DISTRIBUTORSHIP AGREEMENT
This Distributorship Agreement (Agreement) is entered into as of the 6 day of
April, 2000 between SCHICK TECHNOLOGIES, INC., 3100 47th Avenue, Long Island
City, New York 11101, hereinafter referred to as "Vendor", and PATTERSON DENTAL
COMPANY, 1031 Mendota Heights Rd., St. Paul, MN 55120, hereinafter referred to
as "Patterson."
RECITALS
WHEREAS, Vendor provides certain products for the dental industry and desires to
increase its penetration of the United States and Canadian markets, and
Patterson desires to distribute these products into the defined territory in
accordance with the terms and conditions hereof,
NOW, THEREFORE, it is mutually agreed:
Definitions
. The "Products" means the products described on Schedule I.
. The "Territory" is the United States of America and Canada.
1 Appointment and Acceptance. Vendor hereby appoints Patterson as its
exclusive distributor, and Patterson hereby accepts appointment as the
exclusive distributor of the Products together with all additions thereto,
improvements and modifications thereof for and within the Territory.
Patterson may sell the Products in the Territory through its subsidiaries.
2 Term. The term of this Agreement shall be for a period of three (3) year(s)
from the date hereof (Initial Term) and shall automatically renew for
successive one (1) year periods (Renewal Term) unless terminated as
provided herein.
3 Duties of Distributor. Patterson agrees that during the term hereof it will
promote the sale and distribution of Products throughout the Territory.
Patterson shall maintain an adequate staff of personnel knowledgeable with
respect to the Products to discharge its responsibilities hereunder, which
shall include Patterson maintaining at least one technical sales
representative per branch focused on the Products. Also, Patterson shall
appoint a corporate staff person to be responsible for the Products. A
detailed resource plan shall be described in the marketing plan to
accompany this Agreement or to be developed by the parties.
4 Certain Direct Sales. Vendor shall not, except through Patterson, either
sell Products in the Territory or appoint any agent, sales representative
or other distributor to sell Products in the Territory regardless of the
title by which such person may be labeled, nor shall Vendor sell Products
in the Territory through the use of mail order solicitation, the internet
or catalogs, provided, however, Vendor may sell direct to schools and
governmental agencies, and may sell OEM non-Schick branded products to
manufacturers.
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5 Pricing. Vendor agrees to sell the Products to Patterson at the prices
indicated in Schedule II. The prices shall be firm for the first year;
thereafter, prices shall be re-established in good faith by mutual
agreement annually.
6 Payment Terms. Sales from Vendor to Patterson shall be on open account, net
invoice price payable within thirty (30) days from receipt of invoice. A
prompt payment discount of 1% shall apply if payment is made within ten
(10) days from date of invoice.
7 Shipments. All shipments shall be F.O.B. Vendor's facility. Patterson shall
designate the carrier. Patterson shall be responsible for taxes, insurance
and freight charges.
8 Selling Aids and Training. Vendor will provide Patterson with reasonable
quantities of current Products information, promotional materials such as
photographs and artwork and technical literature. In addition, Vendor shall
furnish ratings and specifications for the Products in conformity with
United Sates and Canadian standards so that Patterson shall not have to do
any testing. Upon Patterson's reasonable request, technical help shall also
be furnished to Patterson without cost. Vendor shall supply Patterson from
time to time with copies of its catalogs, brochures, direct mail,
advertising and promotional materials, including audio-visual tapes and
Product data, which Patterson may use in developing its own advertising and
promotional material for the Products. In addition to the foregoing
support, upon Patterson's reasonable request, Vendor will provide
assistance and training to Patterson's personnel at Patterson locations in
the United States and Canada.
9 Cooperative Marketing. Each party shall develop and implement a marketing
plan which shall include the terms of the plan dated the same date as this
Agreement to promote the sale of the Products, including development of a
mutually agreeable marketing budget, and, where appropriate, joint
advertising and promotional efforts. Such advertising and promotional
programs will include all trade shows and dental conventions at which
Patterson is participating. Vendor shall provide Patterson any sales leads
generated through such activity. Vendor and Patterson reserve the right to
disapprove any advertising which varies substantially from the type and
kind in general use by Patterson or Vendor in the United States and Canada
as long as such disapproval is communicated within 48 hours of receipt. In
the event of such disapproval by either Vendor Patterson, neither Vendor
nor Patterson will utilize or disseminate the advertising in question.
