor
acknowledges and agrees that any and all of the rights granted to Licensee by
Creative Integration & Design, Inc. are not in any way intended to be considered
transferrable or impaired hereunder any circumstances.
9. MISCELLANEOUS.
9.1 Recitals, Schedules and Exhibits Incorporated. The Recitals,
Schedules and Exhibits are true and correct, incorporated herein and made a part
of this Agreement as specifically set forth.
9.2 Force Majeure. Neither party shall be responsible for any delay or
failure in the performance of any obligation hereunder due to strikes, lockouts,
fires, floods, acts of God, embargoes, wars, riots, or act or order of any
government or governmental agency; provided, however, nothing set forth in this
Paragraph 9.2 (except as otherwise set forth in or contemplated by Paragraph 4.7
of this Agreement) shall be construed to relieve Licensee of the requirement
that it pay minimum royalties pursuant to Paragraphs 4.5 hereof.
9.3 Waiver. The waiver or failure of either party to enforce the terms
of this Agreement in one instance shall not constitute a waiver of said party's
right under this Agreement with respect to other violations.
9.4 Remedies. The election by either party of any particular right or
remedy shall not be deemed to exclude any other right or remedy and all rights
and remedies of either party shall be cumulative. The parties agree that, in
addition to any other relief afforded under the terms of this Agreement or by
law, each party shall have the right to enforce this Agreement by injunctive or
mandatory relief to be issued against the other party, it being understood that
both damages and specific performance shall be proper modes of relief and are
not to be considered as alternative remedies.
9.5 Notices. All notices and replies thereto required hereunder shall
be in writing, signed by the party giving notice, placed in an envelope and
either delivered by hand or sent by facsimile or registered mail, postage
prepaid, return receipt requested, and properly addressed to the other party.
Notices sent by mail shall be deemed received on the date of receipt indicated
by the receipt verification provided by the United States Postal Service.
Notices sent by facsimile shall be deemed received on the date indicated on the
sender's confirmation report. Notice shall be given, mailed or sent to the other
party at the following addresses or at such other address as may be given by
proper notice:
If to Licensor: WinEase, LLC
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Attn: Xxxxx X. Xxxxxxxxx
Fax No.: [CONFIDENTIAL TREATMENT REQUESTED]
If to Licensee: CNS, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, M.D.
Fax No.: (000) 000-0000
With a copy to: Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
Either party hereto may designate any other address for notices given
hereunder by written notice to the other party given at least ten (10) days
prior to the effective date of such change.
9.6 Entire Agreement. This Agreement, together with the attached
schedules and exhibits, represents the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
discussions (whether written or oral); there are no oral promises,
representations or warranties not set forth in this Agreement. No modification
of this Agreement or waiver of any of its terms shall be binding upon the
parties unless said modification or waiver is in writing, signed by both
parties, and states that it is an amendment to this Agreement.
9.7 Parties in Interest. This Agreement shall inure to the benefit of,
be binding upon, and be enforceable against the parties hereto, their respective
successors and assigns.
9.8 Governing Law. The parties hereby irrevocably submit and consent to
the jurisdiction of Minnesota state and federal courts over any action or
proceeding arising out of or relating to this Agreement and further agree that
all claims in respect of such action or proceeding shall be heard and determined
in any such court which shall construe and enforce the Agreement under the
internal laws (and not the laws of conflicts) in such state. Licensor and
Licensee hereby waive any argument that venue in such forums is not convenient.
9.9 Severability. If any portion of this Agreement is held invalid by
the final judgment of any court of competent jurisdiction, such portion shall be
deemed revised or "blue lined" so that it is enforceable to the fullest extent
possible under applicable law and the remaining provisions shall remain in full
force and effect as if such invalid provision had not been included herein.
9.10 Reasonableness. Licensor and Licensee agree that the restrictions,
covenants, agreements and obligations contained in this Agreement are reasonable
and necessary to protect the legitimate interests of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CNS, INC.
By:
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Its:
---------------------------------
WINEASE, LLC
By:
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Its:
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LIST OF SCHEDULES
Number Description
------ -----------
1.5 Patent Rights
1.6 Trademark Rights
2.6 Countries List
SCHEDULE 1.5
DESCRIPTION OF LICENSED PATENTS
U.S. Patent Applications and all other applications and continuations
thereof filed in connection with the Products together with any and all
international filings as further described in Section 1.3 of this Agreement.
Application Status
----------- ------
U.S. patent application serial no. 08/843,741 Issue fee paid 12/3/98
U.S. patent application serial no. 09/018,603 Filed 2/4/99
U.S. patent application serial no. 09/250,658 Filed 2/16/99
M&G docket no. 12460.1-US-I2 Filed 3/8/99
PCT/US98/07885 Filed 4/17/98
SCHEDULE 1.6
DESCRIPTION OF CERTAIN TRADEMARK RIGHTS
U.S. trademark registration and pending trademark applications as
further described in Section 1.6 of this Agreement.
