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EXCLUSIVE LICENSE AGREEMENT

License Agreement

EXCLUSIVE LICENSE AGREEMENT | Document Parties: AMERICAN MEDICAL TECHNOLOGIES INC/DE | Discus Holdings, Inc | Spectrum Dental, Inc., You are currently viewing:
This License Agreement involves

AMERICAN MEDICAL TECHNOLOGIES INC/DE | Discus Holdings, Inc | Spectrum Dental, Inc.,

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Title: EXCLUSIVE LICENSE AGREEMENT
Governing Law: California     Date: 4/17/2006
Industry: Medical Equipment and Supplies     Sector: Healthcare

EXCLUSIVE LICENSE AGREEMENT, Parties: american medical technologies inc/de , discus holdings  inc , spectrum dental  inc.
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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


 
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