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Exhibit 10.10
LICENSING, MANUFACTURING AND CONSULTING AGREEMENT
LICENSING, MANUFACTURING AND CONSULTING AGREEMENT (the
"Agreement")
dated as of June 1, 2004, among DA VINCI SYSTEMS, INC., Inc., a
California
corporation ("Da Vinci"), Alan Creamer, Chief Executive Officer of
Da Vinci
("Creamer") and MILESTONE SCIENTIFIC, INC., a Delaware
corporation
("MILESTONE").
WITNESSETH
WHEREAS
Creamer has an exclusive license under a patent
co-owned by him and another person as well as other
rights, to certain products used in dentistry for
purposes of curing, trans-illuminating, tacking and
whitening teeth, all as set forth on EXHIBIT 1 to this
Agreement (the "PRODUCTS");
WHEREAS
Da Vinci and Creamer own certain rights to teeth
whitening products geared directly to the professional
dental market all as set forth on EXHIBIT 2 to this
Agreement (the "PROFESSIONAL PRODUCTS");
WHEREAS
Milestone wishes to obtain an exclusive license from Da
Vinci and Creamer to manufacture, market and sell the
Products and the Professional Products in the U.S. and
such other jurisdictions as Milestone determines and Da
Vinci and Creamer wish to grant such license;
WHEREAS
Da Vinci and Creamer own certain rights to and Creamer
has filed provisional patents to teeth whitening
products geared directly to the consumer market all as
set forth on EXHIBIT 3 to this Agreement (the "CONSUMER
PRODUCTS");
WHEREAS
Da Vinci and Creamer wish to assign the rights to the
Consumer Products and assign such provisional patents
to Milestone and Milestone wishes to assume such
provisional patents and obtain such rights to the
Consumer Products from Da Vinci and Creamer;
WHEREAS
Milestone wishes to retain consulting services from
DaVinci in connection with the research and
development, manufacturing, marketing and sale of the
Products the Consumer Products and DaVinci wishes to
provide such consulting services to Milestone;
WHEREAS
Da Vinci wishes to sell to Milestone all of its usable
inventory of parts for the Products (the "INVENTORY")
as well as certain molds used to manufacture some of
the Products and Milestone wishes to purchase such
Inventory and molds; and
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WHEREAS
Milestone wishes that Da Vinci, for a limited period of
time, will be responsible for the assembly and supply
to Milestone of finished Products and Consumer Products
and Da Vinci wishes to do so.
NOW, THEREFORE, for and in consideration of the mutual
promises,
covenants, and promises contained herein, and other good and
valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto,
intending to be legally bound, agree as follows:
1. Exclusive License to Products
1.1 Creamer hereby
grants to Milestone the exclusive right, including as to Da
Vinci and Creamer, to use U.S. Patent 6,102,696, registered jointly
under
his
name and the name of J. Martin Osterwalder which copy is annexed
to
this
Agreement as Schedule 1.1 (the "Patent") and any other rights he
has
to
the Products and the Professional Products, for the life of such
patent,
commencing on the date of this Agreement (the "License Term"), for
the
manufacture, marketing, distribution and sale of the Products and
the
Professional Products in the U.S. and such other jurisdictions as
Milestone
determines .
Creamer hereby represents that he has an exclusive license granted
to him
by
Mr. Osterwalder, to make, market and sell certain products under
the
Patent, including the Products and the Professional Products, which
copy of
such
license is annexed to this Agreement as Schedule 1.2 and that he
has
good
and marketable title to this patent, free and clear of any liens
or
encumbrances.
1.2 Milestone shall
pay to Creamer:
(a) a royalty equal to 2.5% of the net sales of the Products
included
in Schedule 1.2.A ["Gun" style] that are covered under the
Patent
except that on sales made to existing customers of Da Vinci, whose
name
appears on the list attached hereto as Schedule 1.2.B, the royalty
will
be in the rate of 20% of net sales.
(b) a royalty equal to 7% of the net sales of the Products included
in
Schedule 1.2.C [Consumer and Professional Bleaching Kits,
collectively
"Bleaching Kits"]
(c) The foregoing royalty payments shall be paid on a monthly
basis
within 20 days from the end of each month.
