-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NtV5nyYuAhh+ZAJdXfXfhpgLI4q6XWaAlP+2o8uZ4LDu0RM6ASk/mXYb/Czf6cjT A95c3iue2VJQLOWY+rkfRg== 0001005477-97-001029.txt : 19970409 0001005477-97-001029.hdr.sgml : 19970409 ACCESSION NUMBER: 0001005477-97-001029 CONFORMED SUBMISSION TYPE: 10KSB40/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970408 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S OPPORTUNITY SEARCH INC CENTRAL INDEX KEY: 0000855683 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 133545623 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB40/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-26284 FILM NUMBER: 97576726 BUSINESS ADDRESS: STREET 1: 44 KEAN ROAD CITY: SHORT HILLS STATE: NJ ZIP: 07078 BUSINESS PHONE: 2013793171 MAIL ADDRESS: STREET 1: 44 KEAN ROAD CITY: SHORT HILLS STATE: NJ ZIP: 07078 10KSB40/A 1 FORM 10KSB40/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB/A (Mark One) |X| Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 For the Fiscal Year ended December 31, 1996 |_| Transition Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ Commission File Number 0-26284 Milestone Scientific Inc. ------------------------- (Name of Small Business Issuer in its Charter) Delaware 11-309811 ---------------------------- ---------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization Identification No.) 220 South Orange Avenue, Livingston Corporate Park, Livingston, NJ 07039 ------------------------------------------------------------------------ (Address of Principal Executive Office) (Zip Code) Issuer's telephone number (201) 535-2717 Securities registered under Section 12(b) of the Exchange Act: Name of Each Exchange Title of Each Class on Which Registered ------------------- ------------------- None Securities Registered under Section 12(g) of the Exchange Act: Common Stock, par value $.001 per share --------------------------------------- (Title of class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No _| Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. |X| For the year ended December 31, 1996, the revenues of the registrant were $302,388. The aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant, based on the closing price on the Nasdaq SmallCap Market on March 27, 1997 was approximately $15,625,674. As of March 27, 1997, the registrant has a total of 5,555,612 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE None Item 13. Exhibits and Reports on Form 8-K. (a) Certain of the following exhibits were filed as Exhibits to the registration statement on form SB-2, Registration No. 33-92324 and amendments thereto (the "Registration Statement") filed by the Registrant under the Securities Act of 1933, as amended, or the reports filed under the Securities and Exchange Act of 1934, as amended, and are hereby incorporated by reference. Exhibit No. Description ------- ----------- 3.1 Certificate of Incorporation of the Company. (1) 3.2 Certificate of Amendment filed July 13, 1995. (2) 3.3 Certificate of Amendment filed October 31, 1996. (5) 3.4 By-laws of the Company. (1) 4.1 Specimen Stock Certificate. (2) 10.1 Lease dated November 25, 1996 between Livingston Corporate Park Associates, L.L.C. and the Company. (5) 10.2 Employment Agreement between the Company and Leonard Osser. (1) 10.3 Amendment to Employment Agreement between the Company and Leonard Osser. (5) 10.4 Form of Underwriter's Warrant. (2) 10.5 Financial Advisory and Investment Banking Agreement entered into July 1, 1996 between GKN Securities Corp. and the Company. (5) 10.6 Form of Warrant dated June 30, 1996 granted to GKN Securities Corp. and its designees for the purchase of an aggregate of 250,000 shares of the Company's Common Stock. (5) 10.7 Agreement between Spintech and Team Technologies, Inc. dated July 13, 1995. (2) 10.8 Employment Agreement dated November 1, 1996 by and between the Company and Gregory Volok. (5) 10.9 Lease, as amended, dated November 6, 1991 between Raybec Management Co. and Wisdom. (6) 10.10 Employment Agreement made as of December 23, 1996 by and between Sagacity I, Inc. and Joel D. Warady. (5) 10.11 Employment Contract Terms Memorandum entered into by Ronald P. Spinello and Milestone on September 21, 1994 and Employment Agreement made as of November 10, 1995 among Milestone, Spintech and Ronald P. Spinello. (5) 10.13 Agreement for SDS Product dated September 1, 1996 between Spintech and Princeton PMC. (5) 10.14 Agreement for The Wand Product dated September 1, 1996 between Spintech and Princeton PMC. (5) 10.15 Technology License Agreement dated September 20, 1996, between Spintech and Biotronix Laboratories, Inc. (5) 10.16 Exclusive Distributorship Agreement between Wisdom Toothbrushes Limited and Sagacity I, Inc. (6) 10.18 Agreement between Milestone and Spintech dated September 21, 1994 and Amendment No. 1 thereto. (2) 16.1 Letter on Change in Certifying Accountant. (3) 21.1 Subsidiaries of the Registrant. (5) - ---------- (1) Filed with the initial filing of the Company's Registration Statement. (2) Filed with Amendment No. 1 to the Registration Statement. (3) Filed with Form 8-K dated January 29, 1996. (4) Filed with the Company's Form 10-KSB for the year ended December 31, 1995. (5) Filed with original filing of Form 10-KSB. (6) Filed herewith. (b) There were no reports on Form 8-K filed by the Registrant during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized. Milestone Scientific Inc. By: /S/ Leonard Osser ----------------------------- Leonard Osser, President, Chief Executive and Chief Financial Officer Date: April 1, 1996 In accordance with the Exchange Act, this Amendment has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Date Title --------- ---- ----- /s/ Leonard Osser April 1, 1997 President, Chief Executive - ------------------------------- Officer, Chief Financial Leonard Osser Officer and Director /s/ Gregory Volok April 1, 1997 Executive Vice President - ------------------------------- Chief Operating Officer and Gregory Volok Director - ------------------------------- _______________ Director Giovanni Montoncello /s/ Michael J. McGeehan April 1, 1997 Director - ------------------------------- Michael J. McGeehan - ------------------------------- _______________ Director David Sultanik /s/ Stephen A. Zelnick April 1, 1997 Director - ------------------------------ Stephen A. Zelnick EX-10.09 2 LEASE LEASE THIS LEASE, made November 6, 1991, between Raybec Manage Co., Ltd. (herein called Lessor), and Wisdom Toothbrush Company (herein called Lessee), whereby Lessee has leased premises from Lessor, and Lessor has demised to Lessee, certain premises containing approximately 4,607 square feet, and designated as Unit T, as outlined in red on the attached building floor plan (herein called Leased Premises); said Leased Premises are located in a building commonly known as 151 S. Pfingsten Road, Deerfield, IL (herein called Building), containing approximately 85,667 square feet, situated on a parcel of ground (herein called Site), the vacant portion of which is or will be improved with parking areas, driveways and landscaping. The lease Term will be for a term of three years and will commence on January 1, 1992 and terminate December 31, 1994 (herein called Lease Term). The term rental will be $94,428 (herein called Term Rent) payable monthly in advance in installments of $2,496, each (herein called Monthly Installments). "Lessee's Proportionate Share" as such term is hereinafter used shall be 5.4%. Lessee has deposited with Lessor the sum of $4,992 as Security Deposit. Leased Premises shall be used only for Office and Distribution of Toothbrushes and related items (herein called the Specified Use). "Holdover Rental" as such term is hereinafter used, shall be $250 per day. Until otherwise notified in writing by Lessor, the Term Rental, Monthly Installments and all other sums to be paid by the Lessee to Lessor hereunder shall be made payable to the order of Raybec Management Co., Ltd. At 7855 Gross Point Road, Skokie, IL 60077 IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written, intending thereby to incorporate and include therein, all terms, conditions and provisions contained in Sections 1 through 11 (consisting of 11 pages attached hereto) as though the said Sections had been hereinbefore fully set forth. __________________________________ _________________________________________ __________________________________ _________________________________________ (Title) (Title) By: /s/ Marie Fry By: /s/ Joel Warady, President ------------------------------ ------------------------------------- ATTEST:___________________________ ATTEST:__________________________________ (Title) (Title) (seal) LESSOR (seal) LESSEE Section 1. RENTAL 1.1 Lessee agrees to pay the Term Rent to Lessor in Monthly Installments payable one each in advance on or before the first day of every calendar month of the Lease Term, in lawful money of the United States or by good check or draft (subject to collection). 