EXHIBIT 10(a)
Medical Enterprises International
Manufacturer's Representative Agreement
72
MANUFACTURER'S REPRESENTATIVE AGREEMENT
Agreement made effective as of July 1, 1995 between Medical
Enterprises International (MEI) and Versus Technology, Inc. (VTI).
RECITALS
VTI designs and manufactures infra red tracking systems for use by
hospitals and other medical organizations (the "VTI products").
MEI has established a qualified technical medical sales
organization made up of independent manufacturers representatives
throughout the USA.
VTI wishes to appoint MEI as its sales and marketing representative
for the VTI products upon the terms and conditions hereinafter set
forth.
AGREEMENT
Now, therefore, in consideration of the mutual covenants, premises
and understandings contained in this agreement, VTI and MEI agree
as follows:
1. Exclusive Sales Representative. VTI grants to MEI the
exclusive right to solicit orders for the VTI products, as
defined above, through its network of independent
representatives in all parts of the medical community in the
USA. VTI further grants MEI the non exclusive right to
solicit orders from industrial customers outside the medical
field, for any other products currently for sale by VTI as of
the date of this Agreement so long as such activity does not
conflict with any agreements now or later put in place by VTI
and as described to MEI by VTI; the intention being hereby
stated that if VTI shall grant to another an exclusive right
to solicit orders for any of such other products, then MEI's
non-exclusive rights as stated in this sentence shall
terminate. VTI retains the right to itself directly solicit
and accept orders for the VTI products from time to time, if
MEI was not the procuring cause of the order and MEI is not
called upon to service the account. Notwithstanding any of
the foregoing, MEI acknowledges that VTI already has an
existing agreement with Xxxxxxxxxxx Electric, Inc.; MEI
agrees that VTI and Windemuller Electric's performance of such
agreement is permitted, and is not in conflict with MEI's
rights under or in connection with this Manufacturer's
Representative Agreement.
2. Acceptance of Orders. All orders are subject to acceptance or
rejection by an authorized officer of VTI and to the approval
of VTI's credit department, and VTI may accept or reject any
such order at its sole discretion, with or without cause. VTI
shall be responsible for all credit risks and collections,
except as herein otherwise set forth.
73
3. Terms of sale. All sales shall be at prices and upon terms
established by VTI and it shall have the right, in its sole
discretion, from time to time to establish, change, alter or
amend prices and other terms and conditions of sale. MEI
shall not accept orders in VTI's name or make price quotations
or delivery promises without VTI's prior approval, which shall
be confirmed in writing.
4. Compensation.
(a) On system sales, the order for which MEI was the
procuring cause, VTI shall pay to MEI, as the entire
compensation for MEI's services rendered under this
agreement, a commission of 35% of the invoiced price of
the VTI products sold pursuant to such order. Shipping
and mailing costs, taxes, insurance, and allowances or
discounts granted to the customer by VTI, shall be
excluded from amounts against which commissions are
based. It is understood that approximately 57% of such
commission will be paid by MEI to the independent
representative organization responsible for procuring the
order and that approximately 43% of such commission will
remain with MEI. Payment to be made to MEI from VTI
within 15 days following receipt of final payment from
the customer.
(b) On rental plans:
The commission on rentals will be structured as
illustrated in Appendix A.
(c) Returns
If commission has been paid and a return takes place
requiring repayment to a customer, a covenants to MEI for
the commission amount paid will be made.
5. Responsibility of MEI and Associated Agents. The following
shall be among the responsibilities of MEI, provided, however,
VTI's sole remedy for non performance shall be termination of
this agreement pursuant to paragraph 11, and in no event shall
MEI be liable for incidental or consequential damages to VTI:
(a) Establish professional independent representative network
throughout the U.S. medical market within 4 months from
the date of this agreement.
(b) Employ their best efforts to promote the sale of the VTI
products within the assigned markets.
(c) Represent VTI, through MEI's affiliates, in all aspects
of the sale of VTI products, from taking the order to
74
assisting in installation, handling in service education
(after suitable training) and helping to make collections
when necessary.
