CONSULTING AGREEMENT
This Consulting Agreement, dated as of July 1, 2003, by and
between BriteSmile Development, Inc., a Delaware corporation ("BDI"), and
BriteSmile, Inc., a Utah corporation ("BriteSmile") (BDI and BriteSmile are
collectively referred to as the "Company"), and Oraceutical LLC, a Delaware
limited liability company ("Oraceutical"), Oraceutical Innovative Properties
LLC, a Delaware limited liability company ("OIP") and R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇▇") (Oraceutical, OIP and ▇▇▇▇▇▇▇▇▇▇ each a "Consultant" and
together, the "Consultants", and Consultants and the Company together, the
"Parties"). Capitalized terms which are not otherwise defined in this Agreement
are defined in the definitions of defined terms that appears in Section 1of this
Agreement.
R E C I T A L S:
A. Oraceutical and BriteSmile are parties to a
Consulting Agreement, dated November 27, 2000, that
automatically renewed on January 1, 2003 for a period
of 12 months (the "Consulting Agreement").
B. BriteSmile has an exclusive license to OIP's light
activated teeth whitening ("LATW") technology and
LATW intellectual property in perpetuity. BriteSmile
also has a license to OIP's Background Rights for
LATW as defined by the Consulting Agreement.
▇. ▇▇▇▇▇▇▇▇▇▇ is a member of the board of directors and
a shareholder of BriteSmile and has substantial
expertise in developing and commercializing certain
HOC (as defined below) products.
D. On May 9, 2003, the Parties entered into a Binding
Memorandum of Understanding (the "MOU") in which they
agreed to use commercially reasonable efforts to
cause the Company to (i) purchase certain of the OIP
Group's intellectual property, including patents and
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related assets which have use in or application to
HOC, (ii) enter into this Agreement and (iii)
establish certain relationships with OAC, including
rights in favor of the Company, which will protect
the existing and future interests of the BSML Group.
E. Concurrent with the execution and delivery of this
Agreement, the Parties and certain of their
Affiliates have entered into the APA (as defined
below) whereby the BSML Group will acquire and the
OIP Group will grant the rights described in Recital
D(i) and (iii) above.
F. Now, in satisfaction of its remaining obligations
under the MOU, the Company wishes to engage the
Consultants and the Consultants are willing to accept
such engagement upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. The following capitalized terms used herein have the following
meanings:
"APA" means the Asset Purchase Agreement between the BSML
Group and the OIP Group of even date.
"Acquired Future New Product" means a new product described in
a Future Product Notice that embodies or incorporates Acquired Future HOC IP.
"Acquired Future HOC IP" means Future HOC IP that is acquired
or licensed by the Company pursuant to Section 10.
"Affiliate" means with respect to a person or entity any other
person or entity that directly or indirectly controls, is controlled by or is
under common control with such person or entity.
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"BSML Group" means the Company and any of its respective
Affiliates.
"Change of Control" means (a) consolidation or merger of a
Person with or into any other corporation, corporations or another legal entity
or entities in which (i) the holders of such Person's outstanding voting
securities or equity interests immediately before such consolidation or merger
do not, immediately after such consolidation or merger, retain voting securities
or equity interests representing a majority of the voting power of the
corporation or other legal entity that wholly owns, directly or indirectly, the
surviving entity of such consolidation or merger and (ii) the composition of the
board of directors, managers or similar controlling body of such Person has
changed in connection with such consolidation or merger (excluding changes in
respect of Affiliates), (b) the sale, transfer or assignment of securities of a
Person representing a majority of the voting power of such Person's outstanding
voting securities or other equity interests by the holders thereof to an
acquiring party other than an Affiliate of such Person in a single transaction
or a series of transactions, or (c) the sale of all or substantially all of the
assets of a Person in a single transaction or a series of transactions.
"Commencement Date" shall have the meaning set forth in
Section 2 of this Agreement.
"Common Stock" shall mean BriteSmile's Common Stock, $0.001
par value per share.
"Contract Period" shall have the meaning set forth in Section
2 of this Agreement.
"Fully Loaded Manufacturing Costs" means with respect to any
New Product or Future New Product, all fixed and variable costs relating to the
manufacture, processing and/or packaging of such New Product or Future New
Product. Manufacturing Costs are subject to adjustment pursuant to Section 11(d)
hereof.
"HOC" refers to human oral care and shall mean, specifically,
compositions, procedures (including the application of light and/or heat),
equipment, materials and any combination thereof, applied to any human oral
cavity surface or tissue and intended for the diagnosis, mitigation, cure,
treatment and/or prevention of an aesthetic or disease condition of the human
oral cavity or tissue, including all and any other beneficial or cosmetic
effects to the subject that such application may confer.
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"Invention" shall mean any design, discovery, concept, idea,
innovation, improvement, addition, variation and modification which has at least
been recorded in tangible form (e.g., in writing, electronically, etc.), whether
or not patentable or reduced to practice, copyrightable or protectable as a
trade secret.
"Market Price" on any given date shall mean the last sale
price of the Common Stock during regular trading hours of the Principal Trading
Facility as reported by Bloomberg L.P.
"Net Retail Revenues" shall mean the amount received by the
BSML Group for Third Party Sales of New Products (defined in Section 4, below)
or Acquired Future New Products directly to persons for their personal use and
not for resale, whether without alteration or as part of another product or
service or otherwise, including payments from insurers, less: (A) transportation
charges or allowances actually paid by the BSML Group (B) trade, quantity, cash
and other discounts, if any, actually paid by the BSML Group to Non-BSML Group
Member(s); (C) allowances actually paid by the BSML Group on account of rejects,
returns, recalls or retroactive price reductions; and (D) any tax or
governmental charge directly on the sale or transportation, use or delivery or
service actually paid by the BSML Group. Where any New Product or Acquired
Future New Product is sold as part of a product or service including other
products or services, for a single price, the revenue actually received from
such New Product or Acquired Future New Product (as the case may be) shall be
deemed to be the actual price for which the same such New Product or Acquired
Future New Product was sold as a stand-alone product or service to any person
for his/her personal use during the same or previous two (2) reporting periods.
