EXHIBIT 10.1
DISTRIBUTOR AGREEMENT
AGREEMENT, dated as of June 5, 1997, between (1) CYBEX International, Inc., a
New York corporation ("CYBEX"), (2) Xxxxxxx Inc., a Delaware corporation having
its principal place of business at 00 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
("Xxxxxxx"), (3) Forza Fitness Equipment Ltd., a company registered in England
with number 2836238 (the "Distributor"), and (4) The Forza Group Limited, a
company registered in England with number 2768509 ("Forza").
PRELIMINARY STATEMENT
---------------------
(A) CYBEX has entered into the Agreement and Plan of Merger dated as of
December 27, 1996 (the "Merger Agreement"), among itself, Xxxxxxx, and Cats
Tail, Inc., a wholly-owned subsidiary of CYBEX, pursuant to which Cats
Tail, Inc. has merged with and into Xxxxxxx, with the result that Xxxxxxx
has become a wholly-owned subsidiary of CYBEX (the "Merger").
(B) CYBEX, the Distributor and Xxxxxxx have agreed that, subject as provided in
Clause 2, CYBEX/Xxxxxxx shall appoint the Distributor its exclusive
distributor for certain products within the Territories on the terms and
conditions more fully set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions
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(a) The following terms, when utilized herein, shall have the indicated
meanings:
business day: A day (other than a Saturday or Sunday) on
------------
which banks are open for business in London;
Cardiovascular Products: Any cardiovascular-based health or fitness
-----------------------
related products or equipment of any kind
(including any improvements, modifications,
supplements, or replacements therefor)
which, in any such case, are developed,
manufactured, and/or promoted by any member
of the CYBEX Group from time to time, but
excluding New Products;
Cost: The cost to CYBEX/Xxxxxxx of the Strength
----
Products and Isokinetic Products as
certified by CYBEX/Xxxxxxx, from time to
time, on the basis of the cost model set out
in Exhibit A;
CYBEX Forza: CYBEX Forza International Ltd., a company
-----------
registered in England with number 3215786;
CYBEX Group: CYBEX and all its subsidiary undertakings
-----------
and associated undertakings from time to
time;
CYBEX Products: Together CYBEX Cardiovascular Products,
--------------
CYBEX Strength Products, and Isokinetic
Products;
CYBEX Proprietary Marks: The trademarks and/or trade names and/or
-----------------------
logos of CYBEX listed in Exhibit B and/or
any other such trade marks and/or trade
names and/or logos used on or in relation to
the CYBEX Products from time to time;
CYBEX/Xxxxxxx: CYBEX and/or Xxxxxxx, as applicable;
-------------
Effective Date: The effective date of this Agreement, as
--------------
provided in Clause 2;
Enlarged Territory: Those territories edged and hatched black
------------------
(including the area edged and hatched blue)
on the map included in Exhibit C together
with any other geographical area(s) which
may be included by written agreement of the
parties;
Fitness Products: Together Cardiovascular Products and
----------------
Strength Products;
Force Majeure: In relation to any party, war, civil
-------------
conflicts, floods, Acts of God, strike,
lock-out or other form of Industrial action
or any other cause beyond its control and
for which it is not responsible;
Isokinetic Business: The sale and promotion of Isokinetic
-------------------
Products currently carried on by CYBEX;
Isokinetic Products: Those products listed in Exhibit D together
-------------------
with any other derivative products which are
internally developed by CYBEX from time to
time;
New Products: Any health, fitness or medical products or
------------
equipment of any kind (including any
improvements, modifications, supplements, or
replacements therefor) which, in any such
case,
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are manufactured or promoted by a
third party (other than a member of the
CYBEX Group) and which products (or the
rights thereto or interest therein) are
acquired by any member of the CYBEX Group
together with any medical products developed
by any member of the CYBEX Group;
Products: Such Cardiovascular Products, Strength
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Products, Isokinetic Products, Reactor and
New Products as to which the Distributor
from time to time, in accordance with the
provisions hereof, acts as a distributor
within the Territories (for the avoidance of
doubt, unless otherwise stated, Products
shall include parts for Products);
Proprietary Marks: Together the CYBEX Proprietary Marks and
-----------------
Xxxxxxx Proprietary Marks, together with any
trademarks and/or logos used on or in
connection with any Product;
Reactor: The product manufactured by CYBEX and known
-------
as "The Reactor";
Strength Products: Any strength-based health or fitness related
-----------------
products or equipment of any kind (including
any improvements, modifications,
supplements, or replacements therefor)
which, in any such case, are developed,
manufactured and/or promoted by any member
of the CYBEX Group from time to time, but
excluding New Products;
Term: The term of this Agreement;
----
Termination Agreement: The agreement of even date herewith between
---------------------
the parties to this Agreement;
Territories: Such portions of the Territory and the
-----------
Enlarged Territory as to which the
Distributor from time to time, in accordance
with the provisions hereof, has been
appointed as a distributor of Products;
Territory: England, Scotland, Wales, Germany, Austria,
---------
Switzerland, and Russia (as defined by the
old
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USSR and as edged and hatched blue on
the Territory map included in Exhibit C);
Xxxxxxx Proprietary Marks:The trademarks and/or trade names and
-------------------------
logos of Xxxxxxx listed in Exhibit E and/or
any other such trade marks and/or trade
names and/or logos used on or in relation to
the Xxxxxxx Products from time to time;
Xxxxxxx Products: Together Xxxxxxx Cardiovascular Products and
----------------
Xxxxxxx Strength Products.
(b) References to the singular shall include the plural and to any gender
shall include every gender and references to persons shall include
corporations and unincorporated associations.
2. Effectiveness of Agreement
--------------------------
This Agreement shall be effective solely upon CYBEX and Forza having
complied with their obligations under Clauses 2 and 3 of the Termination
Agreement. In the event that the above condition is not consummated on or
before July 1, 1997 (or such later date as may be agreed to by the
parties), this Agreement shall be void and of no further force or effect.
