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EXHIBIT 10(b)
DISTRIBUTION AGREEMENT
Agreement ("Agreement") made and entered into as of this first (9th) day of
August, 1996 by and
between
Merck KGaA, a corporation with general partners, with principal office located
at Xxxxxxxxxxx Xxxxxxx 000, 00000 Xxxxxxxxx, Xxxxxxx Xxxxxxxx of Germany
- hereinafter called MERCK -
and
Neogen Corporation, having principal office located at 000 Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx, 00000, X.X.X.
- hereinafter called Neogen -
WITNESSETH
WHEREAS, MERCK is engaged in the business of manufacturing and selling certain
products as listed in Schedule A.
WHEREAS, MERCK has the option to exercise the exporting, selling and invoicing
of the products as listed in Schedule "A" by Merck Ltd., Xxxxx, Neogen on
behalf of Merck.
WHEREAS, Neogen is engaged in the business of selling products for the testing
of various substances to end users in the United States and is interested to
include the Products as listed in Schedule A into its product range.
NOW, THEREFORE, in consideration of the premises and of the mutual promises of
the parties hereinafter set forth, the parties agree upon the following:
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ARTICLE I - DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
(1) "Product(s)" shall mean certain laboratory chemical products, including
the HY-LiTE(TM) monitoring system as listed in Schedule A.
The Agreement may be changed by mutual consent to cover other Products,
to delete certain Products or to change the specifications of the
Products.
(2) "Customers" shall mean users or potential users of Products.
(3) "Territory" shall mean the United States of America.
ARTICLE 2 - APPOINTMENT
(1) MERCK hereby appoints Neogen a non-exclusive distributor of Products in
the territory. For the markets in which Neogen has verified distribution,
Merck will not assign additional distribution rights without the written
consent of Neogen, which will not be unreasonably withheld.
(2) Products will be sold and distributed by Neogen under Merck's and/or EM
Science's own name and under a make up as described in Article 6.2 hereto.
(3) Neogen shall purchase all of its requirements of Products from MERCK
through MERCK Ltd., Great Britain.
ARTICLE 3 - TERM AND TERMINATION
(1) This Agreement shall be for a term of two (2) years from the date hereof
and, unless sooner terminated as provided hereinafter, shall thereafter be
automatically renewed and continue in effect for additional renewal terms
of one (1) year, unless either party gives at least six (6) months notice
to terminate the Agreement before the then current period.
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(2) The right to terminate the Agreement for serious reasons is reserved. In
particular, serious reasons are constituted by a gross failure to fulfill
contractual obligations by either party.
However, notice of termination will be valid only if the defaulting party
fails to fulfill its contractual obligations
within thirty (30) days after receiving notification by the other party.
(3) Furthermore, this Agreement may be immediately terminated by either
party upon notice to the other party if any of the following events of
default occur:
(a) If there is a substantial change of management or
ownership of one party effected without prior written consent of
the other party;
(b) If any of the parties shall dissolve or become insolvent;
(c) If Neogen fails to achieve the annual minimum order
quantities according to Article 4.2 hereto.
(4) Upon termination of this Agreement for any reason, Neogen agrees to
discontinue the use of the name and trademarks of MERCK, except for the
sale of the Products bearing said name or trademarks still on Neogen's
stock at termination date.
ARTICLE 4 - FORECAST AND ORDERING PROCEDURE
(1) Neogen shall supply MERCK, before November 30 of each year, with a
forecast of the quantities of Products which will be required by Neogen
during each quarter of the subsequent year. Such forecast shall be
renewed at the end of February, May and August of each year, for the term
of April to end of March, July to end of June and October to end of
September respectively. The quantity for the first quarter notified in
the respective forecasts shall be deemed to be a binding order; the
quantities notified for the second, third and fourth quarter in the
respective forecasts shall be deemed to be unbinding estimates.
(2) The minimum order quantity is $5,000.00. The annual minimum quantity
should not fall short of the quantities as defined in Schedule B "Annual
Sales Plan" as will be revised annually.
