-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MbKngjZK8MbqZJfFJE6jDHVhSuNgUk8q1o+KMn6Ii0jm/JsBPah9UV/nyyCgWq4/ 7yolOGmdRyinB27B+0FvHw== 0000950116-97-000878.txt : 19970509 0000950116-97-000878.hdr.sgml : 19970509 ACCESSION NUMBER: 0000950116-97-000878 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970508 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW BRUNSWICK SCIENTIFIC CO INC CENTRAL INDEX KEY: 0000071241 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 221630072 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06994 FILM NUMBER: 97597780 BUSINESS ADDRESS: STREET 1: 44 TALMADGE RD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 BUSINESS PHONE: 9082871200 MAIL ADDRESS: STREET 1: 44 TALMADGE ROAD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarter Ended March 31, 1997 Commission File No. 0-6994 ------ NEW BRUNSWICK SCIENTIFIC CO., INC. State of Incorporation - New Jersey E. I. #22-1630072 ----------- 44 Talmadge Road, Edison, N.J. 08818-4005 Registrant's Telephone Number: 732-287-1200 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve (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 ninety (90) days. Yes [X] No [ ] There are 3,809,982 Common shares outstanding as of May 5, 1997. NEW BRUNSWICK SCIENTIFIC CO., INC. Index
PAGE NO. -------- PART I. FINANCIAL INFORMATION: Item 1: Consolidated Condensed Balance Sheets - March 31, 1997 and December 31, 1996 3 Consolidated Statements of Operations - Three Months Ended March 31, 1997 and 1996 4 Consolidated Condensed Statements of Cash Flows - Three Months Ended March 31, 1997 and 1996 5 Notes to Consolidated Condensed Financial Statements 6 Item II: Management's Discussion and Analysis of Results of Operations and Financial Condition 7 PART II. OTHER INFORMATION 9
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands, except for share data)
ASSETS ------ March 31, December 31, 1997 1996 ------------ ----------- Current Assets (Unaudited) Cash and cash equivalents $ 3,871 $ 5,196 Accounts receivable, net 8,404 10,108 Refundable income taxes 107 334 Deferred income tax benefit 97 97 Inventories: Raw materials and sub-assemblies 6,940 6,762 Work-in-process 3,022 2,327 Finished goods 4,161 3,891 ------- ------- Total inventories 14,123 12,980 Prepaid expenses and other current assets 2,213 1,880 ------- ------- Total current assets 28,815 30,595 ------- ------- Property, plant and equipment, net 5,599 5,701 Other assets 1,242 930 ------- ------- $35,656 $37,226 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current Liabilities Current installments of long-term debt $ 133 $ 135 Accounts payable and accrued expenses 6,335 7,014 ------- ------- Total current liabilities 6,468 7,149 ------- ------- Long-term debt, net of current installments 344 401 Other liabilities 425 425 ------- ------- Shareholders' equity: Common stock, $.0625 par, authorized 25,000,000 shares; shares issued and outstanding, 1997 - 3,809,982 and 1996 - 3,808,932 net of shares held in treasury, 1997 and 1996 - 355,425 238 238 Capital in excess of par 20,781 20,738 Retained earnings 8,764 9,092 Currency translation adjustment (939) (392) Pension liability adjustment (425) (425) ------- ------- Total shareholders' equity 28,419 29,251 ------- ------- $35,656 $37,226 ======= =======
See notes to consolidated condensed financial statements. NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
Three Months Ended March 31, --------- 1997 1996 ---- ---- Net sales $10,095 $9,707 Operating costs and expenses: Cost of sales 6,382 5,980 Selling, general and administrative expenses 3,148 2,934 Research, development and engineering expenses 1,001 763 ------- ------ Total operating costs and expenses 10,531 9,677 ------- ------ Income (loss) from operations (436) 30 Other income (expense): Interest income 33 51 Interest expense (8) (12) Other income (expense), net 1 (1) ------- ------ 26 38 ------- ------ Income (loss) before income taxes (410) 68 Income taxes (benefit) (82) 14 ------- ------ Net income (loss) $ (328) $ 54 ======= ====== Earnings (loss) per Common share $ (.09) $ .01 ======= ====== Weighted average number of shares outstanding 3,809 3,775 ======= ======
See notes to consolidated condensed financial statements. NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended March 31, ----------------------------------- 1997 1996 ---------- --------- Cash flows from operating activities: Net income (loss) $ (328) $ 54 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 201 162 Change in related balance sheet accounts: Accounts receivable 1,348 925 Refundable income taxes 227 - Inventories (1,362) (690) Prepaid expenses and other current assets (407) (188) Accounts payable and accrued expenses 146 167 Advance payments from customers (696) (59) ------- ------- Net cash provided (used) by operating activities (871) 371 ------- ------- Cash flows from investing activities: Additions to property, plant and equipment (198) (648) Investment (250) - Sale of equipment - 1 ------- ------- Net cash used by investing activities (448) (647) ------- ------- Cash flows from financing activities: Repayment of long-term debt (25) (26) Discount from fair market value upon issuance of options under stock option plan for nonemployee directors 35 - Proceeds from issue of Common stock under stock option plan for nonemployee directors 8 - ------- ------- Net cash provided (used) by financing activities 18 (26) ------- ------- Net effect of exchange rate changes on cash (24) (53) ------- ------- Net decrease in cash and cash equivalents (1,325) (355) Cash and cash equivalents at beginning of period 5,196 6,382 ------- ------- Cash and cash equivalents at end of period $ 3,871 $ 6,027 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 8 $ 7 Income taxes 69 3