3. Appointment of Distributor
--------------------------
(a) CYBEX hereby appoints the Distributor as of the Effective Date as its
sole and exclusive distributor for the sale, marketing and promotion
of
(i) the CYBEX Products and the Reactor in the Territory;
(ii) the Reactor in the Enlarged Territory until 31 December 1997;
and
(iii) the Isokinetic Products in the Enlarged Territory until 31
December 1997 or until the sale of the Isokinetic Business or
the discontinuance by CYBEX of said Business (whichever is the
earlier)
in each case in accordance with the terms of this Agreement.
(b) CYBEX/Xxxxxxx shall on the Effective Date serve notice of termination
of the existing Distributor Agreement dated January 10, 1994 between
Xxxxxxx and Polaris International, which notice shall state that such
termination shall be effective three months after the date of notice.
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(c) CYBEX/Xxxxxxx shall appoint the Distributor with effect from the
termination of the agreement referred to in Clause 3(b) as its sole
and exclusive distributor for the sale, marketing and promotion of the
Xxxxxxx Products in England, Scotland and Wales all in accordance with
the terms of this Agreement.
(d) CYBEX/Xxxxxxx hereby appoints the Distributor as of the Effective Date
as its sole and exclusive distributor for the sale, marketing and
promotion of the Xxxxxxx Products in the Territory (other than
England, Scotland and Wales) all in accordance with the terms of this
Agreement.
(e) Prior to commencing the sale of New Products in the Territory, CYBEX
shall offer the Distributor the right to be the exclusive distributor
in the Territory for such New Products, at the best pricing offered by
CYBEX and on such other commercial terms as are generally offered to
CYBEX's other distributors. Such offer shall be in writing and shall
include all material terms of the proposed arrangement. If the
Distributor accepts such offer (which acceptance must be made in
writing within thirty days after receipt of such offer), it shall be
the exclusive distributor for such New Products in the Territory. If
the Distributor does not provide such notice of acceptance in
accordance with this Clause, (i) the Distributor shall have no right
to promote, market or sell such New Products in the Territory, (ii)
the term "Products" as utilized herein shall specifically exclude such
New Products, and (iii) CYBEX shall be free to promote, market and
sell such Products throughout the Territory in any manner it
determines to be appropriate.
(f) During the Term CYBEX will not appoint, nor will it permit Xxxxxxx or
any other subsidiary to appoint, another authorized distributor in the
Territory for Products; provided that Xxxxxxx may, subject to Clause
3(b), continue to utilize Xxxxxxx UK/Polaris International as its
distributor in England, Scotland and Wales until the effective
termination of the agreement referred to in Clause 3(b). During this
period of time, Xxxxxxx shall only accept orders from Xxxxxxx
UK/Polaris International against orders evidenced in writing and sold
by Xxxxxxx UK/Polaris International. CYBEX and Xxxxxxx each reserves
the right to sell and distribute Products to anyone on any terms
outside of the Territory and to terminate the manufacture or sale to
the Distributor of any Product if it has ceased to manufacture and
sell any such Product throughout the world.
(g) The Distributor shall be entitled, subject to Clause 9(e), to promote
and market the Products in the Territories in any reasonable manner
and, in particular, to resell the Products to its customers at such
prices as it may determine and, subject to Clause 4(l), to appoint and
remove sales agents or sub-distributors for any jurisdiction within
the Territories on an exclusive or nonexclusive basis in connection
with the sales or marketing of the Products as aforesaid.
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(h) For the avoidance of doubt, the Distributor shall be entitled to
fulfill (but not solicit) orders for Fitness Products for supply to
medical establishments in the Enlarged Territory until 31 December
1997.
(i) Notwithstanding any other provision of this Agreement, all
distributors (including sub-distributors) and/or dealers with whom
CYBEX Forza is carrying on business at the Effective Date shall for
the period of 30 days thereafter be entitled to place orders for CYBEX
Products through and for the account of the Distributor.
(j) Notwithstanding any other provision of this Agreement, all
distributors (including sub-distributors) and/or dealers with whom
Xxxxxxx is carrying on business at the Effective Date shall for the
period of 30 days thereafter be entitled to place orders for Xxxxxxx
Products through and for the account of Xxxxxxx.
(k) Following the Effective Date, the parties shall cooperate to ensure
that payments received by CYBEX Forza and/or the Distributor and/or
CYBEX/Xxxxxxx are applied to the oldest outstanding invoices of CYBEX
Forza and/or CYBEX/Xxxxxxx.
4. Distributor Responsibilities
----------------------------
Distributor hereby undertakes to:
(a) Actively and aggressively promote, demonstrate and sell Products
throughout the Territories.
(b) Submit an outline marketing plan to CYBEX at least 60 days prior to
the beginning of each of CYBEX's fiscal years, outlining promotional
activities, advertising, pricing strategies, training requirements and
sales forecasts for that fiscal year, the first such plan to be
submitted in respect of the fiscal year commencing January 1, 1998.
(c) Provide or procure the provision of prompt and appropriate
installation, repair and maintenance services to customers in the
Territories and instruct them in the proper use and care of Products.
(d) Absorb labor costs for repair and service on Products under warranty,
except (i) where such costs are incurred in respect of Products sold
prior to the Effective Date of this Agreement (in which case
CYBEX/Xxxxxxx shall reimburse the Distributor for any actual costs
within 60 days of receipt of evidence of same, provided the
Distributor uses reasonable endeavours to utilize the most efficient
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means of warranty service; this reimbursement procedure shall be
effective during 1997 and shall be subject to adjustment as mutually
agreed between the parties as of January 1, 1998), without regard to
the customer's source of the Products, and (ii) that Distributor will
be entitled to standard warranty reimbursement for Products under
warranty sold after the Effective Date of this Agreement;
(e) Assure, with the full cooperation of CYBEX/Xxxxxxx, that Distributor's
sales and service personnel are thoroughly and properly trained.
(f) Establish and maintain an adequate inventory of replacement parts.
