EXHIBIT 10.12
EXCLUSIVE LICENSE
AGREEMENT
This Exclusive License Agreement
(“Agreement”) is made as of April 11, 2006 (the
“Effective Date”), by and between Discus
Holdings, Inc., a California corporation with its principal
place of business at 8550 Higuera St., Culver City, CA 90232
(“Discus”), Spectrum Dental, Inc., a California
corporation with its principal place of business at 8554 Hayden
Pl., Culver City, CA 90232 (“Spectrum”, and Discus and
Spectrum will be considered collectively “Licensor”),
and American Medical Technology, Inc. a Delaware corporation
with its principal place of business at 5655 Bear Ln., Corpus
Christi, TX 78405 (“AMT”).
RECITALS
A.
Licensor manufactures and sells
certain proprietary dental products.
B.
AMT is a leading distributor of
dental and other products.
C.
Licensor and AMT desire that
Licensor appoint AMT as the exclusive distributor of such Licensor
products in a designated territory, subject to and in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of
the foregoing, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
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1.
APPOINTMENT AND
LICENSES.
1.1
Exclusive Appointment
. Subject to AMT’s compliance
with the terms and conditions of this Agreement and subject to any
limitations in this Agreement, Licensor appoints AMT, and AMT
accepts such appointment, as the independent, exclusive distributor
of the products listed in Exhibit A (“
Products ”) in and limited to the territory
specified in Section 1.2 (“
Territory ”). Subject to AMT’s compliance
with the terms and conditions of this Agreement, during the term of
this Agreement, Licensor will not appoint another distributor of
the Products in the Territory.
1.2
Territory . AMT will distribute the Products only to
dealers throughout the world for resale to professional dental
customers. Nothing herein shall provide AMT the right to sell
Products directly to professional dental customers.
1.3
Technology License
. Licensor shall deliver to AMT,
promptly after the Effective Date, such packaging instructions,
design materials, formulas, and other written specifications
reasonably required to enable AMT to distribute the Products within
the Territory (the “ Specifications ”).
Licensor understands and acknowledges that the Products are
manufactured through the use of those certain processes, know-how
and related materials proprietary to Licensor and made available to
AMT hereunder (the “ Technology ”).
Licensor hereby grants AMT a worldwide, exclusive (except as set
forth herein), non-transferable license during the term of this
Agreement to use the Technology solely for the purpose of selling,
offering to sell, exporting, distributing, marketing and supporting
the Products as to the Territory. Except for the limited right to
appoint other distributors to market and distribute the Products as
contemplated herein, AMT shall have no right to sublicense the
rights set forth herein.
1.4
Supply and
Manufacturing . AMT
acknowledges that Licensor has granted manufacturing rights using
the Technology to Westside Packaging, Inc. (“
Westside ”) , and that AMT shall
purchase the Products from Westside pursuant to a Manufacturing
Agreement between them. In the event that during the term of this
Agreement AMT desires to either purchase the Products from another
distributor or to obtain the rights to manufacture the Products on
its own account, AMT must first obtain Licensor’s consent.
Further, AMT acknowledges that Spectrum has various distribution
arrangements in place with foreign distributors identified in
Exhibit C , and that the parties will work together for
Spectrum to transfer such arrangements to AMT or in the alternative
to terminate such distribution relationships with
Spectrum.
1.5
Trademark License
. Subject to AMT’s compliance
with the terms and conditions of this Agreement, Licensor grants to
AMT an exclusive, non-transferable license to use the trade names,
trademarks, logos and designations in or associated with the
Products, as specified in Exhibit A (“
Marks ”), during the term of this Agreement,
solely in connection with AMT’s marketing, promotion and
distribution of the Products within the Territory. Any such use of
a Mark by AMT must correctly attribute ownership of such mark to
Licensor and must be in accordance with applicable law and
Licensor’s then-current trademark usage guidelines. AMT will
not remove or obscure any Marks on or in the Products, and will not
attach any additional trademarks, logos or trade designations on or
to the Products. For the avoidance of doubt, the preceding language
will not prohibit AMT from noting AMT as the exclusive distributor
of the Products or providing contact information of AMT for
questions and problems relating to the Products. AMT acknowledges
and agrees that Licensor owns the Marks and that any and all
goodwill and other proprietary rights that are created by or that
result from AMT’s use of a Mark hereunder inure solely to the
benefit of Licensor. AMT will at no time contest or aid in
contesting the validity or ownership of any Mark or take any action
in derogation of Licensor’s rights therein, including,
without limitation, selling any Product (other than
Licensor’s) or applying to register any trademark, trade name
or other designation that is confusingly similar to any
Mark.