See notes to consolidated condensed financial statements. NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 1 - Interim Results: In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly, its financial position as of March 31, 1997 and the results of its of its operations and cash flows for the three months ended March 31, 1997 and 1996. Interim results may not be indicative of the results that may be expected for the year. Note 2 - Earnings per share: Earnings per Common share are based on the weighted average number of shares outstanding. Stock options are not included in the calculation as they had no significant dilutive effect on earnings per share. Note 3 - Consolidated Condensed Statements of Shareholders' Equity:
Three Months Ended March 31, ---------------------- 1997 1996 -------- ------- (In thousands) Balance at beginning of period $29,251 $28,181 Net income (loss) (328) 54 Currency translation adjustment (547) (179) Discount from fair market value upon issuance of options under stock option plan for nonemployee directors 35 - Issue of shares under stock option plan for nonemployee directors 8 - ------- ------- Balance at end of period $28,419 $28,056 ======= =======
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is Management's discussion and analysis of significant factors that have affected the Company's operating results and financial condition during the quarter ended March 31, 1997. Results of Operations --------------------- Quarter Ended March 31, 1997 vs. Quarter Ended March 31, 1996. - -------------------------------------------------------------- For the quarter ended March 31, 1997, net sales were $10,095,000 compared with net sales of $9,707,000 for the quarter ended March 31, 1996. There was a net loss for the 1997 quarter of $328,000 or $.09 per share compared with net income of $54,000 or $.01 per share for the first quarter of 1996. The loss for the 1997 quarter was primarily attributable to research, development and engineering expenses which increased to $1,001,000 in the 1997 quarter from $763,000 in the 1996 quarter to support the operations of DGI BioTechnologies, the Company's drug lead discovery operation and to a decrease in gross margin due to the effects of foreign currency exchange rate fluctuations on the Company's European operations. Financial Condition ------------------- Liquidity and Capital Resources - ------------------------------- During the period ended March 31, 1997, Cash and Cash Equivalents decreased to $3,871,000 from $5,196,000 at December 31, 1996. The decrease in cash resulted primarily from an increase in inventories from $12,980,000 at December 31, 1996 to $14,123,000 at March 31, 1997 of which $695,000 was in work-in-process inventory in preparation for the introduction of new products; the net loss for the quarter of $328,000; an increase in prepaid expenses and other current assets of $333,000 and a reduction in accounts payable and accrued expenses of $679,000 for the quarter, partially offset by a decrease in accounts receivable to $8,404,000 at March 31, 1997 from $10,108,000 at December 31, 1996. The decrease in accounts receivable, resulted from the lower volume of sales during the quarter ended March 31, 1997 as compared with the quarter ended December 31, 1996. Cash Flows from Operating Activities - ------------------------------------ During the period ended March 31, 1997, net cash used by operating activities amounted to $871,000 compared with net cash provided of $371,000 for the quarter ended March 31, 1996. The primary reasons for the $1,242,000 negative change between the two periods were the following: (a) inventories increased $1,362,000 in 1997 vs. a decrease of $690,000 in 1996: (b) prepaid expenses and other current assets increased $407,000 in 1997 vs. an increase of $188,000 in 1996; c) advance payments from customers decreased $696,000 in 1997 vs. a decrease of $59,000 in 1996 and there was a net loss of $328,000 in 1997 vs. net income of $54,000 in 1996 and were partially offset by a decrease in accounts receivable of $1,348,000 in 1997 vs. a decrease of $925,000 in 1996. Cash Flows from Investing Activities - ------------------------------------ Net cash used by investing activities amounted to $448,000 in 1997 vs. $647,000 in 1996, as a result of additions to property, plant and equipment and from an investment in another entity in 1997. A significant portion of the 1996 capital additions were attributable to building laboratories and purchasing equipment for DGI BioTechnologies. Cash Flows from Financing Activities - ------------------------------------ Net cash provided by financing activities amounted to $18,000 in 1997 vs. $26,000 of net cash used in 1996. The 1997 amount includes $35,000 related to the discount from fair market value upon issuance of options under the Company's stock option plan for nonemployee directors. Management believes that the resources available to the Company, including its line of credit are sufficient to meet its near and intermediate-term needs, including funding commitments for DGI BioTechnologies, and its strong unleveraged balance sheet and debt-free real estate provide the basis for any long-term financing if the need should arise. NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits (10-18) Distribution Agreement with Fisher Scientific Company dated January 1, 1997. (10-19) Amendment dated March 13, 1997, to Loan and Security Agreement with Summit Bank, the successor to United Jersey Bank/Central NA dated February 17, 1993. (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1997. