Exhibit 10.36
INDEPENDENT SALES CONTRACTOR AGREEMENT
1. PARTIES
This agreement (the "Agreement") is between X. X. Xxxxx Company, Inc., ("Xxxxx")
and Dimension Distributing, Inc., who, by virtue of this Agreement, agrees to
serve as an Independent Sales Contractor (the "Contractor").
2. INDEPENDENT CONTRACTOR RELATIONSHIP
In accordance with the mutual intention of Xxxxx and the Contractor, this
Agreement establishes an independent contractor relationship, and all of the
terms and conditions of this Agreement shall be interpreted in light of that
relationship. There is no intention to create an employer-employee relationship
by this Agreement.
3. APPOINTMENT AND TERRITORY
Xxxxx appoints Contractor as its sales representative in the institutional
market of hospitals, nursing homes and surgical supply dealers in the
geographical areas (the "Territory") listed below:
NY zipcodes 105-106, 109, 120-123, 124-127, 128, 130-135, 137-149,
MA zipcodes 010-013, 014-027, CT zipcodes 000-00, XX, XX, XX, XX
All references to the "Territory" in this Agreement include the entire territory
listed above, excluding House Accounts in the Territory and listed on Exhibit I
and periodically updated by Xxxxx. "House Accounts" are customers who specify
product design, packaging, and/or labeling of products for resale, and/or
customers who charge promotional or advertising fees, either cash or credit.
Xxxxx also reserves the right to negotiate House Account direct
manufacturing/sales agreements with other companies and all other industries and
private individuals.
4. AUTHORITY
Contractor is authorized to sell and service Xxxxx products in the Territory,
and agrees not to represent any competitive product line. Contractor agrees to
notify Xxxxx within 30 days after agreeing to represent compatible product lines
not listed on Exhibit H, attached ("Compatible Lines").
5. CONTRACTOR'S AND XXXXX'X ACTIVITIES
5.1 CONTRACTOR'S DUTIES Contractor's duties will include, but not be limited
to:
(a) servicing existing accounts in the hospital-, nursing home- and surgical
supply dealer market on a regular and consistent basis, including timely
reply and follow-up within 24 hours to all customer inquiries;
(b) cooperating with, attending and assisting Xxxxx in promotional campaigns
and exhibitions in states within the Territory or where existing or
potential customers from the Territory may reasonably be expected to
attend;
(c) promoting the sale of Xxxxx products and cooperating with Xxxxx in
carrying out Xxxxx'x sales, pricing and marketing policies;
(d) maintaining and enhancing the good name and reputation of Xxxxx to
customers and potential customers (however, Contractor expressly agrees
not to misrepresent the capability, use or application of Xxxxx products,
or to make any representation or warranties on behalf of Xxxxx other than
those set forth in Xxxxx'x sales literature and other written materials,
or as expressly approved in writing by the Director of Marketing or
President of Xxxxx);
(e) increasing sales volume by at least 10% per year, or as otherwise defined
by Xxxxx, and meeting Xxxxx'x sales goals for the Territory;
(f) providing Inservice training in the territory as requested by Xxxxx'x
current and/or potential customers regarding the uses, features,
benefits, accessories and service specifications of the products,
including, but not limited to, applicable local, state, and federal
regulations, statutes, and laws, as well as standards of nursing
practice that relate to the use of Xxxxx products;
(g) providing activity reports as requested by Xxxxx outlining significant
points, problems, product-related information, Inservice reports, and
sales forecasts;
(h) providing the purchaser of Xxxxx products with all product notices,
warnings, instructions, recommendations, recall or retrofit notices,
and other similar materials;
(i) assisting Xxxxx in compiling complete and accurate mailing lists by
providing customer lists of names from the Territory in the manner and
schedule requested by Xxxxx;
(j) Upon completion of its first year, Contractor will maintain a salesperson
or persons whose sales efforts provide time equal to that of one
salesperson devoted exclusively to Xxxxx products for each assigned
territory, provided, however, that Contractor organizations that are
assigned more than one territory may redraw internal boundaries or
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reassign coverage at their discretion, and that Contractor will employ
said representatives individually and not as agents of Xxxxx, and will
do so at his/her expense;
(k) paying all taxes and expenses incurred in covering the Territory,
including, but not limited to travel, entertainment, vehicle leasing
and operation, insurance, postage and telephone expenses;
(l) representing Xxxxx products at medical and professional exhibitions as
requested by Xxxxx, provided that such exhibitions are within the
Territory or require only a reasonable amount of travel, and current
or potential customers from the Territory can be reasonably expected to
attend;
(m) selling Xxxxx products at the published list price less the standard
trade discounts offered by Xxxxx or its subsidiaries, or at a contracted
prices in the case of national or contract accounts, provided that in no
case may the standard trade discount be greater than 35% of the published
retail price list (price code A) unless said discount has been approved in
advance by the Director of Marketing or the President;
(n) accepting financial responsibility for all sales demonstrators or
accessories that are necessary to properly demonstrate Xxxxx products;
(o) attending and participating in national and regional sales meetings held
from time to time by Xxxxx; and
(p) using Xxxxx-provided sales tools such as voicemail and any trade show
materials or sales aids exclusively for the promotion and sale of Xxxxx
products.