If no such stand-alone sale occurred during the same or previous two (2)
reporting periods, the Parties shall use a mutually agreeable sale price. The
Company shall make the first offer of such sale price. If no such sale price is
mutually agreed by the parties within ten (10) days of the end of the reporting
period in which the sale occurred, the highest price previously offered by the
Company shall be used as the sale price and either Party may then have the sale
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price (with retroactive adjustment of amounts paid hereunder) determined by
binding arbitration by making written demand for same, such arbitration to be
before the American Arbitration Association in New York City in accordance with
the Commercial Arbitration rules of the AAA then in place.
"Net Wholesale Revenues" means the amount received by the BSML
Group for Third Party Sales of New Products or Acquired Future New Products to
wholesalers, distributors, dentists, dental technicians and others who have
purchased such New Products or Acquired Future New Products not for their
personal use but for resale either without alteration or as part of another
product or services less: (A) transportation changes or allowances actually paid
by the BSML Group; (B) trade, quantity, cash or other discounts, if any, paid by
the BSML Group to independent third parties; (C) allowances actually paid by the
BSML Group on account of rejects, returns, recalls or retroactive price
reductions; and (D) any tax or governmental charge directly on the sale or
transportation, use, delivery or service, that is actually paid by the BSML
Group. Where any New Product or Acquired Future New Product is sold to
wholesalers, distributors, dentists, dental technicians and others who have
purchased such New Products or Acquired Future Products for resale as part of a
product or service including other products or services, for a single price, the
revenue actually received from such New Product or Acquired Future New Product
(as the case may be) shall be deemed to be the actual price for which the same
such New Product or Acquired Future New Product was sold as a stand-alone
product or service to any person for resale during the same or previous two (2)
reporting periods. If no such stand-alone sale occurred during the same or
previous two (2) reporting periods, the Parties shall use a mutually agreeable
wholesale price. The Company shall make the first offer of a wholesale price. If
no such wholesale price is mutually agreed by the parties with ten (10) days of
the end of the reporting period in which the sale occurred, the highest
wholesale price previously offered by the Company shall be used as the wholesale
price and either Party may then have the wholesale price (with retroactive
adjustment of amounts paid hereunder) determined by binding arbitration by
making written demand for same, such arbitration to be before the American
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Arbitration Association in New York City in accordance with the Commercial
Arbitration rules of the AAA then in place.
"Non-BSML Affiliate" means person or entities that are neither
the Company nor any Affiliate of the Company.
"OAC" means Oraceutical Acquisition LLC, a Delaware limited
liability company.
"OIP Group" means any of OIP, Oraceutical or ▇▇▇▇▇▇▇▇▇▇ or any
of their respective Affiliates, other than OAC.
"Packaging Costs" means the actual cost of packaging materials
used by Consultants to produce a New Product or Future New Product. Estimates of
Packaging Costs for each New Product or Future New Product shall be agreed upon
by the Company and Consultants from time to time. Packaging Costs are subject to
adjustment pursuant to Section 11(d) hereof.
"Principal Trading Facility" shall mean the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange whichever is at the time the principal trading exchange or market
for the Common Stock, it being acknowledged and agreed by the parties that, as
of the date hereof, the Principal Trading Facility is the Nasdaq SmallCap
Market.
"Raw Materials Costs" means the actual cost of the raw
materials used by Consultants to produce a New Product or Future New Product.
Estimates of Raw Materials Costs for each New Product or Future New Product
shall be agreed upon By the Company and Consultants from time to time. Raw
Material Costs are subject to adjustment pursuant to Section 11(d) hereof.
"Royalty Term" means as to any individual New Product or
Acquired Future New Product the period that begins on the date of the first
Third Party Sale of such New Product or Acquired Future New Product (i.e., the
first arms length Third Party Sale that is not part of a clinical trial, market
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test, etc., of that New Product or Acquired Future New Product) and (x) in the
case of a New Product or Acquired Future New Product that is not covered by a
Valid Claim, that ends on the tenth anniversary thereof and (y) in the case of a
New Product or Acquired Future New Product that is covered by a Valid Claim, at
the time of such first Third Party Sale or thereafter, that ends on the
expiration of such Valid Claim.
"Sunk Costs" means as to any Future HOC IP: (x) all costs and
expenses paid to third parties incurred to obtain or acquire patents, trademarks
or copyrights on or file patent, trademarks or copyright applications with
respect to any intellectual property that constitutes the relevant Future HOC IP
and (y) all other costs and expenses (including normal operating overhead
reasonably allocable to the Future HOC IP) that were incurred to research and
develop the applicable Future HOC IP.
"Third Party Sales" means a sale by the BSML Group to a person
or entity which is a Non-BSML Affiliate, provided that:
a) in circumstances where there are multiple sales in
any one reporting period of the same New Product
or Acquired Future New Product (i.e., sale of the
same package or other unit of product) by the BSML
Group to Non-BSML Affiliates (e.g., with
intervening sales by Non-BSML Affiliates to the
BSML Group as part of an integrated sale or
distribution process), only the sale price of the
last sale shall be a "Third Party Sale" for
purposes of computing the Net Retail Revenues and
Net Wholesale Revenues attributable to such New
Product or Acquired Future New Product, and
b) any sale(s) in a subsequent reporting period of
the same New Product or Acquired Future New
Product by the BSML Group to Non-BSML Affiliates
reported as a "Third Party Sale" in a previous
reporting period for purposes of computing the Net
Retail Revenues and Net Wholesale Revenues
attributable to such New Product or Acquired
Future New Product, shall only be a "Third Party
Sale" if and to the extent the sale price for any
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such sale in a subsequent reporting period exceeds
the sale price reported for the previous reporting
period.
"Valid Claim" means (i) as to any New Product, any claim set
forth in a patent or patent application that is or covers a Work as defined in
Section 8 hereof, and, (ii) as to any Acquired Future New Product, any claim set
forth in a patent or patent application at the time of the acquisition or
license of such patent or patent application by the Company pursuant to Section
10, in each case, only to the extent for the reporting period in question, such
claim has (A) been maintained, (B) not expired, (C) not been held invalid or
unenforceable by a court of competent jurisdiction or a court of appeals, if
appealed or still appealable from a lower court or, in the case of a claim set
forth in a patent application, has (D) been diligently prosecuted and (E) not
been finally rejected by the patent office of the applicable country (i.e., the
country in which a sale or other reportable event has occurred during the time
in question) where the application has been filed, such rejection having become
unappealable by virtue of a waiver or failure to file and diligently prosecute
on appeal.
