Derma Sciences Inc. entered into a patent and technology license agreement with Quick-Med Technologies Inc. relating to QMT's proprietary anti-microbial technology. The company, pursuant to the prior patent and technology license agreement with QMT, dated March 23, 2007 and previously disclosed, has been utilizing the Technology in a series of wound care products, including conforming gauze, gauze sponges, gauze bandage rolls, gauze packing strips, oil emulsion acetate and Unna boot dressings, and intends to continue to do so under the Agreement. Under the Agreement, QMT granted to the company an exclusive, royalty-bearing right and license to make, use and sell products incorporating the Technology worldwide, except for India. If the company does not achieve the first commercial sale of a product incorporating the Technology in Europe and in Asia and Central and South America by certain dates, QMT has the right to, as its sole remedy, either terminate the Agreement or convert the exclusive license in the Territory to a non-exclusive license. Unless otherwise terminated pursuant to the Agreement, the term of the Agreement extends from July 12, 2012 until, with respect to each country in the Territory, the expiration of the last to expire of the Patent Rights in that country. The company agreed to pay to QMT an upfront license fee of $1.3 million. In addition to the upfront license fee, royalties are payable to QMT based upon a sliding scale starting at 8.5% the company's net sales of products incorporating the Technology, less certain deductions and declining as Net Sales increase.