EXHIBIT (10-18)
DISTRIBUTORSHIP AGREEMENT
This Agreement, made and entered into to be effective as of the 1st day
of January, 1997, by and between:
NEW BRUNSWICK SCIENTIFIC CO. INC.
Xxx 0000, 00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
a corporation organized under the laws of the state of New Jersey, hereinafter
referred to as SUPPLIER; and
XXXXXX SCIENTIFIC COMPANY
0000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
a corporation organized under the laws of the state of Delaware, hereinafter
referred to as DISTRIBUTOR.
W I T N E S S E T H:
WHEREAS, SUPPLIER desires to sell and/or market its products through
the use of an exclusive distributor; and
WHEREAS, DISTRIBUTOR desires to exclusively market the SUPPLIER's
laboratory shakers and accessories for resale to customers; and
WHEREAS, the parties desire to enter into a distributorship agreement
governing their relationship;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth herein, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. PRODUCT
1.1 Products. The Products covered by this Agreement are those products
set forth and attached hereto in Exhibit A ("Products"), manufactured by or for
SUPPLIER, and any improved or updated versions thereof, together with
accessories, parts and components necessary for their maintenance and repair.
Product groups set forth in Exhibit A include, but are not limited to, the G
Series, New C Series, Low End Innova Shakers and Accessories. Exhibit A may be
amended from time to time by mutual written consent of the parties.
1.2 Similar or Related Products. SUPPLIER shall offer to DISTRIBUTOR in
writing the right to distribute any similar or related Products developed by
SUPPLIER during the term of this Agreement on the same terms as set forth
herein. DISTRIBUTOR shall accept distribution rights with respect to similar or
related Products, if at all, in writing, within thirty (30) days after SUPPLIER
advises DISTRIBUTOR of the availability of such similar or related Products. In
the event Products elects not to exercise such right as to all or any of the
products so offered by SUPPLIER within such period, SUPPLIER may distribute any
such rejected similar or related product to any third party on terms no more
advantageous than those offered to DISTRIBUTOR.
1.3 Spare Parts. SUPPLIER represents and warrants that spare parts
necessary for the operation and repair of Products furnished hereunder, if any,
shall be available to DISTRIBUTOR and its customers for a period of five (5)
years after the date of SUPPLIER's invoice for such Products.
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2. GRANT OF RIGHTS
2.1 Distribution Rights. SUPPLIER hereby appoints DISTRIBUTOR and
DISTRIBUTOR accepts the appointment as the exclusive distributor of the Products
during the term and pursuant to the provisions of this Agreement, reserving only
those distribution rights set forth in Paragraph 2.3.
2.2 Territory. The territory in which the DISTRIBUTOR has the exclusive
right to sell and distribute the Products shall be the United States and Puerto
Rico.
2.3 SUPPLIER's Reserved Distribution Rights. SUPPLIER reserves no right
to sell the New C Series Products, as defined in Exhibit A, in the Territory
except: (a) to the federal government under its GSA contract and (b) directly to
an end user who is restricted by contract from purchasing such Products from
DISTRIBUTOR. SUPPLIER shall pay to DISTRIBUTOR on a quarterly basis a commission
equal to five percent (5%) of the amount of SUPPLIER's direct sales to end users
under exception (b). SUPPLIER expressly reserves the right to sell all Products
other than New C Series Products in the Territory to any end user.
2.4 Lead Program. In consideration for sales leads provided by
DISTRIBUTOR for SUPPLIER's Fermenter and High End Innova line of products which
DISTRIBUTOR is not authorized to distribute, SUPPLIER shall provide a lead
program as set forth in Exhibit B.
2.5 Exclusive Promotional Activity. DISTRIBUTOR shall exclusively
promote SUPPLIER's G Series, New C Series and Low End Innova Products effective
upon notification from SUPPLIER that all New C Series Products are available for
shipment. "Exclusive Promotion" shall be as defined as set forth in Exhibit C.
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3. ORDERS; DELIVERY
3.1 Orders. DISTRIBUTOR shall make purchases by submitting firm
purchase orders to SUPPLIER.
3.2 Product Availability. All New C Series Products shall be available
for shipment to DISTRIBUTOR no later than March 31, 1997.
3.3 Quarterly Forecasts. DISTRIBUTOR shall use reasonable efforts to
provide a written four quarter forecast, which shall be updated quarterly by the
third week following a calendar quarter.
3.4 Delivery. SUPPLIER shall ship all Products for which it has
received a firm purchase order that are within forecasted levels within thirty
(30) days of order receipt. SUPPLIER agrees that time is of the essence
regarding its delivery of Products.
