EXHIBIT 10.4
THIS DOCUMENT IS COMPANY CONFIDENTIAL
LICENSE AGREEMENT
THIS AGREEMENT, entered into and effective as of the 1st day of
September, 2000 (the "Effective Date") by and between TRISTRATA
TECHNOLOGY, INC., a Delaware corporation having its principal
place
of business at 1105 North Market Street, Suite 1300, P.O. Box
8985,
Wilmington, Delaware 19899 (hereinafter referred to as
"LICENSOR")
and NEOTERIC COSMETICS, INC. a Colorado corporation having a
principal place of business at 4880 Havana Street, Denver,
Colorado
80239 (hereinafter referred to as "LICENSEE");
RECITALS
WHEREAS, LICENSOR and LICENSEE are currently engaged in
litigation in the United States District Court for the District
of
Delaware styled, TriStrata Technology, Inc. v. Neoteric
Cosmetics,
et. al, Civil Action No. 96-227 (JFF), concerning LICENSOR's
claim
of infringement of one or more of the Licensed Patents (as
defined
below) by LICENSEE (hereinafter referred to as the "Delaware
Litigation"); and
WHEREAS, LICENSEE in the course of its business sells
cosmetic and skin care products and is interested in obtaining
from LICENSOR a license to make, have made, use, offer for sale
and/or sell Licensed Products (as hereinafter defined) under
the
Licensed Patent Rights (as hereinafter defined) in the
Territory
(as hereinafter defined); and
WHEREAS, LICENSOR and LICENSEE, by executing this License
Agreement, desire to resolve fully the claims against each
other
in the Delaware Litigation; and
WHEREAS, subject to, and upon, all of the terms and
conditions of this Agreement. LICENSOR is willing to grant to
LICENSEE a non-exclusive license to make, have made, use, offer
for sale and sell the Licensed Products (as hereinafter
defined)
under the Licensed Patent Rights (as hereinafter defined) in
the
Channel of Trade (as hereinafter defined) in the Territory (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing premises
and of the mutual covenants, promises and agreements set forth
herein, LICENSOR and LICENSEE, intending to be legally bound,
hereby mutually agree as follows:
ARTICLE I - GENERAL
1.01 All capitalized terms used in this Agreement (other
than the names of parties and Article headings) shall have the
meanings established for such terms herein.
ARTICLE II - DEFINITIONS
2.01 "Excluded Channel of Trade" shall mean: (1) direct
marketing of Licensed Products (as defined in Section 2.06
below)
by door-to-door sales representatives to consumers; (2) mail
order
sales generated as a result of a door-to-door sales
representative's direct contact with a consumer; (3) products
requiring a prescription from a physician or medical
professional;
and (4) sales to physicians for resale to patients.
2.02 "Channel of Trade" shall mean marketing and sales of
Licensed Products in all channels of trade in the Territory
except
for the Excluded Channel of Trade.
2.03 "Licensed Patent Rights" shall mean, subject to the
specific exclusions set forth in Sections 2.04, those portions
of
the claims of the issued Patents in the Territory set forth in
Schedule A hereto, and any other patents that may issue from
the
applications in the Territory listed in Schedule A, and any
other
patents that may issue from patent applications owned or
controlled by LICENSOR in the Territory, and all divisions,
continuations, continuations-in-part, reexaminations, reissues
and extensions thereof, covering the Licensed Products (as
defined below in Section 2.05) in the Territory for (1) the
reduction, prevention and retardation of human skin wrinkles,
including fine lines on the human skin; and/or (2) the
reduction,
prevention and retardation of the appearance of skin changes
associated with intrinsic or extrinsic aging, including without
limitation, those changes consisting of wrinkles, thinning of
the skin, deepening of skin lines, yellowish skin, loss of
elasticity, loss of recoilability and loss of collagen.
2.04 Notwithstanding anything herein to the contrary,
"Licensed Patent Rights" shall not include any rights to any
patents or patent applications that: (1) claim any alpha
hydroxyacids,
polyhydroxyacids or related compounds other than those specific
alpha hydroxyacids comprising the Licensed Products as defined
below in Section 2.05; or (2) claim any methods of use other
than
for (a) the reduction, prevention and retardation of human skin
wrinkles, including fine lines on the human skin and/or (b) the
reduction, prevention and retardation of the appearance of skin
changes associated with intrinsic or extrinsic aging, including
without limitation those changes consisting of wrinkles,
thinning
of the skin, deepening of skin lines, yellowish skin, loss of
elasticity, loss of recoilability and loss of collagen.
2.05 (a) "Licensed Products" shall mean: subject to the
limitations set forth in Section 2.04 above, any cosmetic
and/or
dermatologic preparation for topical application to the human
skin
within the definition of the Licensed Patent Rights comprising,
alone or in combination: (1) lactic acid and/or its salts;
(2) glycolic acid and/or its salts; or (3) citric acid and/or
its salts (b) For the purposes of Section 4.03, a product is
not
a Licensed Product and shall not be deemed to infringe, under a
method claim contained in the Licensed Patent Rights if: (a)
the
product does not contain any alpha hydroxyacid(s); or (b) even
if
the product contains one or more of the acids set forth in this
Section 2.05(a)(1)through (3) above, a claim within the scope
of
the Licensed Patent Rights is not made, and has never been
made,
for said product on the product container or packaging, or any
product inserts, or any literature distributed about or
concerning
said product, or any print, radio, television or other
advertising
media concerning said product. Any disputes concerning whether
a
product is a Licensed Product shall be discussed by the parties
who shall in good faith attempt to resolve said dispute,
failing
which the dispute shall be arbitrated in accordance with
Section 13.02 of this Agreement.
