Patent License Agreement

Patent License


WHEREAS: PREP-TECHNOLOGY CORP. ("PREP-TECH") desires to obtain a license under certain patents and patents pending which are owned by American Dental Technologies, Inc. ("ADT"), and ADT is willing to license such patents to PREP-TECH.


NOW THEREFORE, the parties agree as follows:


1. ADT hereby grants to PREP-TECH, a nonexclusive license under U.S. Patent No. 5,275,561 and U.S. Patent No. 5,330,354, U.S. Patent No. 5,350,299 and U.S. Patent No. 5,525,058 and any foreign counterparts, reexaminations, reissues, continuations-in-part based on the disclosures of the patents listed in this paragraph 1, for the life of such patents to make, use, lease and sell PREP-TECH'S air abrasive dental models and future models provided they do not infringe any non-dental patents or non-dental patent applications of ADT (for example helical feed mechanisms) throughout the world, but excluding Japan, presently covered by agreements between ADT and Denics Co., Ltd., a/k/a Dental Innovative Corporation, a Japanese corporation. Except as set forth in the following sentence, the license granted in this paragraph 1 is non-transferable by assignment, sublicense or other means of transfer provided, further, that during the period in which PREP-TECH is licensed under this Agreement, PREP-TECH shall have the right to have the products of this paragraph 1 manufactured by a third party solely for PREP-TECH. PREP-TECH may transfer this license to another party (except for Kreativ, Inc., its affiliates, successors or assignees) in connection with the sale of the company or its air abrasion business. Such transferee must assume the obligations hereunder and confirm the validity of the patents covered by this Agreement. The license in this paragraph 1 is subject to the payment provided in paragraph 2 of this Agreement.


Payments


2. Beginning March 1, 1998, PREP-TECH, or its permitted successor or assignee, shall pay to ADT a royalty on the net sales price (defined as gross sales price less freight, duties and excise taxes) on all abrasive products used for cavity preparations manufactured, sold or leased by PREP-TECH, or its permitted successor or assignee, which are manufactured (by or on behalf of PREP-TECH), sold or leased in a country in which ADT, presently or in the future, owns or controls patents or patent applications on any dental air abrasive products or methods of treatment, until the expiration of all such patents/patent applications. For air abrasive products used for cavity preparations which have an electro mechanically operated system and which are covered by either U.S. Patent No. 5,275,561, U.S. Patent 5,330,354 or U.S Patent 5,350,299, or U.S. Patent No. 5,525,058 or any of their foreign counterparts or continuations-in-part, the royalty shall be **. For all other air abrasive products used for cavity preparation, such as completely pneumatic systems, the royalty shall be **. In the event that PREP-TECH manufactures or has manufactured on its behalf, and sells or leases air abrasive products used for cavity preparations wholly within a country where ADT holds no such patents or patent applications or where all such patents ...