EXHIBIT 10.17
ADDENDUM TO DISTRIBUTION AGREEMENT
BETWEEN LOUISVILLE BEDDING COMPANY AND
SPAN-AMERICA MEDICAL SYSTEMS, INC.
JANUARY 1, 2002
This Addendum to Distribution Agreement is hereby entered into and effective as
of January 1, 2002, between Louisville Bedding Company ("Distributor"), a
Delaware corporation and Span-America Medical Systems, Inc. ("Manufacturer"), a
South Carolina corporation.
1. The Agreement between Distributor and Manufacturer of March 1, 1999
("Agreement") is hereby incorporated herein by reference. All defined terms
contained in the Agreement apply to this Addendum.
2. The Term of the Agreement, as amended by this Addendum, shall extend through
December 31, 2006, subject to the terms and conditions of the Agreement, and
shall be renewable thereafter in accordance with the terms of Section 6 of the
Agreement.
3. Distributor shall receive a volume rebate from Manufacturer on the following
basis:
SALES (IN MILLIONS) REBATE %
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Sales are defined as sales from Manufacturer to Distributor. Sales
shall be deemed to have been made as of the date of shipment from Manufacturer
to Distributor or Distributor's customer. The rebate will be calculated from
January 1st to December 31st of each year for the duration of the contract. The
rebate will be paid within 14 calendar days after the end of Louisville
Bedding's fiscal year.
4. Manufacturer hereby licenses to Distributor's subsidiary, AHF Ltd. ("AHF"),
its Trademarks, Patents and other intellectual properties in existence or to be
developed by Manufacturer, for use in connection with the manufacture of
Products to be sold solely in Canada in accordance with the terms of the
Agreement. This license applies only to Manufacturer's Products manufactured by
or for AHF, Ltd., in Canada, not to include Manufacturer or Manufacturer's
agent. AHF Ltd. agrees that Products manufactured under this license will be in
accordance with Manufacturer's typical quality standards and Product
specifications.
In exchange for this license, AHF agrees to pay Manufacturer a license
fee of __ percent of the net sales price of the Products manufactured under this
license. Net sales price shall be determined as follows: gross sales minus
discounts, advertising, royalties, returns, credits, freight, and rebate
allowances. Such license fee shall be calculated and paid by AHF to Manufacturer
quarterly, within thirty (30) days of the end of each calendar quarter.
All other applicable terms and conditions of the Agreement, more
particularly sections 3.1, 3.3, 3.4, 3.6, 3.7, 4.3, 4.4, 5, 6, and 7 will be
applicable to this license agreement between Manufacturer and AHF, Ltd.
LOUISVILLE BEDDING COMPANY
By:
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Title:
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(Distributor)
SPAN-AMERICA MEDICAL SYSTEMS, INC.
By:
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Title:
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(Manufacturer)
AHF, Ltd.
By:
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Title:
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(Licensee)
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