(3) After receipt of a firm order, MERCK will supply the ordered quantities
of Products within four (4) weeks provided the ordered quantities will not
exceed the forecast by more than twenty (20) percent.
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If its requirements are unexpectedly greater, Neogen will inform MERCK
immediately and MERCK will endeavor to meet such requirements within the
limit of its production capacity.
ARTICLE 5 - TERMS OF SALE
(1) MERCK shall ship Products under original MERCK label appropriate for
North America to Neogen's regional distribution centers in the USA at
prices set forth in Schedule A.
(2) Prices established in Schedule A are valid until December 31, 1996.
Prices for the following years, if necessary, will be changed at least
three (3) months before the beginning of every new calendar year. If no
understanding on new prices is reached, both parties have the right to
terminate this Agreement upon six (6) months notice.
(3) MERCK shall send invoices to Neogen for Products ordered by Neogen.
Neogen shall pay MERCK invoices within forty (40) days after date of
invoice.
(4) MERCK shall directly, and/or through its affiliates in Canada/USA, aid
and assist Neogen in the sale of Products by providing Neogen with
literature and promotional material concerning the Products as the same
may be available; establish and maintain a technical consulting service to
support any user of or to answer any claim with respect to said Products;
and to support Neogen in the organization of any sales meeting.
(5) Freight charges will be prepaid by MERCK and added to Neogen invoices,
FOB MERCK Limited Great Britain.
(6) Payments shall be US dollars at the exchange rate range of 1.00 US Dollar
to 0.65 British Pounds Sterling. Currency fluctuations of greater than
ten percent (10% plus or minus) from this exchange rate will be evaluated
for stabilization within one hundred twenty days of the event. If
stabilization does not occur, the prices on Schedule A shall be either
increased or decreased by one-half of the fluctuation in excess of 10%.
(7) MERCK shall supply HY-LiTE(TM) Sampling Pens, whether included in the
Refill Pack 0-00000-0000, or alone in 0-00000-0000 Pen Refills Only, with
a minimum of twenty (20) weeks of remaining shelf life at date of receipt
at Neogen's distribution center.
ARTICLE 6 - DUTIES OF NEOGEN
(1) Neogen will maintain an adequate sales force commensurate with the need
for effective and competent market coverage and will make current market
information available, including sales activities, competitive
observations, exhibit and seminar opportunities. Neogen will not prevent
MERCK from contacting HY-LiTE(TM) users. Neogen also agrees to
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maintain appropriate inventory levels of all Products specified in
Schedule A in all warehouse locations, so that adequate Customer service
can be provided. Neogen will also provide an annual detailed Product sales
and marketing plan for MERCK's approval.
(2) Neogen shall resell the Products without any change whatsoever in the
original labeling and packaging as supplied by MERCK including covering,
removing, relabelling and repacking. Any reference by Neogen in
advertising, catalogues, texts, etc., to Products identified by a
registered trademark of MERCK or any of its affiliates shall include such
identification by use of registered trademark symbol and reference to the
owner thereof as designated by MERCK. Notwithstanding of the foregoing,
Neogen shall have the right to add its own identification label to the
Products, subject to approval by MERCK, which approval shall not be
unreasonably withheld.
(3) Neogen shall obtain necessary registrations and import licenses in its
own name and at its own cost as soon as this Agreement is effective.
(4) Neogen shall, at all times, comply with all applicable laws and with
regulations and order of the respective state authorities.
(5) During the term hereof, Neogen shall maintain product liability insurance
coverage in such amounts, with such terms and underwritten by such
insurers as may be reasonably acceptable to MERCK. If MERCK so requests,
Neogen will promptly furnish evidence of such insurance to MERCK.
ARTICLE 7 - INSPECTIONS AND DISPUTED SHIPMENTS
(1) It shall be Neogen's responsibility to inspect each shipment of Products
after delivery to Neogen and to make any claim for damage or breakage
directly with any carrier who delivers Products to Neogen.
