This Agreement is between GRS MEDICAL (PROPRIETARY)
LIMITED, of 17 Faraday Street, Village Main, Johannesburg, South Africa ("GRS")
and THREE KAY ENTERPRISES INC. ("TKE"), 4820 Camlann Court, Richmond B.C., V7C
4SI, Canada ("The Distributor"), a division of AMS Homecare Inc.
GRS hereby appoints the Distributor as Sole Distributor (Clause 2 - 6)
for the product range ("The Products") and markets ("the Markets") detailed
in Schedule 1 attached for the territory of NORTH AMERICA ("the Territory"),
commencing on the 1 June 2002 ("the Commencement Date") and continuing for
5 years, subject to Clause 5.1.
SOLE DISTRIBUTION (SCHEDULE 1)
This entitles the Sole Distributor and GRS to certain additional rights
not appropriate to a standard non exclusive distribution agreement.
GRS agrees to refer to Distributor all enquiries received for delivery
of the Products and Markets into the Territory.
GRS agrees not to sell or assist any other person to sell inside the
Territory (whether directly or indirectly) in the specified markets listed
in Schedule 1.
The Sole Distributor shall not establish or maintain a distribution office
outside the territory for the purpose of selling the goods there, without
prior consultation with GRS.
The Sole Distributor agrees not to engage in selling, factoring or otherwise
being concerned in the promotion or sale of goods competing with, or similar
to, the Product range, unless agreed to by both parties, which decision
shall NOT be unreasonably withheld.
The Sole Distributor shall apply for and obtain all necessary licences,
permits or other authorisations required by the local law in relation to
the promotion, marketing and supply of the products.
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The Sole Distributor shall, if requested, at the start of each quarter
provide GRS with its best estimate of the volume of orders likely to be
placed with GRS for the ensuing six months, item by item, but such estimate
shall not be binding on either party.
This entitles the Distributor and GRS certain rights:
SUPPLY OF PRODUCTS AGAINST ORDERS
GRS shall use its best endeavours to supply the Products according to
Distributor's orders and to meet agreed lead times. Orders will be delivered
to scheduled dates, or as soon as practical. Failure by GRS to deliver
Products within a reasonable period after the agreed delivery date, shall
be deemed to be a breach of the terms of this Agreement, unless previously
The risk in the products during transit shall be the Distributor's until
arrival at destination, all prices being quoted on an ex-works basis.
GRS shall, at its expense, obtain for the Distributor any necessary certificates
of origin necessary for importing Products into the relevant country of
The Distributor shall bear any customs duties and taxes that may be levied
by reason of importation of the products to the Territory.
GRS do not accept responsibility for the final disposal of product or
The distributor shall:
Use its best endeavours to promote and extend the sale of the Products
throughout the Territory.
Give proper consideration to the interests of GRS in all dealings and
abide by any rules or instructions notified by GRS to the Distributor in
relation to GRS's Products; and not sell or promote Products or into Markets
not specified in Schedule 1.
Not make any representations, or give any warranties, or other benefits
in favour of the proposed purchaser, or to the detriment of GRS.
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In the event of any dispute arising between Distributor and any proposed
purchaser in relation to the sale or offer for sale of the Products, forthwith
inform GRS of the details and circumstances of dispute.
Give adequate details of all enquiries and transactions relating to the
products received or conducted by Distributor.
Defray all expenses of and incidental to the distributorship hereunder
incurred by Distributor including the expenses of advertising and participation
in trade exhibitions. GRS will supply reasonable support information and
Observe any applicable laws in its Territory in regard to the packaging,
labelling and storage of the products.
Distributor recognises that trademarks and names used on, or relative
to the Products, and will not market or sell Products under any other names
without the prior written consent of GRS. GRS would consider private label
manufacture for TKE subject to agreed volumes being realistic.
Where it is necessary to refer to the Trademark, this will be made known.
All Technical product information supplied by GRS, or requested by the
Distributor, will be treated with the utmost confidentiality by both parties
and will remain the property of GRS.
Purchase from GRS a minimum of US$ 100,000 during the course of Year 1
of this agreement. Subsequent years to be mutually agreed upon, on a year
by year basis.
If the Distributor is not at any time providing adequate sales coverage,
or is not achieving Sales levels, in accordance with the budget agreed between
GRS and the Distributor, and without prejudice to any of its other rights
under this agreement, GRS may, by three month's notice in writing, terminate
Termination shall operate without prejudice to the rights and obligations
of either party in relation to the other which have accrued prior to the
Last Full Day, that is to say the day on which a notice of termination of
the Agreement (under the "provisions for giving notice") expires.
During the period of notice, whether given by Distributor or GRS, the
Distributor shall be entitled to place orders for future delivery, whether
the date be before or after the Last Full Day in respect of any orders and
matters relevant thereto, which are still outstanding so that they may be
completed as well as if the Agreement were still in full force and effect.
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Should any of the following events occur, namely:
Failure of either party to observe any of the terms hereof to a material
and significant extent and to remedy the same (where it is capable of being
remedied) within the period specified in a notice given by the aggrieved
party to the party in default calling for remedy, being a period not less
than 30 days;
Distributor being for any cause prevented from performing its duties hereunder
for a continuous period of three months;
Either party becoming insolvent, or having a receiver appointed of assets,
or execution or distress levied upon its assets;
An order being made to a resolution being passed for winding-up or liquidation,
of either party (except that where any such event is only for the purposes
of amalgamation with another, or reconstruction and the resultant company
emerging is, or agrees to be, bound by the terms hereof and is a company
whose shares are owned by persons not in competition with the other party,
except to an amount not exceeding five percent, this provision shall not
The share capital of one party has been acquired to an extent exceeding
26 percent by a competitor of the other party;
The party not so affected may terminate this Agreement by
notice in writing to operate on the date specified in the notice. In any
of these cases, the date specified may be a date earlier than the date of
the notice, so as to defeat any title which a trustee in bankruptcy, or
a receiver, or liquidator, or other such person, might otherwise acquire
to the rights conferred hereby.
