Commercial Agreement

Terms of the Commercial Agreement between

1. Manufacturer : Medtech Concept AB (Sweden)

2. Regional Distributor: The Private Office of HH Sheik Ahmed Bin Faisal Qassimi


This document provides an overview of the commercial terms of the Regional Master Distribution Agreement to be drawn up between both parties. This serves as a plain English explanation to guide legal teams in the preparation of the regional master distribution agreement.



Contract TypeRegional Master Distribution Agreement for MENA & Africa
ProductMinipen2 Insulin syringe
Percentage of Sales Revenue SQ Total Margin available to split 50/50%
Caclucated: [Selling price] – [Cost to Purchase] = [Total Margin]
Contract DurationThe term of this contract is 5 years.
Global Distributor Medtech Concept AB is the Global Distributor and Manufacturer
Assigns License for Royalty Based manufacturing.Only Medtech Concept AB will issue License/Royalty based contracts to manufacture the Minipen 2. Commissions will be paid for introductions of 15% of revenue.
ExclusionsA list of existing companies Medtech Concept have engaged will be provided and these shall be excluded from the contract.
Sub-distributorsYes – The regional distributor shall assign distributors within the regions specified.
PricingThe pricing of each deal will be agreed upon with the manufacturer. The retail pricing shall not be less than the price of the most advanced BD syringe on the market to preserve the products premium product position.
Assign White Labels ?Yes – The Regional Distributor shall assign white label contracts within the regions specified at a price to be agreed with the Manufacturer.
MOQTo Be Agreed – A minimum order quantity of product shipped is required to retain the regional exclusivity agreement in force. The minimum level will increase year on year.
Year 1 – € 0.1% of the total addressable market
Year 2 – € 0.25% of the total addressable market
Year 3 – € 0.5% of the total addressable market
Year 4 – € 0.75% of the total addressable market
Year 5 – € 1.0% of the total addressable market
Anti Shelving Measures ?Both parties agree to include anti-shelving measures that could inadvertently or deliberately (by any party) prevent the Minipen from reaching customers (historical precedent here). These include 1. Minimum marketing Spend by Regional Distributor, 2. Minimum marketing spend by the distributor, 3. Regional Distributor Sales & Support team resources, 4. Pass-thru pricing, 5. MOQ on exclusive distributors @ 1% of the Syringe Market in 2 years to retain exclusivity. 6. Provision of free samples to retailers and clinics.
Pass Thru Pricing ?In the event that Medtech Concept finds a distributor in a country that does not have an existing exclusive distributor assigned (six months after this contract is signed), the manufacturer may introduce a distributor on a 75% pass-through pricing basis. Any such distributors will come under the support of the Regional Distributor. This is a key anti-shelving measure that protects the manufacturer.
Per Deal Price Negotiations ?Yes – Both parties agree to price the product competitively aiming to achieve the price positioning the market described above.
Purchase from Licensed Manufacturers ?The regional distributor agrees to purchase the minipen product from the manufacturers approved by Medtech Concept. This will change over time and will be based on pricing and availability.
New Share IssueNew shares will not be issued in Medtech Concept at this stage
Share Purchase257,500 Existing founder shares (2.5%) will be sold to the Regional Distributor at the value of €250,000 based upon a valuation of €10m. A total of 10,300,000 shares are in circulation. Required to facilitate completion of contractual obligations under this contract.
Equity %2.50% – of the total percentage of equity available. [09/06.21 Update]
Transfer to 30% Equity Both parties agree to explore replacing this contract with an equity-based contract within 6 calendar months.
Loans Provided by DistributorThe Distributor shall facilitate the provision of commercial loans of €5 Million EUROS to support the company, finance production CAPEX and other operational costs. Both parties agree that this contract is worthless without the manufacturing facility in place, and commercial loans or Equity sale is required to ensure the success of this contract.
Early Termination ClauseIn the unlikely event that commercial loan providers cannot be found before the 1st of August 2021, the Regional Distributor agrees to purchase €5m in preferred shares @3% interest rate. This transaction only occurs if commercial loans are not available and no alternative funding source is available. If the required funding cannot be provided for any reason, this contract shall change to a non-exclusive contract on the 1st of August 2021. Prefered shares can be bought back from any loans received or from sales income within 2 years.
Organisation Support UAE
Organisation Support UAEMedtech Concept is looking to set up an office in Dubai and would welcome support from the private office team to establish a legal entity. Fee-Based Service will apply.
Secure further investorsFee-Based Service – A fee-based service shall apply but is not part of this agreement
Contract TermsTerms that apply to sub-distributors
Deposits from ClientsTo ensure liquidity, all contracts with distributors must include a deposit of 25% upon contract signing, a further 25% upon delivery of samples and 50% FOB Incoterms. An escrow deposit of 50% is also acceptable collateral for bank funding to support deposits payable to factories for orders. In this case, an additional charge will be levied to cover bank charges.
Next Steps– Agree with these Terms (Next)
– Create Contract
– Sign Contract
– Client Introductions
– Sign Share transfer agreement
– Share Funds Transfer
– Share Certificate Issued
– Loans Provided (if Applicable)

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