Exhibit 10.31
MANUFACTURER'S REPRESENTATIVE AGREEMENT
THIS AGREEMENT, effective this 16TH DAY OF MARCH, 1999 between ACUMED, INC., an
Oregon corporation, having its principal office at 00000 X.X. 0xx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxx 00000 (hereafter referred to as "COMPANY") and MEDEX
SURGICAL, having its principal office at XXXXX 0 XXX 00 XXXXX XX., XXXXXX, XXXXX
00000, (hereafter referred to as "REPRESENTATIVE").
WITNESSETH:
ACCORDINGLY, the parties hereto agree as follows:
1. DEFINITIONS.
For purpose of this Agreement, the following definitions apply:
A. TERRITORY
"TERRITORY" shall consist of the following description and none other.
NORTH EAST TEXAS AS DEFINED ON THE ENCLOSED COUNTY MAP.
B. PRODUCTS
"PRODUCTS" are defined as Acumed products as listed in ADDENDUM 1 of
this agreement. PRODUCTS my be added or deleted from this agreement
with thirty (30) days written notice.
C. CUSTOMERS
"CUSTOMERS" are defined as hospitals, hospital administrators,
orthopaedic surgeons, outpatient clinics, surgery centers, orthopaedic
nurses, orthopaedic technicians, purchasing agents and podiatrists.
2. APPOINTMENT
A. Company hereby appoints Representative to act as an exclusive
manufacturer's representative for the purpose of soliciting and
transmitting to the Company orders for the PRODUCTS from the CUSTOMERS
in the TERRITORY. The Company agrees not to appoint any other entity
or individual to act in the TERRITORY as a manufacturer's
representative with respect to the PRODUCTS and CUSTOMERS.
B. The Representative shall submit to the Company in a format described
by the Company (Addendum 2) all orders for PRODUCTS in the TERRITORY.
Such orders may be accepted or rejected by the Company at its sole
discretion, but using reasonable standards of commercial judgment. IT
IS UNDERSTOOD AND AGREED THAT THE RELATIONSHIP BETWEEN THE PARTIES
CREATED HEREBY IS SOLELY THAT OF INDEPENDENT CONTRACTOR, AND IS IN
NO REGARD AND FOR NO PURPOSE WHATSOEVER TO BE CONSTRUED AS CREATING
THE RELATIONSHIP OF PRINCIPAL AND AGENT, MASTER AND SERVANT, EMPLOYER
AND EMPLOYEE OR ANY OTHER. The Representative shall have no
authority (i) to accept such orders, (ii) to bind the Company in any
manner and for any purpose, (iii) to amend or modify to any extent
such terms of sale or payment as Company may from time to time
establish, (iv) to assume or create any obligation of any kind,
express or implied on behalf of the Company, or (v) to delegate its
duties hereunder except to its officers and employees.
3. INVOICING/PRICE
Company will invoice PRODUCTS to CUSTOMERS in the TERRITORY at a maximum of
the list price in effect at the time of shipment. Company reserves the
right to change the list price at any time by
providing the Representative notice in writing as to the effective date
and new prices. All products are shipped F.O.B. Beaverton, Oregon.
4. COMMISSION
A. Representative will receive a commission on all sales of PRODUCTS sold
within the TERRITORY net of any charges for any repackaging, lost or
damaged instrumentation, and freight. Commissions and exceptions are noted
in ADDENDUM 3.
B. Commissions will be paid by the 15th day following the last business
day of the month (see ADDENDUM 4, ITEM 1.e. for possible exception). A
detail of the commissionable sales will be provided with each
commission check.
C. For the purposes of Paragraphs A and B, and notwithstanding the
Company's willingness to advance commissions to the Representative
based on invoices to CUSTOMERS, a sale will be deemed to have occurred
only after Company has received payment in full for any PRODUCT(s)
shipped into the TERRITORY. In this regard there shall be deducted
from future commissions the following amounts:
1. In the event Company has not received full payment on an invoice
to a CUSTOMER within ninety (90) days of the invoice date, those
commissions advanced will be deducted from the commission check.