2. Engagement. Upon the terms and subject to the conditions of this Agreement,
the Company retains and engages each Consultant and each Consultant accepts such
engagement with the Company in the capacity hereinafter set forth. At all times
during the Contract Period the Consultants shall be independent contractors in
providing consulting services hereunder, with the sole right to supervise,
manage, operate, control and direct their performance incident to such
consulting services. Nothing contained in this Agreement shall be deemed or
construed to create a partnership or joint venture, to create the relationships
of employee/employer or principal/agent, or otherwise create any liability
whatsoever of any party with respect to the indebtedness, liabilities,
obligations or actions of the other or any of their employees or agents, or any
other person or entity. Each Consultant shall indemnify and hold the Company
harmless from and against any and all Federal, state and local withholding taxes
payable by the Company on or in respect of any payments made to such Consultant
by the Company hereunder.
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3. Term of Consultancy. Subject to Section 15, the term of the Consultants'
engagement by the Company under this Agreement shall commence as of July 1, 2003
(the "Commencement Date") and shall continue until December 31, 2008; provided,
however, that commencing December 31, 2008, and each anniversary thereafter the
term of Consultants' engagement hereunder shall be automatically extended for an
additional period of one (1) year unless, not later than 30 days prior to such
automatic extension date, the Company or any Consultant shall have given notice
to the other that it does not wish to extend such term, in which case such term
shall end on December 31, 2008, or, if later, the date to which the term was
last automatically extended. The period from the Commencement Date until the
Consultants' engagement is terminated is called the "Contract Period".
4. Duties; Extent of Services; Exclusivity.
(a) Duties; Extent of Services. During the Contract Period the
Consultants shall provide such consultation and advice, including research and
product development services, intellectual property support and general business
support, relating to HOC, as the Company may reasonably request and shall
provide the services described in this Section 4. The Consultants, on average,
shall devote an aggregate of a minimum of twenty (20) hours per week to
performing their services hereunder but it is agreed that Consultants shall
devote sufficient time, generally not to exceed 40 hours per week, to perform
the duties required herewith. During periods when Consultants are not performing
services hereunder, Consultants may pursue other endeavors including activities
in veterinary dental or veterinary oral health care but, except to the limited
extent provided in Section 4(c), not including areas involving a Restricted
Enterprise. Consultants shall provide their services hereunder principally by
providing the services of ▇▇▇▇▇▇▇▇▇▇ or of personnel approved by the Company and
acting under the direct supervision of ▇▇▇▇▇▇▇▇▇▇. Consultants shall promptly
report to ▇▇▇▇▇ ▇▇▇▇▇▇▇ or such other person as the Board of Directors of the
BriteSmile may designate regarding all aspects of the consultancy, including the
Works (as defined in Section 8). Within ten (10) days of the end of each month
during the Contract Period, Consultants shall submit a written report to the
Company describing in reasonable detail the services performed under this
Agreement in the preceding month.
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(b) HOC Exclusivity. During the Contract Period, except as provided in
Section 4(c), no member of the OIP Group shall directly or indirectly, whether
through any services, license or commercial assistance or other efforts or grant
of rights of any kind, (i) act as a consultant to, employee, officer, director,
agent or owner of any Restricted Enterprise, (ii) license or otherwise grant
intellectual property or other rights to any person or enterprise for use or
exploitation in a Restricted Enterprise or (iii) pursue the development of any
Restricted Enterprise other than for the Company's benefit pursuant to this
Agreement. A "Restricted Enterprise" is the relevant operations of any person or
enterprise engaged in or which proposes to engage in the research, manufacture,
sale, distribution, licensing, development, creation or other use or
exploitation of HOC products, services, technologies or intellectual property.
(c) Permitted Agreements. Notwithstanding Section 4(b), ▇▇▇▇▇▇▇▇▇▇ and
OAC may continue to perform their respective obligations under those agreements
or licenses described on Exhibit 4(c) hereto (the "Permitted Agreements"), true
copies of which have been delivered to the Company, to the limited extent
necessary to legally comply with the provisions thereof. ▇▇▇▇▇▇▇▇▇▇ and OAC
shall use their best efforts when performing services under any Permitted
Agreements to protect the interests of the Company under this Agreement, and
none of ▇▇▇▇▇▇▇▇▇▇ and OAC shall extend the term of or otherwise amend any of
the Permitted Agreements without the consent of the Company, which consent may
be withheld for any reason. ▇▇▇▇▇▇▇▇▇▇ and OAC each agree that it shall not
assign any of the Permitted Agreements without the written consent of the
Company, which consent may be withheld for any reason.
(d) Consultants' Right to Commercialize. Except as provided in the last
sentence of this Subsection, nothing in this Agreement shall prevent any member
of the OIP Group from licensing or otherwise commercially exploiting technology
and intellectual property rights owned or controlled by any member of the OIP
Group for use or commercial exploitation in the Permitted Field. "Permitted
Field" means the non-HOC field of use. Should any member of the OIP Group make
or conceive of technology or intellectual property rights for the Permitted
Field (i) which uses or is otherwise based, in whole or in substantial part,
upon Confidential Information, and (ii) (x) in the course of performing services
under this Agreement or (y) while using, in whole or substantial part, any
facilities, materials or equipment owned by the Company, such OIP Group Member
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shall promptly transfer title to such technology or intellectual property to BDI
and all Recoveries (as defined in the APA) shall be divided between the Parties
pursuant to Subsection 3.5 of the APA.
5. Product Improvements and Joint Product Development.
(a) Collaboration. As part of Consultants' services hereunder,
Consultants shall cooperate and collaborate with the Company to perform HOC
product research, and/or create new or improved HOC products, technologies and
services for the BSML Group to exploit ("New Products").
