LICENSE AGREEMENT
THIS AGREEMENT made this 28th day of July, 1989, by and between XXXX
X. XXXXXX ("Grantor"), and ACTIVE ANKLE SYSTEMS, INC., a Kentucky Corporation
("Licensee").
WHEREAS, Grantor has developed certain inventions, including U.S. Patent
No. 4510927 entitled "Ankle Brace" and a to-be-filed U.S. Patient application
for improvements thereto, and has developed and is in possession of certain
know-how for an ankle brace system (collectively "Ankle System"); and
WHEREAS, Licensee desires to acquire the right to make, use and sell the
Ankle System within the License Area described below; and
NOW, THEREFORE, Grantor and Licensee, in consideration of the mutual
agreements herein contained, and for other good and valuable consideration,
agree as follows:
I. LICENSE
Grantor hereby grants to Licensee, subject to the terms, conditions and
limitations set forth herein, an exclusive license to make, have made, use and
sell the Ankle System for the term hereof.
II. LICENSE AREA
Licensee shall have the exclusive right to design, manufacture and
distribute the Ankle System within a geographic area extending throughout the
world (the "License Area").
III. CONFIDENTIAL RELATIONSHIP
Licensee acknowledges it has had no part in the creation or development of
U.S. Patient No. 4510927.
During the term of this Agreement, Grantor and Licensee and after the
termination of this Agreement, Licensee shall treat as confidential and shall
not divulge or disclose to, or use for the benefit of, any other person or
entity, any proprietary and not publicly available information supplied by
Grantor to Licensee.
Licensee and Grantor agree that damages would be an insufficient remedy for
the unauthorized use or disclosure of such information. Licensee and Grantor
hereby agree that in addition to any other available legal or equitable
remedies, each are entitled to injunctive relief in order to prevent any such
use or disclosure. The non-breaching party shall be entitled to
receive, in addition to any other relief or remedy granted, its costs and
expenses incurred in seeking to enforce the terms of this Agreement, including
reasonable attorneys' fees.
IV. INFRINGEMENT
Licensee and Grantor shall promptly give written notice and full
information to each other concerning any infringement or alleged infringement of
the Ankle System, and of any and all legal proceedings, suits, actions,
controversies and/or claims which are brought, made or threatened affecting or
relating to the Ankle System. Licensee shall in the exercise of its reasonable
business judgment enforce all proprietary rights in and to the Ankle System and
defend all patents relating to the Ankle System against any such proceedings,
suits, actions, controversies and/or claims. Grantor shall assist Licensee in
the prosecution of any claim, proceeding or action intended to enforce or
protect Grantor's and/or Licensee's rights to the Ankle System. Grantor shall
have the duty to defend claims of infringement by third parties only to the
extent of the consideration (or its value) received herein by Grantor as of the
time the claim is asserted.
V. FEES
In consideration of the issuance of this License and the services and
covenants of Grantor set forth herein, Licensee shall transfer 490 shares of
Active Ankle Systems, Inc.'s stock to Grantor, and shall pay the Grantor's
reasonable attorney fees related to this license.
VI. ASSIGNMENT
Except as provided herein, Licensee may not voluntarily, or by operation of
law, sell, assign, transfer, convey, pledge, hypothecate or otherwise encumber
this Agreement or any right or interest thereunder without Grantor's written
consent, which will not be unreasonably withheld.
VII. TERM OF AGREEMENT
This Agreement shall remain in effect from the effective date hereof until
expiration of the last patent relating to the Ankle System as granted hereunder,
unless sooner terminated, and notwithstanding any event which would deem the
patents invalid.
VIII. TERMINATION
A. GROUNDS. At its option and without prejudice to any remedies it may
otherwise have, Grantor may terminate this Agreement:
1. Upon the breach of any of the provisions of this Agreement by
Licensee, should such breach not be remedied within thirty (30) days after
written notice of same has been given to Licensee.
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2. Upon the commencement of any liquidation proceeding by or against
Licensee, or the appointment of a receiver for the assets of Licensee; the
making of an assignment for the benefit of creditors of Licensee; or a
determination by any professional or governmental body suspending or terminating
the rights to distribute the Ankle System by Licensee or any of its employees.
3. Upon failure of Licensee to sell, distribute, issue or otherwise
promote the Ankle System for one hundred eighty (180) consecutive working days,
except if such failure is caused by an Act of God, force majeure or other
unforeseeable event beyond Licensee's control, in which event the cause thereof
shall be remedied by Licensee as promptly as possible.
B. OBLIGATIONS ON TERMINATION. Immediately upon termination of this
Agreement for any reason:
1. All Licensee's rights as a Licensee shall terminate, and Licensee
shall discontinue all development, advertising, distribution or other use of the
Ankle System except that Licensee may sell its then remaining inventory.
2. All rights, title and interest in and to the use of the Ankle
System shall revert to and vest in Grantor.