If such invoice is later paid, the commission will be posted by
the 15th day following the month of the collection, less any
extraordinary costs incurred in the collection of this invoice.
2. If PRODUCTS are returned and accepted for CUSTOMER credit, any
commissions advanced will be deducted from the commission check
in the month that credit is issued.
In the event there are not sufficient commissions owing to the
Representative to offset said charges in the next month, the
charges will be billed to the Representative. Or upon termination
of this Agreement, the Representative shall pay said charges to
company upon presentation.
3. TERM/TERMINATION
A. The TERM of this Agreement shall be for six months and commence on
March 16th 1999. This Agreement can be terminated at any time in one
of the following ways:
1. This Agreement may be cancelled at any time during the original term
or any extension thereof, for any reason whatsoever, by either of the
parties hereto upon giving thirty (30) days written notice to the
other party hereto. The Company may appoint a new Representative
during this notice period.
2. This Agreement may be cancelled by the Company on thirty (30) days
written notice if the Representative fails to comply fully and
faithfully with any of the terms of this Agreement or the provisional
letter sent on March 8th, 1999.
3. This Agreement may be cancelled by the Representative on thirty (30)
days written notice if the Company fails to comply fully and
faithfully with any of the terms of this Agreement.
4. In the event that either party hereto shall commit an act of
bankruptcy or file voluntary petition of bankruptcy, or be declared
bankrupt in an involuntary proceeding, or file for a plan under the
Bankruptcy Act, or place its affairs in the hands of a receiver, or
enter into a composition or the benefit of creditors, or perform any
other act based upon or due to its inadequate credit position, then
the other party to this Agreement may terminate this Agreement
immediately by written notice of termination to the other party.
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5. The Company shall not, for any reason whatsoever, including but not
limited to the termination, cancellation or expiration of this
Agreement, be liable to the Representative for compensation,
reimbursement or damages, either on account of expenditures,
investments or commitments made in connection therewith, development
or maintenance of the Representative's business goodwill, or on
account of any other thing or cause whatsoever.
6. TERMINATION PROCEDURE
A. Upon termination, cancellation or expiration of this Agreement, for any
reason whatsoever, the Represenative will promptly return to the Company,
transportation charges and insurance fully prepaid, all sales aids, sales
samples, manuals, bulletins, literature, letterheads and related materials.
Furthermore, the Representative will, at his own expense, promptly remove
and discontinue the use of all trademarks and other designations, telephone
listings and advertising which might convey the impression thereafter
that he represents the Company in any manner.
B. All Representative's consignment inventory must be turned over to a
representative of the Company within seven (7) days of termination or
shipped to a Company location. Representative will be responsible at the
list price of all missing implants as documented per the CONSIGNMENT
AGREEMENT (ADDENDUM 4). Any items opened but not used will be assessed a
restocking and repackaging charge per the published terms of the Company's
current price list.
7. COMPANY RESPONSIBILITIES
A. The Company agrees to assist the Representative in:
1. Promoting the sale of Company's PRODUCTS by providing
Representative with reasonable amounts of sales literature,
published technical information, sales aids, as well as holding
periodic sales seminars.
2. Promotion of Company's PRODUCTS in professional journals and at
regional and national meeting of orthopaedic professionals as
deemed of value by the Company.
3. Training Representative's sales representatives and giving them
a working and selling knowledge of Company's PRODUCTS and
POLICIES AND PROCEDURES for business. Training may take place at
Company's offices or at Representative's location at the
discretion of Company.
4. Inventory:
a. At a minimum, Company will supply Representative with one set
of implants and instruments for each of the PRODUCTS. Additional
consignment inventory may be provided at Company's discretion
based upon TERRITORY requirements (see ADDENDUM 5).
Representative agrees to be responsible for all such
inventory as dictated by the CONSIGNMENT AGREEMENT.
b. Company will supply Representative with implant sales samples,
which are the Company's property, as outlined in the SALES SAMPLE
POLICY (ADDENDUM 6).