(b) Budgets. Prior to any initiative (an "Initiative") to create a New
Product, Consultants and the Company shall reasonably agree on the budget for
such Initiative (each an "Approved Budget"). The Company shall be obligated to
pay 100% of all Third Party Costs and 75% of all Research and Development Costs
of each Approved Budget as such costs are incurred. Consultants shall be
obligated to pay 25% of all Research and Development Costs of each Approved
Budget as such costs are incurred. "Third Party Costs" means (i) fees and
expenses of third parties incurred to acquire patents, copyrights or other
intellectual property rights or file patent or copyright applications with
respect to any intellectual property developed in connection with an Initiative
and (ii) the costs of any clinical trails undertaken in connection with an
Initiative. "Research and Development Costs" means all costs included in an
Approved Budget for the creation and development of a New Product other than
Third Party Costs; provided, that Research and Development costs shall not
include any cash compensation payable by the Company to Consultants under this
Agreement or any normal overhead costs that would be incurred by the Company or
the Consultants in the absence of the Initiative to which the applicable
Approved Budget relates.
(c) Payments. Except as provided in the second and third sentences of
this Subsection, BDI shall pay Consultants an amount equal to five percent (5%)
of Net Retail Revenues of the BSML Group and three percent (3%) of Net Wholesale
Revenues of the BSML Group attributable to each New Product during the Royalty
Term applicable to such New Product. BDI shall pay Consultants twenty percent
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(20%) of all revenue of the BSML Group derived from licenses or sublicenses of
New Products during the Royalty Term. In all events, except as otherwise
provided in the APA, no Royalty shall be due with respect to Net Retail Revenues
or Net Wholesale Revenues of any New Product that is used in a dentist's office
or other clinical setting as part of a process or procedure to whiten human
teeth. Royalties shall be paid to Consultants within fifteen (15) days following
the end of each calendar quarter in which revenues from New Products are
received, accompanied by a report describing in detail the Net Retail Revenues
or Net Wholesale Revenues of each New Product.
6. Compensation
(a) Cash Compensation. In consideration of the consulting services rendered by
the Consultants hereunder, the Company will pay the Consultants in the aggregate
at a rate of $15,000 per month during the Contract Period. Payments for each
month shall be made in advance on the first business day of each month in which
the services are to be performed.
(b) Expenses. During the Contract Period the Company shall reimburse the
Consultants for all reasonable and properly documented out-of-pocket costs and
disbursements (not including normal operating overhead of Consultants'
businesses or Consultants' share of Research and Development costs referred to
in Section 4(b)) incurred or paid by the Consultants in connection with the
performance of their duties hereunder.
7. Confidentiality. Each Party agrees and acknowledges that the Confidential
Information (as defined below) of the other Party is valuable, special and
unique to its business; that such business depends on such Confidential
Information; and that each Party wishes to protect such Confidential Information
by keeping it confidential for such Party's use and benefit. Each Party further
acknowledges that any use or disclosure by it or any of its employees of the
other Party's Confidential Information other than in strict accordance with the
terms of this Agreement would be wrongful and would cause the other Party
irreparable injury. Based upon the foregoing, with respect to such Confidential
Information, each Party agrees during the Contract Period and at all times
thereafter:
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(i) except as required by applicable law after prior written notice to each
other Party sufficient for it to take reasonable steps to continue to protect
the confidentiality of the Confidential Information or as required in
furtherance of the business of each other Party in accordance with the terms
hereof, not to use or disclose, directly or indirectly, any Confidential
Information of any other Party;
(ii) to take all steps necessary or reasonably requested by each other Party to
ensure that all Confidential Information is kept confidential for the sole use
and benefit of the applicable Party; and
(iii) at any time that a Party may request in writing, to deliver promptly to
the requesting Party all materials constituting Confidential Information
(including all written, graphic, facsimile, encoded or recorded copies thereof)
of the requesting Party that are in its possession or under the other Party's
control without making or retaining any facsimile, encoded or recorded copy or
extract from such materials, except for a single copy thereof which may be
retained and held by the requesting Party's attorney and which shall be
consulted only for purposes of determining any Party's rights or obligations
with respect to the treatment of Confidential Information under this Agreement.
For purposes of this Section 7, "Confidential Information" means any and all
information owned by a Party, developed by or for any Party, or possessed by a
Party other than as a result of the disclosure of such information to such Party
by any other Party, in either case during the Contract Period, or any time prior
thereto or after the expiration thereof, including but not limited to all Works,
as such term is defined below, whether or not such Confidential Information is
developed by any Consultant, that is (A) not generally known in any industry in
which any Party does business or (B) not publicly available (including for this
purpose information that is publicly available because of a breach of the
provisions hereof by the Party receiving such information from any other Party).
Any information that is Confidential Information of both the Parties may be
disclosed and used by any of them without regard to the provisions of this
Agreement. For avoidance of doubt, all rights and interests acquired by the
Company under the APA and all information developed for the benefit of the
Company by the Consultants pursuant to this Agreement during the Contract Period
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shall be deemed to be Confidential Information solely of the Company, and the
Consultants shall have no right, as against the Company, to claim any Works as
the Consultants' Confidential Information, and provided further, however, that,
subject to Section 3(d) above, Consultants may use such Confidential Information
in the Permitted Field.
8. Improvements and Inventions.
(a) Disclosure of All Improvements and Inventions. As used herein,
"Works" shall collectively refer to: All Inventions, including all patent and
patent application rights and copyright and copyright application rights
relating thereto, obtained by any member of the OIP Group, to the extent that,
in each case, (i) if the Invention is capable of being used or exploited as a
product or technology (or part of a product or technology) for HOC, any member
of the OIP Group made or conceived it during the Contract Period; or (ii) if it
is any other Invention, either (x) the Consultant has made or conceived it while
performing services pursuant to this Agreement including services pursuant to
Section 4 hereof relating to Initiatives to create New Products, or (y) it is
based, in whole or in substantial part, upon information that was Confidential
Information of the Company at the time the Invention was conceived or developed,
or (z) it results, in whole or in substantial part, from or through the use of
any facilities, materials or equipment owned by the Company. For clarification,
an Invention that is capable of use or exploitation in the Permitted Field is a
Work if it is described in the preceding sentence. The Consultants shall
disclose all Works to the Company promptly after making or conceiving them.
