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EXHIBIT 10.45
LICENSE AGREEMENT
AGREEMENT dated as of August 1, 1996 between Texas Airsonics L.P., a
limited partnership, wherein Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxxx XX and Xxx X.
Xxxxxxx are general partners, having a place of business at 0000 Xxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxx 00000 ("Licensor"), Texas Airsonics, Inc., a Texas
corporation having a place of business at 0000 Xxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxx
00000 ("Licensee"), and a wholly owned subsidiary of American Dental
Technologies, Inc. ("ADT"), a Delaware corporation having a place of business
at 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, pursuant to Article 12 of the Agreement and Plan of
Reorganization entered into as of November 22, 1995 ("Merger Agreement")
between Licensee and ADT, all industrial patent rights of Licensee are to be
transferred to Licensor subject to a license agreement and are being
transferred concurrent with this Agreement; and
WHEREAS, the Merger Agreement has been approved by the shareholders of ADT
and Licensee and, therefore; Licensee, Licensor and ADT are desirous of
implementing the terms of the Merger Agreement;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and conditions hereinafter contained, the parties hereby covenant and
agree as follows:
1. Definitions
(a) Whenever used in this Agreement, unless otherwise clearly indicated in
the context, the following terms shall have the meanings defined in this
Article 1.
(b) Effective Time has the same meaning as provided in the Merger
Agreement by and between Licensee, ADT and ADT Merger Corp., a Texas
corporation, wherein Licensee will become a wholly-owned subsidiary of ADT.
(c) Patent Rights means Licensor's rights in or under the patents and
patent applications now licensable by Licensor as listed in the Patent Schedule
attached hereto as Exhibit A. Patent Rights also means Licensor's rights in the
patents and patent applications acquired by license from ADT as listed in the
License Schedule attached hereto as Exhibit B. The rights in the patents and
patent applications listed in Exhibits A and B shall extend to any divisions,
continuations, reissues or re-examination certificates thereof and in any and
all patents issuing thereon throughout all countries of the world.
(d) Industrial Products means any product sold by Licensee and ADT, their
affiliates or assigns, which is not intended for ultimate use in the dental
field.
2. License
(a) Licensor hereby grants, and Licensee hereby accepts, upon the terms
and conditions set forth in this Agreement, the sole and exclusive license to
use the Patent Rights in manufacture, use and sale of Industrial Products.
(b) Licensee shall, at its sole expense, diligently prosecute patent
applications and maintain patents within the Patent Rights listed in Exhibit A
during the term of this Agreement. In no event shall Licensee be obligated to
continue prosecution of any application beyond the level of a final rejection
by the appropriate examining authority. In the event that Licensee elects not
to proceed with the prosecution of any application listed in Exhibit A beyond
the level of final rejection by the appropriate examining authority, Licensee
shall give timely notice to Licensor of its intention and shall afford Licensor
the right to continue prosecution at Licensor's sole expense.
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(c) Modifications by Licensee: Licensee may, in such manner as it deems
fit and at its sole cost and expense, modify, alter, change or improve any
component or assembly of components which comprises the licensed Industrial
Products and use the same by itself or in combination with any other product,
component or assembly of the components in accordance with paragraph 2(a)
hereof and the covenants and conditions of this Agreement.
3. Financial Terms
(a) Licensee Fee: Licensee shall pay to Licensor a Licensee Fee of eight
percent (8%) of Licensee's Revenues, as hereinafter defined from Industrial
Products sold or otherwise put into use.
(b) "Licensee's Revenues" Defined: As used herein, the term "Licensee's
Revenues" shall mean all sums invoiced by Licensee to its customers of
Industrial Products, whether from sales, rentals, leases, licenses or
otherwise, less only returns, uncompleted on-approval sales, shipping charges
and sales, use and excise taxes and customs duties separately stated on
invoices to Licensee's customers.
(c) Method of Payment; Books and Records: The License Fee shall be paid
to Licensor in accordance with the following terms and conditions:
(i) Statements: License Fees shall become payable to Licensor upon the
shipment of Industrial Products by Licensee to Licensee's customers. Within
thirty (30) days of the end of each fiscal quarter of each of Licensee's fiscal
years during the term of this Agreement, Licensee shall deliver to Licensor a
statement showing in reasonable detail all shipments in respect of Industrial
Products made during such period and all License Fees which are payable by
virtue of such shipments. Each such statement shall be accompanied by
Licensee's check in payment of the License Fees for such period.
(ii) Books and Records: Licensee shall keep and maintain accurate and
complete books and records relating to all matters affecting License Fees
payable hereunder. Licensor and Licensor's agents and representatives shall
have the right, at reasonable times and on reasonable notice, to audit such
books at Licensee's offices. Except as may be required in connection with the
resolution of any dispute arising under this Agreement, Licensor shall keep in
confidence all information furnished to it, either in the form of the statement
of License Fees delivered by Licensee, or any information which it might gain
or gather from the examination or audit of Licensee's books. If any audit
discloses any error, the parties shall, by appropriate payment forthwith,
adjust the same. If any such audit discloses errors exceeding ten percent
(10%) of the amount paid to Licensor as License Fees for the audited period,
the cost of such audit shall be borne by Licensee. Otherwise, such cost shall
be borne by Licensor.