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8. REPRESENTATIVE RESPONSIBILITIES
A. Representative agrees to exercise its best efforts to promote the sale of
Company's PRODUCTS among CUSTOMERS in the TERRITORY, and in this regard
Representative shall:
1. Maintain adequate manpower to service CUSTOMERS and prospective
CUSTOMERS.
2. Follow through on inquiries developed by Company's conventions,
advertising, workshops and promotional literature.
3. Assist the Company in staffing booths at national meetings or meetings
within the Territory as needed.
4. Be responsible for direct and indirect selling expenses which may be
incurred in carrying out responsibilities hereunder. IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT REPRESENTATIVE'S EXCLUSIVE REMUNERATION
UNDER THIS AGREEMENT IS THAT SET FORTH IN PARAGRAPH 4 HEREOF.
5. Obtain sales samples for each sales representative that is authorized
to represent Company's PRODUCTS, as dictated by the SALES SAMPLES
POLICY.
6. Maintain adequate levels of instruments to service CUSTOMERS.
7. Sign a NON-DISCLOSURE AGREEMENT (ADDENDUM 7), and maintain in
confidence all confidential and proprietary information pertaining to
the business of the Company.
8. Neither assert nor acquire nor attempt to acquire any rights or
interests in or to, nor contest or assist others in contesting any
trademarks of Company, which shall be solely responsible for design,
development, supply production and performance of its products and
protection of its trademarks.
9. Make no false or misleading representations with respect to Company's
PRODUCTS. Representative shall make no express or implied warranties
to CUSTOMERS or prospective CUSTOMERS on behalf of Company with
respect to Company's PRODUCTS without Company's express written
consent. Representative agrees to hold Company harmless from all
damages resulting from Representative's breach of such obligation.
10. Maintain records of CUSTOMERS and Company inventory and other such
records as reasonably requested by Company and as necessary to comply
with all FDA regulations regarding tracking of products.
11. Not to knowingly sell or deliver, directly or indirectly, any of the
PRODUCTS for resale or use outside of the TERRITORY.
12. Follow the policies and procedures of Acumed that are made known to
the Representative.
13. Representative shall immediately and fully advise Company of any suit,
claim or complaint known to Representative resulting from the sale or
use of any PRODUCTS.
9. SALES QUOTA
A. Representative must obtain sales in the amount agreed upon per the
attached quota. The first quota will be determined by the Company
based upon the formula in ADDENDUM 8. The sales quota will thereafter
be agreed to on an annual basis within ninety (90) days of the
Company's fiscal year.
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B. Company may establish quotas for specific product groups; in such
case, Representative must obtain sales in that product group which are
equal to or in excess of the quota.
C. Company may establish sales quotas for clearly defined regional
sections within the TERRITORY to insure sales activity throughout the
TERRITORY. EXAMPLE; TERRITORY is the State of New York. Separate
quotas would be established for New York City and the rest of the
state. If these separate quotas are not achieved, Company reserves the
right to alter the TERRITORY.
10. GENERAL
A. This Agreement contains the entire understanding of the parties, shall
supersede any other oral or written agreements, and shall ensure to
the benefit of Company's successors and assigns. It may not be
modified in any way without the written consent of both parties.
B. Nothing herein shall be deemed to require that the Company continue
the production of any PRODUCT.
C. Representative acknowledges that this Agreement is personal to it and
shall not be assigned, alienated or otherwise transferred without the
express written consent of the Company.
D. Representative agrees that Company shall be entitled to inspect and
observe from time to time the activities and procedures relative to
this Agreement of Representative and its salespersons with or without
notice of any such inspection or observation.
E. Any notice, request or demand permitted hereunder shall be deemed to
be properly given when deposited in the United States mail, registered
or certified, postage paid, with return receipt requested addressed as
follows:
Acumed Inc.
00000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
Attention: President
F. Company shall not be liable for delays in delivery or failure to
perform any obligation hereunder due to any cause beyond its control,
including, but not limited to, labor disputes, fire, delays in
transportation or shortages of materials or supplies.