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1.6
License Restrictions
. AMT may use the Technology
only in connection with the Products and may make the Products
available only in connection with the Marks. AMT may not
market the Products under any other mark, and may not modify
the Marks in any manner. All rights not expressly granted hereunder
are reserved to Licensor. The Technology and all intellectual
property rights therein are and will remain the sole and exclusive
property of Licensor. AMT will reproduce on each copy it makes of
the Technology and Specifications, and will not alter remove or
obscure, any intellectual property rights notices of Licensor that
may appears on the Technology and Specifications as provided
to AMT.
2.
AMT’S
OBLIGATIONS.
2.1
Manufacturing and
Promotion . AMT will
promote and advertise the Products in accordance with
Licensor’s reasonable policies, as announced from time to
time. AMT will obtain Licensor’s prior approval of any
promotional or advertising materials relating to the Products that
are not expressly authorized by Licensor’s policies before
publishing or distributing such materials. In the event that AMT
manufactures the Products as permitted under this Agreement, AMT
agrees that the nature and the quality of the Products shall
conform to the quality standards set forth by Licensor, as set
forth in the Specifications as may be updated by Licensor from
time to time. In no event shall the Products fail to meet
applicable widely-accepted industry standards, including any laws
or regulations governing the Products. AMT also agrees to furnish
Licensor from time to time representative samples of the Products
for purposes of determining that such Products conform to the
Specifications, and agrees to permit Licensor to inspect, from time
to time, the facilities at which AMT manufactures the Products, as
applicable.
2.2
Minimum Commitments
. AMT will market and sell at least
the minimum quantities of each Licensor Product for each of the
periods specified in Exhibit B . If AMT does not market
and sell the minimum quantities specified in Exhibit B
during any such period, then, upon Licensor’s request, AMT
will promptly provide Licensor with a written report explaining
AMT’s failure to meet its minimum quantity, and Licensor will
have the right, in its sole discretion, to do any of the following:
(i) revise the minimum quantities specified in
Exhibit B for future periods; or (ii) terminate
this Agreement for cause, effective immediately upon notice to AMT,
in the event that AMT does not cure such breach within thirty (30)
days after notice from Licensor by achieving the Minimum Commitment
during such thirty (30) day period.
2.3
AMT Personnel
. AMT will maintain sufficient
technical and sales personnel having the knowledge and skills
necessary to: (i) inform customers about the features and
capabilities of the Products and, to the extent necessary,
competitive products; (ii) service and support the Products in
accordance with AMT’s obligations under this Agreement; and
(iii) otherwise perform its obligations under this
Agreement. AMT will, at its expense, comply with Licensor’s
minimum training requirements for distributors of the
Products.
2.4
Support . AMT will provide prompt and comprehensive
pre-sales and post-sales support services for the Products to
AMT’s customers in the Territory.
2.5
Packaging . AMT will distribute the Products unmodified
and with all packaging and proprietary rights statements intact as
provided in the Specifications, and any changes to such packaging
or marking shall require Licensor’s pre-approval.
Additionally, AMT will be responsible for providing any limited
license agreements or limited warranty statements to customers, and
all such agreements shall be between AMT and the customer. Licensor
shall not be a party to such agreements.
2.6
Business Conduct
. AMT will: (i) conduct
business in a manner that reflects favorably at all times on the
Products and the good name, goodwill and reputation of Licensor;
(ii) make no false or misleading representations or
advertisements with regard to Licensor or the Products; and
(iii) make no representations, warranties or guarantees to
customers or to the trade with respect to the specifications,
features
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or capabilities of the Products that are
inconsistent with the literature distributed by
Licensor.
2.7
Inventory . AMT will maintain an inventory of the Products
sufficient to meet the needs of its customers on a timely basis,
but, in any event, at least an inventory sufficient to meet
AMT’s reasonably anticipated demands for any thirty (30) day
period.