1.2 Lessee shall pay to Lessor, as additional rental, Lessee's Proportionate Share of the amount by which the annual real estate taxes and special assessments on the property of which Leased Premises are a part exceed the sum of $118,705. Lessee shall not be responsible or liable for any income or other taxes of the Lessor. Lessor shall submit to Lessee a statement showing the computations upon which the Lessee's liability, if any, is based. On or before fifteen (15) days immediately following such notification, Lessee shall pay an amount equal to such adjustment for such prior calendar year or portion thereof, and for each month of the current calendar year in which the notification is received, Lessee shall pay an amount equal to one-twelfth (1/12) of such rent adjustment, the installments of rent adjustment payable for each month of the current calendar year prior to the date of such notification being due and payable within fifteen (15) days after such notification. Rental adjustment resulting from an increase in real estate taxes for any odd portion of a calendar year at the end of the Lease Term shall be prorated on a per diem basis. Section 2. SECURITY DEPOSIT The Security Deposit may be applied by Lessor for the purpose of curing any default or defaults of Lessee under this Lease. If said sum or any part thereof is used, applied or retained in curing any such default, Lessee shall, upon demand, immediately deposit with Lessor an amount in cash equal to the amount so used, applied or retained. Default by Lessee in paying to Lessor any amount required to restore the Security Deposit after any application thereof, shall afford to Lessor the same remedies as in the default of the payment of rent. If Lessee has not defaulted hereunder, or if Lessor has not applied said sum to said default, then the Security Deposit or any portion thereof not so applied by Lessor shall be paid to Lessee at the termination of this Lease. In the event of a bona-fide sale of the Site and the Building, Lessor shall have the right to transfer the Security Deposit to the purchaser to be held under the terms of this Lease and, in such event, Lessor shall be released from all liability for the return of such Security Deposit to Lessee. Section 3. UTILITY SERVICES 3.1 Lessee shall promptly pay for all public utilities rendered or furnished, and metered to the Leased Premises during the terms of this Lease. Lessee shall not waste or permit the waste of water, or use the water for any purpose other than those stated. Lessor periodically will bill Lessee for Lessee's Proportionate Share of all water bills received by Lessor for water metered to the Building and Lessee shall pay such amount not later than the date for the next Monthly Installment. Lessee may, at its own cost, install a submeter to meter water delivered to the Leased Premises and in such event Lessee shall be free of the restrictions regarding water usage and shall pay Lessor for water used according to meter readings (at the rate charged by the supplier of such water) in lieu of paying the aforesaid percentage of bills for all water metered to the Building. All leases heretofore or hereafter executed with respect to premises in the Building will contain identical restrictions with respect to the use, misuse or wasting of water, except where the Lessee installs a submeter at its cost (and such submetered water will be deducted prior to computing Lessee's obligation for such water bills). Lessor shall not be liable for damages, by abatement of rent or otherwise, for interruption or failure of, or delay in, furnishing any service or utility, whether the responsibility of Lessor or of others, when the same is occasioned by causes beyond the reasonable control of Lessor, and no such interruption, failure or delay shall be deemed and eviction or disturbance of Lessee's use of the Leased Premises. Section 4. USE 4.1 Lessee may use the Leased Premises for the Specified Use. Lessee shall not injure, overload, deface or otherwise harm Site, Building or Leased Premises nor 2 permit the same; nor commit any nuisance; nor permit the emitting of any objectionable noise or odor; nor burn any trash or refuse thereon or therein; nor sell, display, distribute or give away any alcoholic liquors or beverages; nor make or permit any use of Leased Premises which is improper, offensive or contrary to any law or ordinance, or which will invalidate or increase the cost of any of Lessor's insurance (including the keeping or storage of any article of dangerous, inflammable or explosive character) or which would increase the danger of fire in Leased Premises or in the Building, nor obstruct or permit the obstruction of driveways, walks, parking areas and other common areas of Site. 4.2 Lessee shall not exhibit, inscribe, paint or affix any sign, advertisement, notice or other lettering (hereinafter referred to as "signs") on any part of the Site, exterior of the Building, or in the windows, without the express prior written consent of Lessor, which consent will not be unreasonably withheld. Lessor shall have, at any time and from time to time, the right to establish rules and regulations setting forth uniform characteristics for all signs on the Building and Site, and Lessor's refusal to consent to any sign not meeting such characteristics shall not be deemed to be unreasonable. In the event of the violation of the foregoing, Lessor may remove same without any liability, and may charge the expense incurred by such removal to Lessee. Lessee may, however, place a sign on the front door of Leased Premises which sign shall be installed by Lessor at the expense of Lessee, and shall be (i) for identification purposes only; (ii) uniform with all other such signs on Building; and (iii) of a size, color and style acceptable to Lessor. 4.3 Lessee shall not make changes and alterations in or of Leased Premises, without Lessor's prior written consent first had, which consent shall not be unreasonably withheld. Any change or alteration shall be made in strict accordance with all building and zoning laws and with the rules and regulations of any governmental authority and of the National Board of Fire Underwriters or any other body exercising similar functions. The cost of any such change or alteration shall be paid in cash, or its equivalent, so that Leased Premises, Building and Site shall at all times be free of liens for labor and materials supplied or claimed to have been supplied to Leased Premises. Section 5. CONDITION OF PREMISES 5.1 Lessee's taking possession of the Leased Premises shall be conclusive evidence that Leased Premises were in good order and satisfactory condition when Lessee took possession, with the exception of those items if any, detailed in a written list executed by Lessor and Lessee at or prior to acceptance of possession. No promise of Lessor to alter, remodel, complete or improve Leased Premises or Building or Site, and no representation concerning the condition of Leased Premises or Building or Site have been made by Lessor to Lessee unless same is contained herein or is contained in agreed plans and specifications signed by both parties. At the termination of this Lease by lapse of time or otherwise, Lessee shall return Leased Premises in good order and condition, loss or damage by fire or other casualty, conditions which are the responsibility of Lessor to repair pursuant to the terms of Section 6.2 hereof, and ordinary wear and tear expected. Section 6. UPKEEP OF LEASED PREMISES, BUILDING AND SITE 6.1 Except for repairs require in 6.2 hereof to be performed by Lessor, Lessee agrees at its sole cost and expense: to keep Leased Premises, equipment, facilities and fixtures therein (including the heating systems, air-conditioning systems, plumbing fixtures, light fixtures, bulbs and tubes) neat, clean and in good order, repair and condition (including all necessary painting and decorating), replacing all broken glass with glass of the same size and quality as that broken; to keep Leased Premises in a safe, clean and healthful condition, required by any law or ordinance or order or regulation of any public authority; to comply with all local or general regulations, laws and ordinances applicable to Lessee's use of Leased Premises, as well as lawful requirements of all competent authorities in that behalf; to make all repairs, alterations, additions or replacements to Leased Premises (including equipment, facilities or fixtures therein) required by law or ordinance or any order or regulation of any public authority because of Lessee's use of Leased Premises, and to keep Leased Premises equipped with all safety appliances required because of such use and to furnish any licenses and permits required for any such use. Lessee shall also repair any damage to Site, Building or Leased Premises caused by Lessee's fault or negligence. 3 6.2 Lessor shall at its own expense keep Site (including drives, driveways, walks, parking areas, landscaping, sewer and water lines), and Building (including the exterior of Leased Premises and structural supports and exterior walls and roof thereof) in good condition, order and repair (excluding damage caused by Lessee's fault or negligence), and free of snow, and will make all repairs, alterations, and additions which are required to conform with all laws, ordinances, orders or regulations of any public authorities having jurisdiction, except repairs, alterations and additions required because of Lessee's use of Leased Premises. Section 7. INDEMNIFICATION AND RELEASE OF CLAIMS 7.1 Lessee will at all times hold Lessor, its beneficiaries and the management of the Building harmless and indemnified against any loss, damage, cost, expense or liability resulting to any person or property by reason of any use which may be made of the Leased Premises or any part thereof, unless such loss, damage, cost, expense or liability shall be caused by the sole negligence of Lessor; and Lessee will hold Lessor and Site, Building and Leased Premises harmless, indemnified and free and clear of any and all claims, demands, penalties, liabilities, judgments, costs and expenses, including reasonable attorneys' fees, arising in connection with any use of Leased Premises by Lessee or its employees, agents or servants. 7.2 Neither Lessor nor Lessee shall be liable to the other for any business interruption or any loss or damage to property or injury to or death of persons occurring on Site, in Building or in Leased Premises or in any manner growing out of or connected with the Lessee's use and occupation of Leased Premises, Building and Site, or the condition thereof, whether or not caused by the negligence or other fault of Lessor or Lessee, or of their respective agents, employees, subtenants, licensees, or assignees. This release shall apply only to the extent that such business interruption, loss or damage to property or injury to or death of persons is covered by insurance. Nothing herein shall be construed to impose any other or greater liability upon either Lessor or Lessee than would have existed in the absence of this Section 7.2. This release shall be in effect only so long as the applicable insurance policies contain a clause to the effect that this release shall not affect the right of the insured to recover under such policies. Such clauses shall be obtained by the parties whenever possible. The release in favor of Lessor contained herein, is in addition to, and not in substitution for, or in diminution of the hold harmless and indemnification provisions of Section 7.1 hereof. Section 8. INSURANCE 8.1 At all times subsequent to Lessee taking possession of Leased Premises, it shall, at its sole cost and expense maintain: (a) Comprehensive General Public Liability Insurance against claims for bodily injury, death or property damage occurring in connection with the use and occupancy of Leased Premises, naming Lessee and Lessor, Lessor's beneficiaries and the management of Building as the named insureds, such insurance to afford protection to the limit of not less than Five Hundred Thousand ($500,000.00) Dollars in respect to injury or death of a single person, and to the limit of not less than One Million ($1,000,000.00) Dollars in respect to any one accident, and to the limit of not less than One Hundred Thousand ($100,000.00) Dollars in respect to property damage. (b) Steam Boiler Insurance on all steam boilers, pressure tanks and other such apparatus, if any shall, from time to time, be installed by Lessee on Leased Premises, in such amount as Lessor may from time to time reasonably require. (c) At all times when any work is in process in connection with any change or alteration being made by Lessee, Lessee shall maintain Workman's Compensation insurance covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against Lessor or its beneficiaries, as well as Lessee or Leased Premises. 