10 Governmental Compliance. Vendor represents and warrants to Patterson (i)
that the Products have been cleared for sale in the United States by the
United States Food and Drug Administration ("FDA"); (ii) that Vendor has
complied with all FDA requirements pertaining to the Products, including
registration and listing of the Products as a device; (iii) that the
Products comply with all regulations of Canadian governmental authorities
and are cleared for sale in Canada by the applicable Canadian governmental
authorities; (iv) that the Products comply with the requirements of
Underwriters Laboratories, if applicable; and (v) that the Products will be
manufactured in accordance with applicable Good Manufacturing Practice
(GMP) regulations.
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11 Confidential Information. Patterson agrees to use reasonable efforts to
maintain the confidentiality of any confidential or proprietary information
of Vendor, including technical knowledge respecting the Products, which
Vendor specifically advises Patterson, or which Patterson reasonably should
be aware, is information classified as confidential. Upon termination of
this Agreement, Patterson shall not use any confidential or proprietary
information of Vendor for any reason or purpose except to fulfill service
obligations to customers who purchased Products from Patterson before
termination of this Agreement.
12 Intellectual Property Rights.
12.1 Vendor represents that it has no knowledge or reason to believe that
any of the trademarks, copyrights, patents or other intellectual
property rights relating to any of the Products, whether owned by
Vendor or others, infringe upon or violate the intellectual property
rights (including patents, trademarks, copyrights, symbols or designs)
of any third party.
12.2 If Patterson shall have found that Vendor trademarks, copyrights,
patents or other intellectual property rights are being disputed or
infringed by a third party, Patterson shall promptly inform Vendor
thereof and assist Vendor in taking steps necessary to protect its
rights. Patterson, however, shall have no obligation to bring or
maintain legal proceedings to protect Vendor's interests.
13 Protection for Products Liability and Intellectual Property Rights. Vendor
will indemnify, defend and hold Patterson harmless from and against any
claim, demand, action, loss, cost, damage and expense (including attorneys'
fees and expenses) arising out of or based upon any claim by any person (i)
by reason of the alleged defective manufacture or design of the Products or
failure of the Products to meet the specifications for said Products set
forth in the invoices, documentation or other sales literature applicable
thereto approved by Vendor, or (ii) claiming that the intellectual property
rights relating to any of the Products of Vendor as described in Section 12
hereof infringe upon the rights of any third party. Vendor shall have the
right to assume full control of the defense and settlement of any such
claim, including without limitation any modification of the Products which
may be appropriate in Vendor's judgment in connection with any infringement
suit, and Patterson shall cooperate with Vendor with respect thereto.
Vendor shall maintain public liability insurance including products
liability, with limits of not less then $1,000,000 per occurrence, and
shall deliver to Patterson certificates evidencing such insurance, with
broad form vendor's endorsement for Patterson's benefit naming Patterson
and its subsidiaries as additional insureds.
14 Return Policy.
14.1 Inventory Balance. Vendor realizes that Patterson may not immediately
know the stock requirements for its trading area. To help Patterson
adjust its inventory, Patterson may return to Vendor new unopened and
opened inventory of Products in saleable condition for credit at
Patterson's cost, provided such inventory is returned
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within 120 days of Patterson's receipt thereof. If such returned
inventory is in saleable condition and shipped freight prepaid no
restocking or repacking charge will be made for returned Products.
14.2 Discontinued Distributor. In the event Vendor discontinues Patterson
as an exclusive distributor upon the terms and conditions herein set
forth, Vendor agrees to take back all saleable merchandise under the
terms of Section 14.1 hereof. The amount of any credit (net of any
amount owed Vendor by Patterson for Product purchases) shall be paid
by Vendor to Patterson within thirty (30) days of Patterson's request
therefor.
