EXHIBIT 10.23
SECOND AMENDED & RESTATED
MANUFACTURING, DISTRIBUTION AND ASSIGNMENT
AGREEMENT
This Amended and Restated Agreement is made effective the 3rd day of
February, 1999 and incorporates the original agreement executed on that date as
well as the first amendment thereto made effective on that date, by and between
National Boston Medical, Inc., hereafter call "NBM," a Delaware corporation,
with its principal place of business at 00 Xxxxxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx, 00000, represented by Xxxxxx X. Xxxxx, it CO-CEO, duly authorized
by corporate resolution dated June 18, 1998 and reconfirmed on this 3rd day of
February, 1999, attached hereto and DermaGuard, Inc., hereafter called
________________, a Louisiana corporation with its principal place of business
at 0000 Xx. Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxx 00000, represented
by Xxxxxx X. Xxxx, its President, duly authorized by corporate resolution dated
June 18, 1998 and reconfirmed on this 3rd day of February, 1999, attached
hereto.
I. Appointment and Acceptance
Subject to the terms and conditions contained herein, (including the
performance requirements regarding volume commitments as hereafter set forth)
NBM appoints DermaGuard, and DermaGuard hereby accepts said appointment, as a
manufacturer, distributor and seller of products herein below defined. Pursuant
hereto, DermaGuard shall enjoy a right of first refusal on any new Product
offerings by NBM that are within the scope of said Products as defined herein
and under the terms and conditions otherwise contained herein. The Products
covered by this Agreement are: (1) any and all germicidal, antiviral,
antibacterial, antimicrobial based items, solutions and formulations and any
Products which are derivatives thereof or used in connection therewith; (2) any
solutions or formulations which are cosmetics, barrier creams, lotions,
moisturizers and/or skin conditioners, except the product presently produced and
sold under the name Allergyguard (to be marketed by NBM as a accompainment to
its Bontempi line of instruments); and, (3) SafeShield, whether now or in the
future, owned, secured, distributed and/or marketed by or on behalf of NBM, the
foregoing being collectively or individually referred to herein as the
"Products."
II. Manufacturing Rights
A. DermaGuard shall have the exclusive rights worldwide to manufacture,
make, have made, use, market, advertise, sell, test and have tested or sold, the
Products of NBM including, though not limited to, SafeShield. DermaGuard shall
furthermore have the exclusive right to appoint any and all vendors, brokers,
distributors or others who wish to use, distribute, market, advertise, sell,
have sold or test said Product(s) including the right to use the trademarks,
trade names and service marks associated therewith; except that, NBM shall have
the right to approve the use of any trademarks, trade names and/or service marks
used or to be used by any appointee/s/assignees pursuant hereto.
B. For purposes of Section X of this Agreement, the following customers
shall be the "Former Exclusive Customers" of DermaGuard.
(1) Any and all local, state and federal governmental agencies and/or
institutions, including municipalities, state governments and the United
States of America, its/their political subdivisions, departments and/or
agencies;
(2) Any and all quasi-public and/or controlled entities, including but
not limited to hospitals, schools, military facilities/installations, and
any and all other public oriented and/or publicly supported officers and/or
agencies; and
(3) Any and all entities, which make up or service the food and/or
hospitality industry.
III. Appointment as Master Distributor
Subject to the terms and conditions herein including, but not limited to,
certain performance requirements regarding volume commitments as hereinafter set
forth, NBM appoints DermaGuard and DermaGuard accepts said appointment as Master
Distributor of the Products. In said capacity, DermaGuard shall at its own
expense be responsible for generating and coordinating all orders of the
Products, arranging all shipping and handling of the Products, fulfilling all
orders, providing and maintaining customer support, producing promotional and
related materials, and generally performing the functions necessary and/or
peculiar to the effective and efficient distribution of the Products, including
the development and implementation of a comprehensive marketing plan targeting
any and all domestic and international markets/customers. Notwithstanding
anything herein to the contrary, all Product orders shall be placed through
DermaGuard.