(2) If, upon inspection of a shipment, Neogen believes that there are
shortages of Products ordered or that the shipment does not otherwise
comply with the order placed by Neogen, including quality defects, Neogen
must notify MERCK of the same, whether orally or in writing, with such
notification received by MERCK within thirty (30) days after arrival of
the Products at the premises of Neogen. Any oral notification shall be
promptly followed by a written notification by Neogen. Upon such
notification, MERCK will investigate its records or, in case of a quality
defect, its samples, and, if MERCK confirms that the shipment does not
conform to the order placed by Neogen, MERCK will correct the incorrect
shipment by authorizing return of items not ordered or items shipped in
excess of the amount ordered and will credit Neogen for such returned
items. If the shipment was incorrect in that items ordered were not
delivered or delivered with quality defects, MERCK will ship such items to
Neogen and make, if necessary,
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adjustment in its invoices to Neogen. MERCK will in no event honor any
request by Neogen for MERCK to accept a return of any items shipped to
Neogen unless such request is made under this ARTICLE 7 (2) and MERCK has
actually received notice from Neogen of an incorrect shipment of the same
within thirty (30) days after arrival of the Products at the premises of
Neogen. MERCK further agrees that all credits will be issued to Neogen
within forty-five (45) days from the date of notification of the incorrect
shipment or invoice.
ARTICLE 8 - LIMITED WARRANTY AND EXCLUSIVE REMEDY
(1) MERCK warrants that Products sold to Neogen by MERCK pursuant to this
agreement will conform to the performance specifications set forth on the
application notes which accompany such Products until the expiration date
printed on the container for such Products. MERCK's sole responsibility
under this warranty shall be limited to the replacement, at MERCK's
expense, of any Product not complying with this warranty. Product
replacement shall be at the sole discretion of MERCK. The foregoing
warranty shall apply only if MERCK is notified by Neogen of any such
alleged non-conformance therewith within thirty (30) days after Neogen
learns of the same and if the non-conformance could not have been found
during the inspection according to ARTICLE 7. The foregoing warranty is
expressly conditioned upon Products being used, operated, handled,
maintained and shipped by the Customer and/or by Neogen in accordance with
the application notes and is void as to any Product modified, altered or
damaged by any person other than MERCK (unless done with MERCK's prior
consent). This warranty shall not be applicable to any Products which
become defective through either Neogen's or a Customers' negligence or
through any intentional acts.
(2) EXCEPT FOR THE WARRANTY SET FORTH IN THIS ARTICLE 8, MERCK MAKES NO OTHER
WARRANTY OF ANY KIND WITH REGARD TO PRODUCTS WHETHER EXPRESS, ARISING BY
OPERATION OF LAW, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. MERCK
SHALL NOT IN ANY CIRCUMSTANCE BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES.
(3) Merck will indemnify and hold Neogen harmless from any and all claims,
actions, costs, expenses, or damages, including attorneys fees and
expenses, resulting from any actual or alleged patent infringement in the
use or sales of the products." Please confirm that this wording can be
included.
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ARTICLE 9 - NONASSIGNABILITY
This Agreement may not be assigned by either party without prior written
consent of the other party thereto.
ARTICLE 10 - MISCELLANEOUS
(1) This Agreement shall be governed by and construed under the laws of the
state of New York, USA.
(2) Any dispute or controversy between the parties arising out of or relating
to this Agreement, including without limitation, a dispute or controversy
relating to the construction of any provision or the validity or
enforceability of any term or condition (including this paragraph) or of
the entire Agreement, or any claim that all or any part of this Agreement
(including this provision) is void or voidable, shall be submitted to
arbitration before a single arbitrator in accordance with the Commercial
Rules of Arbitration of the American Arbitration Association of New York,
New York, USA. The laws of the state of New Jersey shall apply without
reference to its choice of laws provisions. Each party shall bear his or
its own costs in any such proceeding. The decision of the arbitrator
shall be final and binding upon the parties and may be enforced in any
court of competent jurisdiction. To the fullest extent permitted by law,
the parties irrevocably submit to the jurisdiction of such forum and waive
any objection he or it may have to either the jurisdiction or venue of
such forum.
