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
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(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 _|
<PAGE>
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
<PAGE>
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)
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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.
<PAGE>
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
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
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ATTEST:___________________________ ATTEST:__________________________________
(Title) (Title)
(seal) LESSOR (seal) LESSEE
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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
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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.
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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
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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
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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:
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(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
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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.
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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.
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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.
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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.
<PAGE>
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
<PAGE>
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
DATED 9 APRIL, 1996
WISDOM TOOTHBRUSHES LIMITED (1)
- and -
SAGACITY I, Inc. (2)
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
<PAGE>
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
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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.
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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
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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
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<PAGE>
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;
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<PAGE>
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;
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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;
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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.
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<PAGE>
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
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<PAGE>
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
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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
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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.
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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
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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.
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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.
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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.
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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
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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
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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
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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.
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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.
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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
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