[Milestone Letterhead]
Da Vinci Systems, Inc.
Attn: Xxxx X. Xxxxxxx, CEO
Dear Xxxx:
This will confirm the agreement under which we will support your
development of a whitening system head (the "Product") and you will grant us
distribution rights to the Product and all pastes, gels or other disposables or
consumables ("Ancillary Products") and to your "Nova Cordless Curing Light" (the
"Curing Light").
1. We will reimburse you for the development cost of the Product, up to
an aggregate of $25,500, as follows: $7,000 for the conceptual design and
prototype engineering and $18,500 for the development of CAD files, tooling and
proto-typing. You will bear any costs in excess of these amounts. If, at any
time, you cease work on the development project or if development is not
completed by ___________, then we shall have the option to assume control of the
development project at our expense. If we assume control of the development
project, you shall cooperate fully with us and shall turn over to us all work
previously completed, including the results of any tests or submissions to focus
groups. Any costs we incur, in excess of $25,500, shall be credited against our
obligations to pay for future units of Product, Ancillary Products and the
Curing Light.
2. We shall be the exclusive worldwide distributor for the Product and
those Ancillary Products, if any, made exclusively for use with the Product. You
shall meet our requirements for Product and such Ancillary Products, including
related packaging, at a price per unit equal to the fully loaded manufacturing
costs thereof plus _____%. All orders shall be filled within _____ days of
scheduled delivery dates and shall be paid for ___% _____ days and net _____
days, F.O.B. manufacturer. In connection with our activities as a distributor,
you hereby grant us, a limited, exclusive worldwide license, to use your
intellectual property, including any patents, in connection with the marketing
and sale of the Product and any Ancillary Products made exclusively for use with
the Product.
3. We shall also be a non-exclusive worldwide distributor of (i)
Ancillary Products not made exclusively for use with the Product and (ii) the
Curing Light. The Ancillary Products and the Curing Light shall be provided to
us at the fully loaded manufacturing costs thereof plus _____% and ________%,
respectively, provided that such price shall not be higher than the lowest price
at which such products are provided to other distributors or dealers. All orders
shall be filled within _____ days of scheduled delivery dates and shall be paid
for ___% _____ days and net _____ days, F.O.B. manufacturer.
4. You will prepare and submit to us, within 15 days after the end of
each calendar quarter, a report setting forth the fully loaded manufacturing
costs for all products sold to us in the previous quarter, broken down by types
of products and a calculation of the prices due and/or collected on such
products for such period (the "Report"). The Report shall be certified by an
officer of Xx Xxxxx to be true and correct. We shall have the right to audit
your books and records, to the extent necessary to determine compliance with
this Section and Sections 2 and 3, during normal business hours and upon
reasonable notice. In the event the audit reveals any discrepancies, the price
paid for products shall be retroactively readjusted to reflect the audit results
and if the discrepancy is more than ____% of your cost, you shall reimburse us
for the cost of the audit.
5. We shall have the right to use our own trademarks or brand names on
the Product and any Ancillary Product and you shall mark each unit and any
packaging utilized in connection therewith with such mark or marks as we direct.
6. You will, at our reasonable request, provide us with reasonable
quantities of samples of the Product and Ancillary Products for the purpose of
performing quality control procedures and tests. We shall have the right to
inspect, not more than once every quarter, any of your manufacturing facilities
pertaining to the Product or Ancillary Products during regular business hours
and upon reasonable notice.
7. You represent and warrant that all Product and Ancillary Product
units produced by you shall comply with all federal, state and local laws,
ordinances, rules, regulations and orders and shall be manufactured in
accordance with the FDA's GMP standards and comparable regulations of the
European Community. You further represent and warrant that all Product and
Ancillary Product units produced by you shall be of merchantable quality and
free from defects. You shall keep your manufacturing and packaging records and
data for the Products in accordance with G.M.P standards. We shall have access
to such information upon reasonable notice during business hours and we shall be
entitled to make copies thereof at our cost.
8. You shall defend and indemnify us and hold us harmless against all
damages, claims, costs and expenses (including reasonable attorneys' fees)
arising out of or resulting from any product liability claims relating to
products produced by you. The obligation for indemnification set forth above
shall be contingent upon giving you timely notice of any claim or loss. You
shall carry and keep in force throughout the term of this Agreement
Comprehensive General Liability Insurance, including Products Liability combined
single limit in the amount of [$2,000,000], naming us as an additional insured
party:
9. All data, inventions, discoveries, product designs, know-how,
formulae, studies, reports, documents, publications, software, computer
programs, source codes and the like relating to the Products or Ancillary
Products, as well as concepts and thoughts, shall be your sole and exclusive
property.
10. You shall disclose to us any intellectual property relating to the
Product or Ancillary Products and assist us in applying for, maintaining, or
otherwise securing legal protection for the same. We agree to execute any
papers, documents or letters necessary to vest title in these materials in your
name. You shall take all appropriate action to defend the intellectual property
and any patents issued with respect thereto.
11. In the event of any dispute between us, we agree that it shall be
resolved through arbitration in New York under the regulations of the American
Arbitration Association, within ninety (90) days following termination of this
Agreement. Any award rendered shall be final and conclusive upon the parties.
This Agreement shall be construed under the laws of the State of New York.
12. At all times during the term of this Agreement, we shall act as
independent contractor, and neither the making of this Agreement nor the
performance of any of the provisions hereof shall be construed to make us your
agent or legal representative of Da Vinci for any purpose, nor shall this
Agreement be deemed to establish a joint venture or partnership. Neither of us
shall have the power or authority to bind or obligate the other party in any way
by any of its acts.
13. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be valid and sufficient if
dispatched by registered mail, postage prepaid, addressed to the address
indicated in this Agreement or to such other address as the addressee shall have
theretofore furnished to the addressor as indicated below
14. This agreement represents the entire agreement between the parties
and may not be changed, amended or modified except by a writing signed by both
parties.
Very truly yours,
MILESTONE SCIENTIFIC INC.
by:__________________________
Xxxxxxx Xxxxx, CEO
Accepted and agreed to the
____ day of July 2003
DA VINCI SYSTEMS, INC.
by:___________________________
Xxxx X. Xxxxxxx, CEO