G. Representative represents to Company that execution,, delivery and
performance of this Agreement and compliance with its terms by
Representative will not result in a breach of any agreement to which
Representative is a party.
H. In the event of termination of this Agreement, Company reserves the
right, but is not obliged, to purchase from Representative all sales
samples owned by the Representative at a price agreed upon between the
parties. All sales samples given to the Representative must be
returned to the Company or they will be invoiced at the sample price
as outlined in the SALES SAMPLE POLICY.
I. This agreement shall be governed by and construed in accordance with
the laws of the State of Oregon.
IN WITNESS WHEREOF, Company and Representative have caused this MANUFACTURER'S
REPRESENTATIVE AGREEMENT to be signed as of the date written above.
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Acumed, Inc. Medex Surgical
By: Xxxxxxx Xxxxxxx By: Xxx Xxxxx
------------------------- -------------------------
/s/ Xxxxxxx Xxxxxxx /s/ Xxx Xxxxx
---------------------------- ----------------------------
Signature Signature
Xx Xxxxx
Its: President Its: /s/ Xx Xxxxx
------------------------ ------------------------
Co-Presidents
Date: 3-17-99 Date: 3/15/99
----------------------- -------------------------
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ADDENDUM 1
PRODUCTS
Products include all of the catalog items in the Company's published price list
in effect as of the date of this Agreement. Any exceptions are noted below.
GTS (Great Too System)
Any products added to the Company's product line throughout the life of this
Agreement are automatically included under the terms of this Agreement unless
specified under a separate contract amendment.
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ADDENDUM 2
ORDER ENTRY FORMAT
The Company will provide Representative with a billing form to be used when
phoning or faxing in orders. The form requests that the following information be
provided. If Representative wishes to use its own form, it must be approved by
the Company.
1. Customer number
2. Purchase order number
3. Customer name
4. Customer billing address
5. Customer shipping address
6. Other shipping address (if replacement to consignment)
7. Instrument rental charge
8. Freight charge
9. Surgeon name
10. Patient name
11. Surgery date
12. Product code(s)
13. Lot number(s) of implant(s)
14. Prices
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ADDENDUM 3
COMMISSIONS
1. The commission for sales of all Acumed implants and instruments is 25%
effective September 1, 1994 until further notice.
2. NO commission will be paid on prototype products until added to the list of
PRODUCTS as outlined in the Agreement.
3. A 15% commission will be paid on custom instruments and implants.
4. If an instrument rental is charged and the instruments are owned by Acumed,
then the instrument rental charge will be split evenly by Acumed and
Representative.
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ADDENDUM 4
CONSIGNMENT AGREEMENT
Agreement made between ACUMED, INC. (hereafter called Supplier) and MEDEX
SURGICAL (hereafter called Representative) this 16TH DAY OF MARCH, 1999. The
purpose of this agreement is to provide an inventory of the most current Acumed
implants and instruments (Products) presently available, as well as insure the
immediate availability of new designs as they evolve. Consequently, the
inventory levels maintained by the Representative will remain consistent with
the Customer demand for this service. Finally, the arrangements described herein
will release the Representative of the financial burden incurred by purchasing
and maintaining a complete stock of the above products.
NOW, THEREFORE, intending to be legally bound, the parties agree as follows:
1. ESTABLISHMENT OF PROGRAM
a. Supplier will establish a consignment inventory program for standby
implants and instruments for use by the Representative for its
Customers. Instruments will be provided on consignment as detailed in
ADDENDUM 5.
b. Representative will provide a secure area within its facility for the
storage of consignment inventory separate from Representative's owned
inventory.
c. Appropriate inventory levels will be determined by the joint agreement
of Supplier and Representative.
d. The initial consignment inventory shall be shipped on a consignment
no-charge purchase order. Any subsequent additions to the consignment
inventory will be communicated by written correspondence including
quantities, catalogue numbers and product descriptions. Any changes to
consignment levels of product will be similarly communicated and
acknowledged by the Representative and Supplier.
e. Representative shall be responsible for physical inventories of lot
coded items on a quarterly basis. Supplier reserves the right to delay
commission payments if the inventory is not received and reconciled by
the 15th of the month.
f. Supplier will either replenish inventory used in surgery automatically
upon the receipt of a completed order form or require that
Representative replenish its inventory of Product on an as needed
basis to maintain adequate stocking levels. A Customer purchase order
is required WITHIN THREE DAYS OF IMPLANTING Supplier's products.