8.2 Lessee shall furnish Lessor with a duplicate certificate or certificates of such insurance and not less than ten (10) days prior to the expiration date of any policy, will furnish Lessor with a new policy or certificate 4 therefor or a renewal thereof, in substitution of the expiring policy. Each such policy which Lessee is required to procure and maintain hereunder shall be issued by insurers of recognized responsibility licensed to do business in Illinois, and shall contain an agreement or endorsement that it will not be canceled by the insurer without at least ten (10) days' prior written notice to Lessor. 8.3 Lessee will not do, suffer or permit any act or omission, whether upon Leased Premises or otherwise, which might or would result in voiding or impairing the obligations of any such policy of insurance. Section 9. FIRE AND CASUALTY 9.1 If Leased Premises are substantially destroyed or rendered untenantable by fire or other casualty, Lessor shall have the right to terminate this Lease by notice in writing to Lessee mailed within twenty (20) days of the fire or other casualty. In any case of fire or other casualty damage to Leased Premises (except where this Lease is terminated by Lessor as hereinbefore provided), Lessor shall repair and rebuild Leased Premises within one hundred and twenty (120) days of the fire or other casualty, and upon failing to do so, Lessee shall have the right to terminate this Lease by notice in writing to Lessor mailed within twenty (20) days thereafter. If any such fire or other casualty renders Leased Premises or any portion thereof untenantable, the rent to be paid by Lessee hereunder shall abate by an amount bearing the same ratio to the total amount of rent for the period of untenantability as the untenantable portion of Leased Premises bears to the entire Leased Premises during the period beginning with the date of such fire or other casualty and ending with the date when Leased Premises are again rendered tenantable. Section 10. CONDEMNATION 10.01 If the whole of Leased Premises shall be taken for any public or quasi-public use under statute or by right of eminent domain or by private purchase in lieu thereof, then this Lease shall automatically terminate as of the date the title shall be taken. If any portion of Leased Premises shall be so taken as to render the remainder thereof unusable for the purpose for which Leased Premises were leased, then Lessor and Lessee shall each have the right to terminate this Lease on thirty (30) days' notice to the other given within sixty (60) days after the date of such taking. In the event neither party shall exercise the aforesaid right to terminate, the rent payable under this Lease shall be equitably apportioned according to the space so taken, and Lessor shall, at its own cost and expense, restore the remaining portion of Leased Premises to the extent necessary to render it reasonably suitable for the purposes for which it was leased and shall make all repairs to Building to Building to the extent necessary to constitute Building a complete architectural unit, provided the cost thereof shall not exceed the proceeds of Lessor's condemnation award. Lessee shall not be entitled to receive any part of any award or awards that may be made to or received by Lessor, but Lessee may prosecute any claim against the condemning authority in such condemnation proceedings for damages which it may have sustained; provided, however, that no such claim shall diminish or otherwise adversely affect Lessor's award or the award of any fee mortgage. Section 11. ASSIGNMENT AND SUBLETTING 11.1 Lessee shall not sublet any part of Leased Premises nor assign this Lease, without in each and every case Lessor's prior written consent thereto first had, which consent shall not be unreasonably withheld, provided, however, that Lessee shall remain liable hereunder, norwill Lessee make or permit any transfer of this Lease or any interest hereunder by operation of law. Section 12. LESSOR'S PERFORMANCE OF LESSEE'S COVENANTS 12.1 Should Lessee at any time fail or omit to do any act or thing provided under this Lease to be done by Lessee, Lessor may in its sole discretion after ten (10) day's written notice to Lessee, itself do or cause to be done such act or thing (including the payment of any claim or lien upon Leased Premises made or filed by any laborer, supplier, materialman, principal contractor, subcontractor, or other person, whether for work, labor or services performed upon, or materials supplied to Leased Premises). All monies paid by Lessor shall be and constitute so much additional rental due hereunder from Lessee to Lessor to be due and payable upon notice given by Lessor of the nature and amount thereof, on the first day of the calendar month next succeeding the month during 5 which Lessor shall have given notice, with interest upon any such amount at the rate of twelve percent (12%) per annum from the date of payment by Lessor until repayment to Lessor by Lessee. Section 13. RIGHTS RESERVED TO LESSOR 13.1 Lessor reserves the following rights: (a) To have pass keys to Leased Premises and no locks shall be changed without the prior written consent of Lessor; (b) To enter the Leased Premises for the purpose of making inspections or repairs, alterations or improvements connected with any portion of Leased Premises during reasonable hours, and at any time in the event of an emergency; (c) To show Leased Premises to prospective lessees or brokers during the last six months of the Term of this Lease (and if vacated during such period, to prepare Leased Premises for reoccupancy) and to prospective purchasers at all reasonable times, provided prior notice is given to Lessee in each case; (d) To designate and/or approve, prior to installation, all types of window shades, blinds, drapes, awnings, window ventilators, and other similar equipment, and to control all internal lighting that may be visible from the exterior of Building. Section 14. SUBORDINATION TO EXISTING AND FUTURE MORTGAGES 14.1 At the option of Lessor's mortgagee, this Lease shall be subject and subordinate at all times to the lien of any existing mortgage or mortgages and of mortgages which hereafter may be made a lien on Site and/or Building; provided that so long as Lessee is not in default under this Lease, its possession of Leased Premises and its rights and privileges hereunder shall not be interfered with by the mortgagee or any purchaser upon a foreclosure of such mortgage. Although no instrument or act on the part of the Lessee shall be necessary to effectuate such subordination, the Lessee shall nevertheless execute and deliver such further instruments subordinating this Lease to the lien of any such mortgages as may be desired by the mortgagee, provided the same acknowledges Lessee's rights as hereinbefore specified. The Lessee hereby appoints the Lessor its attorney-in-fact irrevocably to execute and deliver any such instrument for the Lessee. Section 15. RIGHTS AND REMEDIES 15.1 If default shall be made in the payment of any sum required to be paid by Lessee under this Lease, and default shall continue for five (5) days after written notice to Lessee, or default shall be made in the performance of any of the other covenants or conditions which Lessee is required to observe and perform, and such default shall continue for fifteen (1) days after written notice to Lessee, or if the interest of Lessee under this Lease shall be levied on under execution or other legal process, or if any portion shall be filed by or against Lessee to declare Lessee a bankrupt or to delay, reduce or modify Lessee's debts or obligations, or if any petition shall be filed or other action taken to reorganize or modify Lessee's capital structure if Lessee be a corporation or other entity, or if Lessee be declared insolvent according to law, or if any assignment of Lessee's property shall be made for the benefit of creditors, or if a receiver or trustee is appointed for Lessee or its property, or if Lessee shall abandon Leased Premises during the term of this Lease, then Lessor may treat the occurrence of any one or more of the foregoing events as a breach of this Lease (provided that no such levy, execution, legal process or petition filed against Lessee shall constitute a breach of this Lease if Lessee shall vigorously contest the same by appropriate proceedings and shall remove or vacate the same within thirty (30) days from the date of its creations, service or filing) and thereupon, at its option, may without notice or demand of any kind to Lessee or any other person, have any one or more of the following described remedies in addition to all other rights and remedies provided at law or in equity: 6 (a) Lessor may terminate this Lease and forthwith repossess Leased Premises and be entitled to recover forthwith as damages a sum of money equal to the balance of the Term Rent then remaining unpaid hereunder (without commutation, in consideration of disregarding any rent adjustments pursuant to Section 1.2 hereof) less the fair rental value of Leased Premises for said period, and any other sum of money and damages owed by Lessee to Lessor; (b) Lessor may terminate Lessee's right of possession and may repossess Leased Premises by forcible entry or detainer suit or otherwise, without demand or notice of any kind to Lessee and without terminating this Lease, in which event Lessor may, but shall be under no obligation so to do, relet the same for the account of Lessee for such rent and upon such terms as shall be satisfactory to Lessor. For the purpose of such reletting Lessor is authorized to decorate or to make any repairs, changes, alterations or additions in or to Leased Premises that may be necessary or convenient, and if Lessor shall fail or refuse to relet Leased Premises, or if the same are relet and a sufficient sum shall not be realized from such reletting after paying all of the costs and expenses of such decorations, repairs, changes, alterations and additions and the expense of such reletting and of the collection of the rent accruing therefrom to satisfy the rent provided for in this Lease to be paid, then Lessee shall pay to Lessor as damages a sum equal to the amount of the rental reserved in this Lease for such period or periods, or if the Leased Premises have been relet the Lessee shall satisfy and pay any such deficiency upon demand therefor from time to time and Lessee agrees that Lessor may file suit to recover any sums falling due under the terms of this Section 15.1(b) from time to time, and that no delivery or recovery of any portion due Lessor hereunder shall be any defense to any subsequent action brought for any amount not theretofore reduced to judgment in favor of Lessor. 