14.3 Customer Returns. Provided Patterson has made all reasonable, good
faith efforts to satisfy the end-user customer, in the event such
end-user customer returns any Product to Patterson for credit within
45 days following the date of delivery of the Product to the customer,
and Patterson notifies Vendor of such return within said 45-day
period, Patterson may return such Product to Vendor for credit at
Patterson's cost. A restocking charge equal to five percent (5%) of
Patterson's purchase price for the Product will be assessed by Vendor
in connection with any Product returned pursuant to this Section 14.3.
Such returned Product shall be shipped to Vendor freight prepaid.
15 Termination.
15.1 Basis for Termination:
15.1.1 Either party shall have the right to terminate this Agreement
upon a minimum of ninety (90) days written notice prior to
the expiration of the Initial Term or any Renewal Term. In
the event such notice is given, the termination date shall be
the last day of the Initial Term or any Renewal Term, as the
case may be.
15.1.2 The parties may terminate this Agreement at any time upon
mutual written agreement, in which event the termination date
shall be the date upon which the parties mutually agree.
15.1.3 In addition to the foregoing, this Agreement may be
terminated by either party upon thirty (30) days notice to
the other if either party:
(i) Makes an assignment for the benefit of creditors or
institutes a proceeding as a debtor under any law relating to
insolvency or bankruptcy and is adjudicated an insolvent or a
bankrupt;
(ii) Fails for forty-five (45) days to have discharged any
involuntary proceedings brought against it under any
insolvency or bankruptcy law; or
(iii) Fails to remedy any default in performance of the terms
of this
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Agreement within thirty (30) days of written notice of such
lack of performance from the other party.
15.1.4 Either party may terminate this Agreement upon ninety (90)
days written notice after expiration of the first or second
year hereof if the parties have not agreed upon new prices
under Section 5 prior to the end of such year.
15.2 Obligations Upon Expiration or Termination. Upon the expiration or
termination of this Agreement:
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15.2.1 Patterson shall return to Vendor all price lists, catalogs,
brochures current advertising and sales materials furnished
by Vendor;
15.2.2 Patterson shall remove from its stationery, advertising
literature, and places of business all references to Vendor
and the Products and shall not use any of Vendor trademarks,
trade names or symbols or any trademark, trade name or symbol
confusingly similar thereto; and
15.2.3 Patterson may return for credit saleable Products, and shall
receive payment therefor, in accordance with Section 14
hereof.
15.3 Limitation of Liability. In no event shall either party be liable to
the other for any incidental, indirect or consequential damages
arising out of the termination by either party of this Agreement
pursuant to this Section 15.
16 Warranty.
16.1 Vendor's obligations with respect to the Products are limited to
Vendor's Standard Warranties contained in Schedule III appended
hereto. All such warranties shall be for the benefit of Patterson and
its customers. In the case of new and unused Products, the warranty
period shall not commence until the date of sale to the end-user.
Patterson will inform Vendor of the information specified in Section
16.4 regarding the end-user so that Vendor can start the warranty
period.
16.2 Patterson agrees to cooperate fully with Vendor in carrying out
Vendor's Standard Warranty , in accordance with procedures specified
herein or which may be specified in writing by Vendor from time to
time.
16.3 Patterson will not modify any of the Products without the prior
specific written permission of Vendor. Any modifications to the
Products performed in the Territory by Patterson pursuant to this
paragraph will fall outside Vendor's Standard Warranty, and will be
the sole responsibility of Patterson.
16.4 Product Registration. For Vendor's warranty purposes, Patterson shall
provide the following information to Vendor in connection with each
Product order, within five (5) business days of Patterson's sale of
any Product:
16.4.1 name, address, telephone and fax numbers of End-User;
16.4.2 names of other contact person(s);
16.4.3 quantity and description of all of End-User's Product(s);
16.4.4 all serial numbers of End-User's Product(s);
16.4.5 date of shipment; and
16.4.6 date of installation.
Vendor shall provide Patterson with registration forms for such
information, to be completed by
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Patterson. End-User shall not be entitled to receive warranty service
from Vendor unless and until such information has been provided to
Vendor.