(d) Develop and implement rental plans for and with the
approval of VTI.
(e) Develop and implement leasing programs for and with the
approval of VTI.
(f) Provide sales forecasts by territory within the market,
and deliver bona fide orders for VTI products aggregating
not less than 80% of said forecasts.
(g) Recommend trade shows to attend and provide the manpower
to cover those selected.
(h) Function as an extension of the VTI marketing department
to assist with marketing plans and materials as
requested.
(i) Provide information concerning performance of the systems
including customer comments and complaints.
(j) Provide information concerning competitive products.
(k) Recommend new application ideas.
(l) Maintain communications with the independent
representatives through a combination of sales bulletins
and a periodic newsletter (CAVU).
6. Responsibility of VTI. The following shall be among the
responsibilities of VTI, provided, however, MEI's sole remedy
for non performance shall be termination of this agreement
pursuant to paragraph 11, and in no event shall VTI be liable
for incidental or consequential damages to MEI:
(a) Provide the end customer with VTI products of high
quality and design following current GMP standards.
(b) Provide support materials in the form of literature,
brochures, video tapes, articles by professionals as
proof statements, and any other material that would
assist in the sale of the VTI products.
(c) Attend selected trade shows to promote the VTI products.
(d) Support the VTI products with advertising and press
releases.
(e) Provide suitable demonstration aides to assist the field
sales representatives.
75
(f) Provide modem support to customers.
(g) Provide installation assistance where and when required
at then prevailing prices.
(h) Provide and communicate to customers the current warranty
on VTI products.
7. Invoices. A copy of all invoices for VTI products sold by VTI
with respect to which a commission will be due will be
forwarded by VTI to MEI concurrently with delivery of the
invoice to the customer. MEI will forward a copy to its
responsible affiliated representative.
8. Proprietary Rights and Information. MEI and affiliates shall
be entitled to use VTI trademarks and commercial symbols
applicable to the products for the purpose of indicating that
MEI and affiliates are authorized to represent VTI. This
authorization shall not be interpreted as a license for use of
such trademarks or symbols, and MEI shall not use VTI's
trademarks or symbols in any manner not approved by VTI. MEI
agrees that all of VTI's intellectual or proprietary
properties which MEI learns or comes into possession of in
connection with and during MEI's association with VTI shall
remain the sole property of VTI, and MEI will maintain for
VTI's sole benefit the confidentiality of any information of
VTI which VTI has informed MEI shall be kept as confidential.
9. Relationship Created. MEI and its affiliates are not
employees, agents or partners of VTI for any purpose, and are
independent contractors responsible for their own operating
expenses including, without implied limitation, travel,
entertainment, clerical staff and general selling expenses
incurred in the sales effort. VTI shall have no
responsibility for any such expenses unless VTI has
specifically agreed in writing.
10. Representation of Other Firms. During the term of this
agreement, MEI and affiliates will devote such time as is
necessary to the sale of VTI products. VTI recognizes that
MEI and its affiliates may represent other firms and companies
but it is specifically understood that MEI and all affiliates
associated with VTI shall in no event represent companies that
are in direct competition with VTI.
11. Termination. This agreement shall commence effective as of
the date first above stated and shall continue for a term of
2 years. Thereafter, the agreement will automatically be
renewed for 12 month terms unless notice of non renewal is
given as follows: Either VTI or MEI may give written notice to
the other of its intent not to renew this agreement, without
cause, at the expiration of the then effective term, which
notice shall be given not later than sixty (60) days before
76
such expiration date. In addition, either party may terminate
this agreement at any time by written notice to the other,
effective as specified in the notice, in the event the other
party violates or fails to perform any obligation or condition
contained in this agreement or any other contract between the
parties, becomes insolvent, makes an assignment for the
benefit of creditors, or proceedings are brought by or against
such person under any bankruptcy or other insolvency laws,
including any reorganization, arrangement or receivership.
Any notice given pursuant to this paragraph shall be in
writing and shall be sufficient if delivered personally or
mailed by regular mail, and shall be deemed to have been given
on the date of posting or personal delivery as the case may
be.