(g) Maintain demonstration models of at least two CYBEX or Xxxxxxx models
per Product category on display.
(h) Assist CYBEX/Xxxxxxx in securing any necessary clearance for the legal
sale of Products in the Territories.
(i) Communicate as often as is reasonably necessary with CYBEX/Xxxxxxx
regarding promotional activities, service situations, and other
matters relating to performance under this Agreement.
(j) Keep confidential all technical and marketing information supplied by
CYBEX/Xxxxxxx unless such information has become public knowledge
through no fault of the Distributor.
(k) Subject to Clause 5(c), assume sole responsibility for all costs and
expenses of its own activities, programs and operations carried out in
pursuit of the objectives of this Agreement.
(l) Use all reasonable endeavors as soon as reasonably practicable
following its appointment under Clause 3(c) (i) to appoint Xxxxxxx
UK/Polaris International as a sub-distributor of Xxxxxxx Products in
Great Britain under fair and reasonable terms as agreed between the
Distributor and Xxxxxxx UK/Polaris International provided that CYBEX
has complied with its obligations under Clause 5(q), and (ii) to
continue such sub-distributor relationship during the Term.
(m) Meet or exceed the Performance Criteria set forth in Clause 13.
(n) Meet the payment terms set forth in Clause 7.
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5. CYBEX/Xxxxxxx Responsibilities
------------------------------
CYBEX/Xxxxxxx hereby undertakes to:
(a) Provide sales manuals, service manuals and such other promotional and
documentary materials as are available from time to time and which are
normally provided to the overseas distribution network at no cost to
the Distributor save for any reproduction costs.
(b) Provide promotional literature in English at no charge in reasonable
quantities and furnish existing artwork for production of literature
or advertisements by Distributor at no charge. Copies of artwork,
photographs or advertisements for the production of literature or
advertisements by the Distributor shall be charged at reproduction
cost only.
(c) Provide to the Distributor the same global marketing program it
provides to others and, in addition, each year CYBEX will reimburse
the Distributor for its participation in the FIBO show in Germany and
the LIW show in the United Kingdom in an aggregate amount equal to the
average CYBEX cost for these shows for the three years prior to the
Effective Date, plus any additional amounts agreed to by the parties
as part of the Distributor's marketing plan. During the first year
following the Effective Date these additional amounts will include the
amount which is necessary to fund the trade show presence at the FIBO
show 1998 and the LIW show 1997 and which Xxxxxxx has at the date of
this Agreement agreed to purchase. Xxxxxxx will as soon as practicable
following the Effective Date inform the organizers of said shows that
the Distributor is its authorized representative thereat.
Reimbursements will be made 90 days following actual expenditures
during the remainder of 1997 and 60 days following actual expenditures
thereafter.
(d) Provide timely delivery of orders in accordance with prevailing
manufacturing lead times. The time period from order to availability
will be consistent with the time period from order to availability for
other CYBEX/Xxxxxxx distributors of like size. CYBEX/Xxxxxxx shall not
be liable to Distributor for failure to deliver or for delay in making
delivery if such failure or delay results from any event brought about
by causes other than wilful or grossly negligent conduct by
CYBEX/Xxxxxxx.
(e) Organize training programs for Distributor's sales and service
personnel. CYBEX will assume responsibility for normal room and board
for Distributor personnel while they are in Massachusetts or Minnesota
for training.
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(f) Offer as soon as reasonably practicable following any request therefor
such technical assistance for service and repair problems as the
Distributor may experience and may reasonably require.
(g) Forward to the Distributor any sales leads for Products received from
the Territories, including requests for quotation.
(h) Keep confidential all confidential information supplied to
CYBEX/Xxxxxxx by the Distributor unless such information has become
public knowledge through no fault of CYBEX or any member of the CYBEX
Group.
(i) Submit an outline marketing plan to the Distributor at least 60 days
prior to the beginning of each of CYBEX's fiscal years, outlining
promotional activities, advertising, pricing strategies, training
requirements and sales forecasts for that fiscal year, the first such
plan to be submitted in respect of the fiscal year commencing January
1, 1998.
(j) Communicate as often as is reasonably necessary with Distributor
regarding product changes, pricing, promotional data and other
information that would be of assistance to Distributor.
(k) Not appoint any other person as a distributor or agent for the
Isokinetic Products in the Enlarged Territory while the Distributor is
acting as exclusive distributor pursuant to Clause 3(a)(ii).
(l) Not directly or indirectly, while the Distributor is acting as
exclusive distributor pursuant to this Agreement, supply to any other
person (i) any of the Products for resale in the Territory and/or (ii)
any of the Isokinetic Products for resale in the Enlarged Territory or
sell any Products itself in the Territories.
(m) Supply to the Distributor up-to-date copies of cost lists for the
Strength Products and Isokinetic Products from time to time.
(n) Supply to the Distributor up-to-date copies of distributor prices for
the Strength Products from time to time.
(o) Supply to the Distributor up to date copies of all list prices for
Cardiovascular Products and the Reactor from time to time.
(p) Ensure that the pricing for Cardiovascular Products and/or Strength
Products and/or the Reactor is equal to the most favorable pricing
then in place by CYBEX/Xxxxxxx and inform the Distributor within five
business days of any
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changes to most favorable pricing for Cardiovascular Products and/or
Strength Products and/or the Reactor.
(q) Procure that, as soon as reasonable practicable after the
Distributor's appointment under Clause 3(c), Xxxxxxx UK Limited shall
change its name to such name as shall not include the word "Xxxxxxx"
or any word reasonable capable of being confused with the word
"Xxxxxxx."
6. Exclusions
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Distributor and Forza each hereby agrees:
(a) Subject to Clause 6(b), not to manufacture, promote, distribute or
sell products within the Territories which both:
(i) are intended for resale at a price within 5% of the price of any
Product in the Territories; and
(ii) perform substantially the same function and have substantially
the same features as the Product referred to in (i);
provided, however, this restriction shall not apply to any products
which may be acquired by the Distributor from any manufacturer with
which the Distributor is actively trading as of the date of this
Agreement, a list of which is set out as Exhibit F.