Invoices will be issued and payments due in accordance with Supplier's
published regular terms.
g. Items for which a hospital purchase order is issued will either be
shipped from Supplier to Representative's designated receiving or
directly to the hospital if so specified by Representative.
h. The hospital purchase order will clearly indicate that the products
are for CONSIGNMENT REPLACEMENT and the Supplier will print
CONSIGNMENT REPLACEMENT on the appropriate shipping and invoicing
documents.
i. The Representative agrees that this consignment inventory is the
property of Supplier and that the Supplier or the Supplier's
representative will have free access (with appropriate prior notice
and approval) to this inventory.
j. The Representative agrees to pay for any unutilized consignment
inventory which has been opened and is not implantable WITHIN THREE
DAYS OF OPENING. All consignment inventory opened but reusable will be
repackaged by Supplier. There will be a 25% charge for this service.
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k. The parties agree that the Representative will be responsible for
inventory losses due to loss, theft, damage or otherwise not accounted
for during routine audits at current distributor price list value.
l. The Supplier agrees to inform the Representative of any
manufacturing/packaging changes that will affect the consignment.
2. This agreement shall be effective for the period of the MANUFACTURER'S
REPRESENTATIVE AGREEMENT and will be renewed in accordance with the dates
of the MANUFACTURER'S REPRESENTATIVE AGREEMENT.
-----------------
Executed by the parties hereto as indicated below:
Acumed, Inc. Medex Surgical
By: Xxxxxxx Xxxxxxx By: Xxx Xxxxx
------------------------- -------------------------
/s/ Xxxxxxx Xxxxxxx /s/ Xxx Xxxxx
---------------------------- ----------------------------
Signature Signature
Xx Xxxxx
/s/ Xx Xxxxx
Its: President Its: Co-Presidents
------------------------ ------------------------
Title Title
Date: 3-17-99 Date: 3/15/99
----------------------- -------------------------
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ADDENDUM 5
CONSIGNMENT FORMULA
1. The Company will provide the Representative with the necessary consignment
inventory to adequately cover the TERRITORY. Consignment inventory consists
of both implants and instruments.
2. The Company will periodically review the amount of consignment inventory
against sales to determine if inventory levels are appropriate, and
reserves the right to make increases or decreases in those levels at any
time.
3. A Consignment Agreement, Addendum 4 of the Manufacturer's Representative
Agreement, must be signed before any consignment inventory is shipped.
4. The Company reserves the right to eliminate all consignment inventory with
thirty (30) days written notice for any reason.
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ADDENDUM 6
SALES SAMPLE POLICY
Acumed will generally provide a product sales sample for each brand of product
at no charge to Representative. These samples are the property of Acumed and
will be either new product or a reconditioned product at Acumed's discretion.
Lost samples may be billed at 20% of hospital list price. Company reserves the
right to have Representative purchase sample product from time to time.
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ADDENDUM 7
NON-DISCLOSURE AGREEMENT
This non-disclosure agreement (the "AGREEMENT") is entered into this 16TH DAY OF
MARCH, 1999 by ACUMED, INC. (the "DISCLOSING PARTY") and MEDEX SURGICAL, its
PRINCIPALS, MANAGEMENT and STAFF (the "RECEIVING PARTY") for the purpose of
preventing the unauthorized disclosure of Confidential Information (as defined
below) of the Disclosing Party which may be disclosed to the Receiving Party for
the purpose of pursuing the establishment of a business relationship or
negotiating any contract or agreement between the Disclosing Party and the
Receiving Party.
For purposes of the agreement, Confidential Information shall mean any and all
information relating to Acumed Products and Pricing.