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW BRUNSWICK SCIENTIFIC CO., INC. ---------------------------------- (Registrant) Date: May 5, 1997 /s/ Ezra Weisman ---------------------------------- Ezra Weisman President (Chief Executive Officer) /s/ Samuel Eichenbaum ---------------------------------- Samuel Eichenbaum Vice President - Finance (Principal Accounting Officer) EX-10 2 EXHIBIT 10.18 EXHIBIT (10-18) DISTRIBUTORSHIP AGREEMENT This Agreement, made and entered into to be effective as of the 1st day of January, 1997, by and between: NEW BRUNSWICK SCIENTIFIC CO. INC. Box 4005, 44 Talmadge Road Edison, New Jersey 08818 a corporation organized under the laws of the state of New Jersey, hereinafter referred to as SUPPLIER; and FISHER SCIENTIFIC COMPANY 2000 Park Lane Pittsburgh, PA 15275 a corporation organized under the laws of the state of Delaware, hereinafter referred to as DISTRIBUTOR. W I T N E S S E T H: WHEREAS, SUPPLIER desires to sell and/or market its products through the use of an exclusive distributor; and WHEREAS, DISTRIBUTOR desires to exclusively market the SUPPLIER's laboratory shakers and accessories for resale to customers; and WHEREAS, the parties desire to enter into a distributorship agreement governing their relationship; NOW, THEREFORE, in consideration of the mutual terms and conditions set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows: 1. PRODUCT 1.1 Products. The Products covered by this Agreement are those products set forth and attached hereto in Exhibit A ("Products"), manufactured by or for SUPPLIER, and any improved or updated versions thereof, together with accessories, parts and components necessary for their maintenance and repair. Product groups set forth in Exhibit A include, but are not limited to, the G Series, New C Series, Low End Innova Shakers and Accessories. Exhibit A may be amended from time to time by mutual written consent of the parties. 1.2 Similar or Related Products. SUPPLIER shall offer to DISTRIBUTOR in writing the right to distribute any similar or related Products developed by SUPPLIER during the term of this Agreement on the same terms as set forth herein. DISTRIBUTOR shall accept distribution rights with respect to similar or related Products, if at all, in writing, within thirty (30) days after SUPPLIER advises DISTRIBUTOR of the availability of such similar or related Products. In the event Products elects not to exercise such right as to all or any of the products so offered by SUPPLIER within such period, SUPPLIER may distribute any such rejected similar or related product to any third party on terms no more advantageous than those offered to DISTRIBUTOR. 1.3 Spare Parts. SUPPLIER represents and warrants that spare parts necessary for the operation and repair of Products furnished hereunder, if any, shall be available to DISTRIBUTOR and its customers for a period of five (5) years after the date of SUPPLIER's invoice for such Products. -2- 2. GRANT OF RIGHTS 2.1 Distribution Rights. SUPPLIER hereby appoints DISTRIBUTOR and DISTRIBUTOR accepts the appointment as the exclusive distributor of the Products during the term and pursuant to the provisions of this Agreement, reserving only those distribution rights set forth in Paragraph 2.3. 2.2 Territory. The territory in which the DISTRIBUTOR has the exclusive right to sell and distribute the Products shall be the United States and Puerto Rico. 2.3 SUPPLIER's Reserved Distribution Rights. SUPPLIER reserves no right to sell the New C Series Products, as defined in Exhibit A, in the Territory except: (a) to the federal government under its GSA contract and (b) directly to an end user who is restricted by contract from purchasing such Products from DISTRIBUTOR. SUPPLIER shall pay to DISTRIBUTOR on a quarterly basis a commission equal to five percent (5%) of the amount of SUPPLIER's direct sales to end users under exception (b). SUPPLIER expressly reserves the right to sell all Products other than New C Series Products in the Territory to any end user. 2.4 Lead Program. In consideration for sales leads provided by DISTRIBUTOR for SUPPLIER's Fermenter and High End Innova line of products which DISTRIBUTOR is not authorized to distribute, SUPPLIER shall provide a lead program as set forth in Exhibit B. 2.5 Exclusive Promotional Activity. DISTRIBUTOR shall exclusively promote SUPPLIER's G Series, New C Series and Low End Innova Products effective upon notification from SUPPLIER that all New C Series Products are available for shipment. "Exclusive Promotion" shall be as defined as set forth in Exhibit C. -3- 3. ORDERS; DELIVERY 3.1 Orders. DISTRIBUTOR shall make purchases by submitting firm purchase orders to SUPPLIER. 3.2 Product Availability. All New C Series Products shall be available for shipment to DISTRIBUTOR no later than March 31, 1997. 3.3 Quarterly Forecasts. DISTRIBUTOR shall use reasonable efforts to provide a written four quarter forecast, which shall be updated quarterly by the third week following a calendar quarter. 