Exhibit 10.10

 

LICENSE AGREEMENT BETWEEN CHONG CORPORATION AND

 

VAPARIA CORPORATION- “040 Patent”

 

This Agreement is made as of January 28, 2016, by and between

 

Chong Corporation
a corporation organized under the laws of the State of Minnesota, with its
principal place of business at 5550 Nicollet Avenue, Minneapolis, MN 55419
(“Chong”)

 

- and -

 

VapAria Corporation
a corporation organized under the laws of the State of Delaware, with its
principal place of business at 5550 Nicollet Avenue, Minneapolis, MN 55419
(“VapAria”).

 

WHEREAS:

 

(a) Chong is the assignee of US Patent No. 8,962,040 (the “‘040 Patent”); and  
  (b) Chong wishes to provide an exclusive license to VapAria, and VapAria
wishes to obtain an exclusive license from Chong for the ‘040 patent.

 

NOW, THEREFORE, in consideration of the mutual covenants, conditions, and
promises contained herein, the parties agree as follows:

 

Article 1.00

 

INTERPRETATION

 

1.01 Definitions

 

The following terms will have the following meanings:

 

(a) “040 Patent” shall mean all rights in U.S. Patent License No. 8,960,040.

 

(b) “Business Day” shall mean Monday to Friday inclusive, except statutory or
civic holidays observed in the States of Minnesota and Delaware.

 

(c) “Product” means the purposes for which the license is granted, and refers
specifically to the use of ‘040 the patent in any product or embodiment where
the patent is employed and/or cited in the label.

 

(c) “Territory” shall mean all jurisdictions recognized internationally.

 

(d) “Term” shall mean the term of this Agreement as provided in Article 7.00
hereof.

 

(e) “USPTO” shall mean the United States Patent and Trademark Office.

 

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1.02 Construction of Agreement

 

In this Agreement:

 

  (a) words denoting the singular include the plural and vice versa;         (b)
words importing the use of any gender shall include all genders;         (c) the
word “include”, “includes” or “including” shall mean “include/includes/including
without limitation”;         (d) when calculating the period of time within
which or following which any act is to be done or step taken, the date which is
the reference day in calculating such period shall be excluded. If the last day
of such period is not a Business Day, the period shall end on the next Business
Day;         (e) all references to currency are to United States currency;      
  (f) the division of this Agreement into separate articles, sections,
subsections and exhibits, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement; and         (g)
words or abbreviations which have well known or trade meanings are used herein
in accordance with their recognized meanings.

 

ARTICLE 2.00

 

GRANT OF LICENSE

 

2.01 Grant of License

 

Subject to the terms and conditions of this Agreement, Chong hereby grants to
VapAria an exclusive license for the ‘040 Patent for the purpose of sublicensing
and/or producing and marketing products under the license or a granted
sublicense within the Territory during the term. VapAria shall be permitted to
sublicense the patent to any other party and such sublicense shall be honored by
Chong in the event that VapAria or its legal successor is dissolved, declares
bankruptcy or is otherwise no longer able or willing to pursue to the normal and
anticipated course of its business activities. Furthermore, Chong will agree to
bear all expenses and costs associated with protecting the patent from
infringement and/or from claims of infringement from other parties.

 

2.02 Proprietary Rights

 

Subject to the rights granted herein, Chong retains all of its rights, title and
interests in and to all patent rights, inventions, copyrights, know-how, and
trade secrets relating to the ‘040 Patent except as otherwise expressly agreed
between the parties. VapAria retains all such rights in respect of additional
development undertaken in accordance with this Agreement subsequent to the
Effective Date. Chong shall not sell, dispose, or alienate in any way its
License Agreement without respecting VapAria’s legal rights hereunder, and
requiring any assignee to assume Chong’s obligations hereunder in a form
satisfactory to VapAria.

 

ARTICLE 3.00

 

CHONG REPRESENTATIONS AND WARRANTIES

 

3.01 Representations and Warranties Generally

 

Chong hereby makes the representations and warranties contained in this Article
3.00 to VapAria, and acknowledges that VapAria is relying upon the accuracy of
each such representation and warranty in connection with its entering into this
Agreement.

 

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3.02 Power and Authority

 

Chong has the right, full corporate power, and absolute authority to enter into
this Agreement and to grant the rights herein described to VapAria in the manner
herein contemplated. Chong has taken all necessary or desirable actions, steps,
and corporate or other proceedings to approve or authorize, validly and
effectively, the entering into, and the execution, delivery, and performance of
this Agreement and the granting of the rights herein described. This Agreement
is a legal, valid, and binding obligation of Chong, enforceable against Chong
and VapAria in accordance with its terms.