17 Miscellaneous.
17.1 Relationship and Authority. Patterson and Vendor are independent
contractors and nothing herein shall be construed to create the
relationship of employer and employee, partners, joint venturers or
principal and agent between Vendor and Patterson, between Vendor and
the employees of Patterson or between Patterson and the employees of
Vendor.
17.2 Force Majeure. Neither party to this Agreement shall be liable for its
failure to perform its obligations hereunder due to events beyond its
reasonable control, including, but not limited to, strikes, riots,
wars, fire, acts of God, acts in compliance with any law, regulation
or order (whether valid or invalid) of the United States of America or
any state thereof or any other domestic or foreign governmental body
or instrument thereof having jurisdiction in the matter. Delay
occasioned thereby shall not be considered a breach of this Agreement.
17.3 Entire Agreement. This Agreement, including the schedules, exhibits
and addendum, hereto, which are incorporated herein by reference,
constitutes the entire agreement between Vendor and Patterson. All
prior or contemporaneous agreement, proposals, understanding and
communications between or involving Vendor and Patterson, whether oral
or in writing, are merged into this Agreement. The terms contained in
this Agreement shall supercede any conflicting terms contained in any
purchase order, invoice or other document used or submitted by either
party in connection with the purchase of products covered by this
Agreement. This Agreement may be amended only by a writing signed by
all parties.
17.4 Successors and Assigns. This Agreement shall not be assigned by either
Vendor or Patterson without the prior consent of the other party;
provided, however, that Patterson may, without being released from its
obligations hereunder, assign this Agreement to any of its wholly
owned subsidiaries, provided such subsidiary assumes in writing all of
Patterson's obligations hereunder.
17.5 Notices. All communications, including without limitation consents and
changes of address, required or permitted hereunder shall be in
writing and shall be effective upon delivery or within five (5) days
after the mailing thereof by certified mail, postage prepaid, or by
overnight courier delivery, addressed as provided herein.
17.6 Arbitration. The parties shall attempt to resolve amicably all
disputes, differences and controversies arising out of, under or in
connection with this Agreement through the good faith effort of the
parties; if the parties' efforts are not successful within thirty (30)
days after their commencement, the matter shall be settled and finally
determined by arbitration in Minneapolis, Minnesota before the
American Arbitration Association under the then existing commercial
rules of the American Arbitration Association.
17.7 Applicable Law. This Agreement and the rights and obligations of the
parties hereunder
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shall be construed and governed by the laws of the state of Minnesota.
18 Minimum Purchase Quota.
18.1 Quota. A minimum purchase quota for each year of the Initial Term for
each category of Product shall be as set forth in Schedule IV to this
Agreement.
18.2 Failure to Meet Quota. In the event Patterson fails to achieve the
annual quota, Vendor may terminate this Agreement at any time
thereafter by giving Patterson at least thirty (30) days prior written
notice.
18.3 Purchase Obligation. It is understood that the quota requirements set
forth herein impose no obligation upon Patterson to make payments or
commitments for the payment of money to Vendor other than for Product
actually purchased, and Patterson shall not be liable for damages
resulting solely from its failure to meet the quota requirements set
forth herein.
18.4 Initial Purchase. Patterson agrees to issue an initial purchase order
for Products in the minimum amount of $500,000 upon the commencement
of this Agreement.
18.5 Lack of Products. If Patterson is unable to purchase the required
quantity of Products due to the inability of Vendor to supply
Products, such failure to purchase shall not constitute a default of
this Section 18 and, in such event, in lieu of actual purchases, the
sales quota shall be measured by the orders placed by Patterson.
18.6 Performance Rebate. If Patterson meets the minimum annual purchase
quota as set forth in Schedule IV, Vendor shall pay to Patterson
within 45 days following the end of each year of the Initial Term a
cash rebate equal to two and one-half percent (2 1/2%) of its
purchases during the year.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and
executed as of the day and year first above written.
VENDOR:
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By ___________________________
Its ________________________
PATTERSON DENTAL COMPANY
By ___________________________
Its ________________________
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