2.06 "Territory" shall mean the United States, its
possessions and territories, including the Commonwealth of
Puerto
Rico, Canada, Mexico. Provided royalties are paid in accordance
with Section 4.03 and on the same Net Sales transfer price as
Licensed Products sold in the United States, LICENSEE shall
also
have the right to export Licensed Products manufactured in the
United States to the following territories: South America,
China,
Taiwan, Philippines, Singapore, Indonesia, Australia, New
Zealand,
Iceland, Korea, Thailand, Malaysia, Saudi Arabia, Kuwait,
Bahrain,
Qatar, United Arab Emirates-Oman, Egypt, Syria, Lebanon,
Jordan,
Yemen, India, Pakistan, Iraq and Iran.
2.07 An "Affiliate" of LICENSEE shall mean the wholly owned
subsidiaries of LICENSEE and corporations under common control
with
LICENSEE, which are listed on Schedule B hereto, as said Schedule
B
may from time to time be amended with the prior written consent
of
LICENSOR. Affiliates of LICENSEE shall be subject to all of the
terms and provisions of this Agreement. Notwithstanding any
provision to the contrary herein, LICENSEE shall not have the
right
to include any new Affiliate under this Agreement that has
received
notice from LICENSOR of infringement of one or more of
LICENSOR's
patents without the prior written consent of LICENSOR and on
such
terms as shall be agreed to by LICENSOR and LICENSEE.
2.08 An "Affiliate" of LICENSOR shall mean any person,
corporation, partnership or other entity that directly or
indirectly
controls, is controlled by, or is under common control with,
LICENSOR.
ARTICLE III - LICENSE GRANT
3.01 Subject to all of the terms and provisions of this
Agreement, LICENSOR grants to LICENSEE and Affiliates of
LICENSEE
(as defined in Section 2.07) under the Licensed Patent Rights a
non-exclusive license to make, have made, use, offer for sale
and
sell in the Territory Licensed Products in the Channel of
Trade.
Notwithstanding any provisions herein to the contrary, no
rights
are granted hereunder by LICENSOR to LICENSEE or to any
Affiliate
of LICENSEE to make, have made, use, offer for sale or sell any
Licensed Products either outside the Territory or in the
Excluded
Channel of Trade in the Territory.
3.02 Notwithstanding any provision herein to the contrary,
no right is granted or otherwise conveyed by this Agreement to
any
entity to make, have made, use, offer for sale, sell or
otherwise
dispose of Licensed Products in the Territory other than to
(1) LICENSEE; and (2) to Affiliates of LICENSEE to the extent
provided in Schedule B to this Agreement, as said Schedule B
may
be amended from time to time pursuant to the provisions of
Section 2.07.
3.03 Notwithstanding any provision herein to the contrary,
no right is granted or otherwise conveyed herein by LICENSOR to
LICENSEE or to any Affiliate of LICENSEE to make, have made,
use,
offer for sale, sell or otherwise dispose of Licensed Products
other than those which are sold and/or distributed under the
brand
name(s) and/or trademark(s) of LICENSEE or an Affiliate of
LICENSEE
listed on Schedule C hereto (the "Marks"), as said Schedule C
may
from time to time be amended by written notice to LICENSOR.
Licensed Products of LICENSEE and its Affiliates are currently
sold and/or distributed, or may be sold and/or distributed, in
the Territory under the Marks set forth on Schedule C hereto.
LICENSEE agrees that it will not make, have made, use, offer
for
sale or sell Licensed Products other than under the Marks,
without prior written notice to LICENSOR.
3.04 As a condition to receiving the license under the
Licensed Patent Rights hereunder, LICENSEE hereby
unconditionally
guarantees the compliance and performance by each Affiliate of
LICENSEE with all of the provisions of this Agreement,
including,
without limitation, the payments of all amounts due to LICENSOR
pursuant to any of the provisions of this Agreement.
3.05 The term of this Agreement and of the license granted
hereunder shall commence as of the Effective Date and shall
expire
or terminate upon the expiration of the last to expire of the
Licensed Patent Rights or, if. applicable, upon the earlier
termination of this Agreement pursuant to any of the provisions
of Article VII of this Agreement, or upon the final
non-appealable
decision of a court of appropriate jurisdiction holding the
Licensed Patent Rights to be invalid.
3.06 LICENSOR specifically reserves the right to, and to
grant licenses to others to, make, have made, use, offer for
sale,
sell or otherwise dispose of Licensed Products within or
without
the Territory on such terms as LICENSOR may deem appropriate.
Upon
receipt of information that a third-party may be infringing the
Licensed Patent Rights in the Territory, LICENSOR will consider
in good faith if such third-party is infringing. In the event
LICENSOR concludes that said third-party is infringing the
Licensed
Patent Rights in the Territory, LICENSOR will place said
third-party on notice of the existence of the Licensed Patent
Rights
and take reasonable steps to terminate the infringement short
of
litigation. Notwithstanding anything contained herein to the
contrary, LICENSOR has no obligation whatsoever to commence
litigation against any third-party or to take any other
specific
actions other than as expressly provided in this Section 3.06.
3.07 No license, express or implied, is granted hereunder
to any other patent rights or under any other patents or
technology
owned, used, or otherwise controlled by LICENSOR or any
Affiliate
of LICENSOR. LICENSOR currently is unaware of any other patents
or
patent applications owned or controlled by LICENSOR in the
Territory in additional to the Licensed Patent Rights that are
or
would be infringed based on LICENSEE's current products and
product claims for said products.
ARTICLE IV - PAYMENTS, ROYALTIES AND REPORTS
4.01 [DELETION]
4.02 [DELETION]
4.03 [DELETION]:
4.04 [DELETION]
4.05 [DELETION].
4.06 [DELETION]
4.07 [DELETIO