(b) Assignment of Works. In consideration of the compensation payable
to the Consultants under Section 5 hereof:
(i) The Consultants agree that all Works shall be works made
for hire and shall be the sole and exclusive property of the Company and
available to the Company at all times. At the request of the Company, the
Consultants agree to, and to cause any applicable member of the OIP Group to,
assign, transfer and set over to the Company, or its nominee, without royalty or
any additional consideration, except as may otherwise be provided in this
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Agreement or the APA, its entire right, title and interest in, to and under any
and all Works.
(ii) The Consultants agree to, and to cause any applicable
member of the OIP Group to, execute, both during and after the Contract Period,
such documents as the Company shall deem necessary or desirable for the transfer
of such rights, titles and interests described in clause (i) above to it or its
designee and for the preparation, filing, prosecution and procuring of copyright
and/or patent applications and/or copyrights and letters patent in any country
of the world and for the transfer of interests therein, including the execution
of original, provisional, divisional, continuation, continuation-in-part and
reissue applications, reexaminations, extensions, renewals, registrations,
validations, preliminary statements, affidavits, and concessions.
(iii) The Consultants further agree that if it is legally or
otherwise impossible for the Company to apply for any such copyright or letters
patent in the Company's name, or if any court or other body with appropriate
jurisdiction finds the transfer of copyright or patent rights and/or other
rights in any Work to the Company hereunder to be unenforceable for any reason,
then, in any such case, the Consultants in lieu of the Company shall pursue such
copyright or letters patent in Consultants' own name but at the Company's
expense and the Consultant shall, at the Company's option, either assign such
copyright or letters patent to the Company for nominal consideration or grant
the Company an exclusive license, royalty free according to relevant industry
standards, to utilize the copyright or to make, use, offer for sale, sell or
import Works which are disclosed or claimed in such patent. If such an
assignment or such a license is not or cannot be created, then the Company shall
be able to use such copyright or patent on a non-exclusive, royalty-free basis.
(iv) Consultants agree to provide, upon reasonable request and
sufficient notice and at the Company's expense, any required records, and
otherwise to cooperate fully with the Company as may be necessary to accomplish
the transfer and assignment of all right, title and interest in and to the
Works; and to provide testimony in any court action or administrative proceeding
with respect to any of the rights conveyed to the company pursuant to this
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Agreement. The Company shall pay Consultants fair and reasonable compensation
for time spent and costs incurred after the end of the Contract Period in
preparing for and giving any such testimony.
(c) Future Rights.
(i) Unless and until a Change of Control shall occur with
respect to BriteSmile, to the extent that any member of the OIP Group or any of
their respective successors and assigns acquires from a third party any right or
interest under any patents or other intellectual property rights for HOC,
Consultants hereby grant and agree to cause each other member of the OIP Group
to grant to the Company, its successors and assigns, on reasonable terms and
conditions, worldwide, nonexclusive license for HOC under such rights (such
patents or other intellectual property rights being "Future Rights"), to the
extent requested by the Company, its successors and assigns, including the right
to make, use, offer for sale, import, and sell HOC products and services based
on or incorporating the Works.
(ii) The license described in subsection (i) above shall be
perpetual and royalty-free to the extent of exploitation and exercise of full
rights in the Non-Restricted Business Field.
(iii) "Restricted Business Field" means the specific products
or field of use as the case may be as to which Natural White, Inc. ("Natural
White") has been granted an exclusive license (the "Natural White License")
under that certain Patent License and Trademark Assignment Agreement dated
August 22, 2000 among Idex Dental Sciences, Inc. and Natural White.
(iv) "Non-Restricted Business Field" means any HOC use or
application other than in the Restricted Business Field. XXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
* Redacted pursuant to a Request for Confidential Treatment filed with the SEC.
16
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
(d) No Other Rights. No patent rights or licenses or other intellectual
property rights are granted by any Party to any other Party pursuant to this
Agreement, by implication or otherwise, except as expressly recited in this
Agreement. Consultants make no representation or warranty that any Works or
products based on or embodying any Works will not infringe on intellectual
property rights of others.
9. Reimbursement for Assignment of Inventions. The Company shall reimburse the
Consultants for all reasonable and properly documented out-of-pocket expenses
actually incurred by it in the performance of any of the terms of Section 8
hereof, including the preparation of documents, drawings, models and plans, the
transfer and assignment of Inventions and any travel required to fulfill any
obligation thereunder.
10. Future HOC Intellectual Property.
(a) Right of First Disclosure. Unless and until a Change of Control
shall occur with respect to BriteSmile, each Consultant shall, and shall cause
each other member of the OIP Group to, disclose to the Company all Future Rights
and Inventions, including all patents and patent application rights and
copyright and copyright application rights relating thereto, obtained, invented
or conceived by any of the Consultants following the Contract Period to the
extent that, in each case, the Invention is for HOC (all such Future Rights and
Inventions being "Future HOC IP"). In this regard, it is understood by the
parties that any Future HOC IP may have utility or application both for HOC and
in the Permitted Field. The parties agree that:
* Redacted pursuant to a Request for Confidential Treatment filed with the SEC.
17
(i) any such multi-application Future Rights and Inventions
first developed and commercially implemented for HOC or whose first recognized
commercial application is for HOC will be treated as Future HOC IP; and
(ii) any such multi-application Invention first developed and
commercially implemented in a Permitted Field will instead not be Future HOC IP
and will be referred to herein as "Permitted Field IP." When a HOC utility or
application of any Permitted Field IP is first established, the Company shall at
that time be entitled to a right of disclosure and first refusal to license or
acquire such application under the terms of this Agreement applicable to Future
HOC IP, subject to any third party contractual rights and obligations and any
commercialization existent at that time. (It is understood that all such Future
HOC IP obtained during the Contract Period are Works pursuant to Section 8
hereof and the property of the Company as provided in that Section). The
disclosure required to be made to the Company by this Section 10(a) shall be
made in writing as soon as practicable after the utility or application of any
Permitted Field IP in or for HOC is first reasonably established and, in any
event, such disclosure shall be made to the Company at least before the filing
by any member of the OIP Group of any application for a patent or copyright
covering such Permitted Field IP in or for HOC. The obligation to make the
disclosure described in this Section 10(a) shall be perpetual.