4. SHIPPING; INVENTORY
4.1 Shipping. SUPPLIER shall ship all Products F.O.B. Origin, freight
collect; provided, however, that SUPPLIER shall be responsible for filing all
claims against the carrier for lost or damaged goods. SUPPLIER shall ship
Products to DISTRIBUTOR or DISTRIBUTOR's customers, at DISTRIBUTOR's election,
via a carrier selected by DISTRIBUTOR.
4.2 Overstocked Inventory. DISTRIBUTOR shall review its inventory twice
per year and identify those Products which it considers, in its reasonable
discretion, to be excess inventory. DISTRIBUTOR shall notify the SUPPLIER in
writing, describing such Products, and SUPPLIER shall credit DISTRIBUTOR with
the full purchase price by DISTRIBUTOR for each such Product upon return of the
Product, less a five percent (5%)
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restocking fee for shakers and a fifteen percent (15%) restocking fee for
accessories. DISTRIBUTOR agrees to pay all freight and insurance charges for the
returned Products. Overstocked inventory may be returned no later than one (1)
year after receipt by DISTRIBUTOR. DISTRIBUTOR shall issue a reciprocal purchase
order to SUPPLIER for the amount no less than the net credit due DISTRIBUTOR for
the returned inventory.
4.3 Obsolete Inventory. Any Products owned by DISTRIBUTOR and rendered
unsalable, in DISTRIBUTOR's reasonable opinion, due to: (i) a change in any
Product specification, (ii) discontinuation or elimination by SUPPLIER of any
Product from its product offering, (iii) release by SUPPLIER of any improved or
updated version of any Product, or (iv) any other cause outside of DISTRIBUTOR's
control, shall be repurchased from DISTRIBUTOR by SUPPLIER within thirty (30)
days following DISTRIBUTOR's request therefor at the price paid for such
Product(s) by DISTRIBUTOR.
Obsolete inventory may be returned no later than one (1) year after
receipt by DISTRIBUTOR. DISTRIBUTOR shall issue a reciprocal purchase order to
SUPPLIER for the amount no less than the net credit due DISTRIBUTOR for the
obsolete inventory. Obsolete inventory shall be subject to a five percent (5%)
restocking fee for shakers and a fifteen percent (15%) restocking fee for
accessories.
5. SALES & MARKETING SUPPORT
5.1 Training. SUPPLIER shall provide to DISTRIBUTOR's sales personnel,
at DISTRIBUTOR's premises or such other location as the parties may agree, such
training in the demonstration and use of the Products as may be reasonably
requested by DISTRIBUTOR, and for such training purposes shall make available at
SUPPLIER's expense all necessary instructors, training material and Products for
demonstration. DISTRIBUTOR
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shall provide transportation and lodging expenses for DISTRIBUTOR personnel for
the training of DISTRIBUTOR representatives by SUPPLIER.
5.2 Technical Support. SUPPLIER shall provide technical support to
DISTRIBUTOR's sales personnel and customers, and promptly provide to DISTRIBUTOR
such additional technical information developed or acquired by SUPPLIER from
time to time as may reasonably be expected to be of assistance to DISTRIBUTOR in
fulfilling its obligations hereunder. SUPPLIER shall provide at its own expense
a toll-free long distance telephone service for sales and customer support.
5.3 Literature. SUPPLIER shall provide, at its expense, reasonable
quantities of such instruction manuals and point of sale literature as may, from
time to time, be requested by DISTRIBUTOR for use in connection with the
marketing, sale and distribution of the Products. Subject to DISTRIBUTOR's prior
written approval, DISTRIBUTOR's name may be incorporated in SUPPLIER's
advertising literature intended for distribution by DISTRIBUTOR's sales
representatives. If requested to do so by DISTRIBUTOR, SUPPLIER shall furnish
DISTRIBUTOR with suitable copy and photographs for use by DISTRIBUTOR in
cataloging the Products.
5.4 Sales Commissions. SUPPLIER shall compensate its sales
representatives for Product sales through DISTRIBUTOR in such a way as to limit
the competitive environment between each company's sales forces.
6. PRICE AND PAYMENT TERMS
6.1 Price. SUPPLIER shall supply and ship Product at the prices shown
in Exhibit A through December 31, 1997 ("Firm Price Period"). Such prices may be
reduced by SUPPLIER, but may be increased only according to the terms hereof.
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6.2 DISTRIBUTOR Discount. DISTRIBUTOR's discount from SUPPLIER's
published list prices for the Products shall as set forth in Exhibit A. These
discounts may not be reduced except with prior written approval by DISTRIBUTOR.
