EXHIBIT 10.1
LICENSE AGREEMENT
THIS AGREEMENT, entered into this fourth day of February, 1997, by and
between Dr. Martin Nedderman and John Bedard, both California residents
(hereinafter "Licensors") and Dental Resources, Inc., a Minnesota Corporation
(hereinafter "Licensee").
WHEREAS, Licensors own all fights and title in and to the Total Flex
Denture device and any patents to be applied for and the invention claimed and
disclosed therein and referred to in such patent as Total Flex Denture, and, all
know how, technical information and drawings, associated goodwill, marketing and
trade business information, contract fights, and all other rights, properties
and privileges associated with such device.
WHEREAS, Licensors and Licensees have agreed to own all right, title,
and interest in and to the trade name to such device jointly.
WHEREAS, Licensors are willing to exclusively license in all regions of
the world its rights in the Total Flex Denture device to the Licensee on the
terms contained herein.
WHEREAS, Licensee desires to organize a marketing program to execute
and create a market and demand for these devices, and is accordingly interested
in producing and selling the Total Flex Denture device under this exclusive
license during at least the term provided for in this agreement.
NOW THEREFORE, for valuable consideration and upon the mutual promises
and covenants contained herein, the parties to this License Agreement agree as
follows:
1. The products licensed in this Agreement include all products
and devices manufactured, sold or used by the Licensee that
are associated with such Total Flex Denture device and the
licensed know how covered by this Agreement includes all
factual knowledge, technological information, trade secrets,
drawings, sketches, and other data related to the manufacture,
marketing, installation, fitting, and the use of Total Flex
Denture device, whether presently in the possession, or
subsequently coming into the possession, or developed by
Licensors, during the term of this Agreement.
2. The "license royalty" to be paid under this Agreement is a fee
paid to the Licensors (or their successors in interest) by the
Licensee for each unit of the licensed products that the
Licensors have the fight to manufacture, use and sell under
the terms of this Agreement. For purposes of determining the
license royalty, each "year" shall be measured in respect to
the annual date on which this Agreement is effective.
3. License Grant - For a three-year term commencing on the date
of this Agreement, the Licensors hereby grant to the Licensee
an exclusive license to produce, use and sell the products
covered by this License Agreement, and all patents and know
how pertaining thereto, throughout all regions of the world.
4. Cooperation of Licensors - Licensors agree to cooperate fully
and to use their best efforts, including referring current
distribution or other marketing contacts of Licensors to
Licensee, and in providing any reasonable assistance to
Licensee in solving any technical problems arising in
connection with the production, use and installation of the
Licensed Products. Licensors will also assist Licensee as
necessary with certain training sessions to be agreed to by
the parties hereto as the need arises, provided that Licensee
shall pay Licensors for any out-of-pocket expenses incurred by
them incident to assisting with such training or assisting
with solving technical problems.
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5. Royalties - Licensee shall make the following royalty payments
to Licensors consisting of:
i) A cash license royalty per unit or device of Licensed
Product sold or used by Licensee which shall be equal
to seven percent (7%) (The royalty of seven percent
(7%) will be negotiable for the period of six months
to determine market conditions from the date of this
first contract.) of Licensee's wholesale price to
customers purchasing such devices from Licensee,
which base price shall be flexible and mutually
agreed upon by the parties hereto for the purpose of
determining such royalty payments due hereunder. Such
cash royalty payments shall be made to Licensors by
Licensee within ten (10) days of the end of each
quarter. Licensee shall not be required to pay cash
royalties on free sample devices used in promotions
or for damaged or defective products.
BUSINESS RECORDS: Licensee hereby agrees to keep business
records showing the manufacture and sale or other disposition
of the Licensed Products in sufficient detail to enable the
License Royalty to be accurately and fairly determined, and
further agrees to permit its books and records to be examined
from time to time, during normal business hours and with
reasonable notice, to the extent necessary for Licensors to
verify that Licensee is complying with the requirements and
obligations of this Agreement. If material omissions or errors
are discovered incident to any such verification examinations,
Licensee shall be responsible for all costs of such
examinations by Licensors or their accounting representative.
At a minimum, such business records shall show all customer
names and addresses purchasing Licensed Products from
Licensee, and the amount of the Licensed Products purchased by
them from Licensee. Any business record knowledge acquired by
Licensors, or business operational information pertaining to
Licensee, shall be treated by Licensors on a strictly
confidential basis and not disclosed to any other party
without the permission of Licensee.