IV. NBM's Representations, Warranties and Covenants
A. NBM shall serve as DermaGuard's contract manufacturer and agent for the
purpose of producing and/or securing the production of the SafeShield product at
one or more FDA approved manufacturing facilities.
B. NBM shall refer all inquires and purchase orders on Products from any
and all customers to DermaGuard or DermaGuard's assignees.
C. NBM shall secure or assist DermaGuard in securing any and all FDA
registrations for Products and all such other licensing and permits necessary
for the manufacture and distribution of the Products by DermaGuard.
D. NBM represents and warrants that it is the sole and lawful owner of all
rights to the formulation and know-how of the Product known as SafeShield, and
that it shall prosecute and/or defend at its sole expense, said rights whenever
and wherever necessary.
E. NBM shall, from time to time as needed advance all costs associated with
product testing of SafeShield as may be required or deemed advisable by
DermaGuard and approved by NBM, which approval shall not be unreasonably
withheld.
F. NBM shall assist DermaGuard, Inc. in any way reasonable to fulfill its
obligations hereunder.
G. NBM warrants that it has not entered into any agreement with any other
parties that will or may affect its ability to enter into this Agreement except
as have been fully disclosed to DermaGuard.
V. DermaGuard Representations and Covenants
A. DermaGuard has paid to NBM and NBM acknowledges the deposit of Seventy
Five Thousand, Eighty Three and 88/100 ($75,083.88) DOLLARS more or less,
towards an initial purchase order of SafeShield, the receipt by NBM of which is
hereby acknowledged.
B. DermaGuard shall actively promote the sale of the Products through
direct and indirect selling activities.
C. DermaGuard shall permit NBM to review its inventory at regular intervals
at NBM's direction (but no more than four (4) times per year) on thirty (30)
days prior written notice.
D. DermaGuard shall provide NBM with quarterly projections, operating plans
and financial statements, together with updates of DermaGuard's Product sales
reports for the previous fiscal quarter.
VI. Promotional Campaign
A. DermaGuard shall conduct such promotional campaigns of the Products as
it determines desirable or necessary in its sole and absolute direction. NBM
shall have the right to participate in said promotional campaigns by
contributing a portion of the costs of any promotional campaigns or programs
conducted by or on behalf of DermaGuard provided however such contribution shall
not entitle NBM to direct or control the content or quality of said promotional
campaign or program. The above notwithstanding, NBM reserves the right to review
all DermaGuard marketing materials.
B. NBM shall allocate and pay to DermaGuard a minimum of $25,000.00 per
annum to promote the Products, which shall include, though not be limited to,
organizational membership dues, advertising costs, brochures, catalogs and
product sales, as DermaGuard determines in its sole discretion to be desirable.
C. Further, NBM shall allocate and pay to DermaGuard an amount equal to 3%
of the gross revenue from the Products sold by DermaGuard, for DermaGuard's use
in promoting the sale of the Products as per "B" above, except that, any amounts
expended by NBM under "B" above, shall be credited against this obligation.
D. The payments referred to in "B" and "C" above, shall be made to
DermaGuard by NBM, by DermaGuard's crediting and offsetting said amount(s) from
any invoice(s) outstanding with NBM or from any other amounts owed to NBM by
DermaGuard.
E. DermaGuard shall at the end of each quarter, substantiate all costs
incurred in promoting the Products.
VII. Product Warranty
NBM's responsibility to DermaGuard, pursuant to Section IV(A) hereof, with
respect to any claimed defect in the Products is limited to replacement of the
claimed defective Products and NBM shall not be liable to DermaGuard for any
indirect, special or consequential damages of any kind whatsoever with respect
to any such defects. Without in any way limiting the foregoing, in no case shall
the liability of NBM under any warranty, expressed or implied, of or for any
reason arising out of a Product sold to DermaGuard, exceed the value of the
Product sold.