In the event of termination, MEI and affected affiliates will
return to VTI all samples, equipment, promotional materials,
documents containing confidential information, and supplies as
requested, and shall discontinue use of VTI trademarks or
symbols.
In the event of termination of this agreement, MEI and its
affiliates will be eligible to receive commissions on sales
from any orders received by VTI within 6 months following the
effective date of the termination provided a VTI quotation has
been given to the customer on or before the date of
termination. The commission on those sales, if any, will be
at the following rates:
Sales orders received by VTI within 2 months
following effective date of termination...will
receive full commission (35%).
Sales orders received by VTI 2-4 months after
effective date of termination will receive 25%
commission.
Sales from orders received by VTI 4-6 months after
effective date of termination will receive 20%
commission.
12. Indemnification. VTI indemnifies and holds harmless MEI and
its affiliates from any and all liability arising out of use
of the VTI products, provided that such liability does not
arise from the negligence or misconduct of MEI or its
affiliates, unauthorized changes made by MEI or its affiliates
in either the products or descriptive literature, or failure
to conform with VTI's approved promotional materials or other
policies. MEI shall indemnify and hold harmless VTI from any
and all liability arising from the negligence or misconduct
77
MEI or its affiliates, or unauthorized changes made by MEI or
its affiliates in VTI products or VTI's descriptive
literature, or failure to conform with VTI's approved
promotional materials or other policies.
13. Assignment. VTI has entered into this agreement with MEI
based upon its evaluation of MEI's form and method of
conducting business, current ownership, business acumen,
capacity to sell and service the products and business
reputation. VTI understands, and MEI covenants to VTI, that
the conditions of this agreement will be conveyed to all MEI
affiliates and that they will be bound by the same provisions
as are contained herein.
14. Notices and Requests. Unless otherwise specifically provided
in this agreement, 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
deposited in the United States mail, postage prepaid,
registered or certified, and addressed to the addressee at the
principal office set forth above. Any party may change its
address for purposes of this agreement by written notice given
in accordance herewith.
15. Adjustment and Adjudication of Disputes. The parties shall be
free to bring all differences of interpretation and disputes
arising in connection with this agreement to the attention of
the other at any time without prejudicing their harmonious
relationship and operations hereunder, and the offices and
facilities of either party shall be available at all times for
the prompt and effective adjustment of any and all such
differences, either by mail, telephone, or personal meeting.
This agreement shall be governed and construed pursuant to,
and in accordance with, the laws of the State of Michigan,
excluding any conflicts of laws provisions. Any litigation
involving any claim arising out of or relating to this
agreement shall be brought in the circuit court for the County
of Grand Traverse, Michigan, or in the federal district court
for the Western District of Michigan. In the event of
litigation, the prevailing party may recover court costs and
reasonable attorneys' fees.
If any provision or term of this agreement is held to be
invalid, void or unenforceable, the remainder of the
provisions shall remain in full force and effect and shall in
no way be affected, impaired, or invalidated.
16. Entire Agreement; Binding Effect. This agreement constitutes
the entire agreement between VTI and MEI concerning the
subject matter of this agreement and supersedes all prior and
contemporaneous agreements between the parties. This
agreement may be amended only by an instrument in writing
78
expressly referring to this agreement and specifically stating
that it is intended to amend it. No party is relying upon any
warranties, representations or inducements not set forth in
this agreement. This agreement shall bind and benefit VTI and
MEI as well as their respective or permitted successors or
assigns, as the case may be.
IN WITNESS WHEREOF, each of the parties has caused this agreement
to be signed on its behalf by a duly authorized individual, or
officer, as of the date set forth above.
VERSUS TECHNOLOGY, INC.
By: XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
Its: President and Chief Executive Officer
and By: X. XXXXX SNOWDAY
X. Xxxxx Snowday
Its: Chairman of the Board
MEDICAL ENTERPRISES INTERNATIONAL
By: XXXXX X. XXXXXX, XX.
Xxxxx X. Xxxxxx, Xx.
Its: Chairman of the Board
and By: R. XXX SOUTHERN
R. Xxx Southern
Its: President
79