(3) In case of force majeure, official orders, strike or lockout or similar
hindrances which the parties are unable to avert, the parties shall be
released for the duration of such hindrance from the contractual
obligations which they are prevented from performing.
(4) This Agreement merges and supersedes all prior discussions and agreements,
written or oral, between the parties with respect to generally the same
subject matter. In any event, no other terms of delivery will apply on the
contractual relationship of the parties if not mutually agreed upon.
(5) Any waiver by either party of any of its rights under this Agreement may
be terminated at any time, and any waiver of default by a party shall not
constitute a waiver of any continuing or subsequent default by the other
party.
(6) Both MERCK and Neogen are independent contractors, and this Agreement
shall not constitute one party as an agent or legal representative of the
other for any purpose. Neither party shall have any right or authority to
assume or create any liability, express or implied, on behalf of the other
party or to bind the other party in any manner whatsoever.
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(7) Subject to the limitations of ARTICLE 9 hereof, this Agreement shall
inure to the benefit of, and shall be binding upon, the successors,
assigns and legal representatives of the parties hereto.
(8) This Agreement shall not be altered, amended or supplemented except by a
written instrument executed by both parties.
(9) Any notice required or permitted by this Agreement shall be in writing
and may be delivered personally or may be sent by telex, telefax or
certified mail, return receipt requested, addressed to:
Merck KGaA
Attn: Xx. X. Xxxxxxxx
00000 Xxxxxxxxx
Xxxxxxx Xxxxxxxx of Germany
If to Neogen Corp.:
Attn: Xx. Xxx Xxxxxxx
President
Neogen Corporation
000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
XXX
or such other address as either party may designate to the other. Any
notice shall be deemed to have been received as follows.
(a) Personal Delivery: Upon receipt.
(b) Telex or telefax: One (1) hour after dispatch by the operator.
(c) Certified Mail, Return Receipt Requested: Three (3) days after
delivery to the postal authorities by the party serving the notice.
If sent by telex, a confirming copy of such notice shall be sent by
certified mail, return receipt requested, to the other party.
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(10) The headings used herein are solely for the convenience of the parties
and shall not serve to modify or interpret the text of the ARTICLES or
paragraphs at the beginning of which they appear.
(11) This agreement may be executed in one or more counterparts, each of which
shall be deemed an original.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
Darmstadt, Lansing, MI
Federal Republic of Germany, United States of America
/s/ Xxxxx X. Xxxxxxx, President
Merck KGaA Neogen Corp.
/s/ Xxxxx Xxxxxxx
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06/20/96
SCHEDULE A
HY-Lite(TM) Product and Price List for 1996
TRANSFER SUGGESTED
SYSTEMS PRICE LIST PRICE
ITEM NUMBER DESCRIPTION PER YEAR (US $) (US $)
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1.30100.2222 HY-Lite(TM) Compact Kit 0-50 Systems $1,300.00 $2,000.00
51-100 Systems $1,100.00 $2,000.00
101+ Systems $1,000.00 $2,000.00
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1.30101.0002 HY-Lite(TM) Refill Pack (100
Tests) 100 Tests $ 170.00 $ 350.00
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1.30102.0002 HY-Lite(TM) Sampling Pens 50 Pens $ 90.00 $ 180.00
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1.30100.0002 HY-Lite(TM) Hygiene Monitoring All Purchases $2,100.00 $3,500.00
System - Complete System
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08/09/96
SCHEDULE B
ANNUAL SALES PLAN
ANNUAL PURCHASES ANNUAL PURCHASES
1996 1997
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HY-Lite(TM) Monitoring- 40 Units 150 Units
Basic Unit or Complete
System
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HY-Lite(TM) Pens 16,000 Tests 170,000 Tests
or Complete Refills
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