3.4 Delivery. SUPPLIER shall ship all Products for which it has received a firm purchase order that are within forecasted levels within thirty (30) days of order receipt. SUPPLIER agrees that time is of the essence regarding its delivery of Products. 4. SHIPPING; INVENTORY 4.1 Shipping. SUPPLIER shall ship all Products F.O.B. Origin, freight collect; provided, however, that SUPPLIER shall be responsible for filing all claims against the carrier for lost or damaged goods. SUPPLIER shall ship Products to DISTRIBUTOR or DISTRIBUTOR's customers, at DISTRIBUTOR's election, via a carrier selected by DISTRIBUTOR. 4.2 Overstocked Inventory. DISTRIBUTOR shall review its inventory twice per year and identify those Products which it considers, in its reasonable discretion, to be excess inventory. DISTRIBUTOR shall notify the SUPPLIER in writing, describing such Products, and SUPPLIER shall credit DISTRIBUTOR with the full purchase price by DISTRIBUTOR for each such Product upon return of the Product, less a five percent (5%) -4- restocking fee for shakers and a fifteen percent (15%) restocking fee for accessories. DISTRIBUTOR agrees to pay all freight and insurance charges for the returned Products. Overstocked inventory may be returned no later than one (1) year after receipt by DISTRIBUTOR. DISTRIBUTOR shall issue a reciprocal purchase order to SUPPLIER for the amount no less than the net credit due DISTRIBUTOR for the returned inventory. 4.3 Obsolete Inventory. Any Products owned by DISTRIBUTOR and rendered unsalable, in DISTRIBUTOR's reasonable opinion, due to: (i) a change in any Product specification, (ii) discontinuation or elimination by SUPPLIER of any Product from its product offering, (iii) release by SUPPLIER of any improved or updated version of any Product, or (iv) any other cause outside of DISTRIBUTOR's control, shall be repurchased from DISTRIBUTOR by SUPPLIER within thirty (30) days following DISTRIBUTOR's request therefor at the price paid for such Product(s) by DISTRIBUTOR. Obsolete inventory may be returned no later than one (1) year after receipt by DISTRIBUTOR. DISTRIBUTOR shall issue a reciprocal purchase order to SUPPLIER for the amount no less than the net credit due DISTRIBUTOR for the obsolete inventory. Obsolete inventory shall be subject to a five percent (5%) restocking fee for shakers and a fifteen percent (15%) restocking fee for accessories. 5. SALES & MARKETING SUPPORT 5.1 Training. SUPPLIER shall provide to DISTRIBUTOR's sales personnel, at DISTRIBUTOR's premises or such other location as the parties may agree, such training in the demonstration and use of the Products as may be reasonably requested by DISTRIBUTOR, and for such training purposes shall make available at SUPPLIER's expense all necessary instructors, training material and Products for demonstration. DISTRIBUTOR -5- shall provide transportation and lodging expenses for DISTRIBUTOR personnel for the training of DISTRIBUTOR representatives by SUPPLIER. 5.2 Technical Support. SUPPLIER shall provide technical support to DISTRIBUTOR's sales personnel and customers, and promptly provide to DISTRIBUTOR such additional technical information developed or acquired by SUPPLIER from time to time as may reasonably be expected to be of assistance to DISTRIBUTOR in fulfilling its obligations hereunder. SUPPLIER shall provide at its own expense a toll-free long distance telephone service for sales and customer support. 5.3 Literature. SUPPLIER shall provide, at its expense, reasonable quantities of such instruction manuals and point of sale literature as may, from time to time, be requested by DISTRIBUTOR for use in connection with the marketing, sale and distribution of the Products. Subject to DISTRIBUTOR's prior written approval, DISTRIBUTOR's name may be incorporated in SUPPLIER's advertising literature intended for distribution by DISTRIBUTOR's sales representatives. If requested to do so by DISTRIBUTOR, SUPPLIER shall furnish DISTRIBUTOR with suitable copy and photographs for use by DISTRIBUTOR in cataloging the Products. 5.4 Sales Commissions. SUPPLIER shall compensate its sales representatives for Product sales through DISTRIBUTOR in such a way as to limit the competitive environment between each company's sales forces. 6. PRICE AND PAYMENT TERMS 6.1 Price. SUPPLIER shall supply and ship Product at the prices shown in Exhibit A through December 31, 1997 ("Firm Price Period"). Such prices may be reduced by SUPPLIER, but may be increased only according to the terms hereof. -6- 6.2 DISTRIBUTOR Discount. DISTRIBUTOR's discount from SUPPLIER's published list prices for the Products shall as set forth in Exhibit A. These discounts may not be reduced except with prior written approval by DISTRIBUTOR. 6.3 Price Increases. After the expiration of the Firm Price Period, prices may be increased no more than once in any contract year to be effective January 1 of the next following calendar year. SUPPLIER shall give at least ninety (90) days prior written notice to the DISTRIBUTOR of any price increase. Such price increases shall be as negotiated by the parties. Shipments shall be billed at the price in effect at time of order placement. Notice of price changes shall be sent to: MARKETING SERVICES Fisher Scientific 2000 Park Lane Pittsburgh, PA 15275 With a copy to: CENTRAL PURCHASING 6.4 Payment Terms. Payment terms shall be net thirty (30) days from the date of receipt of the invoice. DISTRIBUTOR shall not be in breach of this Agreement unless payment from the DISTRIBUTOR is more than thirty (30) days overdue. DISTRIBUTOR shall not be considered in breach if the late payment is for an invoice in dispute. 