Document:

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 fails to cure
that breach within thirty (30) days after notice thereof from the non-breaching
party, assuming such breach is capable of being cured. Licensor may also
terminate this Agreement, at any time, if any one of the following occurs:

 

(i) at
any time commencing with the following:  (a) starting
December 31, 2006, for a proceeding six (6) consecutive month rolling
period, (b) starting March 31, 2007, for a proceeding nine (9) consecutive
month rolling period, and (c) starting June 30, 2007, and continuing
for the remainder of the Term, for a proceeding twelve (12) consecutive month
rolling period, AMT fails to maintain positive net income in accordance with
generally accepted accounting principles during the applicable rolling period;

 

(ii) AMT
becomes the subject of a voluntary or involuntary petition in bankruptcy or
proceeding relating to insolvency, receivership, or liquidation for the benefit
of creditors;

 

(iii) AMT
is (a) merged or consolidated, (b) sells all or substantially all of
its assets, or (c) is subject to any substantial change in ownership,
management or control without written approval from Discus;

 

(iv) the
common stock of AMT is no longer trading, or permitted to be traded, in any
domestic securities market, or AMT is not in compliance with applicable
securities laws;

 

(v) AMT
defaults on any debt owed to any third party where such debt is in excess of
Fifty Thousand Dollars ($50,000);

 

(vi) AMT
or its assets are the subject of any involuntary lien, levy, injunction or
attachment relating to a portion of AMT’s property in an amount in excess of
Fifty Thousand Dollars ($50,000);

 

(vii) any
judgment is rendered against AMT in an amount in excess of Fifty Thousand
Dollars ($50,000);

 

(viii) AMT
states in writing its inability to pay, or is generally unable to pay, its
debts as they become due or ceases operations;

 

(ix) any
change in AMT’s results of operation or condition (financial or otherwise)
which in Licensor’s sole opinion has or could have a material adverse effect on
the condition (financial or otherwise) of AMT and its business, properties or
prospects or AMTs ability to perform its obligations hereunder;

 

(x)
AMT receives a “going concern” letter from its independent auditors;

 

(xi)
any license or permit necessary for AMT to conduct its business as presently

 

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conducted is revoked or
threatened with revocation; or

 

(xii)
AMT changes substantially the nature of its business as presently conducted; or

 

(xiii)
AMT fails to maintain the insurance as set forth in Section 2.10 of this
Agreement.

 

5.3           Effect
of Termination. Upon the termination or expiration of this Agreement: (i) 
each party will promptly return to the other party or destroy all Confidential
Information of the other party in its possession or control, and will provide
the other party with a certification, signed by one of its officers, certifying
the return or destruction of all such Confidential Information; (ii) AMT
will cease using the Marks and promoting and advertising the Products and (iii) the
all licenses hereunder shall terminate.

 

5.4           Survival.
The rights and obligations of the parties under Sections 3.3, 5.3, 5.4, 6, 7,
8, 9, and 10 will survive the termination or expiration of this Agreement.

 

6.             CONFIDENTIALITY.

 

6.1           Definition.
“Confidential
Information” means: (i) any non-public information of a
party, including, without limitation, any information relating to a party’s
current and planned products and services, technology, techniques, know-how,
research, engineering, designs, finances, accounts, procurement requirements,
manufacturing, customer lists, business forecasts and marketing plans,
including without limitation the Specifications and the Technology; (ii) any
other information of a party that is disclosed in writing and is conspicuously
designated as “Confidential” at the time of disclosure or that is disclosed
orally, is identified as “Confidential” at the time of disclosure, and is
summarized in a writing sent by the disclosing party to the receiving party
within thirty (30) days of any such disclosure; and (iii) the specific
terms and pricing set forth in this Agreement.

 

6.2           Exclusions.
The obligations in Section 6.3 will not apply to the extent any
information: (i) is or becomes generally known to the public through no
fault of or breach of this Agreement by the receiving party; (ii) was
rightfully in the receiving party’s possession at the time of disclosure,
without an obligation of confidentiality; (iii) is independently developed
by the receiving party without use of the disclosing party’s Confidential
Information; or (iv) is rightfully obtained by the receiving party from a
third party without restriction on use or disclosure.

 

6.3           Obligations.
Each party will not use the other party’s Confidential Information, except as
necessary for the performance of this Agreement, and will not disclose such
Confidential Information to any third party, except to those of its employees
and subcontractors that need to know such Confidential Information for the
performance of this Agreement, provided that each such employee and
subcontractor is subject to a written agreement that includes binding use and
disclosure restrictions that are at least as protective as those set forth
herein. Each party will use all reasonable efforts to maintain the
confidentiality of all of the other party’s Confidential Information in its
possession or control, but in no event less than the efforts that it ordinarily
uses with respect to its own confidential information of similar nature and
importance. The foregoing obligations will not restrict either party from
disclosing the other party’s Confidential Information or the terms and
conditions of this Agreement: (i) pursuant to the order or requirement of
a court, administrative agency, or other governmental body, provided that the
party required to make such a disclosure gives reasonable notice to the other
party to enable it to contest such order or requirement; (ii) on a
confidential basis to its legal or professional financial advisors; (iii) as
required under applicable securities regulations; or (iv) on a
confidential basis to present or future providers of venture capital and/or
potential private investors in or acquirers of such party.

 

7.             WARRANTY. LICENSOR MAKES NO
REPRESENTATIONS TO AMT OR TO ANY OTHER PARTY REGARDING ANY PRODUCTS OR SERVICES
PROVIDED BY LICENSOR. TO THE FULLEST EXTENT

 

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PERMITTED BY APPLICABLE
LAW, LICENSOR DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, AND ANY
WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE. AMT WILL NOT
MAKE ANY WARRANTIES OR REPRESENTATIONS IN LICENSOR’S NAME OR ON LICENSOR’S
BEHALF.

 

8.             INDEMNITIES.

 

8.1           Licensor
Indemnity. Licensor will defend or settle any lawsuit brought against AMT,
and only AMT, to the extent that it is based upon a third-party claim that
Licensor’s use of the Technology, as provided by Licensor to AMT under this
Agreement, infringes any United States patent or any copyright or
misappropriates any trade secret, and will pay any costs and damages made in
settlement or awarded against AMT in final judgment resulting from any such claim, provided that AMT: (i) gives
Licensor prompt notice of any such claim; (ii) gives Licensor sole control
of the defense and any related settlement of any such claim; and (iii) gives
Licensor, at Licensor’s expense, all reasonable information, assistance,
cooperation and authority in connection with the foregoing. Licensor will not
be bound by any settlement or compromise that AMT enters into without Licensor’s
express prior consent.

