The brackets ("[ ]") which appear in various places in the
following exhibit indicate areas where confidential
information has been redacted by the Company. Such redacted
information is the subject of a request for confidential
treatment and is therefore being filed separately with the
Commission.
LICENSE AGREEMENT
This Agreement is entered into as of August 1, 1996, by and between
VEXCEL CORPORATION, a Colorado corporation having its principal place of
business in Boulder, Colorado, hereinafter referred to as "Licensor," and
IMAGE GUIDED TECHNOLOGIES, INC., a Colorado corporation having its principal
place of business in Boulder, Colorado, hereinafter referred to as "Licensee."
RECITALS
WHEREAS, Licensor owns United States Patent No. 4,836,778
(Mandibular Motion Monitoring System).
WHEREAS, Licensee is desirous of acquiring a non-exclusive,
world-wide right and license, to make, have made, use and sell, in medical
applications, the subject matter covered by the claims of said patent and
Licensor is willing to grant such a license upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, terms and conditions hereinafter expressed, the parties hereto
hereby agree as follows:
I. DEFINITIONS
As used herein, the following terms shall have the meanings set forth
below:
1.1 PATENT OR PATENTS means United States Patent No. 4,836,778, along
with all foreign counterparts, divisions, continuations and reissues thereof.
1.2 LICENSED PRODUCTS means any and all products or systems which are
covered by, or are produced using a process or utilize a method covered by,
or constitute a method of use covered by, the claims of the PATENT.
1.3 COMMENCEMENT DATE shall be the date first above written.
1.4 FIELD OF USE means any use that is involved with, related to, or
otherwise connected with the practice of medicine or dentistry, the
maintenance of health, the prevention, alleviation or cure of disease or the
treatment of disease, injury or deformity by medical, dental or instrumental
operations.
1.5 FISCAL YEAR means the period beginning on August 1 and ending on
July 31 of the next year.
1.6 NET SELLING PRICE means the invoiced price, F.O.B. or Ex-Works
Licensee's factory, after deduction of discounts, packaging, freight, duties
and taxes, but before deduction of any other items.
II. LICENSE GRANT
2.1 Licensor hereby grants to Licensee the non-exclusive, world-wide
right and license to make, have made, use and sell LICENSED PRODUCTS in the
FIELD OF USE. Licensee may sublicense such right and license to Licensee's
customers and to users of Licensee's and its customer's products; provided
Licensee remains responsible for payment of the royalty due under the first
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sentence of Section 3.2 below. Licensee shall not be deemed to have granted
a sublicense unless the same is in writing and references this Agreement.
III. ROYALTIES
3.1 Within 30 days after execution hereof, Licensee will pay Licensor
[ ] in cash.
3.2 In addition to the payment described in Section 3.1 above, Licensee
agrees to pay Licensor during the term of this Agreement a royalty for each
LICENSED PRODUCT sold or used by Licensee or its sublicensees (but not more
than one royalty for each LICENSED PRODUCT) of the greater of [ ] or [ ] of
the NET SELLING PRICE of Licensee's localizer system included in the LICENSED
PRODUCT. Licensee agrees that the minimum amount of royalty payable under
this Section 3.2 for each FISCAL YEAR beginning with the FISCAL YEAR starting
August 1, 1996, shall be [ ].
3.3 For the purpose of this Article III, a LICENSED PRODUCT will be
considered sold or used when Licensee has billed the purchaser therefor.
Royalties paid on LICENSED PRODUCTS which are not accepted or are returned by
the customer within ninety (90) days of delivery shall be credited to
Licensee.
3.4 Licensee's obligation to pay royalties hereunder shall cease upon
the earlier of (i) the expiration of the PATENT or (ii) the termination of
this Agreement. The PATENT shall be deemed to have expired upon the
non-payment of the maintenance
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fee, upon the judgment of invalidity or unpatentability by a court or
administrative agency of competent jurisdiction from which no appeal is taken
or can be taken or upon expiration of the term of the PATENT.
3.5 At the time Licensee delivers the accounting statement required by
Section 8.1 below, Licensee shall simultaneously pay to Licensor a sum equal
to the aggregate payment due based on the information contained in such
accounting statement and consistent with this Agreement.
IV. INFRINGEMENT CLAIMS
4.1 Licensor shall, at its election and expense, have the right, but
not the obligation, to prosecute any and all claims against third parties for
infringement of the PATENT. Licensor shall also have the right, but not the
obligation, to defend any and all claims against the validity of the PATENT
by third parties. If Licensor finds it necessary or desirable, it may join
the Licensee as a party in any suit or proceeding against third parties
alleging infringement of the PATENT. Should Licensor elect not to prosecute
or defend or not to continue to prosecute or defend any claim, action or
proceeding described above, it shall promptly give notice thereof to the
Licensee and the Licensee shall have the right, at its own expense, to
prosecute or defend or continue the prosecution or defense of such claim,
action or proceeding.