6.5 Resale. DISTRIBUTOR shall be entitled to resell Products on such terms as it may, in its sole discretion, determine, including without limitation price, returns, credit and discounts. 6.6 Special Pricing. SUPPLIER shall negotiate in good faith with DISTRIBUTOR to provide special pricing (i) where required for DISTRIBUTOR to meet competition, and (ii) on any large quantity order for Products which may be requested by DISTRIBUTOR's customers. 6.7 Information Exchange. All price changes and additions of new products -7- accepted by DISTRIBUTOR shall be sent to DISTRIBUTOR at the address set forth in Section 6.3 hereof in an electronic format as provided to SUPPLIER. In addition, SUPPLIER shall promptly implement full Electronic Data Interchange (EDI) capability in a format compatible with DISTRIBUTOR's systems for receipt of purchase orders and transmission of invoices. 7. PACKAGING 7.1 Packaging. SUPPLIER shall supply Products in sizes and packaging configurations corresponding to those set forth in Exhibit A as it may be amended from time to time. SUPPLIER further agrees to prepare and mark all outer packaging with DISTRIBUTOR's catalog numbers. 7.2 Bar Coding. Upon request from DISTRIBUTOR, SUPPLIER agrees to bar code the Products at the lowest saleable unit using symbology 3 of 9 in accordance with HIBC (Health Industry Bar Code). Additionally, where applicable, Products shall be bar coded to include standard unit, alternate unit, lot number and expiration date. 8. TERM AND TERMINATION 8.1 Term. The initial term of this Agreement shall be from the date of execution by the last-signing party through December 31, 1999. Thereafter, the Agreement shall automatically renew for successive one (1) year periods unless and until either party given written notice to the other party of its intent to terminate the Agreement. Such notice must be given no less than ninety (90) days prior to the expiration of the then-current term. 8.2 Termination. Notwithstanding the foregoing, this Agreement may be -8- terminated for cause at any time as follows: (i) In the event of default or material breach of the terms of this Agreement by either party, written notice thereof may be given to the defaulting party. Thereafter, the defaulting party shall have thirty (30) days to cure said breach. In the event that said breach has not been cured within said thirty (30) day period, the non-defaulting party may terminate this Agreement on or within thirty (30) days after the expiration of the cure period. (ii) In the event of nationalization, expropriation, liquidation or bankruptcy of, or an assignment for the benefit of creditors of insolvency of either party. 9. PROCEDURES ON TERMINATION 9.1 Procedures. On the termination of this Agreement, except for cause pursuant to Section 8.2(ii), SUPPLIER shall continue to honor DISTRIBUTOR's orders for Products up to the effective date of termination and for a period of sixty (60) days thereafter, provided such orders are no greater than ten percent (10%) above the quantities established during the sixty (60) days prior to the date of the notice of termination, and DISTRIBUTOR shall pay for all such Products on the terms and conditions of this Agreement. 9.2 Survival. The rights and duties of each party under this Agreement and the Exhibits hereto in respect of performance prior to termination or non-renewal shall survive and be enforceable in accordance with the terms of this Agreement. 9.3 Existing Inventory. Upon termination or non-renewal of this Agreement, SUPPLIER shall repurchase from DISTRIBUTOR, at DISTRIBUTOR's request and at DISTRIBUTOR's current cost therefor, such Products as are then owned by DISTRIBUTOR -9- which have been purchased within the previous twelve (12) months. In the event of SUPPLIER's breach, termination or non-renewal of the Agreement, no restocking fees shall apply. In the event of DISTRIBUTOR's breach, termination or non-renewal, a restocking fee shall apply equal to five percent (5%) for shakers and fifteen percent (15%) for accessories. Delivery of Products repurchased from DISTRIBUTOR hereunder shall be F.O.B. origin, freight collect. 10. WARRANTIES, INDEMNITY, RECALL AND INSURANCE 10.1 Warranties. In addition to the warranties of SUPPLIER set forth in this Agreement and in the Continuing Guaranty which is attached hereto as Exhibit D, SUPPLIER warrants that the Products will conform to the specifications set forth in SUPPLIER's product literature and Exhibit A; that they will comply and be manufactured, packaged, labeled and shipped by SUPPLIER in compliance with all applicable federal, state and local laws, orders, regulations and standards; and that they will be merchantable and fit for their intended purpose. All Products shall include SUPPLIER's warranty statement containing the customer's warranty. All SUPPLIER Products shall be warranted to DISTRIBUTOR's customer against defects in materials and workmanship, including parts and labor, under normal use for a period of two (2) years. SUPPLIER warrants that the Products have been thoroughly tested before shipment and that, if applicable, they are free of mechanical and electrical defects. The warranty period becomes effective at the earlier of installation or fifteen (15) days from date of shipment to the DISTRIBUTOR's