 

8.2           Injunctions.
If AMT’s rights to use the Technology under the terms of this Agreement is, or
in Licensor’s opinion is likely to be, enjoined due to the type of claim
specified in Section 8.1, then Licensor may, at its sole option and
expense: (i) procure for AMT the right to continue to use and distribute
such Technology under the terms of this Agreement; (ii) replace or modify
such Technology so that it is non-infringing; or (iii) if options (i) and
(ii) above cannot be reasonably accomplished, then Licensor may terminate
AMT’s rights and Licensor’s obligations hereunder with respect to such
Technology.

 

8.3           Indemnity
Exclusions. Licensor will have no obligation under Sections 8.1 or 8.2 for
any claim of infringement or misappropriation to the extent that it results
from: (i) the combination, operation or use of the Technology with or in
equipment, products, or processes not provided by Licensor or authorized in the
Specifications; or (ii) modifications to a Licensor Product other than as
authorized in the Specifications or otherwise approved by Licensor. The
foregoing clauses (i) and (ii) are referred to collectively as “Indemnity Exclusions”.

 

8.4           Limitation.
THE FOREGOING PROVISIONS OF THIS SECTION 8 SET FORTH LICENSOR’S SOLE AND
EXCLUSIVE LIABILITY AND AMT’S SOLE AND EXCLUSIVE REMEDY FOR ANY CLAIMS OF
INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY
RIGHTS OF ANY KIND.

 

8.5           AMT
Indemnity. AMT will defend or settle, indemnify and hold Licensor harmless
from any liability, damages and expenses (including court costs and reasonable
attorneys’ fees) arising out of or resulting from any third-party claim based
on or otherwise attributable to: (i) AMT’s negligence or intentional
conduct; (ii) any misrepresentations made by AMT with respect to Licensor
or the Products; or (iii) an Indemnity Exclusion.

 

9.             LIABILITY.

 

9.1           Exclusion
of Certain Damages. IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS OR REVENUE, LOSS OF USE, LOST BUSINESS OPPORTUNITIES OR LOSS OF
GOODWILL), OR FOR THE COSTS OF PROCURING SUBSTITUTE PRODUCTS, ARISING OUT OF,
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR PERFORMANCE OF
ANY

 

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PRODUCTS OR SERVICES
PROVIDED BY LICENSOR, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON
CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR
OTHERWISE, WHETHER OR NOT LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSS OR DAMAGE. THE PARTIES HAVE AGREED THAT THESE LIMITATIONS WILL SURVIVE AND
APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE
FAILED OF ITS ESSENTIAL PURPOSE.

 

9.2           Total
Liability. LICENSOR’S TOTAL LIABILITY TO AMT UNDER THIS AGREEMENT, FROM ALL
CAUSES OF ACTION AND UNDER ALL THEORIES OF LIABILITY, WILL BE LIMITED TO FIVE
HUNDRED THOUSAND DOLLARS ($500,000).

 

9.3           Basis of Bargain. The parties
expressly acknowledge and agree that Licensor has set its prices and entered
into this Agreement in reliance upon the limitations of liability specified
herein, which allocate the risk between Licensor and AMT and form an
essential basis of the bargain between the parties.

 

10.          GENERAL.

 

10.1         Assignment.
AMT may not assign or
transfer this Agreement, in whole or in part, by operation of law or otherwise,
without Licensor’s express prior consent. Any attempt to assign or transfer
this Agreement, without such consent, will be null and of no effect. Subject to
the foregoing, this Agreement will bind and inure to the benefit of each party’s
permitted successors and assigns.

 

10.2         Governing
Law and Jurisdiction. This Agreement will be governed by and construed in
accordance with the laws of the State of California, excluding its conflict of
laws principles. The parties disclaim application of the United Nations
Convention on Contracts for the International Sale of Goods. Any legal action
or proceeding arising under this Agreement will be brought exclusively in the
federal or state courts located in the Central District of California and the
parties hereby irrevocably consent to the personal jurisdiction and venue
therein.

 

10.3         Compliance
with Law. AMT will have and maintain all permits and licenses required by
any governmental unit or agency and will comply with all applicable laws and
regulations, including United States export laws, in performing its this
Agreement and with respect to the Products.

 

10.4         Attorneys’
Fees. The prevailing party in any dispute between the parties relating to
this Agreement will be entitled to recover all attorneys’ fees, costs and other
expenses that it incurs in connection with such dispute.

 

10.5         Nonexclusive Remedy. Except
as expressly set forth in this Agreement, the exercise by either party of any
of its remedies under this Agreement will be without prejudice to its other
remedies under this Agreement or otherwise.

 

10.6         Notices.
All notices, approvals, consents and other communications required or permitted
under this Agreement will be in writing and delivered by confirmed facsimile
transmission, by courier or overnight delivery service with written
verification of receipt, or by registered or certified mail, return receipt
requested, postage prepaid, and, in each instance, will be deemed given upon
receipt. All such notices, approvals, consents and other communications will be
sent to the addresses set forth above or to such other address as may be
specified by either party to the other party in accordance with this Section.

 

10.7         Force
Majeure. Neither party will be responsible for any failure or delay in its
performance under this Agreement (except for any payment obligations) due to
causes beyond its reasonable control, including, but not limited to, labor
disputes, strikes, lockouts, shortages of or inability to obtain energy, raw
materials or supplies, war, terrorism, riot, or acts of God.

 

10.8         Relationship
of the Parties. The parties are independent contractors and this Agreement
will not establish any relationship of partnership,

 

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joint venture,
employment, franchise or agency between the parties. Neither part y will
have the power to bind the other party or to incur any obligations on its
behalf, without the other party’s prior consent.

 

10.9         Waiver.
The failure by either party to enforce any provision of this Agreement will not
constitute a waiver of future enforcement of that or any other provision.

 

10.10       Severability.
If for any reason a court of competent jurisdiction finds any provision of this
Agreement invalid or unenforceable, that provision of the Agreement will be
enforced to the maximum extent permissible and the other provisions of this
Agreement will remain in full force and effect.