 

3.03 Intellectual Property

 

Chong is the exclusive assignee of the ‘040 Patent and is authorized to license
the ‘040 Patent. Chong has not received any notice, complaint, threat, or claim
alleging infringement of the ‘040 Patent or other intellectual property or
proprietary right of any other person in connection with the ‘040 Patent. There
are no charges, encumbrances, pledges, security interests, liens, actions,
claims, demands or equities of any nature or kind, nor any rights or privileges
capable of becoming any of the foregoing, affecting the ‘040 Patent.

 

3.04 No Other Obligations

 

No person has or has made any claim or notification to Chong alleging any
written or oral agreement, understanding or commitment, or any right or
privilege (whether by law or contractual) capable of becoming an agreement or
commitment, to obtain rights in and to the ‘040 Patent that would conflict with
the rights herein granted to VapAria.

 

3.05 Warranty Disclaimer

 

Chong makes and VapAria receives no warranties of any kind, either expressed or
implied, statutory or otherwise. Chong specifically disclaims any and all
implied warranties or conditions of merchantability, satisfactory quality or
fitness for a particular purpose.

 

3.06 Investment Representation

 

Chong is acquiring the Consideration Shares for its own account with the present
intention of holding such securities for purposes of investment, and that it has
no intention of distributing such Consideration Shares or selling, transferring
or otherwise disposing of such Consideration Shares in a public distribution, in
any of such instances, in violation of the federal securities laws of the United
States of America.

 

ARTICLE 4.00

 

VAPARIA REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

4.01 Representations, Warranties, and Covenants Generally

 

VapAria hereby makes the representations, warranties, and covenants contained in
this Article 3.00 to Chong, and acknowledges that Chong is relying upon the
accuracy of each such representation, warranty, and covenant in connection with
its entering into this Agreement.

 

4.02 Power and Authority

 

VapAria has the right, full corporate power, and absolute authority to enter
into this Agreement. VapAria has taken all necessary or desirable actions,
steps, and corporate or other proceedings to approve or authorize, validly and
effectively, the entering into, and the execution, delivery, and performance of
this Agreement and the assumption of the obligations herein described. This
Agreement is a legal, valid, and binding obligation of VapAria, enforceable
against VapAria and Chong in accordance with its terms.

 

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4.03 Diligence

 

VapAria will make reasonable efforts to bring an embodiment of the Product to
market in the Territory during the Term. In the event VapAria does not make
commercially reasonable efforts or VapAria or its affiliates license, produce,
or otherwise market a competing product, Chong will be entitled to terminate
this Agreement as provided in Article 7.

 

4.04 Patent Marking

 

VapAria will mark all products sublicensed, manufactured or sold pursuant to
this Agreement with the ‘040 patent number. The marking will be in conformance
with the patent laws and other laws of the country of manufacture or sale.

 

4.05 Consideration Shares

 

The Consideration Shares, when issued in accordance with the terms and
conditions of this Agreement, will be fully paid and non-assessable.

 

ARTICLE 5.00

 

ONE TIME FEE AND ROYALTIES

 

5.01 One Time Fee

 

In consideration for entering into this agreement, VapAria will issue Chong a
one-time fee at closing in the form of 5 million shares ofVapAria’s Common Stock
(the “Consideration Shares”).

 

5.02 Royalty Consideration

 

In consideration for the rights granted to it, VapAria shall further pay
royalties as described in this Article.

 

5.02 Royalties

 

VapAria shall pay to Chong a royalty in the amount of $50,000 per annum in the
first calendar year, and for each year thereafter for the remaining life of the
patent, in which the patent is licensed and/or commercialized with an
acknowledged embodiment and/or use. Such acknowledgement shall be made in a
mutually acknowledged notice between the assignee and the licensee.

 

5.03 Audit

 

During the term of this Agreement, and for a period of 18 months after any
termination of it, VapAria shall keep accurate books of account and all business
records at its principal place of business covering all transactions subject to
a license fee, royalty, or other payment under this Agreement.

 

5.04 Interest

 

Interest shall accrue on amounts unpaid on their due dates hereunder at the rate
of six (6%) percent per annum.

 

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Article 6

 

INDEMNIFICATIONS

 

6.01 Chong Indemnity

 

Chong agrees to indemnify and hold VapAria harmless from and against all claims,
demands, proceedings, losses, damages, liabilities, deficiencies, costs and
expenses (including all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement) suffered or incurred by
VapAria as a result of or arising directly or indirectly out of or in connection
with:

 

  (a) any breach by Chong of or any material inaccuracy of any representation or
warranty of Chong contained in this Agreement;         (b) any breach or
non-performance by Chong of any covenant to be performed by it that is contained
in this Agreement;         (c) any breach arising from or relating to any use
and distribution of the ‘040 Patent other than as expressly provided herein; and
        (d) infringement of any third party intellectual property rights in
respect of the ‘040 Patent, other than any claim arising as a result of
modifications to the product performed by or on behalf of VapAria.