6.3 Price Increases. After the expiration of the Firm Price Period,
prices may be increased no more than once in any contract year to be effective
January 1 of the next following calendar year. SUPPLIER shall give at least
ninety (90) days prior written notice to the DISTRIBUTOR of any price increase.
Such price increases shall be as negotiated by the parties. Shipments shall be
billed at the price in effect at time of order placement.
Notice of price changes shall be sent to:
MARKETING SERVICES
Xxxxxx Scientific
0000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
With a copy to: CENTRAL PURCHASING
6.4 Payment Terms. Payment terms shall be net thirty (30) days from the
date of receipt of the invoice. DISTRIBUTOR shall not be in breach of this
Agreement unless payment from the DISTRIBUTOR is more than thirty (30) days
overdue. DISTRIBUTOR shall not be considered in breach if the late payment is
for an invoice in dispute.
6.5 Resale. DISTRIBUTOR shall be entitled to resell Products on such
terms as it may, in its sole discretion, determine, including without limitation
price, returns, credit and discounts.
6.6 Special Pricing. SUPPLIER shall negotiate in good faith with
DISTRIBUTOR to provide special pricing (i) where required for DISTRIBUTOR to
meet competition, and (ii) on any large quantity order for Products which may be
requested by DISTRIBUTOR's customers.
6.7 Information Exchange. All price changes and additions of new
products
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accepted by DISTRIBUTOR shall be sent to DISTRIBUTOR at the address set forth in
Section 6.3 hereof in an electronic format as provided to SUPPLIER. In addition,
SUPPLIER shall promptly implement full Electronic Data Interchange (EDI)
capability in a format compatible with DISTRIBUTOR's systems for receipt of
purchase orders and transmission of invoices.
7. PACKAGING
7.1 Packaging. SUPPLIER shall supply Products in sizes and packaging
configurations corresponding to those set forth in Exhibit A as it may be
amended from time to time. SUPPLIER further agrees to prepare and xxxx all outer
packaging with DISTRIBUTOR's catalog numbers.
7.2 Bar Coding. Upon request from DISTRIBUTOR, SUPPLIER agrees to bar
code the Products at the lowest saleable unit using symbology 3 of 9 in
accordance with HIBC (Health Industry Bar Code). Additionally, where applicable,
Products shall be bar coded to include standard unit, alternate unit, lot number
and expiration date.
8. TERM AND TERMINATION
8.1 Term. The initial term of this Agreement shall be from the date of
execution by the last-signing party through December 31, 1999. Thereafter, the
Agreement shall automatically renew for successive one (1) year periods unless
and until either party given written notice to the other party of its intent to
terminate the Agreement. Such notice must be given no less than ninety (90) days
prior to the expiration of the then-current term.
8.2 Termination. Notwithstanding the foregoing, this Agreement may be
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terminated for cause at any time as follows:
(i) In the event of default or material breach of the terms of this
Agreement by either party, written notice thereof may be given to the
defaulting party. Thereafter, the defaulting party shall have thirty
(30) days to cure said breach. In the event that said breach has not
been cured within said thirty (30) day period, the non-defaulting party
may terminate this Agreement on or within thirty (30) days after the
expiration of the cure period.
(ii) In the event of nationalization, expropriation, liquidation or
bankruptcy of, or an assignment for the benefit of creditors of
insolvency of either party.
9. PROCEDURES ON TERMINATION
9.1 Procedures. On the termination of this Agreement, except for cause
pursuant to Section 8.2(ii), SUPPLIER shall continue to honor DISTRIBUTOR's
orders for Products up to the effective date of termination and for a period of
sixty (60) days thereafter, provided such orders are no greater than ten percent
(10%) above the quantities established during the sixty (60) days prior to the
date of the notice of termination, and DISTRIBUTOR shall pay for all such
Products on the terms and conditions of this Agreement.
9.2 Survival. The rights and duties of each party under this Agreement
and the Exhibits hereto in respect of performance prior to termination or
non-renewal shall survive and be enforceable in accordance with the terms of
this Agreement.
9.3 Existing Inventory. Upon termination or non-renewal of this
Agreement, SUPPLIER shall repurchase from DISTRIBUTOR, at DISTRIBUTOR's request
and at DISTRIBUTOR's current cost therefor, such Products as are then owned by
DISTRIBUTOR
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which have been purchased within the previous twelve (12) months. In the event
of SUPPLIER's breach, termination or non-renewal of the Agreement, no restocking
fees shall apply. In the event of DISTRIBUTOR's breach, termination or
non-renewal, a restocking fee shall apply equal to five percent (5%) for shakers
and fifteen percent (15%) for accessories. Delivery of Products repurchased from
DISTRIBUTOR hereunder shall be F.O.B. origin, freight collect.