customer. DISTRIBUTOR shall request customers present reasonably acceptable documentation verifying the effective warranty date. -10- During the first year of the warranty period, DISTRIBUTOR may, at its option, return any instrument requiring service to SUPPLIER for replacement or repair, or service the instrument through Fisher Service Division ("FSD"). All reasonable charges for parts, labor and travel incurred by FSD shall be paid by SUPPLIER. DISTRIBUTOR shall use its best efforts to effectively service the customer in one trip to the customer's location. DISTRIBUTOR shall be responsible for all parts, labor and travel expenses of the second year warranty period; provided, however, that in the event DISTRIBUTOR's warranty costs during any calendar year exceed one percent (1%) of gross Product sales, SUPPLIER shall reimburse DISTRIBUTOR for the cost of all warranty parts in excess of that amount either by cash settlement or credit for Products as agreed by the parties; and further providing that in the event DISTRIBUTOR's warranty costs during any calendar year exceed two percent (2%) of gross Product sales, SUPPLIER shall reimburse DISTRIBUTOR for all warranty costs in excess of the two percent (2%) amount. Notwithstanding the foregoing, in the event SUPPLIER must pay warranty costs, it shall be responsible for the travel portion of such warranty costs only to the extent of one (1) round trip per service call. DISTRIBUTOR shall cause FSD to provide SUPPLIER with quarterly service reports submitted thirty (30) days after the close of the previous calendar quarter reasonably detailing total warranty costs for the Products by categories of parts, labor and travel. FSD's right to reimbursement under this section shall survive termination of this Agreement. FSD shall be considered a third party beneficiary to this Agreement only insofar as Section 10.1, Paragraph 3 is or may be concerned. 10.2 Product Improvement Reports. SUPPLIER shall promptly respond to all Product Improvement Reports (PIR) submitted by DISTRIBUTOR, and take all necessary -11- and appropriate corrective action. 10.3 Continuing Guaranty. SUPPLIER shall execute and abide by the terms of DISTRIBUTOR's Continuing Guaranty, a copy of which is attached hereto as Exhibit D and incorporated herein by reference. The terms and provisions of the Continuing Guaranty shall survive the termination of this Agreement. 10.4 Insurance. On or prior to execution of this Agreement, SUPPLIER shall provide DISTRIBUTOR with a Certificate of Insurance which meets the requirements of Paragraph D of the Continuing Guaranty. SUPPLIER shall provide DISTRIBUTOR with renewal insurance certificates in the form mandated by Paragraph D of the Continuing Guaranty during the term of this Agreement, without demand therefor by DISTRIBUTOR. 10.5 Recall. In the event of a confirmed Product failure, or a recall required by a government agency or requested by SUPPLIER, SUPPLIER agrees to pay the costs of retrieval, recall and Product corrective action, including Products already delivered to DISTRIBUTOR's customers, and further agrees to reimburse DISTRIBUTOR for all affected Products including shipping charges. In addition, SUPPLIER shall notify DISTRIBUTOR immediately in writing should SUPPLIER become aware of any defect or condition which may render any of the Products in violation of any statute or regulation, or which in any way alters the specifications or quality of the Products. 11. TRADEMARKS 11.1 Trademarks and Trade Names: SUPPLIER recognizes that DISTRIBUTOR is the owner of the trademarks and trade names connoting DISTRIBUTOR or DISTRIBUTOR products which it may elect to use in the promotion and sale of the Products and that SUPPLIER has no right or interest in such trademarks and trade names. -12- 11.2 Trademark License: SUPPLIER hereby grants to DISTRIBUTOR the royalty-free right to use SUPPLIER's trademarks on SUPPLIER's Products during the term of this Agreement, it being expressly understood that if DISTRIBUTOR elects to use SUPPLIER's trademarks during the term of the Agreement, DISTRIBUTOR shall properly do so and shall discontinue the use of such trademarks in any new published material following the termination hereof. Following the termination of this Agreement, SUPPLIER grants DISTRIBUTOR the right to continue to use its trademarks in connection with sale or service of Products purchased by DISTRIBUTOR during the term of this Agreement. DISTRIBUTOR disclaims any rights to SUPPLIER's trademarks other than the said license. 12. CONFIDENTIALITY 12.1 The parties expressly agree to hold as confidential ("Confidential Information") any information which is designated in writing by the disclosing party as confidential, provided such information is clearly marked as confidential, and the disclosing party obtains a signed receipt or agreement from the receiving party acknowledging that such information is confidential. In the event Confidential Information is exchanged according to these guidelines, such information will be retained by the other party in confidence for a period of two (2) years following the termination of this Agreement; the transmittal of such information is and shall be upon the express condition that the information is to be used solely to effectuate this Agreement; and the receiving party shall not use, publish, or disclose said information, in whole or in part, for any purpose other than that stated herein. SUPPLIER expressly acknowledges and agrees that DISTRIBUTOR's customer names, address and key contacts are and shall be the Confidential Information of DISTRIBUTOR. Notwithstanding the foregoing, the above -13- restrictions on disclosure and use shall not apply to any information which the party can show by written evidence, was known to it at the time of receipt, or which may be obtained from third parties who are not bound by a confidentiality agreement, or which is in the public domain. 