(b) Right of First Refusal on Future HOC IP. Unless and until a Change
of Control shall occur with respect to BriteSmile, each Consultant agrees that
it shall not, and that it shall cause each other member of the OIP Group not to,
use, license, assign, grant rights in or otherwise dispose of or exploit in any
manner or subject to any mortgage, lien or other encumbrance any Future HOC IP
for HOC without first complying with the provision of this Section 10(b).
(i) When a Consultant or any other member of the OIP Group has developed a
product or method for use or exploitation for HOC (a "Future Product") that
embodies Future HOC IP, the Consultant shall give or cause the other applicable
OIP Group members to give written notice to the Company (a "Future Product
Notice") of the existence of such Future Product. The Future Product Notice
18
shall not be given before such time as the Consultant, or other member of the
OIP Group as the case may be, reasonably believes that the Future Product is no
more than four (4) months away from both (x) commercialization in the HOC field
and (y) the date when all clinical trials necessary to establish the safety and
efficacy of the Future Product and the regulatory approvals necessary to market
the Future Product in the HOC field will have been obtained. The Future Product
Notice shall describe the Future Product, the associated Future HOC IP, the
status of clinical trials and regulatory approvals, if any, and the Sunk Cost in
such Future HOC IP as of a date not earlier than 30 days before the date such
Future Product Notice is given.
(ii) The Company shall have 56 days from its receipt of the Future Product
Notice to either acquire or license the Future HOC IP associated with the Future
Product (including the right to use such Future HOC IP to manufacture,
distribute and sell the Future Product) on the terms hereinafter set forth. At
the Company's request, the applicable Consultant or OIP Group member shall,
promptly after delivery of the Future Product Notice, provide the Company
reasonable access to its personnel to discuss the Future HOC IP and Future
Product.
(iii) The Company shall exercise its rights described in Subsection (ii) to
either acquire or license any Future HOC IP by giving written notice to the
Consultant or OIP Group member who provided the applicable Future Product Notice
on or before the end of the 56th day following its receipt of such Future
Product Notice. The written notice from the Company shall specify whether the
Company intends to license such Future HOC IP or acquire it. In the event that
the Company fails to timely make the election to acquire or license such Future
HOC IP, the Company's rights in Section 10(b)(ii) as to such Future HOC IP shall
terminate and the Consultant or applicable member of the OIP Group, as the case
may be, shall be free to use, license, grant rights in, assign or otherwise
dispose of or mortgage, lien or otherwise encumber such Future HOC IP in all
fields without any further restriction under this Agreement.
19
(iv) If the Company timely exercises its rights described in Subsection
10(b)(ii) to either acquire or license any Future HOC IP, a closing (a "Future
HOC IP Closing") of such acquisition or license shall be held within 30 days of
such exercise at which time the applicable member or members of the OIP Group
shall execute and deliver such instruments and other documents as the Company
may reasonably request to effectively assign and transfer to the Company such
Future HOC IP or, if the Company has elected to license such Future HOC IP, to
license such Future HOC IP for use in the HOC field, on a irrevocable,
worldwide, perpetual, royalty free and exclusive (even as to the OIP Group)
basis. If the Company elects to acquire the Future HOC IP, the Company shall
grant the OIP Group member which provided the Future Product Notice with an
immediate and automatic perpetual royalty-free license for the Future HOC IP
associated with the Future Product described in the Future Product Notice for
the Permitted Field.
(v) At each Future HOC IP Closing, the Company shall pay to the assignee or
licensor of any Future HOC IP, the Sunk Cost of the Future HOC IP being acquired
or licensed. Payments on account of Sunk Costs may be made by the Company in
cash or, at the option of the Company in the event that the Common Stock is then
publicly traded, up to fifty percent (50%) of any payment can be made in the
form of Common Stock and the balance in cash; provided, however, that no
payment(s) due Consultants may be paid in the form of Common Stock unless on the
date the payment became due (and if paid late, also at the time the payment is
made) (i) the Common Stock is publicly traded on a Principal Trading Facility,
(ii) has a per share Market Price of at least $1.00, and (iii) the
representations, warranties and covenants set forth in Sections 4.18 - 4.28 of
the APA are true and correct. For the purpose of these payments, the Common
Stock shall be valued at the average closing Market Price for the Common Stock
for the four (4) weeks preceding the applicable Future HOC IP Closing.
(vi) The Company shall pay to the assignor or licensor of any Future HOC IP,
during the Royalty Term of each Acquired Future New Product, Royalties (x) of
three percent (3%) of the Net Retail Revenues of the BSML Group, plus (y) three
percent (3%) of the Net Wholesale Revenues of the BSML Group, and (z) if any
Non-BSML Affiliate is granted a license or sublicense to the Acquired Future New
Product, fifty percent (50%) of the license fees payable to any member of the
20
BSML Group; provided that, with respect to any Acquired Future New Product that
is used as part of a process or procedure performed in a dentist's office or
other clinical setting to whiten human teeth, if (A) a Non-BSML Affiliate is
granted a license or sublicense, then the Company shall pay the assignor or
licensor of the Acquired Future HOC IP fifty percent (50%) of the license fees
payable to the BSML Group, and (B) if the process or procedure is non-light
activated and the Company incorporates such process or procedure into the teeth
whitening system offered to independent dental offices or through its own teeth
whitening centers or spas (collectively, the "Office Procedures"), then the
Company shall pay the assignor or licensor an amount equal to one percent (1%)
of the Net Retail Revenues of the BSML Group from the Office Procedures. With
respect to licenses or sublicenses for Improved Acquired Future New Products
granted to Non-BSML Affiliates, the Company shall not pay the Royalty described
in Subsection 10(b)(vi)(z) until after the Company has recovered its Sunk Costs
for the improvements which rendered the Acquired Future New Product a Improved
Acquired Future New Product. "Improved Acquired Future New Product" shall mean
any Acquired Future New Product as to which the Company or its agents has
materially changed its use, application or functionality. Payments due under
this Section shall be paid to Consultants or other applicable members of the OIP
Group within fifteen (15) days following the end of each calendar quarter in
which revenues from Acquired New Products are received, accompanied by a report
describing in detail the Net Retail Revenues, Net Wholesale Revenues and license
fees from each Acquired Future New Product.
(vii) Any Acquired Future HOC IP will be subject to an irrevocable, perpetual,
royalty free, exclusive world wide license in favor of the OIP Group and their
respective successors and assigns to use and exploit such Acquired Future HOC IP
in the Permitted Field.