(b) With effect from December 31, 1997 to cease distributing and acting as
a distributor of products manufactured by Xxxxxxx and to begin to
reduce its distribution of such products as of July 31, 1997.
(c) Subject to Clause 3(i) of this Agreement and to the sale, pursuant to
the Termination Agreement, of the Allocated Inventory (as defined in
the Termination Agreement), not to promote, distribute or sell
Products outside the Territories without the prior written consent of
CYBEX.
(d) Not to make changes or alterations to the Products without the prior
written consent of CYBEX.
7. Pricing and Terms of Supply
---------------------------
(a) Upon receipt of each order CYBEX/Xxxxxxx shall exercise best
endeavours to inform the Distributor as soon as reasonably practicable
of the estimated date on which the Products will be available ex-
factory, and the time period from order
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to availability will be consistent with the time period from order to
availability for other CYBEX/Xxxxxxx distributors of like size.
CYBEX/Xxxxxxx shall notify the Distributor as soon as reasonably
practicable if it becomes aware of circumstances that will cause these
estimated dates to be exceeded. CYBEX/Xxxxxxx shall provide weekly
updates of changes in manufacturing lead times.
(b) Purchase orders, invoices and directions/instructions issued pursuant
to this Agreement and any other directions or instructions issued by
either the Distributor or CYBEX/Xxxxxxx shall be consistent with this
Agreement, and any additional terms or conditions whatsoever shall not
be binding, upon the parties unless separately agreed to in writing by
the receiving party, and if there is any inconsistency between any
purchase orders, invoices or other directions or instructions and this
Agreement, this Agreement shall prevail.
(c) All Products to be supplied under this Agreement shall be sold ex-
factory, excluding freight, insurance, custom duties, export crating,
and forwarding, banking and consularization fees, which shall be paid
by Distributor, at the following prices:
(i) Strength Products - Cost plus 23% thereof;
(ii) Isokinetic Products - Cost plus 35% thereof;
(iii) Cardiovascular Products and the Reactor - 50% off the prevailing
domestic price list published from time to time by CYBEX/Xxxxxxx
(which may include price increases) or the best pricing then
available from CYBEX/Xxxxxxx (whichever is more favorable to the
Distributor). CYBEX and Xxxxxxx each warrants to the Distributor
that this discount rate is equal to the most favorable pricing
currently in place by CYBEX or Xxxxxxx, as applicable, and
undertakes to the Distributor that this discount rate shall not
be adversely altered for the Distributor and that the Distributor
shall receive the benefit of any improvement in pricing by
CYBEX/Xxxxxxx. If a product discount is used in lieu of cash with
respect to a promotional or marketing program, CYBEX and Xxxxxxx
need not include such product discount in determining best
pricing available.
(iv) Parts shall be supplied at the best applicable discounts
available to other distributors.
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(d) CYBEX/Xxxxxxx will be responsible for all standard packaging and will
provide labour for packing the Products into standard shipment
containers at its warehouse(s), but it shall not be responsible for
the costs of such containers.
(e) Distributor shall be responsible for all costs of shipment, including
freight, insurance, customs duties, export crating, and forwarding,
banking and consularization fees, including those of U.S. banks.
(f) CYBEX/Xxxxxxx shall give to the Distributor not less than 90 days
notice of any changes in the prices of any Products. Prior
notification of parts price increases, however, shall be not less than
seven days. Such notice may be by letter or fax and may indicate
future price increases as a percentage of current prices. Orders
received in writing, delivered by mail, fax or courier, before the
effective date of a new price list shall be invoiced according to the
prices prevailing at time of receipt of order, regardless of prices
prevailing at time of shipment, provided they call for immediate
shipment and acceptance of goods subject to normal manufacturing lead
times.
(g) During calendar year 1997, invoices shall be paid in full in US
dollars within ninety days of the invoice date therefor (which shall
be the date of shipment of the Products). Effective January 1, 1998,
unless otherwise agreed to in writing, invoices shall be paid in full
in US dollars within sixty days of the invoice date therefor (which
shall be the date of shipment of the Products). The applicable date
for payment is hereinafter referred to as the "Due Date."
(h) If the Distributor fails to pay the price for any Products on or
before the Due Date therefor CYBEX/Xxxxxxx shall be entitled to charge
and collect from the Distributor interest at the rate of 18% per annum
on the relevant invoice value.
(i) If the Distributor fails to pay the price for any Products within 15
days after the Due Date therefor CYBEX/Xxxxxxx shall be entitled to
withhold shipment of future Products until such time as the
Distributor shall have remedied such non-payment unless the nonpayment
has arisen as a result of a bona fide dispute between the parties with
respect to which the Distributor has given CYBEX/Xxxxxxx at least 30
days prior written notice.
(j) CYBEX/Xxxxxxx is not obligated to provide consignment inventory after
the Effective Date, and the parties shall handle existing consignment
inventory on a mutually agreeable basis.
8. Limitations
-----------
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Nothing in this Agreement shall be construed as authorizing the Distributor
to contract any debt or liability on behalf of CYBEX or the CYBEX Group.
Subject to Clause 4(d), CYBEX/Xxxxxxx will not be liable for any
expenditures made or incurred by Distributor in connection with the
performance of the Distributor's obligations pursuant to this Agreement.
9. Licence and Intellectual Property
---------------------------------
(a) CYBEX/Xxxxxxx hereby grants during the Term and thereafter during the
sell-off period referred to in Clause 12, a royalty free exclusive
licence, subject to the terms of this Agreement, to use the
Proprietary Marks within the Territories in connection with the
distribution of Products.
(b) The Distributor acknowledges that all CYBEX Proprietary Marks are
valid and belong exclusively to CYBEX and that all Xxxxxxx Proprietary
Marks are valid and belong exclusively to Xxxxxxx, and the Distributor
agrees not contest the same or any other proprietary rights of CYBEX
or Xxxxxxx during the Term or at any time thereafter.