 

10.11       Equitable
Relief. AMT acknowledges that any breach of its obligations under this
Agreement with respect to the proprietary rights or Confidential Information of
Licensor will cause Licensor irreparable injury and significant injury for
which there are inadequate remedies at law. Accordingly, Licensor will be
entitled to obtain immediate equitable relief to enjoin any such breach, in
addition to all other rights and remedies that it may have under this
Agreement, at law or otherwise.

 

10.12       Entire
Agreement. This Agreement, including all exhibits hereto, constitutes the
complete and exclusive understanding and agreement between the parties
regarding its subject matter and supercedes all prior or contemporaneous
agreements or understandings, whether written or oral, relating to its subject
matter. Any waiver, modification or amendment of any provision of this
Agreement will be effective only if in writing and signed by duly authorized
representatives of each party.

 

10.13       Counterparts. This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

 

	
  AMERICAN MEDICAL TECHNOLOGIES:

  	
  DISCUS HOLDINGS, INC.:

  
	
   

  	
   

  
	
  By:

  	
  /s/ Roger Dartt

  	
   

  	
  By:

  	
  /s/ Ken Rosenblood

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Roger Dartt

  	
   

  	
  Name:

  	
  Ken Rosenblood

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  April 11, 2006

  	
   

  	
  Date:

  	
  April 11, 2006

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECTRUM DENTAL, INC:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Ken Rosenblood

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ken Rosenblood

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  April 11, 2006

  	
   

  
											

 

10

 

Exhibit A

 

Products
and Marks

 

	
  PRODUCTS:

  	
   

  
	
   

  	
  contrastpm®

  	
   

  
			

 

	
  Item
  #

  	
   

  	
  Description

  
	
  ZD1112

  	
   

  	
  contrastpm 2 Syringe Touch Up kit / Pack of
  6 Units - 10%

  
	
  ZD1212

  	
   

  	
  contrastpm 2 Syringe Touch Up kit / Pack of
  6 Units - 15%

  
	
  ZD1312

  	
   

  	
  contrastpm 2 Syringe Touch Up kit / Pack of
  6 Units - 20%

  
	
   

  	
   

  	
  12 6 packs = 1 case

  
	
  ZD1100

  	
   

  	
  contrastpm 4 Syringe Mini kit - 10%

  
	
  ZD1200

  	
   

  	
  contrastpm 4 Syringe Mini kit - 15%

  
	
  ZD1300

  	
   

  	
  contrastpm 4 Syringe Mini kit - 20%

  
	
   

  	
   

  	
  12 units = 1 case

  
	
  ZD1115

  	
   

  	
  contrastpm Full Patient kit / 8 Syringes, 2
  EVA, Tray Case - 10%

  
	
  ZD1215

  	
   

  	
  contrastpm Full Patient kit / 8 Syringes, 2
  EVA, Tray Case - 15%

  
	
  ZD1315

  	
   

  	
  contrastpm Full Patient kit / 8 Syringes, 2
  EVA, Tray Case - 20%

  
	
   

  	
   

  	
  12 units = 1 case

  
	
  ZD1111

  	
   

  	
  contrastpm 4 Syringe Bulk Pack - 10% (contains 10 ZD1100’s)

  
	
  ZD1211

  	
   

  	
  contrastpm 4 Syringe Bulk Pack - 15% (contains 10 ZD1200’s)

  
	
  ZD1311

  	
   

  	
  contrastpm 4 Syringe Bulk Pack - 20% (contains 10 ZD1300’s)

  
	
   

  	
   

  	
  1 unit = 1 case

  
	
   

  	
   

  	
  contrastpm®plus

  
	
  ZD2100

  	
   

  	
  contrastpmplus
  4 Syringe Mini kit - 10% (plus = w/ potassium nitrate)

  
	
  ZD2200

  	
   

  	
  contrastpmplus
  4 Syringe Mini kit - 15% (plus = w/ potassium nitrate)

  
	
  ZD2300

  	
   

  	
  contrastpmplus
  4 Syringe Mini kit - 20% (plus = w/ potassium nitrate)

  
	
   

  	
   

  	
  12 units = 1 case

  
	
  ZD2115

  	
   

  	
  contrastpmplus
  Full Patient kit / 8 Syr, 2 EVA, Tray Case - 10%

  
	
  ZD2215

  	
   

  	
  contrastpmplus
  Full Patient kit / 8 Syr, 2 EVA, Tray Case - 15%

  
	
   

  	
   

  	
  12 units = 1 case

  
	
  ZD2111

  	
   

  	
  contrastpmplus
  4 Syringe Bulk Pack - 10% (contains 10 ZD2100’s)

  
	
  ZD2211

  	
   

  	
  contrastpmplus
  4 Syringe Bulk Pack - 15% (contains 10 ZD2200’s)

  
	
  ZD2311

  	
   

  	
  contrastpmplus
  4 Syringe Bulk Pack - 20% (contains 10 ZD2300’s)

  
	
   

  	
   

  	
  1 unit = 1 case

  
	
   

  	
   

  	
  constrastpm® Auxiliary Products

  
	
  ZD1320

  	
   

  	
  1.1% Neutral Sodium Fluoride (4 syringes 1.3 grams each)

  
	
  ZD1017

  	
   

  	
  Light Curable Resin (4 syringes 1.3 g each, w/ new improved
  dispensing tip)

  
	
  MM1001

  	
   

  	
  Tray Cases - Blue (12 units per pack)

  
	
  MM1002

  	
   

  	
  EVA Tray Material “.040” (12 sheets per pack)

  
	
   

  	
   

  	
  contrastamTM chairside

  
	
  ZD3012

  	
   

  	
  contrastamTM Chairside Whitening Power Pack

  
	
   

  	
   

  	
  (contains materials for 6 patients - 4:1 syringes whitening gel,
  FastDam,

  
	
   

  	
   

  	
  brushes, neutral sodium fluoride)

  
	
   

  	
   

  	
  12 units = 1 case

  
	
  ZD1440

  	
   

  	
  contrastamTM Chairside Whitening Combination
  Kit

  
	
   

  	
   

  	
  (contains chairside & take home materials for 1 patient - 4:1
  syringe whitening

  
	
   

  	
   

  	
  gel, FastDam, brushes, neutral sodium fluoride, contrastpm T/U
  kit-15%,

  

 

 

	
   

  	
   

  	
  EVA, tray case)

  
	
   

  	
   

  	
  12 units = 1 case

  
	
   

  	
   

  	
  contrastamTM Chairside Auxiliary Products

  
	