Unless the circumstances require otherwise, Contractor may engage in these
activities at a time of his/her choice.
5.2 XXXXX'X DUTIES Xxxxx'x duties to the Contractor will include:
(a) providing Contractor with training courses and materials as well as
technical updates on Xxxxx products and, when possible, competitive
product lines;
(b) providing Contractor with sales demonstrators and accessories such as
necessary to cover the Territory;
(c) paying expenses related to attending and participating in Xxxxx-sponsored
national and regional sales meetings provided that they are reasonable
and consistent with policies for Xxxxx sales contractors; and
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(d) naming the Contractor as an "Additional Insured" on the X.X. Xxxxx
product liability insurance contract with the carrier.
(e) Xxxxx agrees not to hire, attempt to hire directly or indirectly for the
personal services of Xxxxx, the Contractor's agents, former agents, either
individually or as an employee or any other entity, at any time during
this agreement or for a period one year following termination of this
agreement [or departure of the employee] without prior written approval
of Contractor.
6. COMPENSATION
Philosophy: It is the intention of Xxxxx to employ a compensation plan
that: 1) fairly compensates the Contractor for their efforts on Xxxxx'x behalf,
2) motivates the Contractor to support the attainment of Xxxxx'x business
objectives, and 3) is easy to understand and administer.
Definitions: For purposes of explaining the terms utilized in the
compensation plan, the following definitions shall apply:
QUOTA: A sales objective established for each territory (and
collectively for the Company) which represents the combination of
existing retained business and newly obtained business and
customer relationships. Quota is derived from the objectives of
Xxxxx to continue to add to its business while recognizing the
business climate and market circumstances for itself and its
customers. However, quota is purely discretionary and established for
each territory by the Vice-President of Sales and Marketing and/or
the President.
BASE: An amount of sales less than quota upon which no commissions
will be earned by the Contractor. While not exclusively derived, the
base is understood to be an amount of sales generated in the
territory as a result of prior sales efforts, marketing promotion
and advertising, and Company goodwill. Base is purely discretionary
and established for each territory by the Vice-President of Sales
and Marketing and/or the President. Until notified otherwise, base
shall be calculated at 43.3% of quota for each Territory.
NET SALES PROCEEDS: The actual sales price less all discounts,
credits, and shipping charges.
6.1 FULL COMMISSIONS Once the Contractor has met the base sales within the
Territory, he/she will receive commissions in the amount of fifteen (15%) of the
net sale proceeds for all product sales in excess of the base in the Territory
to dealers, hospitals and nursing homes, as
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calculated on the date of shipment (except for dealer traced sales which
generally will lag by one month). Commissions will be paid to the Contractor by
the twentieth (20th) of the month for shipments made in the previous month.
Three per cent (3%) commission on OEM business will be paid for business covered
by a signed purchase order delivered to the Xxxxx Company (and accepted by the
President or Vice-President of Sales and Marketing) by the Contractor in the
territory where the product is ordered, These are generally 'non-stock' items
and are manufactured to meet product design, labeling or packaging
specifications of the purchaser. An example of this might be a specially
designed strap we make to fit somebody else's product.
A commission of three per cent (3%) will be paid on sales of "specials" designed
by a medical care facility for their use. The product must be covered by a valid
purchase order with design specifications and meet all requirements of all
regulatory bodies and be accepted by the President or Vice-President of Sales
and Marketing.
No commission will be paid on products developed 'in house' for sales through
other networks, or to other industries, private individuals, house accounts, or
classes of trade. An example of this would be the different pulse oximeter
wraps we make for the pulse oximeter manufacturers.
Contractor is not entitled to earn commissions on product returns that result in
a customer refund and uncollectable accounts, or which are generated by product
and/or accessories returned to Xxxxx by mutual consent of the buyer and Xxxxx
that result in a customer refund, and such commissions, if paid, may be deducted
from current commissions. Contractor is also not entitled to earn commissions on
shipments made after the termination of this Agreement; for products
trans-shipped from any other territory without Xxxxx knowledge; or for products
sold through other networks, or to other industries, private individuals, or
house accounts.