(iii) Currency; Exchange Rate: The amounts payable hereunder shall be
paid by a check of the party drawn in United States dollars. To the extent
required under this Agreement, all amounts stated in a currency other than
United States dollars shall be translated into United States dollars, applying
a quarterly average conversion rate of exchange, calculated using the
prevailing New York rate(s) on the last day of each month in the quarter in
which any such computation must be made.
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4. Term
(a) Unless sooner terminated, this Agreement shall remain in effect for a
term of six (6) years from the Effective Time.
(b) Termination for Breach or Default: If Licensee shall materially
breach or default under this Agreement, the Licensor may give written notice of
its intention to terminate this Agreement, stating in reasonable detail the
nature of the breach or default. If Licensee fails to cure or remedy its
breach or default within thirty (30) days of receipt, Licensor may, while such
breach or default continues, terminate this Agreement forthwith on written
notice. Failure to timely pay the License Fee due hereunder shall be a
material breach or default.
(c) Termination for Other Events: In the event ADT is acquired or
transfers or sells substantially all (2/3's or more) of its dental business
(including a merger with, or acquisition by another company) within three (3)
years from the Effective Time, this Agreement shall terminate immediately upon
such transfer or sale. In such event, Licensor shall be the sole owner of the
Patents and Patent Rights listed in Exhibit A and its License Rights in the
patents and Patent Rights of Exhibit B shall become irrevocable.
(d) Assignment of Patent Rights: Texas Airsonics L.P. shall assign,
transfer and convey the entire Patent Rights to ADT, if, at six (6) years and
one (1) day from the Effective Time there exists no material breach or default
by Licensee or ADT hereunder.
5. Relationship
Nothing contained in this Agreement shall be construed by the parties
hereto, or by any third party, as constituting the parties as principal and
agent, partners or joint venturers, nor shall anything herein (except as
otherwise specifically provided) render either party liable for the debts and
obligations of the other, it being understood and agreed that the only
relationship between the parties is that of Licensor and Licensee.
6. Rights and Responsibilities of Parties
(a) Licensee shall be responsible for all manufacturing, marketing and
support activities and the expense attendant thereto.
(b) Licensee shall be solely responsible for any liability imposed on
Licensor, Licensee or any third party arising from the design, manufacture,
distribution or use of any of the Industrial Products. Licensee shall defend,
indemnify and hold Licensor harmless from and against any and all claim for
loss, liability, damage or expense (including reasonable attorneys' fees)
arising out of or in connection with this covenant.
7. Assignment
Prior to three (3) years and one (1) day from the Effective Time, this
Agreement and all rights and duties hereunder are personal to each party and
shall not, without the prior written consent of the other party, be assigned or
sublicensed. However, either party may, without such consent, assign its
rights or obligations under this Agreement to a corporation controlling,
controlled by or under common control with the assigning party; and provided
further that in the event of any such assignment without consent, the parties
hereto shall continue to be liable as guarantors of their respective
obligations hereunder.
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8. Waiver
None of the terms of this Agreement may be waived or modified, except by
an express agreement in writing signed by both parties. The failure of either
party hereto to enforce, or the delay by either party in enforcing any of its
rights under this Agreement shall not be deemed a continuing waiver or a
modification thereof and either party may, within the time provided by
applicable law, commence appropriate legal proceedings to enforce any or all of
such rights.
9. Infringement by Third Parties
If any party shall learn of any infringement or apparent infringement of
any patent of the Patent Rights of Exhibit A or other proprietary right
relating to the Industrial Products by any third party, it shall promptly
notify the other party stating in reasonable detail the facts known to it. In
any such case, Licensee may take such steps as it deems appropriate, in its
name and at its expense, and in its sole discretion, against the person or
persons thought to be infringing, including, without limitation commencement,
prosecution and settlement of legal actions or proceedings, and Licensee shall
be entitled to:
(i) reimburse itself from all amounts recovered by way of settlement or by
court aware for all expenses incurred in such action or proceedings; and
(ii) retain ninety-two percent (92%) of all amounts recovered (after such
reimbursement) by way of settlement or, by court award, with the balance paid
to Licensor. Licensor shall cooperate in such proceedings in all respects
reasonably requested by Licensee.
10. Name
Licensee consents to the use of the name Texas Airsonics, by Licensor, as
its business or tradename during the term of this Agreement but gives no
consent to use of the name as a trademark on products or as a service xxxx
promoting in any manner the marketing of services. In the event this Agreement
is terminated pursuant to the provisions of Section 4(c), Licensor shall have
the exclusive use of the name Texas Airsonics and Licensee shall cease using
the name.
11. Inclusive Reference
Any provision herein in which reference is made to Licensee shall be
deemed to include, and be binding upon, ADT, ADT Merger Corp., their successors
and assigns.
