EXHIBIT 10.0
REVISED LICENSING AGREEMENT
The following summarizes the agreement for the outstanding royalties and note
payments:
The current unaudited balance is $88,914.18, including accrued interest and
royalties through 2002.
Vapotherm will make an immediate payment of $8,914.18 to Transpritator
Technologies, Inc. by bank check. Transpirator will extend the balance of
$80,000 into a Promissory note with interest at 1% above the current prime rate
maturing March 30, 2003. Future royalties will be paid quarterly according to
the license agreement and interest will accrue to the maturity of the note.
Vapotherm will extend the term of the agreement dated May 4, 1997 to an
expiration date of September 27, 2006. See section 5 below for original
expiration date.
To ensure that we have a mutual understanding on the terms of the license
agreement dated May 4, 1997, a number of clarifications are itemized here to
ensure we're in complete agreement:
1. All calculations for royalties are based on Section II of Exhibit B
("New Products"). (Note: If Vapotherm elected to manufacture and sell
the original designs of the MT-1000 or the MT-3000, Section I would
apply). This covers the respiratory therapy units sold by Vapotherm,
currently the Vapotherm 2000i, as well as the Vapotherm(TM) 5000 home
care unit when it is launched during this year. Future versions of
these units will be covered as well. The license agreement also covers
the sale of vapor transfer cartridges by Vapotherm, with the royalty
rate on the cartridges at 50% of the rate being applied to the base
units.
2. Royalties applied to the base therapy units (e.g. 2000i, 5000) are
based on annual sales volumes and will be 5% for the first $1,000,000
in sales of those units each year, 3.5% of those sales from $1,000,001
to $2,000,000 and 2.5% of those sales above $2,000,000. For example,
according to the above formula, $10,000,000 in sales of base units in
any given year would pay a royalty of $285,000, or an effective rate
of 2.85%. All cartridges sold during this period, with be at 50% of
the rate applied to the base units.
3. The minimum royalty prepayment of $175,000, of which $102,500 was paid
in cash, with the balance covered in the Promissory note, was a
license fee, and is not applied as credit against future royalty
payments.
4. The license can be fully paid up, with all title and interest in the
technology, at any time by Vapotherm with a payment of $2,000,000.
This payment is in addition to any royalties previously paid and/or
accrued.
5. The license agreement expires concurrently with the expiration of the
licensed patent #4,773,410. The patent has an expiration date of
September 27, 2005. By this letter, we are extending the term of the
license agreement to one year beyond that date, or September 27, 2006.
6. Vapotherm, Inc. is in the business of developing, manufacturing and
marketing products used in the treatment of chronic lung disease and
acute breathing disorders. As such, we may choose to acquire or
develop technologies that utilize other methods of providing
respiratory therapy (for example, ventilators, positive pressure
devices). The license agreement requires Vapotherm to pay royalties on
devices that incorporate the technology developed utilizing patent
number 4,773,410 only.
7. Transpirator maintains the right to audit Vapotherm's records, at
Transpirator's expense, to ensure the calculation of royalties is
consistent with this agreement.
Acceptance of this letter and the Vapotherm payment of $8,914.18 acknowledges
our mutual agreement as to the validity and terms of the license agreement as
stated above, as well as the satisfaction of all past and current obligations of
Vapotherm, Inc. to Transpirator Technologies, Inc. Furthermore, this letter and
the license agreement between Vapotherm, Inc. and Transpirator Technologies,
Inc. contain the entire agreement among and between the parties. No other terms
are agreed or implied.
Agreed by:
/s/Xxx Xxxxxx,
----------------------------
Chairman & CEO
Transpirator Technologies, Inc.
Agreed by:
/s/Xxxxxx Xxxxxx /s/Xxxx Xxxxxx
--------------------- -------------------
President & CEO Chairman
Vapotherm, Inc. Vapotherm, Inc.
Date:
September 25, 2002
PAYMENT WORKSHEET
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Current Promissory Note Principal $72,500.00
Accrued Interest $ 1,721.88
Accrued Royalties (1Q & 2Q 2002) $14,692.30
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Total Payment $88,914.18