1n the event of the termination of this Agreement, Xxxxx shall withhold the
Contractor's final commission check to cover salesman's sample accounts,
demonstrator devices and/or accessories for which Xxxxx has not been paid. Once
the demonstrator devices and/or accessories for which Xxxxx has not been paid
have been returned to Xxxxx, Xxxxx shall have 5 working days to inventory the
demonstrator devices and/or accessories and mail all funds due Contractor for
demonstrator devices and/or accessories returned in good condition. In addition
Xxxxx will withhold sufficient commissions for a period of up to 90 days after
termination to cover product returns that result in a customer refund and/or
uncollectable accounts.
6.2 PARTIAL COMMISSION At Xxxxx'x option, Contractor may be given a partial
commission on sales in which Contractor is involved that do not normally accrue
to him/her, such as orders shipped out of the Territory. Conversely, Xxxxx may
deduct from normal commissions on sales shipped into the Territory. At Xxxxx'x
option, sales may be adjusted for inter-territory sales by
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Xxxxx'x customers, In all such cases, Xxxxx'x decision on commission splits, if
any, shall be final and binding on the Contractor.
Contractor will receive commissions in the amount of three per cent (3%) for OEM
manufacturing business generated within the Territory provided the Contractor
brings in a signed purchase order which is accepted by the Vice-President of
Sales and Marketing or President of Xxxxx.
In the event the Contractor enters into an agreement with a customer for the
Sale of Xxxxx Products at a price less than the customer's established price
list without the prior approval of the Vice-President of Sales and Marketing or
the President, Xxxxx reserves the right to refuse to accept the purchase order
and not accept the sale and the Contractor will not be entitled to receive
commission based on that sale. If Xxxxx chooses to accept the purchase order and
ship the goods, Xxxxx also reserves the right to deduct from the Contractor's
commissions the difference between the customer's normal discount and the sale
price. If Xxxxx pays any commission to the Contractor for such a sale, and Xxxxx
later determines that the sales was made for a price less than 35% of the
published retail price list (price code A) without prior approval of the
Vice-President of Sales and Marketing or the President, Xxxxx reserves the
right to deduct those commissions and the difference between the standard trade
discount and the sale price from the Contractor's subsequent commissions.
7. RESTRICTIVE COVENANTS
Contractor may not have any financial interest, through partnerships or
commission-sharing agreements, in the sales of any product lines which are: (1)
competitive with any Xxxxx products; or (2) not listed on Exhibit X. Xxxxx has
the sole right to determine whether or not a product line is "competitive"
within the meaning of this prohibition.
Any and all product marketing claims by the Contractor or any of his employees,
agents or representatives, whether oral or written, shall be strictly limited to
those set forth in Xxxxx literature, copies of which have been distributed to
Contractor. The Contractor may not print any information relating to Xxxxx
products or services without prior written approval by the President or Director
of Marketing of Xxxxx.
8. CONFIDENTIALITY
By virtue of this independent contractor relationship, Contractor will receive,
develop, and acquire information of a secret and/or confidential nature. Except
as authorized by Xxxxx in writing, Contractor will not disclose or use directly
or indirectly for purposes other than pursuit of Xxxxx'x business interests, any
information of Xxxxx relating to inventions, products, product specifications,
processes, procedures, machinery, apparatuses, prices, discounts, manufacturing
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costs, ideas, technical data, customer lists or other information which is of
secret or confidential nature. This obligation will apply to the persons
Contractor hires in furtherance of this Agreement pursuant to subsection 5.1(k),
and Contractor agrees to notify persons hired pursuant to that subsection that
agreement to and compliance with this condition of confidentiality is a
condition of continuing employment.
9. DECLARATION
Contractor declares that it is an independent business and will pay its own
federal, state, and local income taxes, and all payroll taxes of any kind, and
will provide its own benefits as required by law or otherwise. Contractor is not
an employee of Xxxxx for any purpose whatsoever, but is an independent
contractor. Contractor shall pay all expenses and disbursements, including, but
not limited to, those for travel and maintenance, entertainment, office,
clerical, and general selling expenses that he/she may incur in connection with
this Agreement, and Xxxxx shall not be in any way responsible or liable
therefore. Contractor will not, however, be responsible for reasonable expenses
incurred in attending Xxxxx-sponsored sales meetings, and will be reimbursed for
those expenses by Xxxxx provided that Contractor submits an expense report
therefor on a timely basis.
