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[XXXXXX-FIELD LETTERHEAD]
October 7, 1997
Mr. Xxx Xxxxxxxxxx, President
Xxx X. Xxxxxx & Associates, Inc.
0000 X. Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Purchasing Agreement
Dear Xxx:
This letter hereby sets forth the terms and provisions of the purchasing
agreement, by and among Xxxxxx-Field Health Products, Inc. ("Xxxxxx-Field"), VGM
& Associates, Inc. ("VGM") and U.S. Rehab, Inc.(SM) ("U.S. Rehab").
1) Three year agreement starting November 1, 1997.
2) Agreement covers all Xxxxxx-Field and related company products either
distributed or manufactured.
3) Total indicated purchased volume by VGM and U.S. Rehab members over three
years will equal or exceed $52,000,000 or a 15% compounded sales increase
(whichever is higher).
4) VGM and U.S. Rehab will receive from Xxxxxx-Field a 2% marketing and
administrative fee (paid monthly) on all products sold to members by
Xxxxxx-Field and Xxxxxx-Field related companies subject only to the limitations
of paragraph 5 and 6 below. Xxxxxx-Xxxxx will supply complete sales reports by
dealer on all products purchased on a timely basis.
5) VGM agrees to cooperate with and assist Xxxxxx-Xxxxx in negotiations with
manufacturers to obtain additional discounts based upon this agreement (above
Xxxxxx-Field's current pricing). VGM may elect to opt out of any such
discussions with manufacturers it has direct relationships with.
6) Xxxxxx-Field may elect not to pay the marketing/administrative fee (2%) to
VGM on any items not manufactured by Xxxxxx-Field unless and until negotiations
(as referred to in paragraph 5) succeed in obtaining at least an additional 2%
of gross margin (i.e.: 2% lower cost to Xxxxxx-Field) on the products in
question. If said negotiations succeed the fee will commence within
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Mr. Xxx Xxxxxxxxxx, President
Xxx X. Xxxxxx & Associates, Inc.
October 7, 1997
Page 2
30 days of any new pricing contract. Xxxxxx-Field may seek additional
discounts which will inure only to its benefit.
7) Pricing will be determined by Xxxxxx-Field but will generally be based on
group volume and prices are expected to be the lowest available for
similar volumes. Pricing may be tiered.
8) A public announcement that we have entered into an "Agreement" may be made
by Xxxxxx-Field upon acceptance by VGM.
9) VGM may designate certain product lines as either "VGM only", "U.S. Rehab
only" or both. Stated discounts shall only be allowed to members of the
applicable group.
Assuming you agree with the terms set-out herein, please sign a copy of this
agreement and return it to us as soon as possible.
Very truly yours,
Xxxxxx-Field Health Products, Inc.
By:/s/
______________________________________________________
Its 10/7/97
______________________________________________________
/s/ XXXXXX X. XXXXXXXXXX
_________________________________________________________
Agreed and accepted by Xxx X. Xxxxxx and Associates, Inc.
10-7-97
_________________________________________________________
Date