15.2 Upon the termination of this Lease or upon the termination of Lessee's right of possession, Lessee shall at once surrender possession of Leased Premises to Lessor and remove all effects therefrom, and if such possession is not immediately surrendered Lessor may forthwith re-enter Leased Premises and repossess itself as of its former estate and remove all persons and effects therefrom, using such force as may be necessary without being guilty of any manner of trespass or forcible entry or detainer. Without limiting the generality of the foregoing, Lessee agrees to remove at the termination of this Lease or upon the termination of Lessee's right of possession, Lessee's movable office furniture, signs, trade fixtures, office equipment and personal property and such alterations, improvements and additions made by Lessee as may be requested by Lessor. If Lessee shall fail or refuse to remove all such property from leased Premises, Lessee shall be conclusively presumed to have abandoned the same and title thereto shall thereupon pass to Lessor without any cost, either by setoff, credit, allowance or otherwise, and Lessor may, at its option, accept the title to such property or at Lessee's expense, may remove the same, or any part thereof, in any manner that Lessor shall choose, and store the same without incurring liability to Lessee or any other person. 15.3 Lessee shall pay, upon demand, all of Lessor's costs, charges and expenses, including the fees of counsel, agents and others retained by Lessor, at any time incurred in enforcing Lessee's obligations hereunder (whether incurred in litigation or otherwise) or incurred by Lessor in any litigation, negotiation or transaction in which Lessee causes Lessor, without Lessor's fault, to become involved or concerned. Section 16. HOLDING OVER 16.1. Lessee shall pay to Lessor Holdover Rental for each day Lessee shall retain possession of Leased Premises, or any part thereof, after the termination of this Lease, whether by lapse of time or otherwise and shall also pay all damages sustained by Lessor on account thereof; but the provisions of this Article shall not operate as a waiver by Lessor of any right of re-entry hereinbefore provided; nor shall the receipt of said rent or any part thereof, or any other act in apparent affirmance of tenancy, operate as a waiver of the right to forfeit this Lease and the Lease Term hereby granted for the period still unexpired, for a breach of any of the covenants herein. Section 17. NOTICES 17.1 All notices to be given by one party to the other under this Lease shall be in writing, mailed or delivered as follows: If to Lessor, at the place where rent is payable; if to Lessee, at the Leased Premises, provided 7 that either party may, by notice to the other, from time to time designate another address to which notices shall thereafter be addressed. Mailed notices shall be sent by United States Certified or Registered Mail, postage prepaid. Such notices shall have been deemed to have been given by posting in the United States Mails. Section 18. ESTOPPEL CERTIFICATE 18.1 Lessee agrees that from time to time, upon request by Lessor, it will deliver to Lessor within ten (10) days after such request a statement, in writing, certifying that this Lease is unmodified and in full force and effect (or if there have been modifications that the Lease, as modified, is in full force and effect), the dates to which rent and other charges have been paid, and that Lessor is not in default under any provision of this Lease or, if in default, the nature thereof in detail. Section 19. COVENANT OF QUIET ENJOYMENT 19.1 Lessor further agrees that at all times when Lessee is not in default under the terms of and during the terms of this lease, Lessee's quiet and peaceable enjoyment of the Leased Premises shall not be disturbed or interfered with by Lessor or by any person claiming by, through or under Lessor. Section 20. TERM 20.1 If any work to be done by Lessor has not been substantially completed and possession delivered by the specified commencement date, then the Monthly Installments of rental payable under this Lease shall abate on a pro rata basis until substantial completion and delivery of possession occurs. 20.2 If Lessee occupies Leased Premises for any period prior to the commencement of the Lease Term, it will pay rental therefor on a pro rata basis from the date of occupancy to the date of commencement of the Lease Term. Section 21. ACTS SUBSEQUENT TO TERMINATION 21.1 No receipt of money by Lessor from Lessee after the termination of this Lease, the service of any notice, the commencement of any suit or final judgment for possession shall reinstate, continue or extend the term of this Lease or affect any such notice, demand, suit or judgment. Section 22. WAIVER OF DEFAULT 22.1 No waiver of default of Lease shall be implied, and no express waiver shall affect any default other than the default specified in such waiver and that only for the time and to the extent therein stated. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision. Section 23. EXAMINATION OF LEASE 23.1 Submission of this instrument for examination or signature by Lessee does not constitute a reservation of or option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Lessor and Lessee. Section 24. DEFAULT UNDER OTHER LEASE 24.1 If the term of any lease, other than this Lease, made by Lessee, for the Leased Premises or any part thereof, or for any other space in the Building shall be terminated or terminable after the making of this Lease, because of any default by Lessee under such other lease, such fact shall empower Lessor, at Lessor's sole option, to terminate this Lease by notice to Lessee and/or to exercise any of the remedies set forth in Section 15. 8 Section 25. REPRESENTATIVE CAPACITY 25.1 No person, partnership, corporation or other organization executing this Lease in a representative capacity for Lessor or Lessee shall be held individually liable hereunder in the absence of fraud provided such person, partnership, corporation or other organization acted with due authority and the intended principals are bound. Section 26. MISCELLANEOUS 26.1 All rights and remedies of Lessor and Lessee under this Lease shall be cumulative and none shall exclude any other rights and remedies allowed by law or statute. 26.2 Each of the provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit, not only of Lessor and of Lessee, but also of their respective heirs, legal representatives, successors and permitted assigns, provided this clause shall not permit any assignment contrary to the provisions of Section 11 hereof. 26.3 All of the representations and obligations of Lessor and Lessee are contained herein and no modification, waiver or amendment of this Lease, or any of its conditions or provisions, shall be binding upon the Lessor and Lessee unless in writing, signed by Lessor and Lessee. 26.4 The receipt by Lessor of any installment of the regular stipulated rent hereunder or any of said additional rent, shall not be a waiver of any other additional rent then due or of any default or Lessee hereunder. 26.5 This Lease may be executed in any number of counterparts. Each such executed counterpart shall be deemed an original hereof and all such executed counterparts shall together constitute but one and the same instrument, which instrument shall for all purposes be sufficiently evidenced by such executed counterpart. 26.6 The section and paragraph headings of this Lease are for convenience only and in no way limit or enlarge the scope or meaning of the language contained in the body of this Lease. 26.7 If Lessor is a bank or trust company, and is executing this Lease as Trustee, then anything in this Lease to the contrary notwithstanding: This Lease is executed by Lessor, not personally but as Trustee as aforesaid, in the exercise of the power and authority conferred upon and vested in it as such Trustee, and under the express direction of the beneficiaries of that certain Trust Agreement hereinbefore specified. It is expressly understood and agreed that nothing herein or in said Lease contained shall be construed as creating any liability whatsoever against said Trustee personally, and in particular without limiting the generality of the foregoing, there shall be no personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained or to keep, preserve or sequester any property of said Trust, and that all personal liability of said Trustee of every sort, if any, is hereby expressly waived by said Lessee, and by every person now or hereafter claiming any right or security hereunder; and that so far the said Trustee is concerned the owner of any indebtedness or liability accruing hereunder shall look solely to the premises hereby leases for the payment thereof. It is further understood and agreed that the said Trustee has no agents or employees and merely holds naked legal title to the property herein described. Section 27. INTEREST 27.1 All sums due Lessor from Lessee shall bear interest at the rate of Twelve percent (12%) per annum from the time when they become due hereunder until paid to Lessor. 