10. TERM
This Agreement shall continue until terminated by either party in accordance
with Section 14.
11. SCOPE OF WORK
This Agreement defines, describes, and includes the entire scope of the work to
be performed. Any changes in scope must be approved in writing by the President
of Xxxxx.
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12. INDEMNIFICATION
Contractor shall indemnify and hold Xxxxx, its officers, agents, and employees
free and harmless from and against any and all obligations, claims, damages,
losses, demands, actions, causes of action, costs and expenses, of any kind or
nature, or any of them, for any liability resulting from injury (whether to
body, property, personal or business character or reputation or otherwise)
sustained by any person or to any person or property by reason of any act,
neglect, default, or omission of Contractor or any of Contractor's agents,
employees, or other representatives, arising from, growing out of, or in any way
connected with the services rendered to Xxxxx under this Agreement. If Xxxxx is
sued in any court for damages by reason of any such conduct of Contractor or
Contractor's employees, agents or other representatives, Contractor shall defend
said action (or cause it to be defended) at Contractor's own expense and shall
pay and discharge any judgment that may be rendered in any such action. In the
event that Contractor refuses to defend such action (or cause it to be
defended), Xxxxx may defend the action, and any expenses which it may pay,
including attorneys' fees and costs, shall be promptly reimbursed by Contractor
upon demand.
13. INSURANCE
Contractor is responsible to provide his/her own insurance at his/her own
expense. This insurance shall include, but not be limited to, general liability,
automobile, bodily injury and property damage liability, and workers'
compensation insurance. The workers' compensation insurance shall be sufficient
to comply with all applicable workers' compensation laws and employer liability
obligations.
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14. TERMINATION
Either party may terminate this Agreement in the first two years at any time for
any reason with 30 days advance written notice to the other party. The
cancellation period shall increase to 60 days in the third year, 90 days for the
fourth year, and 120 days thereafter. During the cancellation period Xxxxx
agrees to pay commissions earned in the territories described in section 3,
provided contractor does not enter into any representation agreement with a
direct competitor of Xxxxx. [IN ALL CASES, THERE SHALL BE NO FINANCIAL PENALTIES
DUE FROM EITHER PARTY FOR ANY REASON WHEN THIS CONTRACT IS CANCELLED ACCORDING
TO THE TERMS OF THIS AGREEMENT.] Xxxxx may terminate this Agreement for any
breach of the Agreement which is not rectified within two (2) days upon written
notice. Xxxxx may also terminate this Agreement at any time for cause with no
advance notice. "Cause" is defined as: failure to employ at all times at least
one full-time salesperson whose sales efforts are devoted exclusively to Xxxxx
products; offering bribes or kickbacks to arty customers or referral sources;
deliberate falsification of reports to Xxxxx regarding other product lines
represented in the past or present; being under the influence of alcohol or
drugs while representing Xxxxx; offering pricing verbally or in writing to
customers that has not been approved in advance by the Director of Marketing or
President; verbally, in writing or on tape misrepresenting the capability, use
or application of Xxxxx products, or making any representation or warranties on
behalf of Xxxxx other than those set forth in Xxxxx'x sales literature and other
written materials, or as expressly approved in writing by the President or
Director of Marketing of Xxxxx; and other malfeasance in the performance of
Contractor's responsibilities under this Agreement.
Promptly upon the termination of this Agreement, Contractor shall immediately
and forever thereafter cease to solicit orders or to represent in any manner
that he/she is associated with Xxxxx. Upon termination, Contractor shall return
or cause to be returned to Xxxxx, after receipt of Xxxxx'x request by telefax,
mail, or voicemail, and at Xxxxx'x expense, all manner of identification,
decals, advertising material, promotional items, promotional materials, sample
products, contracts, sales reports, manuals, teaching materials, customer lists,
and other materials not previously returned to Xxxxx or previously expended in
solicitation activities which have been furnished by Xxxxx in connection with
this Agreement.
15. ENTIRE AGREEMENT
This Agreement represents the entire agreement of the parties and supersedes any
and all prior oral and written agreements.
16. CHOICE OF LAW
Any dispute under this Agreement shall be decided in accordance with the laws of
the State of California.
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17. ASSIGNABILITY
Contractor may not assign this Agreement nor any rights, duties or obligations
contained herein, in whole or in pair, without the prior written consent of an
authorized representative of Xxxxx.
18. SEVERABILITY
If any part of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions or
enforceable parts hereof shall not be affected thereby and shall be enforced to
the fullest extent permitted by law.