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V. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
5.1 Licensor represents and warrants to Licensee that Licensor is the
sole owner of the PATENT, free and clear of all liens and encumbrances, and
has the full power and authority to grant the license provided for in this
Agreement.
5.2 Licensor represents and warrants that the license granted to
Licensee hereunder does not and will not conflict with or violate the terms
of any agreement between Licensor and any third party.
5.3 To the knowledge of Licensor, the PATENT does not conflict with or
infringe upon the property rights of any other person, and no person has
asserted any such conflict or infringement.
5.4 Nothing contained in this Agreement shall be construed as a
representation or warranty by Licensor as to the validity or scope of the
PATENT.
VI. TERM
6.1 The term of this Agreement shall commence on the COMMENCEMENT DATE
and shall end on the expiration date of the PATENT, unless terminated sooner
pursuant to Article VII below.
VII. DEFAULT AND TERMINATION
7.1 Licensee will be deemed to be in default hereunder if (i) Licensee
fails to pay any sum due and payable hereunder within thirty (30) days after
notice from Licensor that the same has become due and payable, (ii) Licensee
breaches any material
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covenant made by it hereunder and fails to remedy such breach within thirty
(30) days after notice thereof from Licensor, or (iii) Licensee fails to
render an accounting statement and payment for all royalties due within
ninety (90) days of the end of the FISCAL YEAR (which failure is not cured
within thirty (30) days after notice of such failure from Licensor). In the
event of Licensee's default hereunder, Licensor may terminate this Agreement
by giving Licensee written notice of termination. In the event that Licensee
is in default hereunder or termination of this Agreement occurs pursuant to
this Section 7.1 or for any other reason, the sole and exclusive remedy which
Licensor shall have will be the termination of this Agreement and the right
to recover unpaid royalties (including any accrued unpaid minimum royalties).
7.2 At any time on or prior to June 30 of each year, Licensee shall
have the right to terminate this Agreement for the next FISCAL YEAR by giving
written notice of termination to Licensor and paying Licensor any unpaid
royalty accrued prior to such termination pursuant to Section 3.2 above.
VIII. ACCOUNTING
8.1 Licensee agrees to keep regular books of account and to render a
statement within ninety (90) days after the end of each FISCAL YEAR setting
forth the number of LICENSED PRODUCTS sold, and the royalty due thereon, and
shall accompany each such state-ment with a remittance covering the royalty
due. Such books of
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account shall be open at reasonable business hours for inspection by Licensor
or its duly authorized representative.
8.2 The accountants then regularly employed by the Company shall audit
the number of LICENSED PRODUCTS sold, which audit shall be delivered to
Licensor together with the Licensee's written statement. The parties agree
that for purposes of the audit the accountants shall only count the number of
sublicenses granted in writing by Licensee pursuant to this Agreement.
IX. INDEMNITY
9.1 Licensee agrees to indemnify and hold harmless the Licensor from
and against any product liability and patent infringement claims that may be
asserted against Licensor based upon or arising out of Licensee's manufacture
or sale of LICENSED PRODUCTS.
X. RIGHT OF ASSIGNMENT
10.1 Licensee may assign its rights and duties under this Agreement to
any purchaser of all or substantially all its business to which this license
pertains, to any corporation, joint venture or other entity in which Licensee
has an interest or to any successor to Licensee by way of merger or
consolidation. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
assigns.
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XI. MISCELLANEOUS
11.1 This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof. This Agreement may not be
amended or modified except by a written instrument executed by all parties.
11.2 This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Colorado applicable to contracts entered into
and to be wholly performed within that state.
11.3 All notices hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person,
or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or to such
other address for a party as shall be specified by like notice):
If to Licensee: Image Guided Technologies, Inc.
5710-B Flatiron Parkway
Boulder, CO 80301
ATTN: Paul L. Ray, Chairman of the
Board
If to Licensor: Vexcel Corporation
2477 55th Street
Boulder, CO 80301
ATTN: Dr. John C. Curlander,
President
11.4 If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder of the
provisions shall remain in full force and effect and shall in no way be
effected, impaired or invalidated.
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11.5 This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
VEXCEL CORPORATION
By: /s/ John C. Curlander
-------------------------------
President
IMAGE GUIDED TECHNOLOGIES, INC.
By: /s/ Robert E. Silligman
-------------------------------
President