9 Section 28. RENT SCHEDULE 28.1 1/1/92 -12/31/92 $2496 1/1/93 -12/31/93 $2620 1/1/94 -12/31/94 $2753 28.2 Lessee to receive January and February 1992 rent free. March rent and Security Deposit due upon Lease execution Section 29. Tenant shall procure and maintain, at Tenant's expense, a heating and air conditioning system maintenance contract. Section 30. Lessee is responsible for its pro-rata share of any increase of insurance over .03 per square foot. Section 31. No overnight parking or storage of equipment or vehicles without written consent from the management. Section 32. All warehouse personnel are to park in the rear of the building. Section 33. Lessee is responsible for any damage caused by delivery trucks to property, except for any damages that exist prior to Lessee's occupancy. Section 34. Lessee is responsible to keep adjoining outside area free of any debris from Lessee's unit. Section 35. Lessee is responsible for its pro-rata share of fees, costs and expenses paid by Landlord during each lease year in seeking or obtaining any refund or reduction of Real Estate Taxes. Section 36. Lessor to buildout office areas as per attached plan. Section 37. After two full years Lessee to have option to cancel this lease should Lessee require additional space and Lessor can not satisfy this requirement written notice to be given by Lessee (4) months prior to end of 2nd year. 10 GUARANTY In consideration of the making of the above Lease by the Landlord with the Tenant at the request of the undersigned and in reliance on the Guaranty, the undersigned hereby guarantees the payment of the rent to be paid by the Tenant and the performance by the Tenant of all the terms, conditions, covenants and agreements of the Lease, as well as all provisions of that certain Work Letter, if any, dated the date hereof from Landlord to Tenant, and the undersigned promises to pay all the Landlord's expenses, including reasonable attorney's fees, incurred by the Landlord in enforcing all obligations of the Tenant under the Lease and Work Letter, if any, or incurred by the Landlord in enforcing this Guaranty. The Landlord's consent to any assignments and successive assignments by the Tenant and Tenant's assigns, of this Lease, or a changed or different use of the demised premises, or amendment or modification of the Lease, or Landlord's forbearance, delays, extensions of time or any other reason whether similar to or different from the foregoing, or the non-existence, termination of existence or legal incapacity of Tenant to enter into this Lease and the Work Letter, if any, shall in no wise or manner release the undersigned from, or limit the undersigned's, liability as Guarantor, this Guaranty remaining applicable to the Lease as changed or modified as set forth above. In the event this Guaranty is signed by more than one person, same shall be the joint and several liability of the parties executing this Guaranty. /s/ Cy Segrich ADDIS LTD. FOR AND ON BEHALF OF ATTEST: ADDIS, LTD /s/ Cy Segrich (SEAL) This Lease consists of the Lease Schedule, Pages 1 through 30 hereof, Guaranty, Riders A and B, and Exhibit A. LEASE AMENDMENT THIS AMENDMENT TO LEASE entered into as of July 13, 1994 by and between Raybec Management Company, Ltd. ("Landlord") and Wisdom Toothbrush Company ("Tenant"). WITNESSETH: WHEREAS, Landlord and Tenant have entered into a certain office/industrial lease ("Lease") on November 6, 1996 for certain premises more commonly known as Unit T at 151 S. Pfingsten, Deerfield, Illinois ("Premises"); and WHEREAS, Landlord and Tenant now desire to amend said Lease upon the terms and conditions set forth herein; and NOW, THEREFORE, the parties hereto evidence their mutual agreement to amend the Lease as follows: 1. The Monthly Base Rent of the Lease shall be extended as follows: 1/1/95 - 12/31/95 $2,753 ($7.17 psf) 1/1/96 - 12/31/96 $2,837 ($7.39 psf) 1/1/97 - 12/31/97 $2,922 ($7.61 psf) 2. After the second year of this Amendment, providing that Tenant does not exercise Section 37 of the Lease, then Landlord agrees to give the Tenant a rental credit for the month of January 1997. 3. Except for the provisions of this Amendment all of the terms, covenants, conditions and provisions of the Lease and all rights and obligations of the Landlord and Tenant thereunder shall remain in full force and effect and are not otherwise revised, amended, altered or changed. IN WITNESS WHEREOF, this Amendment of the Lease has been executed as of the day and year set forth above. LANDLORD: TENANT: WISDOM TOOTHBRUSH CO. __________________________________ BY: /s/ Bennet H. Schwart BY: /s/ Joel Warady TITLE: As Agent TITLE: President ADDENDUM TO LEASE Regarding the Lease dated November 6, 1991 and amended on July 13, 1994 by and between Raybec Management Company, Ltd. ("Landlord") and Wisdom Toothbrush Company ("Tenant"), and following is hereby agreed: 1. Beginning 1/1/95 through 12/31/97, the Monthly Base Rent shall be $2688.00. 2. In the event that Tenant does not exercise Section 37 of the Lease then, Tenant shall receive a base rental credit for the month of January 1997. 3. Landlord agrees to "build out" the unit as mutually agreed as follows: - Build 2 new offices behind existing offices (approx. 12 x 12 and 15 x 2) - - Build out a hallway with tile floor to match existing - - Add drop ceiling and HVAC - Install new vanity sink in washroom and upgrade general appearance of bathroom - - Join with doorway the office on right to current executive office and with doorway joining both of the two new offices - - New offices to have proper electrical, heating and air conditioning - 4. Tenant agrees to contribute $5,000 towards the build out of the unit. In reference to payment, $2,500 shall be paid at the start of the build out and the balance shall be paid upon its completion. Agreed on this 31 day of July 1994 by: /s/ Bennet H. Schwart /s/ Joel Warady ----------------------------- ------------------------------ Landlord Tenant EX-10.16 3 EXCLUSIVE DISTRIBUTORSHIP AGREEMENT DATED 9 APRIL, 1996 WISDOM TOOTHBRUSHES LIMITED (1) - and - SAGACITY I, Inc. (2) EXCLUSIVE DISTRIBUTORSHIP AGREEMENT INDEX Clause - ------ 1. Interpretation 2. Appointment and Term 3. Distributor's and Company's Duties 4. Terms of Supply 5. Title 6. Sales and Marketing 7. Targets 8. Intellectual Property 9. Confidentiality 10. Termination 11. Consequences of Termination 12. Force Majeure 13. Assignment 14. Severability 15. Entire Agreement 16. Variations 17. Waiver 18. Notices 19. Other Provisions 20. Governing Law and Jurisdiction Schedule 1: The Products Schedule 2: The Territory Schedule 3: The Outstanding Debts Schedule 4: The Estimated Targets Schedule 5: Current Price List Schedule 6: Current Standard Conditions of the Company 2 AGREEMENT DATE: 9 APRIL PARTIES: (1) WISDOM TOOTHBRUSHES LIMITED (registered no.02881666) a company incorporated under the laws of England and Wales and having its registered offices at The Silk Mill, Haverhill, Suffolk, CB9 8DT ("the Company") (2) SAGACITY I, Inc. a company incorporated under the laws of the State of Delaware, United States of America and having its registered office at 1209 Orange Street, Wilmington, Delaware, County of New Castle, United States of America and the name of its registered agent at such address being The Corporation Trust Company. ("the Distributor") RECITALS: (A) The Company is principally engaged in the business of design, manufacture and distribution of the Products (as defined below). (B) The Company wishes to develop its business in the Territory and wishes to appoint the Distributor as its exclusive distributor in the Territory. (C) The Distributor has extensive marketing experience in the Territory and wishes to be appointed as the Company's exclusive distributor in the Territory. (D) The Company has agreed to appoint the Distributor as its exclusive distributor in the Territory on the terms and subject to the conditions set out below. 3 AGREEMENT 1. Interpretation In this Agreement the following words and expressions shall (save where the context otherwise requires) have the following meanings:- "BMG Partnership" means the BMG Partnership being a general partnership under Delaware law constituted by a Partnership Agreement dated 14 February 1990. "Confidential Information" means any information which is disclosed to either party ("Disclosee") by the other ("Discloser") pursuant to this Agreement and any information relating in any way to the Products, the Intellectual Property Rights or the Discloser which comes to the Disclosee's knowledge before or after the termination of this Agreement, whether such information is expressed orally or in writing and whether or not expressly stated to be confidential or marked as such; "CIF" means "cost insurance and freight" as defined and explained in Incoterms 1990 as published by the International Chamber of Commerce, Paris, France; "Intellectual Property Rights" means any trade mark, trade name, brand name, service mark, copyright, registered design, patent or other industrial or intellectual property right existing in any part of the world which relates in any way to the 4 Products, and any applications for any of the foregoing; "Products" means, subject to Clause 4.3, the products details of which are listed in Schedule 1 and such other products as the parties may from time to time agree in writing; "Territory" the countries and dependent areas listed in Schedule 2; "Year" means each successive period of 12 months. 2. Appointment and Term 2.1 The Company hereby appoints the Distributor as its exclusive distributor in the Territory for the sale of the Products, and so long as the Distributor is in compliance with its obligations under this Agreement, the Company shall: 2.1.1 (subject to Clause 7 (Targets)) not grant to any other person or undertaking the right to represent the Company or to promote or sell the Products in the Territory; 2.1.2 refrain from promoting or selling the Products in the Territory directly other than through the Distributor; 2.1.3 so far as it is lawfully able, take all reasonable steps to prevent its other distributors from promoting or selling the Products in the Territory; 2.1.4 refer all enquiries received by it for the sale of the Products to customers in the Territory to the Distributor; and 5 2.1.5 within three days of dispatch of the Products, notify the Distributor of the same. 2.2 Unless terminated earlier in accordance with Clauses 4.7.1, 7.3 or 10.2 or 10.3, this Agreement shall run for the period of three years from the date of this Agreement and thereafter unless or until terminated by either party in accordance with Clause 10.1. 