LETTER OF INTENT
This Letter of Intent made and entered into as of August 23, 1996
("Effective Date") between DENTAL MEDICAL DIAGNOSTIC SYSTEM, LLC. a U.S.
corporation, having its principal place of business at 000 X. Xxxxxxxx Xxxx.
Xxxxx 000 Xxxxxxxx Xxxxxxx XX 00000, X.X.X. ("DMD") and OLYMPUS JAPAN CO., LTD.,
a Japanese corporation, having its principal place of business at Ryumeikan-
building, 0-xxxxxx, Xxxxxxxxxxxxxx 0-xxxxx, Xxxxxxx-xx, Xxxxx, Xxxxx ("OLJ").
WITNESSETH THAT:
WHEREAS, DMD is engaged in the business of development and manufacture of
intraoral cameras; and
WHEREAS, OLJ desires to purchase intraoral cameras from DMD for
distribution and resale under its name and on its own account;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE 1. PRELIMINARIES
DMD and OLJ hereby state their intent and desire to enter into a binding
OEM Purchase Agreement (the "Final Agreement") with respect to supply and
purchase of intraoral cameras (TeliCam 1000/100 and its equivalents) and their
improvements (collectively the "Products") which satisfy the specifications
agreed upon by both parties (the "Specifications"). This Letter of Intent
summarizes the principal terms which have been discussed. The parties
acknowledge that these proposed terms are subject to changes, additions or
deletions by mutual agreement prior to execution of the Final Agreement.
ARTICLE 2. OEM PRODUCTS
DMD shall manufacture, sell and ship to OLJ the Products. DMD shall attach
trademarks, logos and/or trade names as designated by OLJ (collectively "OLJ
Trademarks" ) to the Products in accordance with OLJ's instructions. DMD agrees
that OLJ may have its affiliated companies distribute the Products.
ARTICLE 3. PURCHASE OF THE PRODUCTS
3.1 DMD shall sell and ship to OLJ, on the exclusive basis in Japan, the
Products pursuant to purchase orders issued by OLJ in accordance with the
pricing schedules as agreed upon by both parties, and OLJ shall purchase and
accept shipment of such Products and shall have the exclusive right to market
the Products in Japan.
3.2 Additional countries in which the Products may be distributed or
otherwise marketed by OLJ shall be added upon mutual agreement.
ARTICLE 4. SHIPMENT
Shipment for the Products shall be made on the basis of F. 0. B. or F. C.
A. Los Angeles in accordance with OLJ's shipping instructions. The trade terms
used in this Letter of Intent or any other communications between both parties
in connection with the Products shall be governed and interpreted by the
provisions of INCOTERMS, 1990 edition, as amended, unless otherwise specifically
stated.
ARTICLE 5. PAYMENT
DMD shall, at the shipment of the Products, issue to OLJ the invoice for
such Products by facsimile and OLJ shall make payments against such invoices
within thirty (30) days after the issuance of such invoice. The payment shall be
made in U. S. Dollars by transmitting the invoice amount to the bank account
designated by DMD.
ARTICLE 6. TARGET PURCHASES
OLJ shall use commercially reasonable efforts to purchase at least 3,000
units of the Products from DMD for three (3) years commencing upon the first
commercial shipment date of the Products (the "First Shipping Date"), but shall,
in no event, be obligated to do so, nor be liable to DMD for failure to do so.
The target purchase volume of the Products for each of years commencing upon the
First Shipment Date and the first and second anniversary dates thereof shall be
described in Exhibit A.
ARTICLE 7. SALES TO CUSTOMERS
7.1 No later than three (3) months before the end of each twelve months
from the execution date of the Final Agreement, the parties shall discuss, in
good faith, sales prospects of the Products by OLJ to its customers over the
next subsequent twelve (12) months based on the actual sales over the past
twelve (12) months.
7.2 Both parties shall exchange any information regarding sales to their
respective customers at any reasonable time as agreed upon by both parties.
ARTICLE 8. SALES BY DMD
8.1 DMD shall not sell or ship any Products, with or without OLJ
Trademark(s), and any products similar to the Products (the "Similar Products"),
directly or indirectly, to any person or company in Japan other than OLJ.
Subject to Article 8.2 below, DMD reserves the right to sell the Products
without OLJ Trademark(s) and the Similar Products to any person or company ("DMD
Customers") outside Japan.
