EXHIBIT 10.14
EXCLUSIVE DISTRIBUTION AGREEMENT
between
MEDIREHA GmbH
Medical Rehabilitation Products
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ - ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
represented by its sole authorized representative
Managing Director ▇▇▇▇ ▇▇▇▇▇
- hereinafter the "Manufacturer" -
and
Ormed GmbH
▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
represented by the Managing Directors
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Gensitz
- hereinafter the "Distributor" -
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1. Exclusive Distribution, Supply
1.1. Effective 1 July 1998, the Manufacturer grants exclusive distribution of
the products designated in Annex 1 of this agreement (agreement products)
to the Distributor. Agreement products include products that the
Manufacturer places into production or distribution as subsequent or
supplemental products to the products designated herein.
1.2. The Distributor buys and sells in its own name and for its own account.
The Distributor is not entitled to act as a legal representative for the
Manufacturer.
1.3. The Manufacturer will only use additional distributors or supply the
business operations of third parties with the agreement products or
similar products with the approval of the Distributor.
1.4. The Distributor may only manufacture and/or distribute products that are
identical or similar to the objects of the agreement designated in Annex 1
of this agreement and/or are in competition with the objects of this
agreement with the approval of the Manufacturer.
1.5. The Manufacturer shall supply the Distributor with the agreement products
as part of its ordinary course of business.
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2. Prices and Delivery Conditions
2.1. The product prices the Distributor is to pay to the Manufacturer can be
found in Annex 2 of this agreement. The product prices shall be
redetermined at the beginning of each calendar year, no later than 31
January. Terms of invoice payment are 60 days after delivery. If the
parties to the agreement cannot agree on the redetermination of product
prices, then they are to use the producer price index for commercial
products for domestic sale as a guideline. The standard to be used is
the increase in this index against the date of the last price
redetermination.
2.2. Product orders by the Distributor are binding on the Manufacturer and are
to be delivered within a reasonable period in the ordinary course of
business of the Manufacturer. Individual transactions between the
Manufacturer and the Distributor, except as otherwise provided for in this
agreement, are governed by the applicable legal regulations.
2.3. The objects of the agreement remain the property of the Manufacturer until
complete payment of all obligations arising from the contractual
relationship. The Distributor is not authorized to pledge or otherwise
assign the objects of the agreement. The Distributor shall immediately
notify the Manufacturer in writing of all changes in location and
interventions by third parties, especially attachments and pledges. The
Distributor is, however, authorized to resell the products in the regular
and normal course of its business, but assigns any purchase price claims
arising herefrom up to the amount of the total claim of the Manufacturer
to the Manufacturer in advance for purposes of security. The Distributor
is entitled to collect claims arising from the resale of reserved goods
until such time as the Manufacturer has announced the assignment of claims
to the assigned debtor. The Manufacturer is, however, only entitled to
such announcement
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in case of default in payment, protest of a ▇▇▇▇ or check or insolvency on
the part of the Distributor. The Manufacturer may then collect the claims
itself after the announcement. The Distributor is obligated to make the
information and documentation necessary for collection available to the
Manufacturer and, upon instruction by the Manufacturer, to notify the
assigned debtor of the assignment.
The Distributor is not allowed to assign these claims to third parties.
If the Distributor is overdue by more than 3 weeks in payment of the
purchase price, the Manufacturer is entitled, at the expense of the
Distributor, to demand return of the reserved goods and to hold them until
such time as complete payment is made. The demand for the return of the
goods serves only to ensure the purchase price claim of the Manufacturer;
all other obligations in relation to the sales contract - with the
exception of the Distributor's temporary possessory right - are maintained
in their entirety.
At the request of the Distributor, the Manufacturer will release, in its
discretion, the collateral to which it is entitled under the above
conditions to the extent that its realizable value exceeds the claims
being secured by 20%.