3. Distributor's Duties 3.1 The Distributor shall during the continuance of this Agreement and at its own expense: 3.1.1 use its best endeavours to promote, sell and distribute the Products and develop the market for the Products throughout the Territory provided that nothing in this sub-Clause 3.1.1 shall oblige the Distributor to increase its employees or resources from the current levels of the BMG Partnership; 3.1.2 only purchase Products for resale in the Territory from the Company or otherwise as may be agreed in writing unless products are deemed to be non-competing; 3.1.3 maintain a representative range of products, as reasonably determined by the Company from time to time and maintain such stocks as are necessary to meet reasonably anticipated customer demand; 3.1.4 assist the Company as requested with market research in the Territory and support the Company in the execution of marketing plans and strategies provided that this exercise does not place undue burden on the Distributor or its employees; 3.1.5 maintain adequate records relating to orders and sales of the Products and other business matters relating to the Products and promptly supply such records to the Company upon request; 6 3.1.6 make clear, in all dealings with customers and potential customers that it is acting as a distributor of the Product and not as an agent of the Company; 3.1.7 participate (with at lease one employee or representative of the Distributor) in up to 2 sales meetings per Year as arranged by the Company at such time and place (being alternative venues in England and in the United States of America) as the Company may from time to time choose; 3.1.8 on a yearly basis and in such form as the Company may reasonably request, provide the Company with: 3.1.8.1 a written analysis of the business and marketing conditions within the Territory with respect to the sale of the Products; 3.1.8.2 a written estimate of its requirements for Products for the next Year; and 3.1.8.3 a marketing plan including sales forecasts; 3.1.9 select employees and maintain facilities and premises for the sale of the Products and maintain a business and sales organisation adequate to work and develop sales of the Products in the Territory in each case in line with the current practice of the BMG Partnership; 3.1.10 inform the Company of any enquiry concerning the Products by any person, firm or company for delivery outside or export from the Territory; 3.1.11 leave in position and not cover or erase any notices or other marks (including without limitation notices that a trade mark, design or copyright relating to the Products is owned by the Company or a third party) which the Company may place on or affix to the Products; 3.1.12 indemnify the Company against all proceedings, costs, liabilities, injury, loss or damage arising out of the breach or negligent performance or failure in performance by the Distributor of the terms of this Agreement; 7 3.1.13 on receipt of at least 3 days' notice, allow the Company or its duly authorised representative access to the Distributor's premises to inspect the premises and facilities of the Distributor and to inspect and take copies of or extracts from any records or other documents relating in any way to the Products or the Distributor's activities under this Agreement; 3.1.14 ensure that it conforms with all legislation, rules, regulations and statutory requirements existing in the Territory from time to time in relation to the Products. In any event, all advertisements, point of sale promotion, merchandising and publicity material for the Products issued by the Distributor ("the Material") shall be subject to the prior written approval of the Company but such approval will be deemed to have been given unless notice is given to the Distributor by the Company within 10 days of its receipt of the Material; 3.1.15 be responsible for the obtaining of any import licenses and payment of all customs and excise and other similar import duties that may be required or levied with regard to any or all of the Products for the purpose of importing the same into the Territory; and 3.1.16 maintain in the Territory adequate product liability insurance of a type and to an extent specified in writing by the Company and satisfactory to it and at a level acceptable by the company provided that this amount is in accordance with common US business practices for a business similar to that carried on hereunder by the Distributor and comparable in relation to all relevant factors including but not limited to the nature of the products, turnover and geographical distribution. 3.2 The Distributor shall not, except as otherwise agreed in writing by the Company: 3.2.1 actively seek customers, solicit orders, or establish any branch or maintain any distribution depot, for the Products outside the Territory; 8 3.2.2 on behalf of itself, or its associate companies (if any), inside the Territory manufacture, sell or import for resale from any person, firm or company other than the Company any products which compete with the Products, nor directly or indirectly be or become interested in any such person, firm or company inside the Territory. 3.2.3 have authority to: 3.2.3.1 act as agent in any way for the Company; 3.2.3.2 represent the Company; 3.2.3.3 pledge the credit of, or make any representations, or give any warranty on behalf of the Company; or 3.2.3.4 contract any rights and liabilities on the Company's behalf, and the Distributor will not in any way hold itself out as having such authority. 3.3 The Company shall be responsible for obtaining any licences required by the US Food and Drug Administration in respect of the manufacture of the Products. 4. Terms of Supply 4.1 All sales of Products by the Company to the Distributor shall be made CIF at such port as the Company shall notify to the Distributor from time to time ("the Designated Port") in accordance with the Company's current price list and on the Company's standard conditions of sale from time to time except as expressly varied by this Agreement and to the extent that any of the same is inconsistent with any provision of this Agreement, in which case the latter shall prevail. A copy of the Company's current price list and the Company's current standard conditions of sale from Schedules 5 and 6 to this Agreement. The Company shall give to the Distributor notice in writing of any change in its standard conditions of sale, not less than one month prior to such change taking effect for the purpose of this Agreement and the Company agrees that such changes shall not be unreasonable. 9 4.2 The price to be paid by the Distributor for the Products may be adjusted every six months by the Company it its absolute discretion (which discretion shall not be subject to review) upon notice being given by the Company to the Distributor provided always that: 4.2.1 the percentage increase in the price to be paid by the Distributor in relation to any particular class of Products shall not be greater than the percentage increase in the Company's prime cost in relation to those Products; where "prime cost" shall mean the cost of raw materials, labour, transport and energy incurred by the Company in relation to that class of Products; and 4.2.2 in any event no such increase shall result in a price to be paid by the Distributor which would give the Company a profit of greater than 10% on the full ex factory cost. The adjusted price will take effect for all orders for the Products received by the Company after the expiry of sixty days from the date such notice is given. 4.3 The acceptance of orders for the Products shall be in writing, at the entire discretion of the Company and will normally be accepted subject to availability of the Products. The Company shall be entitled, at its absolute discretion, to reject any order received from the Distributor and from time to time to extend or discontinue the range of Products or any part thereof provided that the Company shall promptly notify the Distributor of any such acceptance, rejection, extension or discontinuance. The Company will give the Distributor not less than 4 months prior written notice of any discontinuance of a Product or range of Products. 4.4 The Company shall treat the Distributor no less equitably than its other customers, provided always that nothing in this Agreement shall require the Company to give the Distributor any right of priority over the Company's other distributors/customers. 4.5 All dates for delivery of the Products shall be agreed between the parties and shall be stated in writing on the Company's acceptance of the Distributor's order. All dates 10 for delivery of the Products are given in good faith but are only estimates and the Company shall not be liable for any failure to deliver on the date so given. 4.6 Subject only to 4.6.1 below all payments shall be made by the Distributor in US Dollars to such bank account as the Company may from time to time notify in writing to the Distributor within 48 days of the date of invoice provided that the invoice date does not pre-date the date of dispatch by more than three days. 4.6.1 By way of limited exception to the payment terms set out in 4.6 the Company will give the Distributor special payment terms in relation to Outstanding Debts of the BMG Partnership which the Distributor has agreed to pay to the Company in consideration for the Company agreeing to enter into this Agreement. The Outstanding Debts are those invoices dated 48 days or more prior to the date of this Agreement and listed as an Outstanding Debt on Schedule 3 hereto for the total value of $54,902.19. The Distributor agrees to make regular payments in US Dollars to a bank account specified by the Company and made against the specific invoices listed in Schedule 3. The Distributor agrees that within 90 days of the date of this Agreement it will have paid at least 80% of the total value stated in Schedule 3 and the remaining balance thereof within 180 days of the date of this Agreement. For the avoidance of doubt this provision does not affect in any way whatsoever the Distributor's obligations under Clause 4.6 hereof in relation to invoices dated after the date of this Agreement. 