  ZD1426

  	
   

  	
  FastDamTM Soft Tissue Isolation (contains 4 syringes 1.3g each)

  
	
  ZD1423

  	
   

  	
  FastTrakTM Tongue & Cheek
  Retractors - Small (Bag
  of 10)

  
	
  ZD1424

  	
   

  	
  FastTrakTM Tongue & Cheek
  Retractors - Medium (Bag of 10)

  
	
  ZD1425

  	
   

  	
  FastTrakTM Tongue & Cheek
  Retractors - Large (Bag
  of 10)

  

 

MARKS:  Contrastpm®, Contrastpm®plus, Contrastam®,
FastDam®, and FastTrackTM

 

 

Exhibit B

 

Minimum
Commitment Schedule

 

Minimum Commitment Schedule

 

Commencing with the third calendar quarter of 2006 and continuing on a
six-month basis through the remainder of the Term, AMT shall sell Products in
amounts sufficient to earn Net Sales of at least Five Hundred Thousand Dollars
($500,000) per six month period during the remainder of the Term (the “Minimum Commitment.”)

 

At the beginning of each calendar year remaining in the Term, the
Minimum Commitment shall automatically increase by five percent (5%) from the
amount in the preceding year.

 

“Net Sales” means gross
revenues received by AMT for the sale of Products less sales tax, returns and
allowances.

 

 

Exhibit C

Current
International Distributors

 

	
  Country /

  Region

  	
   

  	
  Name &
  Address

  	
   

  	
  Contact

  	
   

  	
  Account

  #

  	
   

  	
  Account
  Type

  
	
  Argentina

  	
   

  	
  Casa Benard

  	
   

  	
  Fabio Peisajovich

  	
   

  	
  241142

  	
   

  	
  Export

  
	
   

  	
   

  	
  Marcelo T
  Alvear 2008

  	
   

  	
  Tel 011 541
  149 640 533

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Buenos Aires
  1122

  	
   

  	
  Fax 011 541
  149 640 094

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Argentina

  	
   

  	
  bernar@dd.com.ar

  	
   

  	
   

  	
   

  	
   

  
	
  Bolivia

  	
   

  	
  G-Dental

  	
   

  	
  Sergio Salinas

  	
   

  	
  286712

  	
   

  	
  Export

  
	
   

  	
   

  	
  Calle Jordan
  E-0170

  	
   

  	
  Tel. 011 591
  442 24047

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Casilla De
  Correos 316

  	
   

  	
  Fax 011 591
  442 56520

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cochabamba,
  Bolivia

  	
   

  	
  gdental@supernet.com.bo

  	
   

  	
   

  	
   

  	
   

  
	
  Colombia

  	
   

  	
  Odontomedica/Inversiones Almalgadent

  	
   

  	
  Juan Carlos Sarmiento

  	
   

  	
  234400

  	
   

  	
  Export

  
	
   

  	
   

  	
  Carrera 11 #
  67

  	
   

  	
  Tel. 011 57
  1 313 1082

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bogota, D.C.

  	
   

  	
  Fax 011 57 1
  345 9093

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Colombia
  S.A.

  	
   

  	
  jucasar@andinet.com

  	
   

  	
   

  	
   

  	
   

  
	
  Costa Rica

  	
   

  	
  Prisma Dental

  	
   

  	
  Josef Cordero, DDS

  	
   

  	
  228211

  	
   

  	
  Export

  
	
   

  	
   

  	
  Rhormose-Boulevar
  de Plaza Mayor

  	
   

  	
  Tel. 011 506
  291 5000

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  300 mts
  Oeste, 3 Piso

  	
   

  	
  Fax. 011 506
  291 5454

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  San Jose,
  Costa Rica

  	
   

  	
  dental@racsa.co.cr

  	
   

  	
   

  	
   

  	
   

  
	
  Ecuador

  	
   

  	
  Eximed

  	
   

  	
  Ivan Jara

  	
   

  	
  120916

  	
   

  	
  Export

  
	
   

  	
   

  	
  6864 S.
  Waterway Drive

  	
   

  	
  Tel. 305 593
  2222

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Miami, FL
  33155

  	
   

  	
  Fax 305 668
  0490

  	
   

  	
   

  	
   

  	
   

  
	
  Europe

  	
   

  	
  ContrastEurope

  	
   

  	
  Jos Overmeer

  	
   

  	
  116138

  	
   

  	
  ContrastEurope

  
	
   

  	
   

  	
  Prof.
  Eykmanweg 11

  	
   

  	
  Tel. 011 31
  416 650 250

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Waalwijk
  6144

  	
   

  	
  Fax 011 31
  416 652 178

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  chantal@contrasteurope.nl

  	
   

  	
   

  	
   

  	
   

  
	
  Israel

  	
   

  	
  Delta Chakir

  	
   

  	
  Zvi Chakir

  	
   

  	
  221891

  	
   

  	
  Distributor

  
	
   

  	
   

  	
  20
  Amagshimim Street

  	
   

  	
  Tel. 011 97
  23 922 2663

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Matalon
  Center

  	
   

  	
  Fax 011 97
  23 922 0859

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Petah Tikva

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  K Corporation*/Wavelengths

  	
   

  	
  Hiro Kusumoto

  	
   

  	
  194293

  	
   

  	
  Distributor

  
	
   

  	
   

  	
  1-11-6
  River-point Tower 1607

  	
   

  	
  Tel. 011 81
  3 2 3443 6931

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tsukuda,
  Chio-Ku

  	
   

  	
  Fax 011 81 3
  5560 3702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tokyo
  104-0051

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  Sun Systems

  	
   

  	
  Melissa Lukasewski

  	
   

  	
  106205

  	
   

  	
  Distributor

  
	
   

  	
   

  	
  23900
  Hawthorne Blvd., Ste 100

  	
   

  	
  Tel. 310 375
  6481

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Torrance, CA
  90505

  	
   

  	
  Fax. 310 375
  6476

  	
   

  	
   

  	
   

  	
   

  
	
  Middle East

  	
   

  	
  Piro Trading International

  	
   

  	
  Caroline Piro

  	
   

  	
  264658

  	
   

  	
  Export

  
	
   

  	
   

  	
  1125 N.
  Golden Blvd., Suite G

  	
   

  	
  Tel. 209 667
  7204

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Turlock, CA
  95380

  	
   

  	
  Fax. 209 667
  8506

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  pirointl.@aol.com

  	
   