VIII. Turnkey Pricing/Ordering Terms
A. NBM shall confirm receipt of all Product order from DermaGuard within
five (5) business days of NBM's receipt. No Product order shall be binding on
NBM until received and confirmed by NBM.
B. All Product orders shall be subject to a minimum cost of $50,000.00.
C. Products shall be shipped F.O.B. Factory, South Atlantic Industries, 00
Xxxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, XX, 00000 or F.O.B. Current Factory at time of
order. Products shall be shipped by the best and most economical means
available. All air shipments must be requested in writing and shall be at the
sole cost and expense of DermaGuard.
D. Payment terms are ne 30-days after receipt of order, except that on the
initial order submitted herewith, payment terms are ne 90-days after receipt of
order.
IX. Duration and Termination
A. This Agreement shall be for a primary term of three (3) years,
commencing on the 3rd day of February, 1999 and terminating on the 3rd day of
February, 2002. This agreement shall be automatically renewable for successive
three (3) year periods; subject to mutually agreed upon annual performance
requirements. Should the parties hereto fail to agree on annual performance
requirements for any extended term of this contract, said annual performance
requirements shall be established at successive ten percent (10%) per annum
increases, until the same is otherwise mutually agreed upon or until a decision
of an arbitrator appointed to decide said matter is received.
B. In the event of breach of this agreement by either party, the offending
party shall have thirty (30) days from the date of written notice from the
offended party to remedy the alleged breach.
X. Performance
A. As to DermaGuard's "Former Exclusive Customers," DermaGuard shall
generate yearly sales to its distributors and/or users for the Product
SafeShield as follows:
(1) Six Hundred Thousand and no/100 ($600,000.00) DOLLARS in the first
year of this agreement (including the initial order);
(2) One Million ($1,000,000.00) DOLLARS in the second year; and
(3) Two Million ($2,000,000.00) DOLLARS in the third year.
B. As to all of DermaGuard's customers including, through not limited to,
those specifically identified in this Section under "A" above, DermaGuard shall
generate yearly sales to its distributors and/or end users for the Product
SafeShield as follows:
(1) Five Million and No/100 ($5,000,000.00) DOLLARS in the first year of
this agreement (including the initial order),
(2) Seven Million Five Hundred Thousand and no/100 ($7,500,000.00) DOLLARS
in the second year, and
(3) Eight Million Five Hundred Thousand and no/100 ($8,500,000.00) DOLLARS
in the third year.
C. DermaGuard shall be considered in compliance with its performance
requirements as set forth in "A" above, retaining all exclusive rights granted
thereunder, if:
(a) DermaGuard is in compliance under "A" above, or
(b) DermaGuard is in compliance under "B" above.
XI. Breach of Performance
A. Notwithstanding anything herein stated to the contrary, DermaGuard shall
be evaluated on its performance at every six (6) month interval, at which time
it is expected that DermaGuard will have satisfied one-half (1/2) of its annual
performance requirement as set forth in Section X above. Should DermaGuard at
such time fail to be in compliance, DermaGuard shall be placed on notice of such
failure by NBM and DermaGuard shall thereafter have an additional ninety- (90)
days to bring its performance into compliance (curative period). DermaGuard's
failure to so comply during its curative period shall be considered a material
breach and default of this contract; provided however, the sole remedy of NBM
for such failure shall be the forfeiture by DermaGuard of its exclusive rights
granted herein, as may be applicable.
B. Should DermaGuard become insolvent or be found guilty of criminal
activity which adversely affects the good name of the SafeShield product in the
market place or DermaGuard's ability to comply with the requisites established
herein, DermaGuard shall be considered in Default of this Agreement.