13. MISCELLANEOUS 13.1 Force Majeure: The obligations of either party to perform under this Agreement shall be excused during each period of delay if such delay arises from any cause or causes which are reasonably beyond the control of the party obligated to perform, including, but not limited to, the following: acts of God, acts or omissions of any government, or any rules, regulations or orders of any governmental authority or any officer, department, agency or instrumentality thereof; fire, storm, flood, earthquake, insurrection, riot, invasion or strikes. The affected party shall use its best efforts to remedy the effects of such force majeure. Any force majeure shall not excuse performance by the party, but shall postpone performance, unless such force majeure continues for a period in excess of ninety (90) days. In such event, the party seeking performance may cancel its obligations hereunder. 13.2 Assignment: This Agreement shall not be assignable by either party except: (a) with the consent of the other party, or (b) to the successor of all or substantially all of the business to which this Agreement relates. 13.3 Notices: Any notice required by this Agreement shall be in writing and shall be deemed sufficient if given personally or by registered or certified mail, postage prepaid, or by any nationally recognized overnight delivery service, addressed to the party to be notified at the address set forth in the initial paragraph of this Agreement. Either -14- party may, by notice to the other, change its address for receiving such notices. 13.4 Entire Agreement: This Agreement, including exhibits, constitutes the entire agreement between the parties relating to the subject matter hereof and cancels and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to such subject matter. 13.5 Existing Obligations: Each party warrants that the terms of this Agreement do not violate any of its existing obligations or contracts. Each party shall protect, defend, indemnify, and hold harmless the other party from and against any claims, demands, liabilities or actions which are hereafter made or brought against the other party and which allege any such violation. 13.6 Modifications, Waiver: No amendment, modification or claimed waiver of the terms of this Agreement shall be binding on either party unless reduced to writing and signed by an authorized officer of the party to be bound. In ordering and delivery of the Products, the parties may employ their standard forms, but nothing in those forms shall be construed to modify or amend the terms of this Agreement. 13.7 Relationship of the Parties: This Agreement does not constitute either party as the agent or legal representation of the other for any purpose whatsoever. 13.8 Governing Laws: This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey. -15- IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives. NEW BRUNSWICK SCIENTIFIC FISHER SCIENTIFIC COMPANY COMPANY, INC. By: By: -------------------- ---------------------- Title: Title: ----------------- ------------------- Dated: Dated: ----------------- ------------------- -16- EX-10 3 EXHIBIT 10.19 EXHIBIT (10-19) THIRD MODIFICATION AGREEMENT This third modification agreement dated March 13, 1997 ("Modification") between Summit Bank ("Bank"), successor in interest to United Jersey Bank/Central, N.A. and United Jersey Bank, and New Brunswick Scientific Co., Inc. ("Borrower"). W I T N E S S E T H WHEREAS, United Jersey Bank/Central, N.A. and Borrower entered into an Amended and Restated Loan and Security Agreement on February 17, 1993, as modified pursuant to a Modification Agreement between Borrower and United Jersey Bank/Central, N.A. dated as of June 1, 1994 and further modified pursuant to a Second Modification Agreement between Borrower and United Jersey Bank dated December 29, 1995 (together, the "Loan Agreement"); and WHEREAS, the Loan Agreement sets forth the terms and conditions for a Revolving Loan, Equipment Loan and Foreign Exchange Transaction Loan, as such capitalized terms are more particularly described in the Loan Agreement; and WHEREAS, Bank and Borrower desire to (a) extend the date for payment of the Obligations defined in the Loan Agreement, (b) extend the credit arrangements under the Loan Agreement and (c) modify certain terms affecting the Foreign Exchange Transaction Loan, as more particularly described below; NOW, THEREFORE, in exchange for the mutual covenants in this Modification and for the other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Modification agree to the following terms, conditions and provisions: 1. Capitalized Terms. Capitalized terms used in this Modification and not expressly defined herein shall have the meaning for such terms set forth in the Loan Agreement. 2. Amendments to the Revolving Loan. (A) All indebtedness under the Revolving Loan shall be payable no later than May 31, 1998, or such earlier date determined pursuant to the Loan Agreement, as modified hereby. (B) The Bank shall not be required to issue Letters of Credit under the Revolving Loan after May 31, 1998. Letters of Credit then outstanding will be reimbursable in accordance with the terms of their issuance. 