4.6.2 The Distributor will clearly identify the relevant invoice or invoice relating to an Outstanding Debt when making any payments to the Company in order that a proper allocation of the payment can be made. 4.7 If the Distributor fails to pay the price for any Products within 48 days after the date of invoice or fails to pay the Outstanding Debts in accordance with 4.6.1 the Company shall be 11 entitled (without prejudice to any other right or remedy it may have whether under the terms of this Agreement or otherwise) to:- 4.7.1 terminate this Agreement immediately; and/or 4.7.2 charge interest on the price to the Distributor at 3% per annum above the base rate of Barclays Bank plc, in force from time to time, from the date the payment became due until actual payment is made; and/or 4.7.3 cancel or suspend any further delivery to the Distributor under any order; and/or 4.7.4 sell or otherwise dispose of any Products which are the subject of any order by the Distributor, whether or not appropriated thereto, and apply the proceeds of sale to the overdue payment. 4.7.5 Without prejudice to any other right or remedy which the Company may have under the terms of this Agreement or otherwise, if the Distributor shall fail to comply with any or all of its obligations contained in Clause 4.6, the Company shall, on giving 10 working days' notice of its intention to do so be entitled to take any or all of the actions set out in sub-Clauses 4.7.1, 4.7.2, 4.7.3 and 4.7.4 4.8 the Distributor shall inspect all Products upon delivery and must notify the Company of any missing, damaged or defective Products within 7 days (in the case of missing products) or 28 days (in the case of damaged or defective Products) of delivery, failing which the Company shall not be liable to the Distributor for such damaged, missing or defective Products. In any event, the Company's liability in respect of any Product shall be limited at the Company's option to either replacement of the Product in question or repayment of the price plus duties paid by the Distributor on said product. Nothing in this clause shall exclude any liability for death or personal injury caused by the negligence of the Company. 5. Title 12 5.1 Any consignment of Products supplied to the Distributor shall remain the property of the Company until: 5.1.1 payment in full for such consignment has been received by the Company; and 5.1.2 The Outstanding Debts (referred to in Clause 4.6 and listed in Schedule 3) due from the Distributor to the Company have been paid in full, and until such payment the Distributor shall hold such Products to the order of the Company. 5.2 Until such time as the Company has been paid in full for the Products, the Distributor shall ensure that the Products are stored in such a way as to be readily identifiable as the property of the Company and easily removable by the Company. 5.3 In the event of non-payment by the due date, the Company shall be entitled, in addition to all other rights, to enter upon any land or premises where the Products may for the time being be and recover possession of them. The Company may use such steps as are reasonably necessary to enter the premises and remove the Products. 5.4 The Products supplied by the Company shall be at the Distributor's risk immediately, upon reaching the Designated Port (defined in Clause 4.1) and the Distributor shall therefore insure the Products accordingly from the time and date of delivery to the Designated Port and procure that the Company's interest is noted on such policy of insurance. 5.5 The Company may maintain an action for the price of the Products notwithstanding that property in the Products may not have passed to the Distributor. 6. Sales and Marketing 6.1 The Distributor shall use in relation to the Products only such advertising, promotional and selling materials as are provided by or approved or deemed to be approved in writing by the Company in accordance with provisions referred to in clause 3.1.14 of this Agreement. 13 6.2 These provisions are without prejudice to those relating to sales and marketing contained in other clauses of this Agreement. 7. Targets 7.1 The Distributor shall purchase Products during each of the first 3 Years of this Agreement having at least the aggregate volume indicated in Schedule 4 as the minimum for each of such Years. For the purpose of this sub-clause and Schedule 4, the minimum aggregate volume of the Products shall be the invoiced volume of the Products. After the initial 3 Years, the minimum aggregate volume for each following year shall be reassessed by the parties on an annual basis. Failure to agree on each new minimum aggregate volume no later than 3 months before commencement of the following Year shall result in the minimum aggregate volume for such following Year being the amount representing an increase of 5% per annum of the minimum aggregate volume of the previous Year. 7.2 The Distributor acknowledges that the figure in column 2 of Schedule 3 is a reasonable estimate of the minimum aggregate volume of the Products which the Company can expect to sell to the Distributor in a particular Year. 7.3 If in any Year of this Agreement the aggregate volume of the Products sold by the Company to the Distributor falls short of the agreed minimum aggregate volume for the Year in question, then unless the Distributor pays a sum equal to the Company's overhead and profit margin (to be determined by the Company acting reasonably) in respect of such shortfall to the Company within 14 days after the end of that Year the Company shall be entitled in its absolute discretion (which discretion shall not be subject to review):- 7.3.1 to terminate this Agreement on notice in writing to the Distributor; or 7.3.2 to appoint another distributor in the Territory to sell the Products or itself to sell Products in the Territory. PROVIDED THAT such shortfall was not a result of the Company not having provided the Products to the Distributor due to reasons outside the ordinary course of business including but 14 not limited to taking account of the volume of orders made by the BMG Partnership over the six months prior to the date of this Agreement. 8. Intellectual Property 8.1 The Company hereby grants and the Distributor hereby accepts a non-exclusive license to use the name "Wisdom Toothbrush Company" (the "Name") as a fictitious business name (but not as its official corporate name) in the Territory in connection with Marketing, distribution and sale of the Products. In connection with such license, the Distributor shall have the right to register a fictitious business name incorporating the Name with any business names register in the Territory. The Distributor shall not use the Name or a confusingly similar name in connection with any goods or services other than the Products. All rights in the Name shall remain at all times the sole property of the Company and all use of the Name shall inure to the benefit of the Company. The rights granted relative to the Name in this Clause shall terminate automatically with the termination or expiration of this Agreement. Upon such termination or expiration, the Distributor shall immediately cease using the Name (or any other name that is confusingly similar to the Name). Without limiting the generality of the foregoing, upon such termination or expiration, the Distributor shall make whatever filings are necessary to withdraw use of the Name as a fictitious business name with any business names register. Also, upon such termination or expiration, the Distributor shall immediately destroy any of its stationery, signs or other printed material that make reference to the Name. The Distributor hereby irrevocably constitutes and appoints the Company to be its true and lawful attorney-in-fact for it and in its name, place and stead, to have the power to perform any act that it might perform that is necessary, convenient or appropriate to comply with the provisions of this Clause, including, without limitation, the power to execute, seal, acknowledge, file or record any paper or document with any business name register to withdraw the Distributor's use of the Name upon the termination or expiration of this Agreement. 15 8.2 The Distributor acknowledges that it has no rights and will obtain no rights in the Intellectual Property Rights belonging to the Company (or any goodwill associated with such rights) other than as may be necessary to fulfil its obligations under this Agreement. 8.3 The Distributor shall promptly notify the Company of any actual, threatened or suspected infringement in the Territory of any Intellectual Property Rights which come to the Distributor's notice, and of any claim by any third party so coming to its notice that the importation of the Products into the Territory, or their sale therein, infringes any rights of any other person, and the Distributor shall at the request and expense of the Company do all such things as may be reasonably required to assist the Company in taking or resisting any proceedings in relation to any such infringement of claim. 8.4 The parties will discuss and may consider entering into a manufacturing and trade mark licence agreement in respect of moulds for certain Products. Any agreement on this will be the subject of a separate written agreement between the parties. 9. Confidentiality Each party shall at all times both during and after the term of this Agreement use its best endeavours to keep the Confidential Information confidential and not to disclose it to any other person and shall not use any Confidential Information for any purpose other than the performance of its obligations under this Agreement provided that this restriction shall not extend to any Confidential Information which:- 9.1 that party is required to disclose to any governmental or other authority or regulatory body; 9.2 is at the date of this Agreement or becomes hereafter, public knowledge through no fault of that party; or 9.3 can be shown by that party ("Recipient"), to the reasonable satisfaction of the other party ("Disclosing Party") to have been known to the Recipient prior to its being disclosed to the Recipient by the Disclosing Party. 