12. Future Licenses
In the event this Agreement is terminated pursuant to the provisions of
Section 4(c), Licensee shall grant Licensor a royalty free, exclusive and
irrevocable license for all, non-dental applications to all patents and/or
patent applications, know-how, proprietary information and technology developed
by Licensee, after the Effective Time, to the date of the termination of this
Agreement.
13. Entire Agreement
This Agreement and the License Schedule incorporated herein constitute the
entire Agreement between the parties with respect to the subject matter
thereof. There are no representations, promises, warranties, covenants, or
undertakings other than those contained in this Agreement.
14. Survival
All provisions of this Agreement relating to confidentially,
indemnification or the rights and obligations of the parties after termination
of this Agreement shall be deemed to survive such termination.
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15. Notices
All notices, reports and other documents provided for herein shall be
deemed to have been given or made when mailed, postage prepaid, or delivered by
telex or cable, addressed to the parties at their respective addresses set
forth above or such other addresses as either of the parties hereto may
designate in writing to the other from time to time for such purpose.
16. Construction
The operation and interpretation of this Agreement shall be governed by
the laws of the State of Texas. The titles of the Sections of this Agreement
are for convenience only and shall not define or limit any of the terms or
provisions hereof.
17. Arbitration
Any dispute or disagreement between the parties hereto arising out of or
connected by this Agreement shall be decided by arbitration. Arbitration may
be brought by Licensor in Corpus Christi, Texas and by Licensee and ADT in
Oakland County, Michigan. The arbitration will be conducted by an arbitrator
appointed by the American Arbitration Association and pursuant to the rules of
the American Arbitration Association. The decision rendered by the arbitrator
will be final and non-appealable. The substantially prevailing party shall be
awarded its costs incurred in the arbitration proceeding, including reasonable
attorney fees.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this License
Agreement the day and year first above written.
TEXAS AIRSONICS L.P. TEXAS AIRSONICS L.P.
By: Xxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxxx
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Title: General Partner Title: General Partner
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TEXAS AIRSONICS L.P.
By: Xxxxx Xxxxxxx III
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Title: General Partner
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AMERICAN DENTAL TECHNOLOGIES, INC. TEXAS AIRSONICS, INC.
By: Xxxxxxx X. Xxxxxxxx By: Xxx X. Xxxxxxx
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Title: President Title: President
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LICENSE SCHEDULE / EXHIBIT A
PATENTS
Canadian Patent No: 1,213,144
Issue Date: October 28, 1986
Subject: HELICAL PARTICLE FEED
Canadian Patent No.: 1,216,272
Issue Date: January 6, 1987
Subject: PINCH TUBE SHUT-OFF DEVICE
British Patent No.: 2,145,389
Issue Date: October 28, 1987
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
U.S. Patent No.: 4,708,534
Filing Date: November 24, 1987
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
Canadian Patent No.: 1,229,984
Issue Date: December 8, 1987
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
U.S. Patent No.: 4,733,503
Issue Date: March 29, 1988
Subject: HIGH PRESSURE ABRASIVE JET UNIT
U.S. Patent No.: 4,893,440
Issue Date: January 16, 1990
Subject: ABRASIVE JET MACHINING
French Patent No.: 84 13194
Issue Date: March 16, 1990
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
Japanese Patent No.: 1,571,789
Issue Date: July 25, 1990
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
Canadian Patent No.: 1,277,837
Filing Date: December 18, 1990
Subject: HIGH PRESSURE ABRASIVE JET UNIT
French Patent No.: 306,492
Issue Date: September 22, 1993
Subject: HIGH PRESSURE ABRASIVE JET UNIT
German Patent No.: 3787529.9
Issue Date: September 22, 1993
Subject: HIGH PRESSURE ABRASIVE JET UNIT
British Patent No.: 306,492
Issue Date: September 22, 1993
Subject: HIGH PRESSURE ABRASIVE JET UNIT
PATENT APPLICATIONS
German Serial No.: 341445.8
Filing Date: August 27, 1984
Subject: SYSTEM FOR STORING & FEEDING ABRASIVE
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LICENSE SCHEDULE / EXHIBIT B
PATENTS
U.S. Patent No.: 5,330,354
Issue Date: July 19, 1994
Subject: Air Abrasive Dental System
U.S. Patent No.: 5,350,299
Issue Date: September 27, 1994
Subject: Air Abrasive Dental System
PATENT APPLICATIONS
Australian Serial No.: 39397/93
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
Canadian Serial No.: 2,132,972
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
European Serial No.: 93 908651.8
Designating all EP countries
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
Japanese Serial No.: 05 517615
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
Korean Serial No.: 94 703416
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
New Zealand Serial No.: 251630
Filing Date: March 26, 1993
Subject: Air Abrasive Dental System
U.S. Serial No: 08/276,964
Filing Date: July 19, 1994
Subject: Servo Valve for Air Abrasive System
PCT Serial No.: PCT/US95/09146
Designating all PCT countries
Filing Date: July 17, 1995
Subject: Servo Valve for Air Abrasive System