(viii) Except in the event of a Change of Control, the right of first refusal
contained in this Section 10(b) shall continue for such period as would not
cause the right to become void or unenforceable under any applicable rule
against perpetuities or similar legal doctrine.
21
11. Manufacturing.
(a) Right of First Refusal. OIP shall have a right of first refusal to
manufacture and sell to any member of the BSML Group at the Fixed Price any
products that are Product Improvements, New Products or Future New Products to
the United States and for any other country or region where any member of the
OIP Group has established or is willing to establish in a timeframe reasonably
satisfactory to the BSML Group an appropriate manufacturing facility. In the
case of any such products that are covered by a Valid Claim, the Fixed Price
shall be 125% of Oraceutical's Fully Loaded Manufacturing Costs, and in the case
of any such products that are not covered by a Valid Claim, the Fixed Price
shall be 115% of Oraceutical's Fully Loaded Manufacturing Costs, provided,
however, in no case shall the Fixed Price per unit be more than 110% of the cost
that the Company would be required to pay to a third party manufacturer in an
arms length transaction to purchase such products in the same volume and
according to the same specifications. The Company shall give OIP written notice
(the "Manufacturing Notice") of the BSML Group's intention to manufacture any
Product Improvement, New or Future New Product together with such additional
information as to relevant manufacturing specifications, projected volumes,
delivery schedules and other matters as is then reasonably available and would
be material to a decision by OIP to exercise its right of first refusal to
manufacture under this Section. At OIP's request, the Company shall, promptly
after delivery of a Manufacturing Notice, provide OIP reasonable access to its
personnel to discuss the Company's manufacturing plans.
(b) Exercise of Right. OIP may exercise its right of first refusal to
manufacture the product referred to in the Manufacturing Notice by giving
written notice (an "Acceptance Notice") to the Company within 21 days of receipt
of the Manufacturing Notice. If OIP exercises its right of first refusal as to
any product, the Company and OIP shall enter into a manufacturing agreement
("Manufacturing Agreement") relating to such product containing provisions
customary in the industry, including provisions relating to forecasts,
deliveries, quality assurance, intellectual property protection, insurance and
indemnification.
22
(c) Expiration or Termination of Right. In the event that OIP duly
elects to exercise its right of first refusal to manufacture a product referred
to in a Manufacturing Notice and thereafter elects to discontinue manufacturing
such product or if OIP's right to manufacture such product expires or is
terminated pursuant to the terms of the Manufacturing Agreement applicable to
such product, OIP shall thereafter have no right under this Agreement to
manufacture or be offered an opportunity to manufacture such product.
(d) Cost Adjustments. Prices charged for New Products or Future New
Products shall be retroactively adjusted from time to time (but not for New
Product or Future New Products shipped more than two (2) months prior to a
written request for such adjustment) to reflect the actual Raw Materials Costs,
Packaging Costs and other components of Fully Loaded Manufacturing Costs for
such New Products or Future New Products. An appropriate payment shall be made
to compensate for any such variance, either by Consultants to the Company or by
the Company to Consultants, as the case may be, within thirty (30) days of the
final determination of cost changes. Upon request, Consultants or the Company,
as the case may be, shall provide to the other, in writing, a reasonable
explanation of any changes in Raw Materials Cost, Packaging Cost or other
components of Fully Loaded Manufacturing Costs that resulted in a price change
to the Company. Should the Company determine that it desires to acquire raw
materials or packaging for any product then manufactured by OIP, it shall give
OIP written notice thereof, the Parties shall promptly coordinate the shipping
to and storage of such by OIP and the Fully Loaded Manufacturing Costs shall be
adjusted to reflect the Company's purchase of such raw materials or packaging
costs.
12. Loaned Equipment. The parties agree that if the Company should loan
equipment or materials to a Consultant pursuant to this Agreement, the Company
shall retain all right, title and interest to such loaned equipment or materials
and shall be responsible for any personal property taxes assessed against the
loaned equipment during the term of this Agreement. The Consultants shall
clearly identify the loaned equipment as property of the Company. The loaned
equipment shall remain personal property and shall not become part of real
23
property by annexation or otherwise. Consultants shall maintain the loaned
equipment in good condition and shall be responsible for all maintenance except
as otherwise agreed in writing. Consultants shall not offer, loan, encumber,
sell or otherwise transfer the loaned equipment to any third party. Unless
otherwise agreed in writing, within 30 days of any termination or expiration of
the Contract Period, Consultants agree to return all equipment and materials
loaned under this Agreement.
13. Representations and Warranties.
(a) The Company. The Company hereby represents and warrants to the
Consultant as follows:
(i) each of the Company is duly organized, validly existing and in good standing
under the laws of its respective state of incorporation; and
(ii) the execution, delivery and performance by the Company of this Agreement
will not conflict with or result in a breach by any of the terms, conditions or
provisions of, or constitute (with due notice or lapse of time or both) a
default under, any agreement or instrument to which the Company is a party or by
which it is bound or any other legally enforceable duty of the Company to any
former employee or person or entity from whom or which it has previously
obtained consulting or employment services;
(iii) this Agreement has been duly authorized, executed and delivered by the
Company; and
(iv) the Company maintains and will continue to maintain product liability
insurance at a level that is commensurate with the risks to which it is exposed.
(b) Consultants. Each Consultant hereby represents and warrants to the
Company as follows:
(i) If an entity, it is duly organized, validly existing and
in good standing under the laws of its state of formation;
24
(ii) the execution, delivery and performance by the Consultant
of this Agreement will not conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute (with due notice or lapse of
time or both) a default under, any agreement or instrument to which Consultant
is a party or by which it is bound or any other legally enforceable duty of
Consultant to any person or entity for whom the Consultant has previously
provided consulting or employment services;
(iii) this Agreement has been duly executed and delivered by the Consultant;
(iv) that it is able to perform its duties set forth in Section 3 and it has no
understanding or agreement with anyone else which restricts its ability to
perform such services; and
(v) that any services it provides and information or materials it develops for
or discloses to the Company will not knowingly contain confidential information
of any other party or infringe any patent or other intellectual property right
of any other party, unless the Consultant is specifically authorized in writing
by such source to use such confidential information or intellectual property
right.