10. WARRANTIES, INDEMNITY, RECALL AND INSURANCE
10.1 Warranties. In addition to the warranties of SUPPLIER set forth in
this Agreement and in the Continuing Guaranty which is attached hereto as
Exhibit D, SUPPLIER warrants that the Products will conform to the
specifications set forth in SUPPLIER's product literature and Exhibit A; that
they will comply and be manufactured, packaged, labeled and shipped by SUPPLIER
in compliance with all applicable federal, state and local laws, orders,
regulations and standards; and that they will be merchantable and fit for their
intended purpose.
All Products shall include SUPPLIER's warranty statement containing the
customer's warranty. All SUPPLIER Products shall be warranted to DISTRIBUTOR's
customer against defects in materials and workmanship, including parts and
labor, under normal use for a period of two (2) years. SUPPLIER warrants that
the Products have been thoroughly tested before shipment and that, if
applicable, they are free of mechanical and electrical defects. The warranty
period becomes effective at the earlier of installation or fifteen (15) days
from date of shipment to the DISTRIBUTOR's customer. DISTRIBUTOR shall request
customers present reasonably acceptable documentation verifying the effective
warranty date.
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During the first year of the warranty period, DISTRIBUTOR may, at its
option, return any instrument requiring service to SUPPLIER for replacement or
repair, or service the instrument through Xxxxxx Service Division ("FSD"). All
reasonable charges for parts, labor and travel incurred by FSD shall be paid by
SUPPLIER. DISTRIBUTOR shall use its best efforts to effectively service the
customer in one trip to the customer's location. DISTRIBUTOR shall be
responsible for all parts, labor and travel expenses of the second year warranty
period; provided, however, that in the event DISTRIBUTOR's warranty costs during
any calendar year exceed one percent (1%) of gross Product sales, SUPPLIER shall
reimburse DISTRIBUTOR for the cost of all warranty parts in excess of that
amount either by cash settlement or credit for Products as agreed by the
parties; and further providing that in the event DISTRIBUTOR's warranty costs
during any calendar year exceed two percent (2%) of gross Product sales,
SUPPLIER shall reimburse DISTRIBUTOR for all warranty costs in excess of the two
percent (2%) amount. Notwithstanding the foregoing, in the event SUPPLIER must
pay warranty costs, it shall be responsible for the travel portion of such
warranty costs only to the extent of one (1) round trip per service call.
DISTRIBUTOR shall cause FSD to provide SUPPLIER with quarterly service
reports submitted thirty (30) days after the close of the previous calendar
quarter reasonably detailing total warranty costs for the Products by categories
of parts, labor and travel. FSD's right to reimbursement under this section
shall survive termination of this Agreement. FSD shall be considered a third
party beneficiary to this Agreement only insofar as Section 10.1, Paragraph 3 is
or may be concerned.
10.2 Product Improvement Reports. SUPPLIER shall promptly respond to
all Product Improvement Reports (PIR) submitted by DISTRIBUTOR, and take all
necessary
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and appropriate corrective action.
10.3 Continuing Guaranty. SUPPLIER shall execute and abide by the terms
of DISTRIBUTOR's Continuing Guaranty, a copy of which is attached hereto as
Exhibit D and incorporated herein by reference. The terms and provisions of the
Continuing Guaranty shall survive the termination of this Agreement.
10.4 Insurance. On or prior to execution of this Agreement, SUPPLIER
shall provide DISTRIBUTOR with a Certificate of Insurance which meets the
requirements of Paragraph D of the Continuing Guaranty. SUPPLIER shall provide
DISTRIBUTOR with renewal insurance certificates in the form mandated by
Paragraph D of the Continuing Guaranty during the term of this Agreement,
without demand therefor by DISTRIBUTOR.
10.5 Recall. In the event of a confirmed Product failure, or a recall
required by a government agency or requested by SUPPLIER, SUPPLIER agrees to pay
the costs of retrieval, recall and Product corrective action, including Products
already delivered to DISTRIBUTOR's customers, and further agrees to reimburse
DISTRIBUTOR for all affected Products including shipping charges. In addition,
SUPPLIER shall notify DISTRIBUTOR immediately in writing should SUPPLIER become
aware of any defect or condition which may render any of the Products in
violation of any statute or regulation, or which in any way alters the
specifications or quality of the Products.