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8.2 DMD shall not sell the Products and the Similar Products to DMD
Customers outside Japan which DMD knows or has reason to believe intends to
resell or reexport the Products to any person or company in Japan.
ARTICLE 9. REPAIR SERVICE
OLJ shall provide OLJ's customers with the repair service on the
Products sold by OLJ; provided that DMD shall provide OLJ with repair and
maintenance training, repair parts, jigs and tools necessary for OLJ to provide
after-sale service on the Products for seven (7) years after the discontinuance
of production of each type of the Products.
ARTICLE 10. WARRANTY
DMD shall warrant to OLJ and its customers that all the Products
purchased by OLJ meet the Specifications. The warranty period shall be for a
period of one (1) year after the date the Products pass OLJ's receiving
inspection.
ARTICLE 11. PATENT INDEMNIFICATION
DMD shall indemnify and hold OLJ harmless from any liabilities, costs,
damages and claims for any infringement of any patent or other intellectual
property right owned or controlled by a third party, arising from the sales or
use of the Products.
ARTICLE 12. PRODUCT LIABILITY
DMD shall indemnify and hold OLJ harmless from any liabilities, costs,
damages and claims which may arise or to be asserted upon personal injury or
property damage resulting from any actual or alleged defect of the Products.
ARTICLE 13. TERM
The Final Agreement shall be in effect for three (3) years commencing
the effective date thereof and may be extended by a period as agreed upon by
both parties in writing if both parties agree to the extension of the Final
Agreement at least three (3) months before expiration of the initial term.
ARTICLE 14. CONFIDENTIAL INFORMATION
Each party shall keep in confidence and not disclose to any third party
any and all sales, marketing, technical, maintenance or any other information
disclosed by or acquired from the other party under this Letter of Intent and
marked or identified as confidential or proprietary; provided, however, that
said obligation shall not apply to the information which:
(a) is known to the public at the time of disclosure,
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(b) becomes known to the public through no fault of the receiving party
after the time of disclosure,
(c) is in the possession of the receiving party at the time of disclosure,
or
(d) is lawfully received by the receiving party from a third party after
the time of disclosure.
ARTICLE 15. OLJ TRADEMARKS
DMD shall not use OLJ Trademarks for the purpose other than supply of
the Products to OLJ.
ARTICLE 16. GOVERNING LAW
This Letter of Intent shall be governed by, performed under and
construed in accordance with the laws of Japan, without giving effect to the
conflict of law principles thereof.
ARTICLE 17. FINAL AGREEMENT
17.1 The Final Agreement shall contain such additional terms and conditions
as are customary in agreements of this type.
17.2 Either party shall have a right to terminate the Final Agreement if
there is a material breach by the other party.
17.3 This Letter of Intent represents the intent of the parties but is not
binding on the parties. Notwithstanding the foregoings in this Paragraph 17.3,
both parties shall not be released from the confidentiality obligation provided
in Article 14 hereof for three (3) years after execution of this Letter of
Intent. Only the Final Agreement, as executed by the parties, is binding on the
parties. Upon execution of the Final Agreement, this Letter of Intent shall be
terminated and superseded by the Final Agreement.
17.4 Both parties desire to conclude the Final Agreement after execution of
this Letter of Intent. However, in the case that the Final Agreement is not
concluded, then, each party shall have no obligation to the other thereafter
except for the confidentiality obligation provided in Article 14 hereof.
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IN WITNESS WHEREOF, the parties have caused this Letter of Intent to be
executed as of the day and year first above written by their duly authorized
representatives.
(DMD)
DENTAL MEDICAL DIAGNOSTIC SYSTEM, LLC.
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NAME: Xxxxxx Xxxxxxxxx
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TITLE: President/CEO
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SIGNATURE:
[SIG]
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DATE: Xxxxxx 00, 0000
(XXX)
XXXXXXX XXXXX CO., LTD.
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NAME: Xxxxxxx Xxxxxx
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TITLE: Director/Division Manager of
the New Business Division
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SIGNATURE:
[SIG]
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DATE: 8/6/96
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EXHIBIT A
TARGET PURCHASE VOLUME OF THE PRODUCTS FOR EACH YEAR
Term Volume
---- ------
1. For the first year (commencing upon the
First Shipment Date) 500 units
2. For the second year 1,000 units
3. For the third year 1,500 units
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