XII. Default
A. Except as otherwise set forth in this agreement, in the event either
party is in default of any of its obligations herein, the other party may, after
having given written notice on the specific default complained of and the
defaulting party failing to cure the default complained of within thirty (30)
days after receipt of said written notice, (a) terminate this Agreement by
written notice to the defaulting party and recover any and all damages including
attorneys fees, costs and expenses caused by or incurred as a result of said
defaults, (b) enforce specific performance of the defaulting party's
obligations, (c) xxx for and recover any and all damages sustained by said party
as a result of the defaults complained of without terminating this Agreement,
(d) perform such obligation on behalf o the defaulting party, who shall
immediately reimburse the other party for the full cost of performing such
obligation, or (e) have recourse to any other remedy to which it may be entitled
by law; it being hereby acknowledged that any default under this Agreement by
either party shall cause irreparable harm to the other party. Notwithstanding
anything herein to the contrary, if any default by either party herein cannot
reasonably be remedied within thirty (30) days after written notice of default,
then such party shall have such additional time as shall be reasonably necessary
to remedy such default before any remedies or default may be enforced. The
prevailing party in any litigation herein shall be entitled to recover the full
amount of its attorneys fees, costs and expenses incurred in order to enforce
and protect its rights.
B. Notwithstanding anything herein above stated to the contrary, the
parties hereto reserve the right unto themselves to demand of each other, that
all matters of disagreement pursuant to this Agreement be immediately submitted
to binding arbitration in a mutually agreeable forum.
XIII. Notices
All notices permitted or required herein shall be made in writing by
certified mail, return receipt requested as follows:
If to DermaGuard: DermaGuard, Inc.
0000 Xx. Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: President or Chief Executive Officer
If to NBM: National Boston Medical, Inc.
00 Xxxxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
P.O. Box 1161
Xxxxxxx, XX 0000
Attn: President or Chief Executive Officer
Either party may change its address for notices by ten (10) days prior
written notice to the other party.
XIV. Conveyance of Rights Under Patent
NBM does hereby convey and deliver to DermaGuard the right and ability to
use all rights, statements or claims made by, for or on behalf of the Products,
particularly SafeShield, as evidenced by and pursuant to NBM's patent or
patent-pending rights (U.S. Application NO. 09/022.241 filed 2/11/98) including,
though not limited to, the trademarks, trad names and service marks associated
therewith. Further, this conveyance of rights shall automatically extend and
apply to any further patents, patent-pending applications, continuations,
continuations in part, divisional and subdivisional, reissues, reexaminations,
extension applications, or related rights obtained by NMB relative to any of its
Products including, though not limited to, SafeShield.
XV. Defense of Rights
A. In the event that NBM receives notice or knowledge of a cause of action
or claim or threatened cause of action or claim, arising out of or in any way
pertaining to the patent or patent pending rights made the subject hereof, NBM
shall immediately notify DermaGuard of said cause of action or claim.
B. Further, in the event of any action or decision adverse or favorable
from the Food & Drug Administration, Office of Patent & Trademarks or any other
government or regulatory entity relating to the Products, including SafeShield,
NBM shall immediately notify DermaGuard of such action or decision.
C. Should DermaGuard determine in its sole and uncontrolled discretion,
that its rights or any of them hereunder are in jeopardy for any reason,
including though not limited to, the institution or threat of institution of
suit against NBM, Gulf Atlantic Industries, Inc., Gulf Atlantic Labs, Inc. or
any of their affiliates, successors or assigns or any of their respective
principals, officers or Directors, in their capacity as principal, officer or
Director of any of said entities or by reason of any of said entities declaring
bankruptcy, or being placed in receivership or being assigned for any reason a
Trustee to surprise it affairs or a significant portion of its assets, or if any
assignment is made for the benefit of creditors or once NBM is afforded notice
of any claim of patent infringement and fails to act timely to protect
DermaGuard's interest herein, them DermaGuard shall have the right, after
notifying NBM in writing, to take any action it deems appropriate, including the
right to name and retain counsel, in its name and/or in the name of NBM,
(whether or not advanced by DermaGuard) the cost of said action to be borne by
NBM. However, nothing herein is intended to limit or mitigate NBM's duty and
obligation to prosecute and/or defend its rights, and the rights granted herein
to DermaGuard, as set forth in Section IV(D) herein or otherwise.