(c) The Distributor shall be entitled to describe itself as CYBEX's and
Xxxxxxx'x "Authorized Distributor" for the Products as contemplated by
this Agreement.
(d) The Distributor and CYBEX/Xxxxxxx agree to cooperate with each other
as shall be necessary to prevent any acts of trademark infringement or
unfair competition with respect to any Proprietary Marks and
CYBEX/Xxxxxxx shall be obliged to take all such steps as shall be
necessary to prevent the same, but CYBEX/Xxxxxxx shall have sole
control over all actions and legal proceedings to suppress
infringement of and unfair competition with respect to any such
Proprietary Marks and any costs incurred by the Distributor at the
request of CYBEX/Xxxxxxx in connection with such actions and legal
proceedings shall be at CYBEX's/Xxxxxxx'x expense.
(e) Distributor agrees that it will use the Proprietary Marks in
connection with the promotion and sale of Products and customer
service for Products only in such manner, to such extent, and for such
purposes as are within CYBEX/Xxxxxxx'x accepted manner of usage of
such Proprietary Marks as communicated by CYBEX/Xxxxxxx to the
Distributor in writing from time to time.
10. Duration
--------
This Agreement shall come into force on the date hereof, subject to Clause
2, and, except as provided herein, shall continue for a fixed term until 31
December 2002, at which point:
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(a) if the Distributor has not met the performance criteria set forth in
Clause 13(b) for the calendar year 2002, CYBEX will have the right to
terminate this Agreement during the 90 day period referred to in
Clause 13(c); or
(b) if the Distributor has met the performance criteria set forth in
Clause 13(b) for the calendar year 2002, the Term shall thereafter be
terminable on not less than 24 calendar months' written notice to
expire at any time on or after 31 December 2004. In the event of any
such extension of the Term, then this Agreement shall thereafter be
varied such that:
(i) the prices relating to the supply of Products shall be equal to
the most favorable prices then in place by CYBEX/Xxxxxxx (and
CYBEX/Xxxxxxx undertakes to the Distributor that such prices
shall be adjusted upon any change in the most favorable prices by
CYBEX/Xxxxxxx); and
(ii) Clause 13 shall no longer apply.
11. Warranties, Liability and Replacement Parts Service
---------------------------------------------------
(a) CYBEX/Xxxxxxx warrants to the Distributor that:
(i) all Proprietary Marks are (or will be in respect of any
applications for registration of such marks made following the
date hereof) capable of being licensed as set out hereunder; and
(ii) it is not aware of any rights of any third party which would
render the sale of the Products, or the use of any of the
Proprietary Marks on or in relation to the Products, unlawful or
an infringement of any third party rights relating thereto, nor
has it received any written notification from any third party
alleging such infringement;
(b) CYBEX warrants to the Distributor that any information supplied by it
or any member of the CYBEX Group to the Distributor pursuant to this
Agreement shall be complete and accurate in all material respects and
shall not omit anything which would affect the accuracy of said
information in any material respect.
(c) The Distributor warrants to CYBEX that any information supplied by it
to CYBEX or to any member of the CYBEX Group pursuant to this
Agreement shall be complete and accurate in all material respects and
shall not omit anything which would affect the accuracy of said
information in any material respect.
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(d) All sales of Products hereunder shall comply with relevant CE and TUV
requirements (where applicable) and shall be made pursuant to
CYBEX's/Xxxxxxx'x standard written warranty, as from time to time in
effect. Without limiting the foregoing, and notwithstanding any
contrary provision contained herein, CYBEX's and Xxxxxxx'x
responsibility with respect to any defect in material or workmanship
of, or in connection with any injury to persons or property caused by,
the Products sold hereunder shall be solely governed by the terms and
provisions of such standard warranty. Except for such written
warranty, CYBEX AND XXXXXXX EACH HEREBY DISCLAIMS ALL WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING IMPLIED WARRANTIES ON MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
(e) Distributor shall be solely responsible for any warranty in connection
with any sales of Products which it has provided other than the
warranties set forth in CYBEX's/Xxxxxxx'x published warranty policies
which have supplied to the Distributor by CYBEX/Xxxxxxx.
(f) Distributor agrees to follow the procedures established from time to
time by CYBEX/Xxxxxxx and supplied to the Distributor for the
processing and disposition of warranty claims and the return and
disposition of replacement parts supplied by CYBEX/Xxxxxxx for
Products which are claimed to be defective.
(g) Distributor's obligation hereunder extends, subject to Clause 4(d), to
all Products under warranty presented to Distributor by a customer in
the Territories, regardless of when the Products were sold and whether
Distributor sold Products to the customer.
(h) CYBEX/Xxxxxxx will provide replacement Products/replacement parts for
Products during the Term, at no cost to Distributor (except duty), in
accordance with the applicable warranty described in Clause 11(d).
(i) CYBEX shall to the fullest extent permitted by law indemnify, defend
and hold harmless the Distributor from and against any and all claims,
actions, liabilities, demands, proceedings or judgments (collectively,
"Claims") brought or established against the Distributor in any
jurisdiction by any third party arising from or related to (i) CYBEX
disposing of or ceasing to carry on the Isokinetic Business and/or
(ii) CYBEX's actions or omissions in connection with the termination
of the agreement referred to in Clause 3(b) and/or the termination of
any other existing agreements or arrangements relating to the
distribution of Xxxxxxx Products in the Territory, provided that the
Distributor gives CYBEX prompt notice of the assertion of the Claims,
the Distributor provides
15
reasonable assistance as requested by CYBEX (and at CYBEX's expense)
in the defense of the Claim, and CYBEX has the sole right to control
the defense and settlement of the Claim, and provided further that
CYBEX's obligations hereunder shall not apply to any claims arising
from actions or omissions of the Distributor.