2.8
Maintenance of Regulatory
Approvals, Licenses, Certifications and CE Mark
.
2.8.1 AMT shall be fully responsible
for obtaining all necessary recertification and registration for
AMT to sell Products. AMT shall also maintain in good standing all
necessary regulatory approvals, licenses, ISO certifications and CE
Markings currently issued under Licensor’s name in countries
previously listed by Licensor and for notifying the issuing parties
and/or governmental agencies in each country where such regulatory
approvals, licenses, ISO certifications and CE Markings have been
issued under Licensor’s name.
2.8.2 AMT will be solely responsible
for maintaining all obligations required as part of any
regulatory approvals, licenses, ISO certifications and CE Markings
issued under Licensor’s name. All such efforts shall be
undertaken at AMT’s cost.
2.8.3 AMT will be solely responsible
for ensuring that the promotion, marketing, sales and distribution
of Products is conducted in compliance with all regulations
applicable to Products in each country where such activities take
place. AMT commits to ensure that all regulatory approvals,
licenses, ISO certifications and CE Markings are properly
maintained or obtained, as applicable, such that there is no
impairment of the good name and goodwill of Licensor.
2.8.4 AMT will be solely responsible
for communicating with pertinent governmental agencies or other
regulating bodies with respect to all regulatory approvals,
licenses, ISO certifications and CE Markings currently issued under
Licensor’s name
2.9
Costs for Maintaining Registered
Trademarks . AMT agrees
to reimburse Licensor for Licensor’s costs relating to the
maintenance of Product’s trademarks in all applicable
jurisdictions.
2.10
Insurance . AMT agrees to procure and to maintain general
comprehensive liability insurance covering each occurrence of
bodily injury and property damage in the amount of not less than
$1,000,000 per occurrence, $10,000,000 aggregate coverage, with
endorsements for product and completed operations, blanket
contractual liability, and vendor’s liability. AMT agrees to
furnish upon request by the Licensor a certificate of insurance
indicating coverage in the required amounts and stating that the
insurer shall endeavor to give Licensor written notice at least
thirty (30) days prior to any cancellation, non-renewal, or
material change in coverage. Licensor must be named as an
additional insured or loss payee
3.
RECORDS AND
REPORTS.
3.1
Reports . Commencing with the third calendar quarter of
2006, and within thirty (30) after the end of each calendar quarter
thereafter, AMT will provide Licensor with a written report that
includes: (i) AMT’s net sales and shipments of each
Licensor Product for that calendar quarter, by dollar volume and
number of units, both in the aggregate and for such categories as
Licensor may designate from time to time;
(ii) AMT’s current inventory levels of the Products,
both in the aggregate and by Licensor Product; and (iii) any
other information requested by Licensor. AMT’s report will
comply in form and substance with Licensor’s reporting
requirements, as they are reasonably determined by Licensor and
communicated to AMT from time to time.
3.2
Notification
. AMT will promptly notify Licensor
of any: (i) claim or proceeding involving the Products; or
(ii) claimed or suspected Licensor Product defects.
3.3
Records . During the term of this Agreement and for a
period of three (3) years after any termination or expiration
thereof, AMT will maintain complete and accurate books, records and
accounts relating to the distribution
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of the Products, and will permit
Licensor’s authorized representatives to examine them on
reasonable prior notice.
4.
CONSIDERATION.
As consideration for the licenses granted by
Licensor to AMT hereunder, AMT shall grant to Discus a certain
warrant, and the parties shall grant to the other certain options,
all as set forth in that certain warrant to purchase common stock
of AMT and that certain Put and Call Option Agreement between the
parties executed on even date herewith.
5.
TERM AND
TERMINATION.
5.1
Term . This Agreement commences on the Effective
Date and, unless terminated earlier in accordance with the terms of
this Agreement, will remain in effect for a term of five
(5) years thereafter. At the end of such five (5) year
term, this Agreement will automatically expire unless the parties
mutually agree in writing to renew this Agreement at least thirty
(30) days prior to such automatic expiration. Further, this
Agreement will automatically terminate in the event that either
party exercises its rights under that certain Put and Call Option
Agreement between the parties identified in Section 4
hereof.
5.2
Termination For Cause
. Either party may terminate
this Agreement, at any time, if the other party breaches any
material term of this Agreement and