FLAIR
NSD
SCHEDULE 2.6
COUNTRIES LIST
1. United States;
2. Canada;
3. China;
4. Japan;
5. Mexico;
6. New Zealand;
7. Australia; and
8. Countries located in Europe.
EXHIBIT A
TRADEMARK LICENSE AGREEMENT
This Trademark License Agreement (the "Agreement") is entered into and
is effective as of this 12th day of March, 1999 by and between WinEase, L.L.C.
("LICENSOR"), a Minnesota limited liability company, and CNS, Inc. ("LICENSEE"),
a Delaware corporation, upon the following terms and conditions:
Recitals
WHEREAS, LICENSOR and LICENSEE have entered into that certain license
agreement on even date herewith (the "License Agreement");
WHEREAS, LICENSOR is the sole and exclusive owner of the certain
"Trademark Rights" (as defined in the License Agreement); and
WHEREAS, LICENSEE wishes to have the right but not the obligation use
the Trademark Rights in connection with the sale and marketing of the "Products"
(as defined in the License Agreement) and to license from LICENSOR whatever
rights LICENSOR may have in the Trademark Rights for use in connection with the
Products;
WHEREAS, LICENSOR is willing to grant such a license on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties hereto, LICENSOR and
LICENSEE agree as follows:
Terms and Conditions
1. Definitions. The following definitions shall apply to this
Agreement:
1.1 The term "Marks" shall mean the Trademark Rights.
1.2 The term "Licensed Goods" shall mean the Products.
1.3 The term "Term" shall mean the time period specified in
paragraph 3 of this Agreement.
1.4 The term "Territory" shall mean worldwide.
2. Grant of Rights and Licenses. Subject to all of the terms and
conditions of this Agreement, LICENSOR hereby grants to LICENSEE an exclusive,
worldwide, royalty-free right and license during the Term of this Agreement to
reproduce, display, broadcast, publish and otherwise use any of the Marks in
connection with the Licensed Goods by LICENSEE throughout the Territory, and
LICENSEE hereby accepts such right and license subject to the terms and
conditions of this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, LICENSEE shall not be under any obligation to use any
of the Marks in connection with the sale of the Products or otherwise.
3. Term. This Agreement and any licenses granted by LICENSOR hereunder
shall commence as of the effective date hereof and shall continue in full force
and effect through the term of the License Agreement, at which time they will
automatically terminate, unless sooner terminated in accordance with the terms
and conditions of the License Agreement.
4. Quality Assurance.
4.1 LICENSOR is familiar with LICENSEE'S human nasal dilator
products and finds them to be of acceptable quality. LICENSEE agrees that any of
the Licensed Goods used with the Marks will be of substantially similar quality.
LICENSEE agrees to submit evidence of the nature of the Licensed Goods used with
the Marks to LICENSOR for review and approval from time to time upon LICENSOR's
reasonable request.
4.2 LICENSEE agrees to take all responsibility for any
Licensed Goods with which the Marks are used. LICENSEE agrees to comply in all
material respects with all applicable laws and regulations and obtain all
appropriate governmental approvals pertaining to the Licensed Goods offered in
connection with the Marks.
5. Trademark Use and Ownership.
5.1 In the event that LICENSEE shall at any time elect to use
any of the Marks, LICENSEE agrees to use the Marks only in the form and manner
with appropriate legends as may be prescribed from time to time by LICENSOR.
5.2 In the event that LICENSEE shall at any time elect to use
any of the Marks, LICENSEE agrees that it shall cause to appear in connection
with the Licensed Goods, such reasonable trademark notice as LICENSOR may
reasonably designate.
5.3 LICENSEE acknowledges and agrees that LICENSOR is the
owner of all rights in and to the Marks and that LICENSEE will not during the
Term of this Agreement or at any time thereafter use the Marks or any element
thereof in any form and for any goods or services or challenge the use or
registration thereof except as permitted under this Agreement or contemplated by
the License Agreement without the prior written permission of LICENSOR.
5.4 LICENSEE agrees that it will not state or imply either
directly or indirectly that LICENSEE or LICENSEE's activities, other than those
permitted by this Agreement, are supported, endorsed, or sponsored by LICENSOR
and, upon the direction of LICENSOR, LICENSEE.
5.5 LICENSEE recognizes the goodwill associated with the Marks
and acknowledges that said goodwill belongs exclusively to LICENSOR and that any
use of the Marks by LICENSEE at any time (whether during or after the term of
this Agreement) will, except as otherwise contemplated by the transactions set
forth in the License Agreement, inure solely to the benefit of LICENSOR, and
LICENSEE hereby assigns any such goodwill in its entirety to LICENSOR upon
termination of this Agreement. Nothing contained herein shall be construed to
confer upon LICENSOR any rights of LICENSEE in or to the Breathe Right(R) xxxx.
5.6 LICENSEE will comply with the provisions of all laws of
the United States and each state in which it elects, in its sole discretion, to
use the Marks regarding trademarks and service marks.
6. Infringement. LICENSEE agrees to notify LICENSOR promptly of any
known use of the Xxxx by others not duly authorized by LICENSOR. Notification of
such infringement shall include all details known by LICENSEE that would enable
or aid LICENSOR to investigate such infringement.
