EXHIBIT 10.19
LICENSE
AGREEMENT
This License Agreement
(“Agreement”) is made as of April 1, 2007, (the
“Effective Date”), between CrownBeav, LLC an
Oregon limited liability company with its principal place of
business at 895 Country Club Road, Suite B-100, Eugene, Oregon
97401 (“Licensor”), and American Medical Technology,
Inc. a Delaware corporation with its principal place of business at
5655 Bear Lane, Corpus Christi, TX 78405 (“AMT”).
RECITALS
A.
Licensor manufactures and sells certain proprietary dental
products.
B.
AMT is a global leading distributor of dental and other
products.
C.
Licensor and AMT desire that Licensor appoint AMT as a 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 terms, covenants, and conditions expressed in
this Agreement to be kept and performed by the parties to this
Agreement, and for other good and valuable consideration, the
receipt, adequacy, and sufficiency of which is hereby acknowledged,
and based on the foregoing recitals which each party acknowledges
to be true, and which are hereby incorporated into this Agreement,
the parties mutually agree as follows:
1.
APPOINTMENT AND LICENSES.
1.1
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 (“the
Exclusive Territory”) and appointment as an independent
nonexclusive distributor of products listed in Exhibit A in and
limited to the territory specified in Section 1.3 (“the
Nonexclusive Territory”). The Exclusive Territory and
the Nonexclusive Territory may be jointly referred to as “the
Territories”. 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 Exclusive Territory.
1.2
Exclusive Territory . The Exclusive Territory is the
world except for the United States and Canada. AMT will
distribute the Products in the Exclusive Territory only to dealers
for resale to dental professional customers. AMT will have an
exclusive license to sell the Products in the Exclusive
Territory.
1.3
Nonexclusive Territory . The Nonexclusive Territory is
the United States and Canada. AMT will distribute the
Products in the Nonexclusive Territory only to dealers for resale
to dental professional customers. AMT will have a
nonexclusive license to sell the Products in the Nonexclusive
Territory.
1.4
Technology License . Licensor shall manufacture, or
have manufactured, and supply all Products to which this Agreement
applies. Licensor shall deliver to AMT, promptly after the
Effective Date, such packaging instructions and written
specifications reasonably required to enable AMT to distribute the
Products within the Territories (the
“Specifications”). Licensor and AMT understand
and acknowledge that the Products are manufactured through the use
of
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those certain
processes, know-how, and related materials proprietary to Licensor
(“the Technology”) and made available to AMT in a
limited way hereunder. Licensor hereby grants AMT a
worldwide, exclusive (in the Exclusive Territory) and nonexclusive
(in the Nonexclusive Territory), 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 Territories.
Except for the limited right to appoint other distributors
(including distributors who may market, distribute and sell to
other distributors) to market and distribute the Products as
contemplated herein, AMT shall have no right to sublicense the
rights set forth herein.
1.5
Supply and Manufacturing : AMT acknowledges that
Licensor has not granted manufacturing rights, (using the
Technology or otherwise) to AMT and that AMT shall purchase the
Products from Licensor pursuant to a Manufacturing Agreement
between both parties. Should future business conditions
dictate the need for AMT to manufacture Products, such
manufacturing rights can only be assigned under a separate
Manufacturing Agreement between both parties. Licensor
shall manufacture, package, label and ship the Products on behalf
of AMT to AMT’s customers. Licensor will provide
packaging, labeling, product assembly, labor, shipping, and other
services requested by AMT at cost plus fifteen percent (15%).
Services and products provided by Licensor will be provided at
location(s) and by personnel determined by Licensor at its sole
discretion. AMT may choose to order bulk shell units at the
agreed unit prices without the aforementioned handling fees except
for shipping charges. In the event that AMT makes such a
decision, then AMT shall be responsible for packaging, labeling,
shipping and any other services related to the distribution of such
shell units in conformance with the Specifications and subject to
the prior approval of the Licensor.
1.6
Trademark License . Subject to AMT’s compliance
with the terms and conditions of this Agreement, Licensor grants to
AMT an exclusive (in the Exclusive Territory) and nonexclusive (in
the Nonexclusive Territory), 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, distribution and sale of the
Products within the Territories. 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 (in the Exclusive Territory), not prohibit AMT from
noting that AMT is a non-exclusive distributor of the Products (in
the Non-exclusive Territory), or providing contact information of
AMT for questions and problems relating to the Products.
1.7
Limitations . No grant, right, license, or immunity is
conveyed or granted to AMT by implication or otherwise under this
Agreement with respect to the Products, the Technology, or any
other actual or inchoate property right of Licensor except as
expressly set forth in this Agreement.
Except as expressly set forth herein, neither
the granting of the licenses herein, nor the acceptance of
Royalties hereunder, shall constitute an approval of or
acquiescence in AMT’s practices with respect to trademarks,
trade names, corporation names, advertising, or similar practices
with respect to the Products, nor does the granting of such
licenses constitute an authorization or approval of, or
acquiescence in the use of Licensor’s name or any trade name
or trademark of Licensor or its affiliates in connection with the
manufacturer, advertising, or sale of the Products, and Licensor
hereby expressly reserves all rights with respect
thereto.
2.
AMT’S OBLIGATIONS.