16 10. Termination 10.1 Without prejudice to the rights of either party existing on termination, this Agreement may be terminated at any time after the expiry of three years from the date of this Agreement by either party giving to the other not less than twelve months prior notice in writing, such notice being given no earlier than the second anniversary of this Agreement and to take effect no earlier than the third anniversary of this Agreement. 10.2 Notwithstanding the provision of Clause 10.1, the Company may by notice to the Distributor terminate this Agreement immediately upon the happening of any one of the following events:- 10.2.1 if the Distributor commits any irremediable serious breach of any provision of this Agreement, including but not limited to a failure to pay the price for any Products in accordance with Clause 4.6 or 4.7 or a failure to achieve the minimum aggregate volume set out in Schedule 4 and in accordance with Clause 7; 10.2.2 if the Distributor commits any remediable breach of any provision of this Agreement and fails to remedy such breach within a period of 30 days from the service on it of a notice specifying the breach and requiring it to be remedied; 10.2.3 if the Distributor or any of its officers, directors or shareholders acts in a manner likely to cause damage to the reputation of the Company or the Wisdom brand; or 10.2.4 if the Distributor ceases to carry on business, becomes insolvent, has a receiver, administrative receiver or manager appointed over the whole or any part of its assets, enters into any composition with creditors generally, or has an order made or resolution passed for it to be wound up (otherwise than in furtherance of any scheme for amalgamation or reconstruction) or undergoes any similar or equivalent process in any jurisdiction. 17 10.3 Notwithstanding the provision of Clause 10.1, the Distributor may by notice to the Company terminate this Agreement immediately upon the happening of any one of the following events:- 10.3.1 if the Company commits any irremediable serious breach of any provision of this Agreement; 10.3.2 if the Company commits any remediable breach of any provision of this Agreement and fails to remedy such breach within a period of 30 days from the service on it of a notice specifying the breach and requiring it to be remedied; 10.3.3 if the Company ceases to carry on business, becomes insolvent, has a receiver, administrative receiver or manager appointed over the whole or any part of its assets, enters into any composition with creditors generally, or has an order made or resolution passed for it to be wound up (otherwise than in furtherance of any scheme for amalgamation or reconstruction) or undergoes any similar or equivalent process in any jurisdiction. 10.4 Any termination of this Agreement shall be without prejudice to any rights accrued in favour of either party in respect of any breach committed by the other prior to the date of such termination. 11. Consequences of Termination 11.1 upon termination of this Agreement for any cause whatsoever:- 11.1.1 the Distributor shall cease all sales and other activities on behalf of the Company save to the extent required by sub-Clause 11.1.2; 11.1.2 the Company shall be entitled (but shall not be obliged) to repurchase from the Distributor, at the price paid by the Distributor for those Products, all stocks of the Products which have been paid for by the Distributor but which remain in the ownership and under the control of the Company at that date. In the event 18 that the Company selects not to repurchase such stocks, the Distributor shall be entitled to dispose of such stocks in the ordinary course of business; 11.1.3 the Distributor shall at its own expense forthwith dispose of in accordance with the directions of the Company all samples of the Products; any advertising, promotional or sales material relating to the Products then in the possession of the Distributor that have been provided by the Company; and all Confidential Information in whatever form; 11.1.4 outstanding unpaid invoices rendered by the Company in respect of the Products shall become immediately payable by the Distributor and invoices in respect of Products ordered prior to termination but for which an invoice has not been submitted shall be payable immediately upon submission of the invoice; 11.1.5 the Distributor shall cease forthwith to use the Company's name or to promote, market or advertise the Products or to make any use of the Intellectual Property Rights; and 11.1.6 the Distributor shall inform its customers for the Products that this Agreement has been terminated and shall supply to such customers the name and address of any new distributor appointed by the Company for the Territory. In addition, the Distributor shall send to the Company the Distributor's current customer mailing list in respect of the Products. 11.2 Termination or expiry of this Agreement (for whatever reason) shall not entitle the Distributor to any compensation or indemnity in respect of such termination or expiry except to the extent that the governing law of this Agreement provides for such compensation or indemnity. 11.3 Notwithstanding the expiration or the determination of this Agreement under any of its provisions, all the provisions of this Agreement which are expressed to have effect on and/or after the expiration or determination of this Agreement (including, without limitation, the 19 obligations of the Distributor in Clause 9) shall survive the expiration or the determination of this Agreement and shall be deemed to remain in full force and effect. 12. Force Majeure 12.1 If either party to this Agreement is prevented or delayed in the performance of any of its obligations under this Agreement by force majeure (as defined below), the party in question shall serve on the other party notice in writing to such effect and be excused the performance or the punctual performance, as the case may be, of its obligations under this Agreement as from the date of such notice for so long as such cause of prevention or delay shall continue. 12.2 For the purpose of this Agreement "force majeure" shall be deemed to be any cause affecting the performance of this Agreement arising from or attribution to acts, events, omissions or accidents beyond the reasonable control of the party to perform and, without limiting the generality thereof, shall include strikes, lock-outs or other industrial action, civil disturbances or war, fire, storm, or other natural disaster, impossibility of the use of any means of public or private transport or any action of any governmental or other regulatory authority rendering impossible performance by either party of its obligations under this Agreement. 13. Assignment This Agreement shall be personal to the Distributors and the Distributor shall not assign, transfer, charge or part with any of its rights under this Agreement to any third party or associated company, nor shall it dispose of any of its rights hereunder or sub-contract or otherwise delegate any of its obligations in relation to such rights. 14. Severability Except in so far as the context otherwise requires, each provision herein shall be construed as independent of every other provision, and if any provision hereof is or 20 becomes partially or totally invalid or unenforceable then the validity and enforceability of the remaining provisions shall not be affected. 15. Entire Agreement This Agreement constitutes the whole agreement and understanding between the parties with respect to the subject matter of this Agreement and supersedes all prior discussions and agreements (whether oral or written) between the parties and/or their agents or advisers. 16. Variations No amendments to the Agreement shall be effective unless and until made in writing and signed by both parties or their duly authorised representatives. 17. Waiver A failure by either party to exercise or enforce any right conferred upon it by this Agreement shall not be deemed to be a waiver of such right or operate so as to bar the exercise of enforcement thereof at any subsequent time or times 18. Notices 18.1 Any notice to be given under this Agreement shall be given by delivering the same personally or by sending the same by registered post or by facsimile or electronic mail transmission to the address of the other party set out on page 1 of this Agreement or to such other address as may be notified by that other for this purpose to the party seeking to give such notice. 18.2 Any notice given pursuant to Clause 18.1 shall be deemed when sent by registered post (and in the absence of evidence of earlier receipt) to be delivered 7 days after despatch and shall be deemed when sent by facsimile or electronic mail transmission to be delivered on the day of transmission provided that the party giving the notice proves that the registered envelope containing the notice was correctly addressed or proves the date, time and correct number of the facsimile transmission. 21 19. Other Provisions 19.1 Nothing in this Agreement shall be taken to constitute a partnership or the relationship of employer and employee between the parties hereto 19.2 If one or more of the terms of this Agreement is found to be unenforceable in whole or in part, the finding thereof shall not affect the validity of the remaining terms of this Agreement in any way. 20. Governing Law and Jurisdiction The validity and performance of this Agreement shall be governed in accordance with the laws of England and the parties hereby submit to the non-exclusive jurisdiction of the English Courts. The Parties or their duly authorised representatives have executed this Agreement on the date shown at its head. 22 SIGNED by ) /s/ B. Morelle for and on behalf of WISDOM ) TOOTHBRUSHES LIMITED in the ) presence of:- Signature: /s/ J. Edgar Partington Name: J. Edgar Partington Address: Daisy's Reor Road, Winestead Bury St. Edmunds, Suffolk Occupation: Accountant SIGNED by (/s/ Joel Warady) ) for and on behalf of ) SAGACITY I, Inc. in the ) presence of:- ) Signature: /s/ Lori A. Rossetti Name: Lori A. Rossetti Address: 1080 West Ave. Waukegan, Il 60085 Occupation Sales 23 -----END PRIVACY-ENHANCED MESSAGE-----