D. Notwithstanding the above, in the event that NBM declares bankruptcy or
if a receiver or trustee is appointed over a significant portion of its assets,
or if any assignment of NBM assets is made of the benefit of creditors, then
this contract shall, ipso facto, convert to a sale of all rights by NBM of the
SafeShield product to DermaGuard, including but not limited to, all of NBM's
patent, patent- pending or related rights, title and interest in and to the
formulation, technology and know-how associated therewith. In consideration of
said sale, DermaGuard hereby agrees to pay to or on behalf of NBM or into
escrow, as appropriate, an amount equal to the net cost per ounce of manufacture
of the SafeShield product. This said amount shall be payable in perpetuity and
shall be in addition to the actual manufacturing cost expended by DermaGuard.
Additionally, DermaGuard shall be required to adhere to the performance
requirement as set forth in Section X hereof and to the minimum annual
incremental performance requirements as set forth under Section IX(A) hereof.
E. Should "D" above be determined unenforceable for any reason, in whole or
in part, DermaGuard shall, in the alternative, have the immediate right to
continue in the exercise of its rights hereunder by paying to or on behalf of
NBM the amount of compensation as agreed to elsewhere herein and no adverse
action taken against NBM by third parties or otherwise shall void or otherwise
affect this agreement.
XVI. Right of First Refusal
In the event of NBM's sale of its rights in and to the SafeShield product,
whether voluntarily or involuntarily, DermaGuard shall in addition to the rights
otherwise herein granted, have the right of first refusal and the ability to
match within sixty- (60) days, the terms and conditions of any offer made to or
accepted by or on behalf of NBM pertaining to said sale. This right shall apply
to each proposed sale and/or renegotiate sale and to any and all offers made
and/or accepted during the term of this Agreement.
XVII. Reserved Rights
Except as expressly set forth herein, the parties hereto retain any and all
rights which they have or may have and place no other restrictions or conditions
whatsoever upon each other.
XVIII. Private Labeling
A. DermaGuard shall have the right to manufacture, distribute, market and
sell any and all of the Products under a DermaGuard private label, including the
right to identify and name or change the name, including the trade name of any
and all such Products as DermaGuard in its sole discretion elects.
B. It is stipulated and agreed that at no time will any multi-level
marketing group, discount marketer or similar marketing organization, individual
or entity be allowed to sell a product bearing the SafeShield name and/or
trademark and any product so marketed must vary from the existing SafeShield
formulation in at least color and scent and be otherwise obviously
distinguishable. Further, no such entity shall be allowed to use or refer to any
test data, which specifically relates to SafeShield, whether said tests were
conducted under the SafeShield product name or any prior or subsequent name.
XIX. Consideration
A. In consideration of the manufacturing rights conveyed herein by NBM to
DermaGuard, and pursuant to Section IV(A) hereof, DermaGuard shall pay to NBM a
royalty amount fixed at a price equal to the actual manufacturing cost of the
Product, SafeShield. Should NBM, pursuant to its duties and/or obligations
hereunder, advance the costs of manufacturing the said Product for or on behalf
of DermaGuard, DermaGuard shall be obligated to reimburse NBM for any and all
amounts to expended. Further, in the performance of its duties hereunder, should
NBM experience any reasonable and customary price increase from any contract
manufacturer of SafeShield, NBM shall notify DermaGuard of such increase sixty-
(60) days in advance of such increase.