2.1
Promotion and Distribution . AMT will promote and
advertise the Products in
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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 to be
used in the Nonexclusive Territory before publishing or
distributing such material. Licensor understands the
complexities of promotion and advertising in the international
marketplace especially with regards to foreign languages and local
standards. As such Licensor shall not require prior approval
for promotional materials and advertising conducted in the
Exclusive Territory. AMT agrees to submit copies of all
international promotions and advertising to Licensor for reference
and archiving. Licensor shall manufacture the Products, but
in the event that the parties may agree in the future that AMT
shall manufacture, assemble or repackage all or a portion of the
Products, AMT agrees that the nature and the quality of the
Products it manufactures, assembles or repackages shall conform to
the quality standards of 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. If AMT manufactures,
assembles or repackages the Products, AMT agrees to furnish
Licensor from time to time with 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 and with reasonable notice, the facilities at which
AMT manufactures assembles or repackages the Products, as
applicable.
2.2
Minimum Commitments . AMT will market and sell at
least the minimum quantities of each 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 sell the 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 ninety (90) days after notice from
Licensor by selling the minimum quantities during such ninety
(90) 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.
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 Territories.
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,
which approval shall not be unreasonably withheld.
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) not engage in any
business practice or conduct that will result in the disparagement
of the Products and/or 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, or
capabilities of the Products that are inconsistent with the
literature distributed, created, or approved by Licensor.
2.7
Maintenance of Regulatory Approvals, Licenses, Certifications
and CE Mark .
2.7.1 AMT
shall be fully responsible for obtaining all necessary
recertification and
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registration for AMT to
sell Products in the Exclusive Territory. 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. Licensor shall, at no cost to
Licensor, provide any assistance reasonably requested by AMT with
respect to AMT obtaining regulatory approvals, licenses, ISO
certifications and CE Markings.
2.7.2 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 AMT undertakes such activities. 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. Licensor shall, at no cost to Licensor, provide any
assistance reasonably requested by AMT in order for AMT to ensure
that all regulatory approvals, licenses, ISO certifications and CE
Markings are properly maintained or obtained, as
applicable.
2.7.3 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 in the
Exclusive Territory.
2.8
Costs for Maintaining Registered Trademarks . AMT
agrees to reimburse Licensor for Licensor’s reasonable costs
relating to the maintenance of the Product’s trademarks in
all applicable jurisdictions.
3.
RECORDS AND REPORTS.
3.1
Reports . Commencing with the second calendar quarter
of 2007, and within thirty (30) calendar days 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 Product for that calendar quarter, by dollar
volume and number of units (a “unit” being defined for
this Agreement as an individual crown shell or individual bridge
shell or comparable item), both in the aggregate and for such
categories as Licensor may reasonably designate from time to time;
and (ii) any other information reasonably 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, allegation, or proceeding of any kind or nature
involving the Products, or any of them; or (ii) claimed or
suspected Product defects.
3.3
Records . During the term of this Agreement and for a
period of two (2) years after the termination or expiration
thereof, AMT will maintain complete and accurate books, records and
accounts relating to the distribution of the Products, and will
permit Licensor’s authorized representatives to examine them
on reasonable prior notice.
4.
CONSIDERATION.
4.1
Royalty. AMT shall pay to Licensor, as provided in
Exhibit B to this Agreement, the sum or sums due for sale of the
Products (“the Royalty”). AMT shall pay for all
orders placed for Products and/or services under net 30 day
terms. If the Royalty amount, or other amount due, is unknown
at the time of placement of the Product Order Licensor shall issue
an invoice for the amount due when known. Any outstanding
invoices for Products or services must be paid within thirty (30)
days from the receipt of such invoices by AMT in accordance with
Section 9.6 of this Agreement. Violation of these payment
terms by AMT shall result in non-fulfillment of orders until
deficiencies are rectified. If such deficiencies continue for
a period of ninety (90) days, Licensor has the right to terminate
the Agreement for cause without the payment of compensation as
referenced in Section 5.3 of this
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Agreement. If the
Agreement is terminated and payment deficiencies have been
rectified by AMT, Licensor agrees to pay AMT for any open Product
sales-related compensation that may be owed. AMT shall be
liable for interest on any overdue Royalty payments commencing on
the date such Royalty becomes due at the annual rate of one percent
(1%) over the prime interest rate quoted by Licensor’s bank
on the date such Royalty becomes due. If such interest rate
exceeds the legal rate in the jurisdiction where a claim therefore
is being asserted, the interest rate shall be reduced to the
maximum rate that is legal in such jurisdiction.
4.2
Option . In addition to amounts due to Licensor under
the provisions of Agreement, as consideration for the license
granted by Licensor to AMT hereunder, AMT grants to Licensor an
option, as set forth in that certain Option Agreement, attached
hereto as Exhibit C.
5.
TERM AND TERMINATION.
5.1
Term . This Agreement commences on the Effective Date
and, unless it is terminated earlier or the term is modified in
accordance with the terms of this Agreement, will remain in effect
for a term of ten (10) years thereafter. At the end of such
ten (10) year term, this Agreement will renew for an additional ten
(10) years if the terms and conditions of such renewal are agreed
upon by the parties prior to the expiration of the initial term of
this Agreement, and thereafter shall automatically renew for
additional five (5) year terms unless the parties mutually agree in
writing to cancel this Agreement at least thirty (90) days prior to
such automatic renewal.
5.2
Termination For Cause . Either party may terminate
this Agreement for cause at any time if the other party breaches
any material term of this Agreement and fails to cure that breach
within sixty (60) days (except that if the breach is for nonpayment
under Section 4.1, no additional time for cure shall be allowed
beyond the ninety (90) days set forth in Section 4.1) after notice
thereof from the non-breaching party, assuming such breach is
capable of being