12. Termination
-----------
(a) This Agreement may be terminated by CYBEX with respect to any country
or countries within the Territory in accordance with Clause 13(c).
(b) Except to the extent that a greater notice period is required by any
applicable statute, CYBEX shall have the right to terminate the
Agreement (or by part thereof) with immediate effect by sending notice
to Distributor by certified mail, return receipt requested or by fax,
for the following specific reasons:
(i) The dissolution, liquidation or change of ownership (i.e.
transfer of majority of capital stock) of the Distributor.
(ii) The voluntary institution by the Distributor of any proceeding
seeking relief or readjustment of indebtedness or the involuntary
institution against the Distributor of any such proceedings.
(iii) Any sale, assignment or transfer or attempted sale, assignment or
transfer by the Distributor of such part of its business as
relates to the distribution of the Products without the prior
written consent of CYBEX, not to be unreasonably withheld.
(iv) Submission by Distributor of a fraudulent report or statement or
of a fraudulent claim for reimbursement, refund or credit which
in any case has not been remedied by the Distributor within
thirty (30) days of Distributor's receipt of written notice of
same from CYBEX.
(v) The failure of Distributor to pay any invoice hereunder within 60
days after the Due Date of the relevant invoice, provided that
CYBEX has given the Distributor at least thirty (30) days prior
written notice in accordance with Clause 25.1 of Distributor's
failure to pay on the Due Date.
(c) Except to the extent that a greater notice period is required by any
applicable statute, the Distributor shall have the right to terminate
this Agreement with immediate effect by sending notice to CYBEX by
certified mail, return receipt requested, or by fax, for the following
specific reasons:
16
(i) The dissolution or liquidation of CYBEX.
(ii) The voluntary institution by CYBEX of any proceeding seeking
relief or readjustment of indebtedness or the involuntary
institution against CYBEX of any such proceedings.
(d) Upon termination of this Agreement, the Distributor may sell stocks of
Products (and, to the extent that such stocks are insufficient
CYBEX/Xxxxxxx will supply to the Distributor sufficient numbers of
Products) to enable the Distributor to fulfil orders which it has
accepted from customers prior to the date of termination of this
Agreement but which are unfulfilled (in whole or in part) or to
otherwise dispose of its stock on hand.
(e) Upon termination of this Agreement, all outstanding debts or claims
which one party may have against the other shall become immediately
due.
(f) Upon termination of this Agreement, CYBEX is entitled (but not
obligated), subject to Clause 12(d), to take over Distributor's stock
of Products at that time to dispose of as is seen fit, in which event
it will credit Distributor with ex-factory prices (including freight
and duty) for the corresponding goods (as long as they are in good
repair and condition).
(g) After termination of this Agreement, Distributor shall save as
provided in Clause 12(d) refrain from the use or promotion of
equipment, literature or advertising matter related to CYBEX, Xxxxxxx
or the Products which may imply or suggest a continuing relationship
with CYBEX or Xxxxxxx.
(h) Upon termination of this Agreement, Distributor shall provide CYBEX
with the names and addresses of all customers who purchased and/or
obtained service for Products from or by Distributor and the service
records of all such customers.
(i) Nothing in this Clause 12 shall be construed as adversely affecting
the rights and remedies of the parties as provided by law with respect
to breaches of this Agreement.
13. Performance Criteria
--------------------
(a) The parties agree that the initial base sales figures for the purposes
of this Clause shall (i) in respect of each individual country within
the Territory be as set out in Column (1) of Schedule 1 (the figures
for each individual country in said Column being an "Individual Base
Amount") and (ii) in respect of the entire Territory be the aggregate
total of all Individual Base Amounts, being the "Total Base Amount."
17
(b) The Distributor undertakes to CYBEX to ensure that the aggregate price
of Products ordered during each successive period of 12 months
commencing 1 January 1998 is equal to or exceeds the Total Base
Amount:
(i) plus on a compound basis 15% thereof (being the aggregate total
(the "Total Adjusted Base Amount") of the amounts set out in
Columns (2) -(6) of Schedule 1 (being in respect of each country
an "Individual Adjusted Base Amount")); or
(ii) plus on a compound basis x% thereof (where x equals the amount
(expressed as a percentage) by which the aggregate turnover of
CYBEX and Xxxxxxx worldwide sales (net of sales pursuant to this
Agreement) for the relevant period of 12 months exceeds said
turnover in the immediately preceding period of 12 months, in
each case as set out in the relevant accounts of CYBEX),
whichever is the lower.
(c) In the event that the Distributor fails to meet the performance
criteria set forth in Clause 13(b) for any year, CYBEX shall be
entitled, at any time during the 90-day period following the
publication of CYBEX's audited financial statements for the year, to
terminate this Agreement in respect of any country or countries in the
Territory where the aggregate price of Products ordered for re-sale in
that country during the prior year is less than the relevant
Individual Base Amount or Individual Adjusted Base Amount, but such
termination shall be without prejudice to the Distributor's rights to
the remaining countries in the Territory. The provisions of Clause
12(d) shall apply to the sales of any Products following any such
termination by CYBEX.
(d) The parties agree that if the lead delivery times (being the period
between the placement of any confirmed orders for Products and
shipment thereof) are longer than eight weeks then this may have an
adverse effect upon the Distributor's ability to comply with its
obligations under Clause 13(b) and the parties shall agree upon such
adjustment to the performance criteria in Clause 13(b) as shall be
reasonable in the circumstances.
(e) The Distributor shall provide to CYBEX within 60 days after the end of
each year all information reasonably required to determine the price
of Products ordered for re-sale in each country listed on Schedule 1
for that year.
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14. Isokinetic Business
-------------------
(a) In the event that CYBEX intends to sell or otherwise dispose of the
Isokinetic Business it shall provide the Distributor with a notice (a
"Transfer Notice") as soon as reasonably practicable and in any event
not less than 14 days prior to such sale or other disposition setting
out all material terms upon which it intends to sell or otherwise
dispose of said Business and shall offer to sell the Isokinetic
Business to the Distributor on terms no less favorable than as set out
in the Transfer Notice (save that the consideration payable by the
Distributor shall exceed the consideration set out in the Transfer
Notice by US$1).