B. In respect hereof, DermaGuard shall submit, in conjunction with the
execution of this Agreement, a Purchase Order #1123, dated 1/26/99 for products
(in ounces) totaling Six Hundred Seven Thousand, Six Hundred Eight and No/100
($607,680.00) DOLLARS (see attached purchase order), including Five Hundred One
Thousand, Nine Hundred Fifty Two and No/100 ($501,952.00) DOLLARS for 1,140,800
ounces of SafeShield at $0.44 per ounce (including NBM's royalty) and total
packaging costs of One Hundred Five thousand, Seven Hundred Twenty Eight and
No./100 ($105,728.00) DOLLARS. In conjunction with the said Purchase Order
#1123, NBM agrees to advance the cost of and invoice DermaGuard separately for
the associated costs of manufacturing and packaging said product for market on
DermaGuard's behalf (pursuant to Section IV(A) hereof), including packaging,
filing, printing and container costs.
C. As additional security and consideration for NBM, DermaGuard agrees that
it will within five (5) days of the execution hereof, provide a irrevocable
letter of credit in favor of NBM in the aggregate amount of One Hundred Fifty
Thousand and No/100 ($150,000.00) DOLLARS payable ninety- (90) days from the
receipt of the SafeShield product pursuant to the attached purchase order.
D. As additional consideration to DermaGuard, NBM agrees to and does hereby
grant to DermaGuard an incentive option and right to purchase an aggregate of
one million (1,000,000) share of restricted common stock of NBM with
registration rights. NBM shall issue one warrant within thirty-days of the date
of execution hereof for one million (1,000,000) shares to appear in form and
substance as per SPECIMEN WARRANT attached hereto as made a part hereof for all
purposes. (See attached Exhibit "A".)
E. In order to exercise the said warrant and a the point of exercise,
DermaGuard shall not be in default of this Agreement and additionally, must
have, prior to said exercise, met the following minimum criteria:
Requirements For Exercise of Warrant
5. Confirmed gross sales by DermaGuard to its distributors
and/or end users of not less than five million and no/100
($5,000,000.00) DOLLARS with actual payment having been
tendered to and received by NBM for Product associated
therewith; and,
6. The establishment and sale of Product to at least one
confirmed account opened that is a national retail chain
operator; and,
7. the establishment and sale of Product to at least one
confirmed account opened that is a national food service or
hospitality chain operator; and,
8. The establishment and sale of Product to at least one
confirmed account opened that is a national purchasing
group for the health and/or hospital industry; and,
9. The establishment and sale of Product to at least one
confirmed account opened with a department of the United
States of America; and,
10. The establishment and maintenance, of a national broker
and/or distributor system for SafeShield covering all of
the United States and its territories.
For purposes of this subpart "D," the above six (6) criteria relate solely
to the product SafeShield.
F. In lieu of "E" above, DermaGuard may exercise its warrant by confirming
total annual sales of not less than Seven Million Five Hundred Thousand
($7,500,000.00) DOLLARS.
XX. Miscellaneous
A. NBM expressly warrants that upon the execution hereof any and all
discussions or negotiations presently underway with any distributors, brokers,
or end users, concerning or in any way relating to the sale or distribution of
the Products shall cease and be referred to DermaGuard for further handling.
B. It is further stipulated that NBM has not entered into any agreement,
directly or indirectly, with any parties which can or may adversely affect this
Agreement.
C. NBM specifically warrants that it has not entered into any agreement,
effective beyond the date hereof, with Creative Resources, L.L.C. of Lake Ozark,
MO, Creative Resources II or any related entity or affiliate, director or
principal thereof, it being the express intent of the parties hereto that any
and all agreements with said entity/entities shall fall within the scope of this
Agreement and within the exclusive rights granted herein by NBM to DermaGuard.
XXI. Rights Excepted
A. Specifically excepted from this Agreement is NBM's right to contract
with, and only with, the entity known as Sheffield Resource Network (SRN) of
Tampa, Arizona. It is hereby agreed that NBM reserves the right to contract with
Sheffield for the limited purpose of Sheffield's marketing a certain variation
of the SafeShield product to, and only to, multi-level marketing entities
(MLM's). Any such Agreement must however, incorporate the above restriction, be
non-assignable and be approved and endorsed by DermaGuard as to form and
substance, which endorsement and/or approval may not be unreasonably withheld.