If at any time, GRS shall cease to carry on the business of
manufacturing any of the Products, of which prior notice in writing will
be given, this Agreement shall terminate in relation to those products.
Failure by either party to observe the terms of this Agreement
arising from causes beyond its reasonable control, shall not be deemed a
breach of this Agreement, which shall continue in force until the circumstances
have ceased to prevent performance provided that the period of cessation
does not exceed six months. Without limiting the generality of this provision,
the following shall be deemed to be causes beyond the reasonable control
of either party, namely: earthquake, lightning, storm, hurricane, fire,
explosion, failure of public services, absence of transport facilities,
labour dispute and the like.
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This agreement may be extended for further periods of 5 years
subject to the following:
The agreed purchase targets as referred to in paragraph 4.11 having been
A new purchase target, as envisaged in Clause 4.11 for the forthcoming
periods being agreed upon.
EFFECT OF TERMINATION
GRS shall be entitled to purchase from the Distributor at invoice price,
plus cost of transport, insurance and all other associated costs, all unsold
Products then in the possession of Distributor which it desires so to purchase,
notifying Distributor of its decision with 30 days of date of termination,
based on Distributor's last statistical return.
Distributor may sell stocks for which it has accepted orders prior to
the date of termination, or in respect of which GRS does not exercise its
right of repurchase under Clause 6.1 (I) above and for those purposes and
to that extent the provisions of this Agreement shall continue in full force
Except as provided above, the Distributor shall cease to support any advertising
or promotional program.
In respect of any Products supplied by GRS, the invoice for which has
not been paid, GRS may exercise the right of an unpaid seller and repossess
such products against cancellation of such invoice. For the purpose of operating
this clause fairly, GRS may apply all payments received in chronological
order in relation to shipments despatched and may apply any remainder, which
does not fully discharge an invoice, to such items on such invoice as it
shall in its absolute discretion determine.
Outstanding, unpaid invoices shall become payable immediately in place
of the payment terms set forth, or which may have been agreed subsequently
between the parties or established by course of conduct.
Distributor shall forthwith cease to use the trademarks in connection
with the Products, or in connection with any other Goods, other than in
respect of which GRS does not exercise its right of repurchase.
The Distributor shall not be entitled to compensation for
goodwill, which may have accrued, to the marketing of GRS's Products in
the Territory, and GRS may make such other arrangements for marketing the
Products as he may deem expedient, in order to preserve the goodwill marketing
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The relationship between the parties is that of seller and
buyer, on a supply basis and shall not be deemed to be that of employer/employee,
Principal/Agent, joint venture, partnership, or otherwise. Distributor is
not authorised to act on behalf of the principal purporting to bind GRS.
Neither party shall have the right to assign this Agreement,
or the rights hereunder, except as part of the sale of its whole business
as a going concern and to a person who is not a direct or serious competitor
of the other, or except with consent of the other.
The Distributor shall not be entitled to appoint any sub-distributor,
except with the prior written consent of GRS, which consent shall not be
The Distributor and GRS hereby undertakes:
Not at any time to divulge any information which it may become possessed
or aware of, in relation to each others affairs in relation to this Agreement,
or the operation thereof, which is of a confidential nature; except and
to the extent as is necessary for the purposes contemplated by this agreement,
or as required by law;
Alter, remove or tamper with the trademarks, packaging or other means
or identification GRS's Products;
Recognise that the right to patent product developments, enhancements
and new products belong to GRS.
Any waiver or forbearance in regard to the performance of
this Agreement shall operate only if in writing and shall apply only to
the specified instance, and shall not affect the existence and continued
applicability of the terms thereof thereafter.
This Agreement embodies all the terms binding between the
parties hereto and replaces all previous representations or proposals not
embodied herein. Amendments hereto shall not come into operation until duly
embodied in an amending agreement properly executed on behalf of both the
All communications between the parties hereunder made in the
course of operating this Agreement, or of terminating the same, or giving
notice of breach, or alleged breach, which are sent or despatched as set
out below, shall be deemed to have been given to the addressee at times
stated provided that the communication is addressed to the last known address
from which this Agreement is being operated by the other party and is properly
franked or otherwise prepaid:
By airmail - 10 days after despatch;
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By cable - four days after despatch;
By telex, telecopier or other electronic means of written communication
- 6 hours after despatch during business hours; otherwise, 4 hours after
commencement of business thereafter.
By courier, by receipted delivery, upon receipt.
This agreement shall be governed by the laws of the Republic
of South Africa, and both parties agree to the jurisdiction of the South
The Distributor undertakes to effect all payments in respect
of goods purchased from GRS in terms of this agreement, by means of an irrevocable
confirmed letter of credit payable 60 days after the date of the Bill of
Should any amounts owing to GRS by the Distributor to GRS
remain unpaid for 15 days of notice being given by GRS to the Distributor
requesting payment, GRS may cancel this agreement without giving any further
IN WITNESS WHEREOF the authorised representatives of the parties have
set their hands the day and year first before written.