1.3 For purposes of
this section "Net Sales" shall mean gross sales less
discounts, returns and allowances.
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1.4 The parties agree
that in the event of Creamer's death before the end of
the
License Term, Milestone shall continue to pay royalty directly to
his
wife, Mrs. Rosanna Creamer.
1.5 Milestone shall
have the right to use its own trademarks and brand names on
the
Products and any ancillary products designed for use along with
the
Products.
2. Assignment of patent applications for Consumer Products
2.1 Creamer hereby
assigns to Milestone any and all rights, including his
provisional patent applications for (i) Intra Oral Whitening Light
and
Photo Sensitive Whitening Formula; (ii) Whitening Tablet and Rinse;
and
(iii) Method and Composition for Whitening Teeth, which copies of
such
applications are annexed to this Agreement in Schedules 2.1.A,
2.1.B and
2.1.C, respectively. Da Vinci and Creamer hereby represent that
they have
good
and marketable title to these patent applications, free and clear
of
any
liens or encumbrances and that no other party has rights to
these
patents.
2.2 Creamer shall
fully cooperate in the preparation and filing of
non-provisional and foreign applications for the abovementioned
provisional
applications and in the assignment of these patent applications
to
Milestone, including executing any and all necessary documents.
3. Consulting Services
3.1 Engagement.
Milestone hereby engages Da Vinci to make Creamer available to
Milestone on a full time basis to render the consulting services,
through
Creamer, specified herein, and Da Vinci accepts engagement by
Milestone to
render certain consulting services on the terms and conditions set
forth
herein.
3.2 Services. For a
term of one year commencing on the date hereof and
terminating on the one year anniversary of the date hereof (the
"Consulting
Term"), Da Vinci shall perform the following services ("Services")
for
Milestone:
A. Da Vinci shall assist Milestone in the orderly transfer of
the
Inventory and the rights for the Consumer Products from Da
Vinci to Milestone;
B.
Da Vinci shall assist Milestone in responding to inquiries
from customers of Milestone;
C. Da Vinci shall train employees of Milestone relative to the
use of the Products, the Professional Products and the
Consumer Products; and
D. Da Vinci shall perform such other duties, as Milestone shall
reasonably deem in the best interest of Milestone, including,
without limitation, participating in trade shows and assisting
with research and development of the Products, the
Professional Products and the Consumer Products.
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3.3 Compensation. For
the Services rendered by Da Vinci pursuant to this
Agreement, Milestone shall pay to Da Vinci the sum of One Hundred
Thousand
and
00/100 Dollars ($100,000.00), which sum shall be payable in twelve
(12)
equal monthly installments in the amount of Eight Thousand Three
Hundred
and
33/100 Dollars ($8,333.33) each. The first (1st) installment shall
be
due
and payable by the Milestone to Da Vinci upon the execution of
this
Agreement and payment for the following months shall be due and
payable on
the
last day of each month through and including May, 2005.
3.4 Representations
and Warranties. Da Vinci and/or Creamer hereby covenants,
warrants and represents, which covenants, warranties and
representations
shall be continuing covenants, warranties and representations, as
follows:
A. Da Vinci's Chief Executive Officer, Alan Creamer, shall
devote
his full work time, knowledge and skills to perform the
Services to Milestone under this Agreement;
B. Da Vinci and/or Creamer shall be responsible for the
withholding and payment of any and all state and federal
income taxes, FICA or social security taxes, and FUTA or
unemployment taxes applicable under federal, state or local
laws;
C. There is no circumstance, action, proceeding or
investigation
pending or threatened against Da Vinci and/or Creamer nor any
term or
provision of any agreement, instrument, judgment,
decree, order, statute, rule or regulation which prevents or
interferes with or limits adversely its entering into this
Agreement or the validity of this Agreement or carrying out
the terms hereof;
D. Da Vinci and/or Creamer agree that any and all information
pertaining to Milestone, the Products, the Consumer Products
and the Inventory, including but not limited to any trade
secrets, customer lists, computer programs, methods of
operation, pricing information and other confidential
information, are the sole property of Milestone. Such
information shall be deemed confidential whether obtained by
Da Vinci and/or Creamer by reason of Da Vinci's engagement
with Milestone or before or during the term of this Agreement.