Upon termination of said agreement, NBM shall retain no further rights pursuant
to this Section.
B. In consideration of this exception, NBM agrees to pay to DermaGuard
Twenty Five (25) percent of the gross margin received by NBM pursuant to any
sales of Product made by, on behalf of or with the assistance of Sheffield
pursuant to Sheffield's Agreement with NBM as herein authorized.
XXII. Entire Agreement
This Agreement sets forth the entire agreement and understanding between
the parties relating to the subject matter contained herein and incorporates and
supersedes all prior agreements, orall and written, heretofore made between the
parties; and this Agreement shall be construed in accordance with the laws of
the State of Louisiana. No modification hereof shall be valid unless in writing
and duly signed by an officer of NBM officer of NBM and DermaGuard. The captions
herein are for convenience only and shall not be construed as part of the
agreement between the parties hereto.
B. The parties hereto hereby agree to secure resolutions from their
respective Boards of Directors ratifying this Agreement within five (5) days
form the date of execution hereof.
IN WITNESS WHEREOF, the parties have cause this Agreement to be executed
this 3rd day of Feb., 1999 and made effective the day and year first above
written.
WITNESSES: NATIONAL BOSTON MEDICAL, INC.
/s/ Xxxxx X Xxxxxx
-----------------------
/s/ Xxx X. Kristurns By: /s/Xxxxxx X. Xxxxx
----------------------- -------------------------
XXXXXX X. XXXXX, President
DERMAGUARD, INC.
/s/illegible By: /s/ Xxxxxx X. Xxxx
------------------- --------------------------
President
/s/Alverz Ferrovilles
------------------------
EXHIBIT "A"
SPECIMEN WARRANT
Warrant No.:______________ Right to purchase 1,000,000 Shares
National Boston Medical, Inc.
Warrant to purchase Common Stock
Registered Owner: DermaGuard, Inc.
For value received, National Boston Medical, Inc., a Delaware corporation, (the
"Corporation") grants the following rights to the registered owner of this
Warrant:
(a) Issue. Upon tender to the Corporation (as defined in paragraph (e) hereof),
the Corporation shall issue to the registered owner hereof the number of shares
specified in paragraph (b) hereof of fully paid and nonassessable shares of
Common Stock of the Corporation that the registered owner is otherwise entitled
to purchase.
(b) Number of shares. The number of shares of Common Stock of the Corporation
that the registered owner of this Warrant is entitled to receive upon exercise
of this Warrant is 1,000,000 shares. The corporation shall at all times reserve
and hold available sufficient shares of Common Stock to satisfy all conversion
and purchase rights represented by outstanding convertible securities, options
and warrants, including this Warrant. The corporation covenants and agrees that
all shares of Common Stock that may be issued upon the exercise of this Warrant
shall, upon issuance, be duly and validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the purchase and the
issuance of the shares.
(c) Exercise price. The exercise price of this Warrant, the price at which the
shares of stock purchasable upon exercise of this Warrant may be purchased, is
One Dollar ($1.00) per share.
(d) Exercise period. This Warrant may only be exercised on or after June 1,
1999, and on or before January 31, 2000 ("Exercise Period"). If not exercised
during this period, this Warrant and all rights granted under this Warrant shall
expire and lapse.
(e) Tender. The exercise of this Warrant must be accomplished by actual delivery
of the Exercise Price in cash, certified check, or official bank draft in lawful
money of the United States of America, and by actual delivery of a duly executed
exercise form, a copy of which is attached to this Warrant as Exhibit "1,"
properly executed by the registered owner of this Warrant, and by surrender of
this Warrant. The payment and exercise form must be delivered, personally or by
mail, to the offices of the Corporation at Taunton, Massachusetts. Documents
sent by mail shall be deemed to be delivered when they are received by the
Corporation.