 

Notwithstanding the foregoing, in the event that the ‘040 Patent, or any part
thereof is held to constitute an infringement on the intellectual property of
any third party, Chong, at its option and expense, may either (a) indemnify
VapAria as above or (b) indemnify VapAria from and against any damages for such
pre-existing infringement, and (i) amend the Patent to make it non-infringing,
(ii) procure for VapAria the right to use the infringing materials, and/or (iii)
replace the ‘040 Patent with other suitable noninfringing rights having
functionality that is substantially the same in all material respects to the
‘040 Patent.

 

6.02 VapAria Indemnity

 

VapAria agrees to indemnify and hold Chong harmless from and against all claims,
demands, proceedings, losses, damages, liabilities, deficiencies, costs and
expenses (including all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement) suffered or incurred by the
Licensor as a result of or arising directly or indirectly out of or in
connection with:

 

  (a) any breach by VapAria of or any material inaccuracy of any representation
or warranty of VapAria contained in this Agreement;         (b) any breach or
non-performance by VapAria of any covenant to be performed by it that is
contained in this Agreement;         (c) any breach arising from or relating to
any use and distribution of the product by VapAria other than as expressly
provided herein; and         (d) infringement of any third party intellectual
property rights which infringement arises from modifications to the Product
performed by or on behalf of the VapAria, except to the extent such claim is
covered under section 7.01.

 

6.03 Indemnification Procedure

 

Any party seeking indemnification under Article 6.00 (the “Indemnitee”) in
respect of a third party claim shall (i) promptly notify the indemnifying party
(the “Indemnitor”) of such claim, (ii) provide the Indemnitor sole control over
the defense and/or settlement thereof, and (iii) at the Indemnitor’s request and
expense, provide full information and reasonable assistance to Indemnitor with
respect to such claims. Without limiting the foregoing, with respect to third
party claims brought under Sections 6.01 and 6.02, the Indemnitee, at its own
expense, shall have the right to participate with counsel of its own choosing in
the defense and/or settlement of any such claim.

 

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Article 7.00

 

TERM AND TERMINATION

 

7.01 Term

 

The term of this Agreement shall be for the life of the patent commencing on the
date of execution of this Agreement, and shall continue in full force and effect
unless terminated in accordance with this Article 7.00.

 

7.02 Termination for Cause

 

Either party may terminate this Agreement for cause as follows:

 

7.02.1 Nonpayment

 

If either party fails to pay any amount due hereunder to the other party within
five (5) Business Days after the non-defaulting party gives the defaulting party
written notice of such nonpayment, the non-defaulting party shall have the right
to terminate this Agreement immediately upon the expiration of such five (5)
Business Day period.

 

7.02.2 Non-Monetary Default

 

If any representation or warranty provided for herein proves to be materially
inaccurate, or if either party breaches any non-monetary covenant provided for
herein or defaults in the performance of any non-monetary term, condition, or
provision of this Agreement and the default is not cured within thirty (30) days
(if capable of being cured within that time) after the non-defaulting party
gives written notice to the defaulting party of such default, the non-defaulting
party shall have the right to terminate this Agreement immediately upon the
expiration of such thirty (30) day period. If the nature of the default is such
that more that thirty (30) days are required for cure, the non-defaulting party
shall have the right to terminate upon written notice if the defaulting party
fails to commence efforts to cure such default within the thirty (30) day period
and in any event such cure is not completed within 75 days of the commencement
of such 30 day period.

 

7.03 Effect of Termination for Cause

 

(a) Upon the termination of this Agreement by VapAria for cause, the following
provisions shall take effect:

 

  (i) The rights and licenses granted to VapAria under this Agreement shall
survive, subject to the limitations set forth herein, and VapAria shall be
entitled to continue its use of the ‘040 Patent; and         (ii) The indemnity
and outstanding payment obligations hereunder existing at the time of
termination, shall survive.         (iii) VapAria shall have such other rights
and remedies for damages as provided by law.

 

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(b) Upon the termination of this Agreement by Chong for cause, the following
provisions shall take effect:

 

  (i) The rights and licenses granted to VapAria under this Agreement shall be
terminated, subject to subsection (ii) below; and         (ii) Any and all
Product manufactured by or for VapAria prior to the effective date of such
termination and in accordance with the terms and conditions herein shall not be
deemed a violation of this Agreement; and         (iii) Chong shall have such
other rights and remedies for damages as provided by law.