  	
   

  	
   

  	
   

  
	
  Peru

  	
   

  	
  Manufacturas Calidad Total

  	
   

  	
  Victor Flores

  	
   

  	
  228017

  	
   

  	
  Export

  

 

 

	
   

  	
   

  	
  Calle Pedro
  de Halcon

  	
   

  	
  Tel. 011 51
  323 2472

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  104 Urb
  Valle de Hermoso de Monterr

  	
   

  	
  Fax 011 51
  147 38404

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lima

  	
   

  	
  vict_flores@hotmail.com

  	
   

  	
   

  	
   

  	
   

  
	
  Philipines

  	
   

  	
  AVM Ortho

  	
   

  	
  Alma San
  Agustin

  	
   

  	
  240894

  	
   

  	
  Export

  
	
   

  	
   

  	
  Recuerdo
  Townhouse, Unit E

  	
   

  	
  Tel. 011 632
  843 6208

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6623 E.
  Ramos Street

  	
   

  	
  Fax. 011 632
  893 7696

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Makati City,
  Philippines

  	
   

  	
  avmortho@skynet.net

  	
   

  	
   

  	
   

  	
   

  
	
  Saudi Arabia

  	
   

  	
  KH JDS/Jeddah Dental Supply

  	
   

  	
  Dr. Khaled M. Abdalwassi

  	
   

  	
  250960

  	
   

  	
  Export

  
	
   

  	
   

  	
  6590
  Palestine Street

  	
   

  	
  Tel. 011 966
  266 9246

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jeddah
  21452, Saudi Arabia

  	
   

  	
  khjds@hotmail.com

  	
   

  	
   

  	
   

  	
   

  
	
  South Africa

  	
   

  	
  Digismart Systems

  	
   

  	
  Rodney Keetz

  	
   

  	
  194042

  	
   

  	
  Export

  
	
   

  	
   

  	
  13th Floor,
  Bedford Centre

  	
   

  	
  Tel. 011 27
  1 616 0781

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bedfordview,
  Johannesburg 2047

  	
   

  	
  Fax 011 27 1
  616 0754

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  digismart@mweb.co.za

  	
   

  	
   

  	
   

  	
   

  
	
  Taiwan

  	
   

  	
  Macorich Enterprises

  	
   

  	
   

  	
   

  	
  228729

  	
   

  	
  Export

  
	
   

  	
   

  	
  6F, No. 53,
  Sec 2, Fu Hsin Road

  	
   

  	
  Tel. 011 886
  2 2732 1012

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hsin Chuang
  City

  	
   

  	
  Fax 011 886
  2 2735 9438

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Taipen
  County

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vietnam

  	
   

  	
  Vo Hein/ Vietco

  	
   

  	
  Nguyen

  	
   

  	
  271033

  	
   

  	
  Distributor

  
	
   

  	
   

  	
  125 Le Thi
  Rieng St.

  	
   

  	
  Tel. 011 84
  8 925 6501

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HCMC

  	
   

  	
  Fax. 011 84
  8 925 6500

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vietnam

  	
   

  	
  vn_nhaviet@yahoo.com

  	
   

  	
   

  	
   

  	
   

  
	
  Korea

  	
   

  	
  OJ Alliance

  	
   

  	
  Miyong

  	
   

  	
  263234

  	
   

  	
  Distributor

  
	
   

  	
   

  	
  1318 Hyundai
  Hyel, 713 Suseo-Dong

  	
   

  	
  Tel. 82 2
  2040 7771

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kangnam-Gu

  	
   

  	
  Fax. 82 2
  2040 7693

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seoul, Korea
  135-539

  	
   

  	
  myyun@ojalliance.comEXHIBIT 10.13

 

MANUFACTURING
AGREEMENT

 

This Manufacturing Agreement (“Agreement”) is
dated and effective this 11th day of April, 2006 (“Effective Date”), by and
between Westside Packaging, Inc., a California corporation (“Westside” or “Manufacturer”),
with its principal place of business and manufacturing facility located at 1700
South Baker Avenue, Ontario, CA 91761 (“Facility”) and American Medical
Technologies, Inc., a Delaware corporation (“AMT”), with its principal
place of business located at 5655 Bear Lane, Corpus Christi, Texas 78405.

 

WHEREAS,
Manufacturer is a wholly-owned subsidiary of Discus Holdings, Inc. (“Holdings”),
a California corporation with an office at 8550 Higuera St., Culver City, CA.

 

WHEREAS,
concurrent with the execution of this Agreement, AMT has acquired from Spectrum
Dental, Inc. (“Spectrum”), a wholly-owned subsidiary of Holdings, the
exclusive right to make, distribute and sell Spectrum products under Spectrum’s
trademarks pursuant to a certain ELA (defined herein);

 

WHEREAS, heretofore, Manufacturer has
manufactured products marketed and sold by Spectrum; and

 

WHEREAS, to facilitate and set forth terms
for the continued manufacture by Manufacturer of products under Spectrum’s
trademarks for AMT the following agreement is agreed and entered into by and
between Manufacturer and AMT.

 

NOW THEREFORE, in consideration of the monies
to be paid, the obligations under taken, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of
the undersigned parties, AMT and Manufacturer agree, as follows:

 

General
Terms

 

1              Definitions.

 

1.01         Products.
“Products” shall mean the products Manufacturer manufactures for Spectrum at
the time Spectrum and AMT entered into the ELA, namely the existing product
lines sold under the marks Contrastpm, Contrastam, and

 

 

FastDam, FastTrak.

 

1.02         Formulas.
“Formulas” shall mean the tooth bleaching formulas as embodied in
Formula/Compound specifications owned by Spectrum at the time Spectrum and AMT
entered into the ELA. 

 

1.03         ELA. “ELA” shall mean that certain
Exclusive License Agreement, executed by Spectrum and AMT concurrently with the
parties’ execution of this Agreement.

 

1.04         Dependent Agreements. “Dependent
Agreements” shall mean those agreements required to be executed concurrently
with this Agreement, namely the ELA, a certain Put and Call Option Agreement
and Warrant between AMT and Holdings, and certain Real Estate Purchase
Agreement and Lease Agreement between AMT and the Sepulveda Group. 