In consideration of the Disclosing Party's disclosure of Confidential
Information to the Receiving Party, the Receiving Party hereby agrees as
follows:
1. The Receiving Party shall hold and maintain the Confidential Information in
strictest confidence and in trust for the sole and exclusive benefit of the
Disclosing party.
2. The Receiving Party shall not, without the prior written approval of the
Disclosing Party, use for its own benefit, publish or otherwise disclose to
others, or permit the use by others for their benefit or to the detriment
of the Disclosing party, any of the Confidential Information.
3. The Receiving Party shall carefully restrict access to the Confidential
Information to those of its officers, directors and employees who clearly
need such access in order to participate on the behalf of the Receiving
Party in the analysis and negotiation of a business relationship or any
contract or agreement, or the advisability thereof, with the Disclosing
Party. The Receiving Party further warrants and represents that it will
advise each of the persons to whom it provides access to any of the
Confidential Information pursuant to the foregoing sentence that such
persons are strictly prohibited from making use, publishing or otherwise
disclosing to others or permitting others to use for their benefit or to
the detriment of the Disclosing Party, any of the Confidential Information.
4. The Receiving Party shall take actions necessary to protect the
confidentiality of the Confidental Information except for its disclosure
pursuant to paragraph 3 above, and hereby indemnifies the Disclosing Party
against any and all losses, damages, claims or expenses incurred or
suffered by the Disclosing Party as a result of the Receiving Party's
breach of this Agreement.
5. This agreement shall continue in full force and effect indefinitely, except
that the Receiving Party's obligations hereunder shall not extend to any of
the Confidential Information which the Receiving Party can demonstrate was
in the public domain on the date of this Agreement.
6. The Receiving Party understands and acknowledges that any disclosure or
misappropriation of any of the Confidential Information in violation of
this Agreement may cause the disclosing Party irreparable harm, the amount
of which may be difficult to ascertain and, therefore, agrees that the
Disclosing Party shall have the right to apply to a court of competent
jurisdiction for an order restraining any such further disclosure or
misappropriation and for such other relief as the Disclosing Party shall
deem appropriate, such right of the Disclosing Party to be in addition to
the remedies otherwise available to the Disclosing Party at law or in
equity.
7. The Receiving Party shall return to the Disclosing Party any and all
records, notes and other written, printed or tangible materials pertaining
to the Confidential Information immediately upon written request of the
Disclosing Party.
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8. This Agreement and the Receiving Party's obligations hereunder shall be
binding upon the representatives, assigns and successors of the Receiving
Party and shall inure to the benefit of the assigns and successors of the
Disclosing Party.
9. The Agreement shall be governed by and construed in accordance with
internal laws of the State of Oregon.
10. If any action at law or inequity is brought to enforce or interpret the
provisions of this Agreement, the prevailing party in such action shall be
entitled to reasonable attorney's fees.
11. The Agreement constitutes the sole understanding of the parties with
respect to the subject matter hereof and may not be amended or modified
except in writing signed by each of the parties hereto.
--------------------------
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on the
date set forth above.
Disclosing Party: Receiving Party:
Acumed, Inc. Medex Surgical
---------------------------- ----------------------------
By: Xxxxxxx Xxxxxxx By: Xxx Xxxxx Xx Xxxxx
------------------------- -------------------------
/s/ Xxxxxxx Xxxxxxx /s/ Xxx Xxxxx /s/ Xx Xxxxx
---------------------------- ----------------------------
Signature Signature
Its: President Its: Co-Presidents
------------------------ ------------------------
Title Title
Date: 3-17-99 Date: 3/15/99
----------------------- -------------------------
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ADDENDUM 8
SALES QUOTA
Company reserves the right to have achievable sales quotas by product for a
specified period of time.
Quotas will be determined after ninety (90) days of the signing of this
Agreement and on a calendar year basis thereafter.
Company reserves the right to alter the Territory and/or Products as defined in
this Agreement if individual quotas for products are not met upon mutual
agreement.
Company will provide Representative a "Sales versus Quota" report at least on a
quarterly basis.
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