19. AMENDMENTS
This Agreement may be supplemented, amended or revised only in writing signed by
the parties.
20. WAIVER
The failure of either party to enforce at any time any of the provisions hereof
shall not be construed to be a waiver of such provisions or of the right of such
party thereafter to enforce any such provisions.
21. NO LICENSE
Xxxxx products are offered for sale and are sold by Xxxxx subject to the
condition that such sale does not convey any license, express or implied, to
manufacture, duplicate or otherwise copy or reproduce any of the products except
as may otherwise provided in Xxxxx'x then-current Terms and Conditions of Sale
at the time of purchase.
22. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement or breach
thereof shall be finally determined, by binding arbitration conducted in Los
Angeles County, California before a retired judge of the California Superior
Court in accordance with the provisions Section 1282-1288.8 (specifically
including Section 1283.05) of the California Code of Civil Procedure. Judgment
upon any award rendered in that arbitration proceeding may be entered by any
state or federal court having appropriate jurisdiction. The arbitrator shall
apply California law in making his award. The parties intend that this agreement
to arbitrate is valid, enforceable and irrevocable. By agreeing to arbitrate all
disputes, Contractor waives the right to a jury or court trial and the right to
appeal. This provision is not intended to abrogate Contractor's right to require
non-binding fee arbitration pursuant to Section 6200-6206 of the California
Business & Professions Code.
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23. ATTORNEYS' FEES
This Agreement may be specifically enforced by Xxxxx against Contractor. If
Xxxxx prevails in any such claim or action, Xxxxx shall recover its costs and
attorneys' fees from Contractor. Likewise, if judgement is rendered in favor of
Contractor, Contractor shall recover its costs and attorney's fees from Xxxxx.
24. MODIFICATION OF DISCONTINUANCE OF PRODUCTS
Xxxxx reserves the right to modify, alter, improve, change, or discontinue any
or all of its products and prices without prior notice.
25. NOTICES AND REQUESTS
Any notice, demand, or request required or permitted to be given hereunder shall
be in writing and shall be deemed effective twenty-four (24) hours after having
been telefaxed or deposited in the United States mail, postage prepaid,
registered or certified, and addressed or telefaxed to the addressee at the
principal residence set forth below. Any party may change its address or telefax
number for purposed of this Agreement by written notice given in accordance
herewith.
Acceptance of these terms is confirmed by signing and returning to us the
original copy of this Agreement.
X.X. XXXXX COMPANY, INC. Federal Tax ID Number 000000000
Except as to section 6, originally signed 8-26-98
By: /s/ Xxxx Xxxxxxx Date: 1-21-00
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Printed Name and Title Xxxx Xxxxxxx, VP Sales & Mktg.
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The undersigned understands and agrees to the terms and conditions set forth in
this agreement.
Xxx Xxxx /s/ Xxx Xxxx 1/24/00
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(Printed Name of Contractor Signed Name of Contractor Date
Federal Tax Identification Number 06 1337 674
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Social Security Number:
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Principal Residence: Dimension Distributing
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000 Xxxxxxxx Xx., Xxxxxx, XX 00000
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000-000-0000
Telefax: 000-000-0000
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EXHIBIT H COMPATIBLE LINES
The following list is a complete list of lines I carry. (Write "none" if you do
not carry any compatible lines.) I understand I must keep this list current
(within 30 days of any changes) with the Xxxxx Company to be in compliance with
my agreement.
MENTOR, EHOB INC., 1ST PRODUCTS, PRINCIPAL BUSINESS ENTERPRISES
/s/Xxx Xxxx 1/24/00
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Signed Dated
EXHIBIT I - HOUSE ACCOUNTS
The following list represents a current list of House. This list may be updated
from time to time by the home office or at the request of the Contractor.
Customer Name Customer #
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Select Service Supply 1155
Epic Medical Equipment Services 3102
Airsep Corporation 3213
B&B Medical Technologies 3757
Datex Xxxxxxxx 4838
Direct Supply Healthcare 6344
Adaptability A2037/A2039
Alimed A3357
BCI International B0042
Xxxxxx B7811
Criticare C9508/C9509
Xxxxxx Medical D5890/D5891
Xxxxxxx Group E3549
Masimo Corporation M2406
Nellcor Inc. X0000
Xxxxx Xxxx Xxxxxxx X0000
Novametrix Medical System N3541
Ohmeda O4165/O4167/O4171
Repironics, Inc. X0000
Xxxxxxx Xxxxxxx X0000
Sensormedics X0000
Xx. Xxxxx Xxxxxxx X0000
Xxxxxxxx Ostomy S8757