 

1.05         Affiliate. “Affiliate” shall mean any corporation, partnership, limited
liability company, limited liability partnership, or other entity which (i) is
owned, directly or indirectly, by a party, (ii) directly or indirectly
owns a party, (iii) more than fifty percent (50%) of the ownership
interest is common to a party, or (iv) any similar arrangement which has
the practical effect that the company and a party are controlled by the same
people or entities.

 

2              Westside
Shall Continue to Manufacture for AMT.

 

2.01         Appointment.
Upon execution and closing of this Manufacturing Agreement together with the
concurrent Dependent Agreements, AMT appoints Westside as a non-exclusive
manufacturer of the Product to be distributed solely for the benefit of AMT in
accordance with the ELA. Westside shall manufacture Products for AMT on the
terms stated herein.

 

2.02         Acceptance.
Westside accepts the appointment to manufacture Products for AMT in accordance
with this Agreement and the ELA.

 

2.03         License
to Manufacturer. AMT, pursuant to the ELA, has the right to have Westside
manufacture the Formulas and Product solely for the benefit of AMT.

 

2.04         Competitive
Products. Manufacturer shall have the right to manufacture and sell to any
person goods that compete with the Products but which do not

 

 

infringe upon the patents, trademarks, trade
names, trade secrets, and other intellectual property rights of AMT.

 

3              Orders.

 

3.01         Forecasting.

 

3.01.1      Placement
of Forecasting. AMT will provide Westside with six (6) month forecast,
updated no less than quarterly. In dependence on such forecast without
limitation, (i) Westside will acquire ingredient product and (ii) Westside
will plan manufacturing schedules and quantities, including future expiration
dates on manufactured quantities. 

 

3.01.2      Guaranty
on Forecasting. In recognition that Westside will rely on AMT’s forecast:

 

3.01.2.1                   In the first year AMT
guarantees that it shall purchase no less than seventy-five percent (75%) of
AMT’s forecast.

 

3.01.2.2                   After the
beginning of the second year, AMT guarantees that it shall purchase no less
than one hundred percent (100%) of AMT’s forecast.

 

3.01.3      Excess
Raw Materials and Obsolete Packaging and Literature.

 

3.01.3.1                   Excess Raw
Materials. When raw materials are not utilized because purchase orders fell
short of forecast, Westside in good faith will attempt to use raw materials for
other purposes before charging AMT for expiration of raw materials purchased
based on guaranty provided for in Section 3.01.2 above. 

 

3.01.3.2                   Obsolete Packaging
and Literature. AMT shall be responsible for one hundred (100%) of
packaging and literature that become obsolete produced by Westside after the
parties enter into this Agreement.

 

3.02         Purchase
Orders and Confirmation.

 

3.02.1      AMT
shall order the Products from Westside by submitting purchase orders, which
shall include the Product number, description, quantity,

 

 

shipping instructions, and required delivery
dates of the Products ordered.

 

3.02.2      All
orders shall be subject to the terms of this Agreement and to confirmation by
Westside, which shall not be unreasonably withheld or delayed. In the event of
any conflict between the terms and conditions of any purchase order or
confirmation conflict with the term of this Agreement, the terms and conditions
of this Agreement shall control.

 

3.02.3      Within
three (3) business days of receipt of a purchase order, Westside shall
confirm the purchase order and delivery dates by written notice to AMT.

 

3.03         Minimum
Purchase Order. For economy of scale, Westside shall require that for each
order placed, AMT must place a minimum order for each product as stated for
each Product in Schedule A. 

 

4              Manufacturing
Pricing and Costs.

 

4.01         Manufacturing
Pricing. Westside shall manufacture Product(s) for AMT for the unit price (“Manufacturing
Price”) as follows:  (i) Westside’s
actual cost of direct or contract labor, as applicable, incurred by Westside in
manufacture plus; (ii) the product ingredients’ actual cost to Westside;
plus (iii) 45% of the sum of (i) and (ii), as manufacturing overhead
and profit charge. The parties recognize that Manufacturing Prices may increase
or decrease depending upon any possible change in specifications as well as
changes in material costs or labor. The Manufacturing Price shall not include
any proportional allocation of overhead.

 

4.02         Manufacturing
Costs. Manufacturing costs shall be become due net 30 from the time Product
is manufactured and invoiced. All invoices not paid when due shall accrue late
charges at the rate of one and one-half percent (11⁄2 %) per month or the maximum
rate permitted by law, whichever is less.

 

5              Manufacturing
Requirements.

 

5.01         Specifications.
Westside will manufacture Products within the Compound Specifications currently
part of the Formula/Compound Specifications. AMT may modify the
Compound Specifications upon providing written notice to

 

 

Westside, provided AMT obtains Westside’s
consent and Spectrum’s consent if such request is made prior to the exercise of
a Put Option or Call Option pursuant to the Put and Call Option Agreement.

 

5.02         Westside
shall manufacture Products within thirty (30) days of confirmation of the
purchase order.

 

6              Storage
and Shipping.

 

6.01         Storage.

 

6.01.1      Finished
Product. Westside will manufacture Products ready to ship.

 

6.01.2      Storage
Costs. AMT shall pay Westside storage space for finished Product at the
rate of $1.00 a square foot.

 

6.02         Shipping
Costs. AMT shall be responsible for all shipping costs.

 

6.03         Distribution
of Products. Westside at AMT’s election can either distribute Products in
the form of finished goods to AMT or in the alternative drop ship to AMT’s
customers.

 

6.03.1      Shipping
to AMT. If Westside ships Products to AMT, Westside shall deliver Products,
FOB Ontario, in Pallets (maximum capacity - 28 boxes each). AMT shall be
responsible for the shipping costs.

 

6.03.2      Shipping
to AMT Customers. If Westside fills and distributes AMT’s orders and drop
ships finished goods to AMT’s customers, Westside shall charge AMT at the rate
of $6.00 per box for distribution of finished goods, exclusive of shipping
costs.

 

6.04         Shelf
Life Policy. Attached as Schedule B is Spectrum’s current Shelf Life
Policy (FORM – 081 Rev B to the Quality Service Manuel). Westside shall
only ship Products that conform to this policy, unless Westside receives a
written deviation of policy or AMT in writing modifies the policy. If AMT
requests modifications to the policy (and obtains Spectrum’s consent if such
modifications are made prior to exercise of a Put Option or Call Option
pursuant to the Put and Call Option Agreement), Westside shall follow the newly
adopted policy.