6. Marketing - The Licensee will use its best efforts to
diligently promote and market the Licensed Products herein,
and Licensee shall not make any warranties, representations or
claims regarding the Licensed Products without the approval of
Licensors. Any governmental approval needed to market the
Licensed Products in any federal, state, or local governmental
area shall be obtained by Licensee at its expense. The
Licensee assumes all risks and liabilities arising out of any
warranty, guarantee, or other representation made by Licensee
in the marketing or promotion of the Licensed Products; and
Licensee will indemnify and hold harmless Licensors in respect
to any lawsuit, claim or proceeding arising out of any such
warranty, guarantee or representation of Licensee in the sale
or promotion of the Licensed Products, or arising out of the
use of the Licensed Product by anyone derived from sales
thereof made by Licensee.
Licensee will set aside and expend at least five thousand
dollars ($5,000.00) to develop and package the Licensed
Products for proper marketing by Licensee; and in addition,
Licensee will set aside and expend an additional ten thousand
dollars ($10,000.00) for marketing and distribution of the
Licensed Product during the first year hereof
7. Renewal - Licensors hereby agree to renew the royalty payments
due on sales of the Licensed Products after the end of the
three-year term of this agreement, with such renewal terms to
be mutually agreed upon by both parties hereto.
8. Transfer of Rights - All license rights under this Agreement
shall be binding upon any successor in interest of the
Licensors. The Licensee shall have no fight to sublicense or
assign the license fights hereunder without the express
written consent of the Licensor.
9. Termination - During the three-year term of this exclusive
license, the Licensee may terminate and release its license
fights hereunder only upon providing sixty (60) days advance
notice in writing to the Licensors. It is mutually understood
and agreed between the parties hereto that the failure of the
Licensee to comply with the terms of this Agreement shall give
the Licensors the
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fight to cancel this Agreement by giving Licensee thirty (30)
days notice in writing of such cancellation; provided,
however, that if within such thirty-day period Licensee shall
have corrected such contract default leading to the
cancellation by the Licensors, this Agreement shall remain in
full force and effect. Upon termination for default, Licensee
shall not be relieved of any prior obligations hereunder and
Licensee shall pay all royalty payments due at termination and
for any products sold by Licensee after termination. Licensors
have the fight to make a final inspection of business records
of Licensee upon such termination for the purpose of verifying
all royalties have been accounted for and paid by Licensee as
required by this Agreement.
10. Surplus Supplies - In the event Licensors enter into a license
agreement with a party other than the Licensee herein after
the expiration of the three-year term of this Agreement,
Licensors shall then purchase from the Licensee the molds,
equipment, surplus merchandise, promotional material and any
other item that has been purchased by the Licensee to promote,
manufacture or market the above device. The surplus supplies
shall be purchased at their original cost to Licensee.
11. General Matters -
a. Notices: All notices provided for herein shall be
given in writing and hand delivered or sent by
certified mail, directed as follows:
To Licensors: Dr. Martin Nedderman and John Bedard
c/o A & M Dental Laboratories, Inc.
425 South Santa Fe Street
Santa Ana, California 92705-4196
To Licensee: Dental Resources, Inc.
c/o Doug Murphy 530 South River Street
Delano, Minnesota 55328
b. Parties in Interest: This Agreement shall inure to
the benefit of and bind the parties hereto, and their
respective successors and assigns as the case may be.
c. Waiver: Any failure on the part of either party
hereto to comply with any of the obligations or
conditions of this Agreement may be waived in writing
by the other party.
d. Governing Law: This Agreement shall be construed and
enforced in accordance with the laws of the State of
Minnesota.
e. Severability: If any part of this Agreement is deemed
to be unenforceable for any reason, the balance of
the Agreement shall remain in full force and effect.
f. Relationship of Parties: The relationship between the
parties hereto is strictly that of Licensors and
Licensee, and the Licensee shall have no fight to
bind or in any way obligate the Licensors in respect
to any contract or understanding with another party.
g. Entire Agreement: This Agreement contains the entire
agreement between the parties hereto and supersedes
all previous understandings, negotiations and
commitments between the parties hereto in respect to
the subject matter of this Agreement; and this
Agreement may not be released, discharged, abandoned,
changed or modified in any manner except by a written
instrument duly executed by each party hereto.
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IN WITNESS WHEREOF, the parties hereto have duly executed this License
Agreement as hereinafter appearing.
/s/ Dr. Martin Nedderman /s/ Doug Murphy
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Dr. Martin Nedderman Doug Murphy - President
Licensor Licensee
/s/ John Bedard
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John Bedard
Licensor