11. TRADEMARKS
11.1 Trademarks and Trade Names: SUPPLIER recognizes that DISTRIBUTOR
is the owner of the trademarks and trade names connoting DISTRIBUTOR or
DISTRIBUTOR products which it may elect to use in the promotion and sale of the
Products and that SUPPLIER has no right or interest in such trademarks and trade
names.
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11.2 Trademark License: SUPPLIER hereby grants to DISTRIBUTOR the
royalty-free right to use SUPPLIER's trademarks on SUPPLIER's Products during
the term of this Agreement, it being expressly understood that if DISTRIBUTOR
elects to use SUPPLIER's trademarks during the term of the Agreement,
DISTRIBUTOR shall properly do so and shall discontinue the use of such
trademarks in any new published material following the termination hereof.
Following the termination of this Agreement, SUPPLIER grants DISTRIBUTOR the
right to continue to use its trademarks in connection with sale or service of
Products purchased by DISTRIBUTOR during the term of this Agreement. DISTRIBUTOR
disclaims any rights to SUPPLIER's trademarks other than the said license.
12. CONFIDENTIALITY
12.1 The parties expressly agree to hold as confidential ("Confidential
Information") any information which is designated in writing by the disclosing
party as confidential, provided such information is clearly marked as
confidential, and the disclosing party obtains a signed receipt or agreement
from the receiving party acknowledging that such information is confidential. In
the event Confidential Information is exchanged according to these guidelines,
such information will be retained by the other party in confidence for a period
of two (2) years following the termination of this Agreement; the transmittal of
such information is and shall be upon the express condition that the information
is to be used solely to effectuate this Agreement; and the receiving party shall
not use, publish, or disclose said information, in whole or in part, for any
purpose other than that stated herein. SUPPLIER expressly acknowledges and
agrees that DISTRIBUTOR's customer names, address and key contacts are and shall
be the Confidential Information of DISTRIBUTOR. Notwithstanding the foregoing,
the above
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restrictions on disclosure and use shall not apply to any information which the
party can show by written evidence, was known to it at the time of receipt, or
which may be obtained from third parties who are not bound by a confidentiality
agreement, or which is in the public domain.
13. MISCELLANEOUS
13.1 Force Majeure: The obligations of either party to perform under
this Agreement shall be excused during each period of delay if such delay arises
from any cause or causes which are reasonably beyond the control of the party
obligated to perform, including, but not limited to, the following: acts of God,
acts or omissions of any government, or any rules, regulations or orders of any
governmental authority or any officer, department, agency or instrumentality
thereof; fire, storm, flood, earthquake, insurrection, riot, invasion or
strikes. The affected party shall use its best efforts to remedy the effects of
such force majeure. Any force majeure shall not excuse performance by the party,
but shall postpone performance, unless such force majeure continues for a period
in excess of ninety (90) days. In such event, the party seeking performance may
cancel its obligations hereunder.
13.2 Assignment: This Agreement shall not be assignable by either party
except: (a) with the consent of the other party, or (b) to the successor of all
or substantially all of the business to which this Agreement relates.
13.3 Notices: Any notice required by this Agreement shall be in writing
and shall be deemed sufficient if given personally or by registered or certified
mail, postage prepaid, or by any nationally recognized overnight delivery
service, addressed to the party to be notified at the address set forth in the
initial paragraph of this Agreement. Either
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party may, by notice to the other, change its address for receiving such
notices.
13.4 Entire Agreement: This Agreement, including exhibits, constitutes
the entire agreement between the parties relating to the subject matter hereof
and cancels and supersedes all prior agreements and understandings, whether
written or oral, between the parties with respect to such subject matter.
13.5 Existing Obligations: Each party warrants that the terms of this
Agreement do not violate any of its existing obligations or contracts. Each
party shall protect, defend, indemnify, and hold harmless the other party from
and against any claims, demands, liabilities or actions which are hereafter made
or brought against the other party and which allege any such violation.
13.6 Modifications, Waiver: No amendment, modification or claimed
waiver of the terms of this Agreement shall be binding on either party unless
reduced to writing and signed by an authorized officer of the party to be bound.
In ordering and delivery of the Products, the parties may employ their standard
forms, but nothing in those forms shall be construed to modify or amend the
terms of this Agreement.
13.7 Relationship of the Parties: This Agreement does not constitute
either party as the agent or legal representation of the other for any purpose
whatsoever.
13.8 Governing Laws: This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives.
NEW BRUNSWICK SCIENTIFIC XXXXXX SCIENTIFIC COMPANY
COMPANY, INC.
By: By:
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Title: Title:
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Dated: Dated:
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