 

7              Regulatory.

 

7.01         AMT
shall obtain and maintain all documents, regulatory approvals or

 

 

registrations reasonably necessary for the
manufacturing, storage, shipment or sale of Products by AMT, including but not
limited to ISO, CMDCAS or CE certificates (collectively, “Certificates”),.

 

7.02         AMT
shall (i) inform TUV Rheinland and NEMKO USA Inc. that AMT has
acquired the right to distribute and sale Products and (ii) provide new
contact information for these entities.

 

7.03         Upon
completion of this agreement, maintenance of Certificates and the AMT Quality
System Manual shall be the sole responsibility of AMT. Westside or any of its
Affiliates shall not have any responsibility for maintenance of the
Certificates in connection with AMT’s distribution and sale of Products.

 

7.04         AMT
acknowledges that there are certain responsibilities for maintenance of a
Quality System Manual, a Quality System that complies with ISO 13485 as well as
other responsibilities that maybe required for registration or approval of sale
of products in some countries and that AMT is solely responsibility for these
responsibilities and documenting compliance therein. Neither Westside nor its
Affiliates shall have any responsibility whatsoever for maintenance of AMT’s
Quality System Manual, as well as other responsibilities that maybe required
for registration or approval of sale of products in any foreign country, if
applicable.

 

7.05         AMT
shall provide all approved documents necessary for Westside to produce finished
products as requested by AMT. This should include but is not limited to the
following documents:  (i) Work
instructions; (ii) formula compound specifications, (iii) specifications
for purchased component(s) if needed, (iv) specifications for
sub-assemblies if needed, (v) specifications for finished product, (vi) printed
material specifications, and (vii) artwork masters. Prior to the exercise
of a Put Option or Call Option pursuant to the Put and Call Option Agreement,
all changes to current specifications must be reasonably approved by Spectrum.

 

7.06         Westside
will produce and deliver finished product that meets or exceeds Spectrum’s
current specifications listed herein (and which may be reasonably modified
by Spectrum), and not make any significant changes or deviations in

 

 

any of the processes described in the
pertinent work instructions attached herein unless otherwise authorized by AMT.

 

7.07         AMT
shall (i) bear primary and sole responsibility for its customer relations,
and claims and issues with customers, save and except only product defect or
manufacturer warranty issues, (ii) be liable for returns, product
replacements, shipment errors or mis-directions caused by the action or in
action of AMT; and (iii) indemnify and hold Westside harmless from all
liabilities and claims arising from AMT’s actions or omissions.

 

7.08         Westside
shall conduct all manufacturing/inspection/inventory and shipping operations,
and maintain facilities, in compliance with Westside’s own internal quality
system. Westside will be solely responsible for complying with ISO 13485:2003
for medical device manufacturing and provide current copies of certifications
of compliance with these standards to the Manufacturer upon request by AMT.

 

7.09         AMT
will develop and maintain specifications for final product and provide these to
Westside. AMT will notify Westside of any change to these specifications.

 

7.10         AMT
will advise Westside (and Spectrum prior to the exercise of an option pursuant
to the Put and Call Option Agreement) of any malfunction or product complaint
reported to AMT resulting in actual or potential injury to a patient or death
of a patient, or adverse event or Product Vigilance report pertaining to
defects or malfunctions of a product made by Westside for AMT. Westside will
cooperate with any AMT investigation of product failures and/or product
complaints received by AMT and communicated to Westside by AMT regarding
defects in workmanship made by Westside for AMT.

 

7.11         AMT
will be responsible for managing any filed actions or recalls of product made
by Westside and placed on the market by or on behalf of AMT. In the event of a
field action or recall, AMT will notify Westside (and Spectrum prior to the
exercise of an option pursuant to the Put and Call Option Agreement) and AMT
will coordinate investigation of product history, distribution and root cause
analyses to ensure prompt remedial action for

 

 

affected product. Westside will cooperate
with AMT in the event of a field action or recall to investigate product
history and root cause analysis pertaining to product made by Westside for AMT.

 

7.12         Westside
shall test each lot of Product per the Specifications provided by AMT, retain
appropriate samples of finished product, track and maintain lot manufacturing
records and provide AMT and third parties reasonable access, verification, and
inspection rights thereto for the purpose of verifying compliance with Westside’s
Quality Systems and/or ISO 13485:2003.

 

7.13         Each
party shall comply with all local state federal wage and employment laws, in
connection with the manufacture and sale of Products for AMT.

 

8              Term,
Renewal and Termination.

 

8.01         Term.

 

8.01.1      Initial
Term. The initial term of this Agreement shall commence on the Effective
Date for a term of three (3) years (“Initial Term”).

 

8.01.2      Renewal
Period. Unless terminated earlier in accordance herewith, after the Initial
Term and or any renewal period, the Agreement term shall automatically renew
for annual periods of one (1) year (“Renewal Periods”) unless either party
informs the other in writing more than three (3) months prior to the
expiration of the current term to its election to terminate and not renew at
the expiration thereof.

 

8.02         Termination.

 

8.02.1      Termination
for Event of Default. Any one of the following acts or omissions shall
constitute and Event of Default and shall justify the immediate termination of
this Agreement “for cause”:

 

8.02.1.1                   Absent an event
constituting force majeure, failure of Manufacturer to perform any of its
obligations hereunder which failure shall continue for a period of sixty (60)
days after notice thereof, and demand for cure, from AMT;

 

8.02.1.2                   Failure of AMT to
submit a forecast for a period of ninety (90) days after notice thereof;

 

8.02.1.3                   Failure of AMT to
pay due when any invoice of

 

 

Manufacturer, in whole or in part, in
accordance with its terms and such failure shall continue for a period of
thirty (30) days thereafter;

 

8.02.1.4                   Filing by either
AMT or Westside for protection under the Federal Bankruptcy code or similar
statute of any jurisdiction;

 

8.02.1.5                   Admission by
either AMT or Westside of its inability to pay its debts as they mature or the
making of an assignment for the benefit of creditors;

 

8.02.1.6                   Adequate
Assurance. Nothing in this Agreement is intended to affect either party’s
right to demand adequate assurance of performance in accordance with the
provisions of Section 2-609 of the applicable Uniform Commercial
Code.

 

8.02.2      Termination
without Clause. This Agreement may be terminated at any time by either
party on six (6) months written notice to the other.

 

9              Warranty
and Remedy.

 

9.01         Westside
agrees to exercise reasonable best efforts to meet the quantities and deadlines
of AMT for completed product.