(c) Natural White. Consultants and the Company agree that nothing in
the Natural White License nor any acts or other performance by either
Consultants or the Company thereunder shall be deemed a breach of this Section
13 or any other provision of this Agreement.
14. Indemnification.
(a) By Consultants.
(i) If any member of the BSML Group incurs any liability or expense as a result
of any claim that any of Consultants' representations and warranties are not
true, the Consultants will indemnify the BSML Group and hold it harmless against
all such liability or expense, including reasonable attorneys' fees, provided
that a member of the BSML Group notifies Consultants of the claim and cooperates
with Consultants in defending against the claim. Each Consultant will notify the
25
Company if it ever becomes aware of any such claim.
(ii) Inasmuch as the BSML Group will not, under the provisions of this Agreement
or otherwise, have control over the manner in which the Consultants utilize the
license granted to the Consultants pursuant to Section 10(b)(vii) or any other
rights granted to Consultants under this Agreement, the Consultants shall defend
and hold the BSML Group and its successors and assigns harmless as against
judgments, fees, expenses or other costs (including reasonable attorneys' fees)
arising from or incidental to any utilization of such license by the Consultants
or any of their successors, assigns, subcontractors or agents, licensees or
sublicensees, whether or not any member of the BSML Group is named as a party
defendant in any applicable lawsuit.
(b) By Company. Inasmuch as Consultants will not, under the provisions
of this Agreement or otherwise, have control over the manner in which the
Company or third parties practice the inventions encompassed by the Works or any
Future Rights or Acquired Future HOC IP, the Company shall defend and hold the
Consultants harmless as against any judgments, fees, expenses or other costs
(including reasonable attorney's fees) arising from or incidental to the
utilization of the Works, the Future Rights or the Acquired Future HOC IP by any
member of the BSML Group or any of their successors, assigns, subcontractors or
agents licensees, sublicensees, whether or not any Consultant is named as a
party defendant in any applicable lawsuit.
15. Continuation of Relationship. In the event that the Contract Period expires
but the Consultants continue to perform services for the Company similar to
those described in Section 3(a), the respective rights of the parties in any
intellectual property resulting from such services shall be deemed to be
governed by the provisions of Sections 7 and 8 hereof.
16. ▇▇▇▇▇▇▇▇▇▇'▇ Death and Disability. Anything herein contained to the contrary
notwithstanding, the Company may, on 30 days' prior written notice to the
Consultants, elect to terminate the Contract Period in the event ▇▇▇▇▇▇▇▇▇▇ dies
or is unable because of physical or mental disability to perform services
26
hereunder on Consultant's behalf for a period of 60 consecutive days or on an
aggregate of 100 weekdays during any twelve month period.
17. Successors. This Agreement shall be binding upon and inure to the benefit of
the Parties and their successors and assigns.
18. Waiver of Breach. The waiver by the Company or a Consultant of a breach of
any provision of this Agreement by the other Party shall not be construed as a
waiver of any subsequent or continuing breach of the same provision or of any
other provision of this Agreement.
19. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given when delivered by hand, or by a reputable
overnight courier or mailed by first-class certified mail, postage prepaid and
return receipt requested, addressed as follows:
If to the Company:
BriteSmile, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
With a copy to:
Durham ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: 801-415-3500
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
And with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
27
and to
Mayer, Brown, ▇▇▇▇ & Maw
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Consultant:
Oraceutical Innovative Properties,
Oraceutical LLC,
or R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Banner & Witcoff, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without giving effect
to the conflicts of law principles thereof.
21. Expenses. All costs and expenses (including attorneys' fees) incurred in
connection with the negotiation and preparation of this Agreement and, except as
expressly provided herein, any claim, dispute or litigation pertaining to this
Agreement, shall be paid by the Party incurring such expenses.
22. Survival. The termination of the Contract Period shall not terminate any of
the rights and obligations of the Parties hereunder other than those contained
in Sections 4(a) and (b).
28
23. Entire Agreement. This Agreement contains the entire agreement of the
Parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto; provided, however, that nothing contained
herein shall terminate, void, modify or amend any (i) prior grant of any right
or interest by the OIP Group to the BSML Group under the Consulting Agreement,
the APA or any other agreement or instrument nor (ii) the obligations of the
BSML Group to the OIP Group expressly relating to such grants.
24. Severability.
(a) Generally. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(b) Duration and Scope of Certain Covenants. Without limiting paragraph
(a) above, if any court determines that any of the covenants contained in
Section 7, 8 or 10, or any part of such covenants, is unenforceable because of
the duration or scope of such covenant or provision, such court shall have the
power to and is hereby requested to reduce the duration or scope of such
covenant or provision, as the case may be, to the extent necessary to make such
covenant or provision enforceable, and in its reduced form, such covenant or
provision shall then be enforceable.
25. Remedies.
(a) Injunctive Relief. Each Consultant acknowledges and agrees that it
has entered into this Agreement in consideration of the Company's covenants
herein that the covenants and obligations of the Consultant contained in the
Agreement, including in Sections 7, 8 and 10 hereof relate to special, unique
and extraordinary matters and are reasonable and necessary to protect the
legitimate interests of the Company and that a breach of any of the terms of
such covenants and obligations will cause the Company irreparable injury for
which adequate remedies at law are not available. Therefore, the Consultant
29
agrees that the Company shall be entitled to an injunction, restraining order,
or other equitable relief on a temporary or other basis restraining the
Consultant from any such breach without the necessity of posting an injunction
bond.
(b) Amendments, Miscellaneous, Etc. Neither this Agreement, nor any
term hereof, may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
26. Prior Agreement. By its signature below, BriteSmile agrees with Oraceutical
that the "Contract Period" as that term is used in the Consulting Agreement will
end on June 30, 2003.
[Remainder of Page Intentionally Left Blank.
Signature Page Follows.]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
BRITESMILE DEVELOPMENT, INC.
By_________________________________
Name:
Title:
ORACEUTICAL INNOVATIVE PROPERTIES LLC
By_________________________________
R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
ORACEUTICAL, LLC
By_________________________________
R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President/Manager
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R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
For itself and on behalf of the BSML Group
BriteSmile, Inc.
By: ________________________________