 

ARTICLE 8.0

 

CONFIDENTIAL INFORMATION

 

The parties agree that all information forwarded to one by the other for the
purposes of this Agreement: (1) are to be received in strict confidence, (2) are
to be used only for the purposes of this Agreement, and (3) are not to be
disclosed by the recipient party, its agents or employees without the prior
written consent of the other party, except to the extent that the recipient
party can establish competent written proof that such information:

 

  g) was in the public domain at the time of disclosure;         h) later became
part of the public domain through no act or omission of the recipient party, its
employees, agents, successors or assigns;         i) was lawfully disclosed to
the recipient party by a third party having the right to disclose it;         j)
was already known by the recipient party at the time of disclosure;         k)
was independently developed by the recipient; or         l) is required by law
or regulation to be disclosed, provided however, that the disclosing party shall
first give the other party written notice and adequate opportunity to object to
such order for disclosure or to request confidential treatment.

 

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Information shall not be deemed to be available to the public or to be in the
recipient’s possession merely because it:

 

  c) includes information that falls within an area of general knowledge
available to the public or to the recipient (i.e., it does not include the
specific information provided by the other party); or         d) can be
reconstructed in hindsight from a combination of information from multiple
sources that are available to the public or to the recipient, if not one of
those sources actually taught or suggested the entire combination, together with
its meaning and importance.

 

Each party’s obligation of confidence hereunder shall be fulfilled by using at
least the same degree of care with the other party’s confidential information as
it uses to protect its own confidential information. This obligation shall exist
while this Agreement is in force and for a period of 3 years thereafter.

 

Article 9.00

 

GENERAL

 

9.01 Governing Law and Jurisdiction

 

This agreement shall be governed by and construed under the laws of the State of
Minnesota, without reference to conflict of laws principles. The parties agree
that any dispute arising under this Agreement or out of the negotiation of or
the relationship that is being formed pursuant to this Agreement will only be
venued in the State or Federal Courts of Minnesota, and hereby consent to such
jurisdiction and venue.

 

9.02 Assignment

 

To the extent this Agreement is assigned to another either pursuant to this
Agreement or by operation of law, this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

 

9.03 Notices

 

Any notice, demand, or other communication (“Notice”) required or permitted to
be given or made shall be in writing and shall be sufficiently given or made if
delivered in person, sent by facsimile transmission, or sent by prepaid first
class registered mail during normal business hours on a Business Day and
addressed as follows:

 

  to Chong: Chong Corporation     5550 Nicollet Avenue S.     Minneapolis, MN
55419     Attention: Alexander C. Chong         to VapAria: VapAria Corporation
    5550 Nicollet Avenue S.     Minneapolis, MN 55419     Attention: William P.
Bartkowski

 

or to such other person or address as a party may from time to time advise the
other party by Notice in writing pursuant to the provisions of this Section. The
date of receipt of any such Notice, demand or request shall be deemed to be the
date of delivery or facsimile of such Notice, demand, or request if served
personally, faxed on a Business Day during normal business hours, or if sent
after normal business hours of the recipient then the next Business Day, or, if
mailed as aforesaid, the third Business Day following the date of mailing.

 

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9.04 Entire Agreement

 

The parties hereto acknowledge that this Agreement and its Schedules set forth
the entire agreement and understanding of the parties hereto as to the subject
matter hereof, and supersedes all prior discussions, agreements and writings in
respect hereto, including the Letter of Intent.

 

9.05 Counterparts

 

This Agreement may be executed in any number of counterparts and when so
executed and delivered shall have the same force and effect as though all
signatures appeared on one document.

 

9.06 Further Assurances

 

Each party covenants and agrees to do and cause all things to be done and
execute and deliver all such documents as may be required in order to carry out
the provisions of this Agreement.

 

9.07 Severability

 

The provisions of this agreement shall be severable, and if any provision of
this Agreement shall be held or declared to be illegal, invalid, or
unenforceable, such illegal, invalid or unenforceable provision shall be severed
from this Agreement and the remainder of this Agreement shall remain in full
force and effect, and the parties shall negotiate a substitute, legal, valid and
enforceable provision that most nearly reflect the parties’ intent in entering
into this Agreement.

 

IN WITNESS WHEREOF, the parties, by their duly authorized representatives, have
entered into this Agreement.

 

CHONG CORPORATION   VAPARIA CORPORATION       By: /s/Alexander C. Chong   By:
/s/William P. Bartkowski           Name: Alexander C. Chong   Name: William P.
Bartkowski           Title: Chief Executive Officer   Title: President          
Date:  January 28, 2016   Date: January 28, 2016

 

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