7. Disputes Relating to the Xxxx. The parties acknowledge and agree
that all of the provision of Paragraph 6 of the License Agreement shall govern
the parties' rights with respect to disputes relating to the Marks with third
parties.
8. No Agency. Nothing contained herein shall be deemed to create an
agency, joint venture, franchise, or partnership relationship between LICENSEE,
on the one hand, and LICENSOR, on the other hand, and no party shall so hold
itself out. LICENSEE shall have no right to obligate or bind LICENSOR in any
manner whatsoever.
9. Limited Warranty.
9.1 LICENSOR warrants it has the lawful capacity to execute
this Agreement, but does not warrant and shall not be held to have warranted the
validity or scope of the Marks licensed under this Agreement except as may
otherwise be set forth in the License Agreement.
9.2 LICENSOR makes no representations or warranties with
respect to the Licensed Goods provided by LICENSEE and disclaims any liability
arising out of the Licensed Goods offered by LICENSEE under the Marks except as
may otherwise be set forth in the License Agreement.
10. Assignability. This Agreement shall inure to the benefit of
LICENSOR, its successors and assigns, but will be personal to LICENSEE and shall
be assignable by LICENSEE only to the extent that the rights of LICENSEE are
assignable under the License Agreement.
11. Termination. The termination of the License Agreement shall operate
to terminate this Agreement.
12. Effect of Termination.
12.1 Except as may otherwise be set forth in Section 7 of the
License Agreement, the license granted hereunder shall cease immediately upon
termination of this Agreement for any reason.
12.2 The exercise by any party of its rights to terminate this
Agreement as provided herein shall be in addition to and not in lieu of any
other remedies such party may have under this Agreement or otherwise.
13. Waiver. No waiver by a party of any breach of any term or provision
of this Agreement shall be construed to be a waiver of any preceding or
succeeding breach of the same or any other term or provision hereof. The
parties' various rights and remedies under this Agreement shall be construed to
be cumulative and no one of them is exclusive of any other or of any right or
remedy allowed by law or in equity.
14. Notices. All notices to be given hereunder must be in writing and
shall be given hereto in the manner and at the addresses set forth in the
License Agreement.
15. No Act Contrary to Law; Severability. Nothing contained in this
Agreement shall be construed to require the commission of any act contrary to
law and wherever there is any conflict between any provision of this Agreement
and any present or future statute, law, governmental regulation or order or
ordinance, then the latter shall prevail, and in such event the provision or
provisions of the Agreement affected shall be curtailed and limited only to the
extent necessary to bring it or them within legal requirements. All other terms
of the Agreement shall remain unaffected.
16. Governing Law; Jurisdiction. This Agreement shall be deemed to have
been made in the State of Minnesota, and its validity, construction and effect
shall be governed by and enforced pursuant to the substantive laws of the State
of Minnesota without regard to its conflicts of laws principles.
17. Entire Agreement. This Agreement, together with the License
Agreement and attached schedules, constitutes the entire agreement between the
parties relating to the subject matter hereof and shall supersede any and all
prior written or oral agreements between the parties relating to the subject
matter hereof. This Agreement may not be amended except by a written instrument
signed by each of the parties hereto. Each party acknowledges that it has not
executed this Agreement in reliance upon any representation or promise made by
any person, except as expressly provided for in this Agreement or the License
Agreement.
18. Inconsistent Provisions. To the extent that any term or provision
in this Agreement is inconsistent with any term or provision in the License
Agreement, the terms and provisions of the License Agreement shall in all
respects control.
19. Unavoidable Delay. If any party's obligations hereunder are
affected by reason of fire, flood, casualty, Act of God, lockout, strike, labor
conditions, unavoidable accident, LICENSOR calamity, mechanical or other
breakdown, riot, enactment of law or by any similar cause (collectively referred
to as "Unavoidable Delay"), its obligations hereunder herein shall be suspended
during the period of such suspension period due to the Unavoidable Delay, except
that any such suspension period due to such Unavoidable Delay shall in no event
exceed six (6) months.
20. Headings. The headings or captions of this Agreement or any
paragraph hereof are inserted for purposes of convenience only and shall not be
deemed to limit, affect the scope, meaning or intent of this Agreement, nor
shall they otherwise be given any legal effect.
21. Recitals. The Recitals are true and correct, incorporated herein
and made a part of this Agreement.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and will, when taken
together, constitute this Agreement notwithstanding that each party is not a
signator to the same counterpart.
23. Binding on Successors. This Agreement will fully bind and inure to
the benefit of each party and its respective heirs, successors, permissible
assigns, and agents.
24. Further Documents. The parties agree to execute such further
documents as may be reasonably requested by the others to effectuate any of the
provisions or purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized agents effective as of the date first written
above.
LICENSOR:
WinEase, LLC
By
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Print Name:
------------------------------
Title:
-----------------------------------
LICENSEE:
CNS, Inc.
By
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Print Name:
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Title:
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