2.4. The Distributor is obligated to purchase from the Manufacturer the minimum
delivery amounts set forth in Annex 3. The minimum delivery amount shall
be determined annually between the parties to the agreement together with
the delivery prices. In this process, the minimum delivery amount must
amount to at least 85% of the delivery amount of the respective prior
year, and at least 85% of the delivery amount of the year 1997. On the
basis of the business appraisal of the Manufacturer, a review will be
carried out every six months in such a way that the delivery amount is
compared to the corresponding six months of the previous year. If the
delivery amount in a half year in comparison with the corresponding six
months of the previous half year - taking into consideration
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the redetermination of delivery amounts - is considerably lower, i.e., by
more than 15%, then the Manufacturer is released from the exclusive
relationship under 1.3. if the Distributor, after the corresponding notice
from the Manufacturer, does not correspondingly increase its orders in
such a way that the total delivery amount for the year is less than 15%
under the comparable delivery amount for the previous year (whereby it
should be noted that the minimum delivery amount is based on 85% of the
delivery amount in 1997). The Manufacturer's commitment under 1.3. is
again in effect as soon as the Distributor has ordered sufficient
quantities to make up for the deficit within one of the next six-month
periods. The Distributor's commitment under 1.4. remains in effect in all
cases.
2.5. The Manufacturer releases the Distributor from third-party legal claims on
or arising from changes, reductions or damages in connection with defects
in the agreement products. This does not apply if the defects were not
present upon transfer of risk to the Distributor or if the agreement
products are considered to be approved by the Distributor (ss. 377 HGB -
German Commercial Code). Furthermore, this release does not apply to
claims based on a warranty made by the Distributor if the warranty goes
beyond a warranty made by the Manufacturer. The Distributor bears the
burden of proof for the existence of the conditions for such releases.
3. Distribution Conditions
The Distributor may freely establish prices and conditions with respect to
third parties.
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4. Duration of the Agreement, Termination
4.1. The initial duration of the agreement is 5 years. It is automatically
extended for 2 years at a time if notice of termination is not given at
least 12 months prior to expiration. The first possible termination
date is thus 30 June 2003.
4.2. The right to terminate this agreement for cause remains unaffected.
4.3. Notice of termination must be given in writing. If such notice is sent by
registered mail, it is considered to be sent if there has been an
unsuccessful attempt to deliver and a notice of delivery has been left for
the recipient.
4.4. Notice of termination and ending of this agreement as such do not affect
the individual transactions entered into between the Manufacturer and the
Distributor in the course of its execution. The Manufacturer shall
continue to supply the Distributor under the conditions valid at that date
in such a way that the Distributor can fulfill transactions entered into
with third parties up to the end of the contractual relationship.
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5. Written Form, Severability
5.1. No supplementary agreements to this agreement have been made.
Modifications or additions must be made in written form to be legally
valid. This also applies for any waiver of the requirement of written
form.
5.2. Should any of the provisions of this agreement be or become invalid or if
the agreement contains gaps or omissions, this shall not affect the
validity of the remaining provisions of the agreement. The parties hereto
are obligated to replace the invalid provision or the gaps or omissions
with a provision which most closely reflects the economic purpose and the
intentions of the parties on which this agreement is based.
Umkirch, 8/10/98 [handwritten date] Freiburg, 8/14/98 [handwritten date]
[illegible signature] [illegible signature] [illegible signature]
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(▇▇▇▇ ▇▇▇▇▇) (▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) (▇▇▇▇▇▇▇ Gensitz)
Managing Director of Managing Directors of
Medireha GmbH Ormed GmbH
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Agreement Products
Annex 1
1. Passive movement devices
- for knees, shoulder, elbows, ankles and hips
2. Active movement devices
- for knees, shoulder, elbows, ankles and hips
3. Splints - arm abduction splints
4. Heat and cold therapy devices
5. Repairs, replacement parts and accessories for the above products
Umkirch, 8/10/98 [handwritten date] Freiburg, 11/17/98 [handwritten date]
[illegible signature] [illegible signature] [illegible signature]
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Gerd ▇▇▇▇▇ ▇▇▇▇▇▇▇ Gensitz ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Medireha GmbH Ormed GmbH Ormed GmbH