3. In addition to the provisions herein, it is agreed that following
any termination of this Agreement by Grantor or Licensee, at Grantor's option
and upon Grantor's transfer to Licensee of the 490 shares received in paragraph
V hereof, the exclusive license covering U.S. Patent No. 4510927, entitled,
"Ankle Brace" and to be filed a U.S. Patent application for improvements
therein, shall become royalty bearing and Grantor shall be entitled to the
following:
5% of the first $1,000,000 net sales
4% of the net sales between $1,100,001 - $2,000,000
3% of the net sales greater than $2,000,001
IX. GOVERNING LAW AND REMEDIES
Any controversy or claim arising out of or relating to this Agreement, or
its interpretation or enforcement, shall be interpreted in accordance with the
Laws of the Commonwealth of Kentucky. Grantor shall be entitled to receive its
costs and expenses incurred in bringing or defending any claim arising hereunder
in which Grantor prevails, such costs and expenses to include reasonable
attorneys' fees.
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X. WAIVER
No failure of Grantor to exercise, or the partial exercise of, any right or
power given to it hereunder or failure to demand strict compliance by Licensee
with any term, condition, covenant or other obligation hereof, and no practice
of the parties at variance with the terms hereof, shall constitute a waiver of
Grantor's rights to demand exact compliance with the terms hereof or preclude
Grantor from the exercise of any other right or remedy. Any waiver of a default
hereunder shall be in writing and shall not operate as a waiver of any other
default or the same default on a future occasion.
XI. INVALID PROVISION
If any covenant or other provision of this Agreement is invalid, illegal,
or incapable of being enforced, by reason of any rule of law, administrative
order, judicial decision or public policy, all other conditions and provisions
of this Agreement shall, nevertheless, remain in full force and effect.
XII. NOTICE
All notices hereunder shall be in writing and shall be deemed to have been
given when deposited in the United States mail by registered or certified mail,
return receipt requested, if to Grantor addressed to his home or such other
address as Grantor shall designate in writing and if to Licensee and/or its
partners or shareholders at the address(es) of Licensee herein set forth or such
other address(es) as Licensee or such partner or shareholder shall designate to
Grantor in writing.
XIII. BENEFITS AND BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon the heirs,
representatives, successors and assigns of Licensee and Grantor, except as
otherwise expressly provided herein.
XIV. NOT A SECURITY AND NO BUSINESS REPRESENTATIONS
Licensee understands that the success of the business venture undertaken by
Licensee hereunder depends largely upon the ability of Licensee and Licensee's
partners, stockholders, officers, directors, employees and/or agents to operate
as independent businessmen. Licensee expressly disclaims receipt of any
warranty, claim or representation, express or implied, as to the potential
success or profitability of the business venture herein contemplated, or as to
the efficacy of the Ankle System in making the business venture profitable
without substantial effort by Licensee and/or Licensee's partners, stockholders,
officers, directors, employees and agents.
Licensee acknowledges that no person has made any other representation
which is not expressly set forth herein in order to induce Licensee to execute
this Agreement. Licensee
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recognizes and acknowledges that any financial and sales information regarding
Grantor's existing licenses provided to Licensee by Grantor is not indicative of
performance to be attained by Licensee.
XV. REPRESENTATIONS AND WARRANTIES
Grantor hereby warrants and represents that:
(1) To the knowledge and belief of Grantor, it has the exclusive
rights in and for the use of the Ankle System, including the right to license
others and to enter into this Agreement;
(2) To the knowledge and belief of Grantor, such rights of Grantor
and the exclusive license and rights granted to Licensee hereunder, do not
infringe upon any rights whatsoever of any person or, to the knowledge of
Grantor any claimed rights whatsoever of any person;
(3) Grantor has not granted or permitted, and during the term of this
Agreement, Grantor will not grant or permit to any person other than Licensee,
any license or right, whether or not exclusive, and Grantor has not, and during
the term of this Agreement, will not, enter into any Agreement or arrangement
with any such person, to use the Ankle System in any way which conflicts with
the exclusive license and rights granted to Licensee hereunder;
(4) To the knowledge and belief of Grantor, no person is presently
using the Ankle System for any purpose which conflicts with the exclusive
license and right granted to Licensee hereunder, and Grantor does not know of
any actual or threatened infringement or violation by any person of Grantor's
rights in the Ankle System or of the exclusive license and rights granted to
Licensee hereunder, or any imitation by any person of the Ankle System; and
(5) Grantor will use its best efforts to maintain and protect the
Ankle System and his rights therein.
The warranties, representations and undertakings in Article XV shall
survive the expiration or any termination of this Agreement.
XVI. ENTIRE AGREEMENT
This License Agreement contains the entire understanding of the parties,
and no representations, inducements, promises or agreements, oral or otherwise,
between the parties not embodied herein shall be given any force and effect. No
representations or warranties except those contained herein have been made.
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IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
copies, each of which shall be deemed an original.
GRANTOR:
____________________________________
XXXX X. XXXXXX
LICENSEE:
ACTIVE ANKLE SYSTEMS, INC.
BY:_________________________________
ATTEST:
BY:______________________________
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