 

9.02         Westside
represents and warrants that the Products shall be manufactured in accordance
with good manufacturing practices acceptable in the industry and shall be free
from defects in materials and workmanship. EXCEPT AS EXPRESSLY STATED
IN THIS SECTION, THERE ARE NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES WITH RESPECT TO DESCRIPTION OR QUALITY.

 

9.03         In
the event of a breach of this warranty or a defect in workmanship or material
covered by the Westside warranty, Westside’s sole responsibility shall be to
replace the defective Product, or at Westside’s option, to reimburse AMT the
actual cost of any defective Products sold to AMT, and to indemnify AMT against
third party claims solely in accordance with Section Error! Reference source not found. of this
Agreement. Other than as set forth in this paragraph 9.01and 9.03, WESTSIDE SHALL NOT BE LIABLE TO AMT FOR ANY

 

 

INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, OR FOR ANY DAMAGES RESULTING FROM LOSS OF USE OR LOSS OF
PROFITS, ANTICIPATED OR OTHERWISE, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT FOR THE SALE, USE OR PERFORMANCE OF THE PRODUCTS, WHETHER SUCH CLAIM
IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), ANY THEORY OF STRICT
LIABILITY OR REGULATORY ACTION.

 

10            Insurance
and Indemnification.

 

10.01       Each
Party 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. Each Party agrees to furnish
upon request by the other Party a certificate of insurance indicating coverage
in the required amounts and stating that the insurer shall endeavor to give the
other Party written notice at least thirty (30) days prior to any cancellation,
non-renewal, or material change in coverage. Each party shall name the other on such insurance as an
additional insured or loss payee.

 

10.02       AMT
shall indemnify, defend and hold Westside and its Affiliates harmless from and
against all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that such
entities may incur in any way arising out of assertions of any third party
relating to the Products or this Agreement, including but not limited to claims
of infringement or claims in breach of the representations and warranties by
AMT; provided, nevertheless, AMT shall have no liability for such
indemnification if the cause of any such claim or assertion was the gross
negligence or willful misconduct of Westside or any of its Affiliates. Upon any
such third party assertion made against Westside or its Affiliates, AMT

 

 

will assume the defense thereof at its own
cost and expense and satisfy any judgment or decree that may thereafter be
entered.

 

10.03       Westside
shall indemnify, defend and hold AMT harmless from and against any claim or
suit brought by a third party against AMT (including reasonable attorneys’ fees
and expenses incurred in connection therewith) arising out of (a) the sale
or use of any Products that have an actual defect determined to be caused by
Westside or (b) any negligence or intentional misconduct of Westside’s
officers, agents or employees.

 

11            Miscellaneous.

 

11.01       Independence
of Parties. The relationship of AMT and Westside is that of customer and
manufacturer and does not create a partnership, agency, or joint venture.

 

11.02       No
Waiver. Failure of a party to insist upon strict performance of any term of
this Agreement, or the waiver by a party of any breach of the Agreement, shall
not constitute a waiver of the subsequent strict enforcement of any such term
or terms.

 

11.03       Force
Majeure. Failure of Manufacturer to fulfill any order placed with it by AMT
or to make any delivery of Products manufactured by Manufacturer, when due, if
occasioned in whole or in part by an act of God or the public enemy or
terrorism, fire explosion, perils of the sea or air, flood, drought, war,
riots, civil insurrection, sabotage, accident, embargo, governmental priority
or allocation or any action of any governmental authority, or shortage or
failure of supply of materials or labor, or strikes or other labor trouble, or
any occurrence, act, cause, or thing beyond the control of Manufacturer, shall
excuse any such failure on the part of Manufacturer; and Manufacturer
shall have no obligation or liability whatsoever arising out of or in
connection with any such failure.

 

 

11.04       Written
Notices. All written notices required hereunder shall be deemed delivered
if delivered by hand or if mailed by United States certified mail, return
receipt requested, postage pre-paid and addressed as follows or to such other
address as may be specified by notice by either party specifically
referring to this paragraph:

 

	
  To AMT:

  	
   

  	
  Roger Dartt

  
	
   

  	
   

  	
  c/o American Medical Technologies, Inc.

  
	
   

  	
   

  	
  5655 Bear Lane

  
	
   

  	
   

  	
  Corpus Christi, Texas 78405

  
	
   

  	
   

  	
   

  
	
  To Westside:

  	
   

  	
  Scott Mejia

  
	
   

  	
   

  	
  Westside Packaging, Inc.

  
	
   

  	
   

  	
  1700A South Barker Avenue

  
	
   

  	
   

  	
  Ontario, California 91761

  
	
  With copy to:

  	
   

  	
  Ken Rosenblood

  
	
   

  	
   

  	
  Chief Executive Officer, Westside Packaging, Inc.
  and Chief Operating Officer, Spectrum Dental, Inc.

  
	
   

  	
   

  	
  8550 Higuera St.

  
	
   

  	
   

  	
  Culver City, CA 90232

  

 

11.05       Governing
Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California. Any and all disputes
arising out of, related to, or in concerning this agreement shall be resolved
in arbitration, conducted by and under the rules of AAA (American
Arbitrators Association), any such hearing shall be held in Los Angeles County,
California.

 

11.06       Assignment.
The parties shall not assign any rights or obligations hereunder without the
prior written consent of the other, which shall not be unreasonably withheld.

 

11.07       Entire
Agreement. This Agreement sets forth the entire Agreement and understanding
of the parties with respect to the subject matter treated herein and supersedes
all prior and contemporaneous agreements, understandings, and representations
and warranties, whether oral or written save that neither

 

 

party shall be relieved hereby from making
payment of any amount due and owing under any agreement entered into prior to
the date hereof. The Agreement may not be amended, modified or altered,
nor may any of its provisions be waived, except by writing signed by the
party against whom such amendment or modification is sought to be enforced.

 

IN WITNESS WHEREOF,
the parties have cause this Agreement to be executed by their duly authorized
Presidents the day and year first hereinabove written.

 

	
  “WESTSIDE”

  	
  “AMT”

  
	
   

  	
   

  
	
  Westside Manufacturing, Inc.,

  	
  AMT Dental, Inc.,

  
	
   

  	
   

  
	
  a California corporation

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  

 

 

Schedule A

 

Minimum Orders:  Each time AMT places an order for the
following Product(s), AMT must place a minimum order for the following amount:

 

 

Schedule B

 

Shelf Life Policy
– FORM – 081 Rev B attached.

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