(b) The Distributor shall within seven days of receipt of a Transfer
Notice inform CYBEX whether it wishes to acquire the Isokinetic
Business and if it wishes to acquire said Business CYBEX shall be
obliged to sell said Business to the Distributor. If the Distributor
does not indicate within the said seven day period its intention to
acquire the Isokinetic Business then CYBEX shall be at liberty to
transfer said Business to any third party in accordance with the terms
set out in the Transfer Notice but shall not be entitled to sell said
Business for any lower consideration than specified in said Notice.
(c) In the event that CYBEX intends to cease operating the Isokinetic
Business (without a sale or other disposition of such Business), CYBEX
shall give the Distributor not less than seven days notice of its
cessation of such Business and the Distributor shall be entitled to
make a bid to purchase such Business; provided (in the event there is
no sale of such Business) CYBEX will exercise its best endeavors
(subject to the transfer of its physical facility) to supply
Isokinetic Products as reasonably required by Distributor for the
period of six months following the date of such notice and CYBEX will
supply replacement parts for any Isokinetic Product as long as there
is an existing warranty obligation by CYBEX for such product. In the
event CYBEX intends to transfer its physical facility, it will give
the Distributor not less than seven days notice prior to such transfer
and the Distributor shall be entitled to place a bulk order (on
mutually agreed reasonable terms) to cover the time gap resulting from
the transfer of the physical facility.
15. Information Evaluation
----------------------
(a) The Distributor shall have the right once during any calendar year of
the Term, on not less than seven days prior written notice, to inspect
the source of any information relating to the price of the Products
under this Agreement and to instruct its auditors to produce a report
certifying the accuracy of any such information. If such audit reveals
any material inaccuracy in such information (being any such inaccuracy
which has resulted in the Distributor making any
19
overpayments exceeding 1% of the total amount shown by such Report to
be the correct amount which should have been paid by the Distributor
for all Products for the year) and such material inaccuracy is
confirmed by agreement of, or a decision binding on, the parties,
CYBEX shall bear the cost of such Report. If a material inaccuracy is
not shown by such Report and confirmed, the Distributor shall bear the
cost of such Report. If an overpayment or underpayment is identified
and confirmed through this process, CYBEX or the Distributor, as
applicable, shall make a corrective payment within 14 days of demand.
(b) CYBEX shall have the right once during any calendar year of the Term,
on not less than seven days prior written notice, to inspect the
source of any information relating to the Distributor's performance
against the Performance Criteria set forth in Clause 13 and to
instruct its auditors to produce a report certifying the accuracy of
any such information. If such audit reveals any material inaccuracy in
such information (being any such inaccuracy which has resulted in the
Distributor not meeting one or more of the Performance Criteria and
thereby being subject to a termination pursuant to Clause 13(c)) and
such material inaccuracy is confirmed by agreement of, or a decision
binding on, the parties, the Distributor shall bear the cost of such
Report. If a material inaccuracy is not shown by such Report and
confirmed, CYBEX shall bear the cost of such report.
(c) Each party shall, if requested by the other in accordance with this
Agreement, provide that other party and its authorized representatives
with such information, access to documentation and assistance as is
within the possession of that party and which may be reasonably
required by the other party for the purposes of any such review.
16. Force Majeure
-------------
(a) If any party is affected by Force Majeure it shall forthwith notify
the other parties of the nature and extent thereof.
(b) No party shall be deemed to be in breach of this Agreement, or
otherwise be liable to the others, by reason of any delay in
performance, or non-performance, of any of its obligations hereunder
to the extent that such delay or non-performance is due to any Force
Majeure of which it has notified the other party, and the time for
performance of that obligation shall be extended accordingly.
(c) If the Force Majeure in question prevails for a continuous period of
five months, the parties shall make a bona fide attempt to alleviate
the effect of the
20
Force Majeure and, if that attempt has not been successful by the end
of the sixth month, the affected party or parties have the right to
terminate this Agreement in accordance with Clause 12 notwithstanding
the existence of the Force Majeure.
17. Binding Effect
--------------
This Agreement is binding on and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
18. No Implied Waivers
------------------
The failure of either party at any time to require performance by the other
of any provision of this Agreement shall in no way affect the full right to
require such performance at any time thereafter, nor shall waiver by either
party of any succeeding breach of the same or any other provision
constitute a waiver of the provision itself.
19. Amendments
----------
Terms of this Agreement may be amended by mutual consent of the parties
hereto only in writing, duly signed by authorized officials of each of the
parties.
20. Entire Agreement
----------------
This Agreement contains the entire agreement among CYBEX, Xxxxxxx,
Distributor, and Forza with respect to the subject matters hereof and with
effect from the Effective Date supersedes all prior agreements or
understandings of the parties with respect thereto.
21. Severability
------------
If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable or in conflict with the law of any state or
jurisdiction, such provision shall be severed from this Agreement or
otherwise modified to become valid and enforceable insofar as it relates to
that jurisdiction only, but the illegality or unenforceability of such
provision shall have no effect upon and shall not impair the enforceability
of any other provision of this Agreement.
22. Nature of Agreement
-------------------
Nothing in this Agreement shall create, or be deemed to create, a
partnership or the relationship of principal and agent or employer and
employee between the parties.
21
23. Applicable Law
--------------
This Agreement shall be governed by and construed in all respects in
accordance with the laws of England.
24. Jurisdiction
------------
The courts within the State of Massachusetts shall have exclusive
jurisdiction of all disputes and controversies arising out of or related to
this Agreement or the parties' performance hereunder, and the parties
consent to the exclusive jurisdiction of such courts.