Da Vinci and/or Creamer shall not without the prior written
consent of Milestone, use for its or his own benefit or in any
way adverse to the interests of Milestone, or disclose,
directly or indirectly, in any fashion or manner whatsoever,
either during the term of this Agreement or at any time
thereafter, any trade secret or other confidential information
relative to Milestone, the Products, the Professional
Products, the Consumer Products and the Inventory. Da Vinci
and/or Creamer shall not, without the prior written consent of
Milestone, take or retain or copy any trade secrets or other
confidential information.
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3.5 Termination.
The Consulting Term may terminate earlier than contemplated
in section
3.2 above, commencing two weeks from receipt of written notice
from
either party notifying the other party of its material breach of
the
terms of
the provisions of this section 3 to this Agreement and in the
event the
breaching party had not cured such breach during this two week
period. In
the event the Consulting Term is terminated due to a material
breach on
behalf of Milestone, the entire unpaid compensation owed by
Milestone
to Da Vinci pursuant to Paragraph 3.3 hereof shall continue to
be payable
according to the same monthly schedule. In any other event of
early
termination, no additional payments shall be due to Da Vinci
following
the termination date.
3.6 Relationship
of Parties. The relationship of the parties herein shall be
that of
principal and independent contractor and not that of employer
and
employee.
Nothing contained in this Agreement shall be deemed or
construed
to create
a partnership, tenancy-in-common, joint tenancy, joint venture,
co-ownership or other similar relationship by or between Milestone
and Da
Vinci. Da
Vinci shall have full power and authority to select the means,
manner,
method and sequence of performing the services hereunder.
3.7
Non-Assignability. Milestone and Da Vinci acknowledge and agree
that Da
Vinci
shall perform the Services only through its Chief Executive
Officer,
Alan
Creamer, and will not have the right to assign its obligation
to
perform
the Services to any other employee or agent on its behalf.
4. Sale of Inventory and Molds
4.1 Da Vinci
will sell and transfer to Milestone and Milestone will purchase
from Da
Vinci its entire usable inventory of parts of the Products, as
set
forth on
Schedule 4.1. ("Transferred Inventory"). Da Vinci hereby
represents
and warrants to Milestone that it is the sole legal and
beneficial
owner of all of the Transferred Inventory and that such assets
are owned
free and clear of all liens, mortgages, pledges and other
security interests and
that it has the full legal and corporate power and
authority
to transfer such assets to Milestone in accordance with the
terms
hereof. The purchase price for the Transferred Inventory shall
be
$94,897.59
and shall be payable in cash within 5 days following execution
of this
Agreement.
4.2 Da Vinci
will sell to Milestone and Milestone will purchase from Da
Vinci
the molds
associated with the production of the "Gun Style" Cool Blue
products
("Molds"), as set forth on Schedule 4.2. Da Vinci hereby
represents
and warrants to Milestone that it is the sole legal and
beneficial
owner of the Molds and that they are owned free and clear of
all liens,
mortgages, pledges and other security interests and that it has
the full
legal and corporate power and authority to transfer such Molds
to
Milestone
in accordance with the terms hereof. The purchase price for the
Molds
shall be determined by dividing the original purchase price of
each
mold by
the number of applications it was designed to perform and
multiplying the quotient by the number of applications remaining to
be
made using
such mold. The number of applications remaining to be made will
be the
number of applications the mold was designed to perform less
the
number of
applications made to that date using that mold. The purchase
price for
the Molds, as will be agreed by the parties using the above
described
formula will be paid in twelve equal monthly installments
commencing
15 days from final inspection and validation of the Molds by
Milestone,
to be performed no later than August 1, 2004. Upon payment of
the first
installment, the parties will execute a bill of sale reflecting
the
passage of ownership in the Molds to Milestone.
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5. Assembly and Supply of Finished Goods
5.1 Da Vinci
shall continue to assemble and supply finished Products to
Milestone
pursuant to purchase orders received from Milestone, at a
manufacturing price per unit as set forth in schedule 5.1. DaVinci
shall
use parts
owned and inventoried by Milestone for such Products. DaVinci
will have
access to Milestone's warehouse and will independently obtain
the
necessary parts to fulfill each purchase order. Da Vinci will
provide
to
Milestone, no later than the 7th day of each