3. Amendments to the Equipment Loan. The Bank shall not be required to make any advances under the Equipment Loan after May 31, 1998, or such earlier date determined pursuant to the Loan Agreement, as modified hereby. 4. Amendments to the Foreign Exchange Transaction Loan. (A) The definition of Foreign Exchange Transaction Loan as used in the Loan Agreement is hereby deleted and replaced as follows: "Foreign Exchange Line of Credit" means a line of credit with respect to which Bank has agreed to enter into Foreign Exchange Contracts not to exceed the Foreign Exchange Line Of Credit Maximum. (B) The definition of Foreign Exchange Transaction Loan Maximum as used in the Loan Agreement is hereby deleted and replaced as follows: "Foreign Exchange Line of Credit Maximum" means the aggregate principal amount of $2,500,000, but in no event shall Bank be obligated to deliver Foreign Exchange Contracts having the same settlement date in excess of $500,000 in the aggregate. (C) All references in the Loan Agreement to "Foreign Exchange Transaction Loan" shall mean "Foreign Exchange Line of Credit" and all references to "Foreign Exchange Transaction Loan Maximum" shall mean "Foreign Exchange Line of Credit Maximum." (D) The Loan Agreement is amended to delete all references to the Foreign Exchange Transaction Note. The obligation of Borrower to repay all monies advanced by Lender to Borrower in connection with the Foreign Exchange Line of Credit shall be evidenced by this Loan Agreement. (E) All indebtedness under the Foreign Exchange Line of Credit shall be payable in accordance with the terms of the particular Foreign Exchange Contract with Bank. The Foreign Exchange Line of Credit shall terminate on May 31, 1998 or such earlier date determined pursuant to the Loan Agreement, as modified hereby. -2- 5. Delivery of Renewal Notes. Simultaneously with the execution of this Modification by Borrower, Borrower has made and delivered to Bank restatements of the Revolving Note and Equipment Note to evidence the obligation of Borrower to repay all monies at any time advanced by Bank in connection with, respectively, the Revolving Loan and the Equipment Loan. Each such note amends and restates the note it replaces but is not delivered by Borrower in payment, satisfaction or cancellation of the Obligations evidenced thereby. 6. Affirmation; Estoppel. Except as expressly modified herein, all terms and conditions of the Loan Agreement and each of the other Loan Documents remain in full force and effect. Borrower affirms (a) the extent and validity of each obligation, (b) that all Loan Documents remain enforceable as of the date hereof, (c) that payment and performance of all Obligations continue to be secured by all Collateral, with respect to which this Modification shall constitute Borrower's grant and re-grant of a security in all Collateral, (d) that all representations set forth in the Loan Agreement remain true and correct as if stated on the date hereof, and (e) that Borrower has no knowledge of the existence of an Event of Default under any Loan Document or an event or condition that, with notice or passage of time, would constitute an Event of Default. All Obligations are owed without setoff, right, claim or cause of action of any nature whatsoever known to Borrower. 7. Conditions Precedent. Bank's performance under this Modification is conditioned upon: (A) Updated UCC searches showing no liens on any other Collateral; (B) Receipt of an officer's certificate of Borrower respecting due authorization and authority for the execution, delivery and performance of this Modification; (C) Payment of all fees and expenses of Bank's counsel incurred in connection with this Modification; and (D) Other documents, opinions, resolutions and certificates as Bank may reasonably request. 8. Notice. The address for notices to Bank is: Summit Bank, 210 Main Street, Hackensack, New Jersey 07601 9. Complete Agreement. This Modification constitutes the complete, entire final agreement of the parties regarding the subject matter hereof and supersedes all prior agreements regarding the subject matter hereof. -3- 10. Jury Trial Waiver. IN ANY LITIGATION RELATING TO THIS MODIFICATION, BANK AND BORROWER EACH WAIVE THEIR RIGHT TO TRIAL BY JURY. BANK AND BORROWER ACKNOWLEDGE THAT THEY HAVE CONSULTED WITH THEIR RESPECTIVE COUNSEL SPECIFICALLY ON THE RAMIFICATIONS OF WAIVING THE RIGHT TO TRIAL BY JURY PRIOR TO AGREEING TO THIS PROVISION. IN WITNESS WHEREOF, Bank and Borrower have caused this Modification to the Loan Agreement to be executed as of the day and year first above written. BORROWER: ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC. a New Jersey corporation By: - -------------------------- -------------------------- Name: Name: Title: Title: BANK: ATTEST: SUMMIT BANK By: - -------------------------- -------------------------- Name: Name: Title: Title: -4- EX-27 4 FINANCIAL DATA SCHEDULE
5 0000071241 NEW BRUNSWICK SCIENTIFIC CO., INC. 9-MOS DEC-31-1997 SEP-30-1997 4,415,000 0 7,916,000 0 14,235,000 28,580,000 5,760,000 0 34,905,000 5,931,000 0 0 0 236,000 27,828,000 34,905,000 29,074,000 29,074,000 17,611,000 28,828,000 0 0 36,000 210,000 42,000 168,000 0 0 0 168,000 .05 0
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