25. Notices and Service
-------------------
25.1 Any Notice required or desired to be given by either party hereto to the
other shall be deemed validly given if delivered by hand or sent by pre-
paid post (airmail, if sent abroad) or by fax:
(i) in the case of CYBEX or Xxxxxxx, to its above address (fax 1508
533 5799) (attn: Xxxxx Xxxxxx) but with a courtesy copy to Xxxxx
Xxxxx at Xxxxxx & Xxxxxxx (fax 0 000 000 0000);
(ii) in the case of the Distributor or Forza, to its above address
(fax 00 000 000 0000) (attn: Xxxxx Xxxxxxxxx/Xxxxxxx Xxxxxx) but
with a courtesy copy to Xxxx Xxxxxxxxx at Gouldens (fax 44 171
583 3051)
but any party may by written notice to the others nominate an alternative
address (or fax number) for the purposes of service hereunder.
25.2 In the case of a Notice delivered by hand it shall be deemed to be
delivered at the time of delivery (if delivered between 9:00 a.m. and 4:30
p.m. on a business day in the receiving party's country) or (if not so
delivered) at 9:00 a.m. in the receiving party's country on the next
business day following; in the case of a Notice posted as aforesaid it
shall be deemed to have been served on the fifth business day following
dispatch; and in the case of a Notice sent by fax it shall be deemed to
have been served at the time of dispatch (if dispatched on a business day
between 9:00 a.m. and 4:30 p.m. in the receiving party's country) or (if
not so dispatched) at 9:00 a.m. in the receiving party's country on the
next following business day.
25.3 For the avoidance of doubt any consent required to be given in writing
pursuant to the provisions of this Agreement may be given by fax.
22
25.4 Each of the parties shall give notice to the other of any address or
telephone, fax or similar number at the earliest possible opportunity but
in any event within 48 hours of such change.
26. Warranty as to Status and Authority
-----------------------------------
(a) CYBEX hereby warrants and represents to the Distributor that it is a
corporation duly organized under the laws of the State of New York
with full power to enter into this Agreement and any agreement to be
entered into pursuant hereto and to exercise its rights and perform
its obligations under this Agreement and any such ancillary agreements
and all corporate and other action required to authorize its execution
of such documents and its performance of its obligations thereunder
has been duly taken.
(b) Xxxxxxx hereby warrants and represents to the Distributor that it is a
corporation duly organized under the laws of the State of Delaware
with full power to enter into this Agreement and any agreement to be
entered into pursuant hereto and to exercise its rights and perform
its obligations under this Agreement and any such ancillary agreements
and all corporate and other action required to authorize its execution
of such documents and its performance of its obligations thereunder
has been duly taken.
(c) CYBEX and Xxxxxxx each hereby warrants and represents to the
Distributor that it has obtained all necessary consents and
authorizations to enable it lawfully to enter into and perform its
obligations under or contemplated by this Agreement and any ancillary
agreements each of which it warrants is or will when entered into be
valid and enforceable against it in accordance with its terms.
(d) The Distributor and Forza each hereby warrants and represents to CYBEX
that it is a corporation duly organized under the laws of England with
full power to enter into this agreement and any agreement to be
entered into pursuant hereto and to exercise its rights and perform
its obligations under this Agreement and any such ancillary agreements
and all corporate and other actions required to authorize its
execution of such documents and its performance of its obligations
thereunder has been duly taken.
(e) The Distributor and Forza each hereby warrants and represents to CYBEX
that it has obtained all necessary consents and authorizations to
enable it lawfully to enter into and perform its obligations under or
contemplated by this Agreement and any ancillary agreements each of
which it warrants is or will when entered into be valid and
enforceable against it in accordance with its terms.
23
27. Announcements
-------------
Save in respect of statutory returns or matters required to be disclosed by
law or to any governmental or regulatory authority, none of the parties
hereto shall make any press statement or other public announcement in
connection with this Agreement without the prior written approval of the
others in connection with the text of such statement or announcement.
CYBEX agrees to publish an announcement within ten business days of the
Effective Date disclosing that it is taking the action described in Clause
3(b), and the Distributor agrees to publish an announcement within ten
business days of the Effective Date disclosing that it is taking the action
described in Clause 6(b).
28. Costs of Litigation
-------------------
In the event of litigation arising out of or related to this Agreement or
the parties' performance hereunder, the prevailing party or parties shall
be entitled to recover from the other party or parties to the litigation,
upon a final judgment, reasonable costs and expenses of litigation,
including without limitation attorneys fees, relating to such litigation
(including appeals).
29. Enforceability.
--------------
Insofar as the restrictions contained in this Agreement or any arrangement
of which it forms part are registerable under the Restrictive Trade
Practices Act 1976 (the "RTPA") such restrictions shall to such extent not
come into force until the day following the day upon which such particulars
relating thereto as are required to be filed with the Office of Fair
Trading ("OFT") pursuant to the RTPA shall have been received by the OFT
for filing. CYBEX hereby authorizes Forza to file such particulars with
the OFT and CYBEX and Forza hereby undertake to use their respective best
endeavours to provide such further information and assistance as may be
required in relation to this Agreement (i) by the OFT or (ii) in support of
an application to the Court for a declaration that none of the said
restrictions is contrary to the public interest.
24
30. Counterparts
------------
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and each of which shall be
deemed an original instrument.
AS WITNESS the hands of the duly authorized representatives of the parties the
day and year first above written.
CYBEX INTERNATIONAL, INC. XXXXXXX INC.
BY: /s/ Xxxxx Xxxxxx BY: /s/ Xxxxx Xxxxxx
-------------------------------- -------------------------------
Print Name: Xxxxx Xxxxxx Print Name: Xxxxx Xxxxxx
------------------------ -----------------------
FORZA FITNESS EQUIPMENT LIMITED THE FORZA GROUP LIMITED
BY: /s/ Xxxxxxx Xxxxxx BY: /s/ Xxxxx Xxxxxxxxx
-------------------------------- -------------------------------
Print Name: Xxxxxxx Xxxxxx Print Name: Xxxxx Xxxxxxxxx
------------------------ -----------------------
25
