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HomeMy WebLinkAbout03-1447CHRISTOPHER C. FREY, Plaintiff Vo SURGICAL RESOURCES, INC., a/k/a SURGICAL RESOURCES OF PA, INC., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA . · CIVIL ACTION - LAW NOTICE TO PLEAD You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by an attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the foregoing Petition or for any other claim or relief requested by the Plaintiff. You may lose money, property or other fights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 (800) 990-9108 CHRISTOPHER C. FREY, Plaintiff SURGICAL RESOURCES, INC., a/k/a · SURGICAL RESOURCES OF PA, INC., · Defendants · IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 03 lq'q? COMPLAINT AND NOW, comes the Plaintiff, Christopher C. Frey, by and through his attomeys, Malatesta Hawke & McKeon LLP, and sets forth the following complaint: 1. Plaintiff Christopher C. Frey is an adult individual residing at 1365 Valley Road, Etters, York County, Pennsylvania. 2. Defendant Surgical Resources, Inc. is a Pennsylvania corporation having offices and/or place of business at 4902 Carlisle Pike, Mechanicsburg, Cumberland County, Pennsylvania. At all times relevant hereto, Surgical Resources acted through and by its agent, principal, officer and/or owner Douglas F. Mitchell. 3. From on or about September 1, 2002 through and including January 31, 2003, Defendant employed Plaintiff. 4. Defendant is in the business of distributing, marketing and selling medical devices and surgical equipment· 5. Plaintiff was hired by Defendant as a marketing and sales consultant for medical devices manufactured by Orthologic, Inc. During the course of Plaintiff's employment with Defendant, Plaintiff was responsible for originating, servicing and/or executing approximately 75 customer accounts, primarily in central and eastem Pennsylvania. 6. In exchange for the services provided to the Defendant by Plaintiff, Plaintiff was compensated in part pursuant to a written agreement that provided for sales commissions and an oral agreement by which Defendant agreed to pay Plaintiff a stipend of $2,500 per month. 7. When negotiating the written agreement, Plaintiff made one change to the agreement in Paragraph 16. A true and correct copy of the Agreement signed by the Plaintiff is attached hereto and made a part hereof as Appendix A. At the time the Agreement was signed by Plaintiff, Defendant had already signed the Agreement. 9. Later, after Plaintiff signed the Agreement and made the change indicated on Paragraph 16, the Defendant provided Plaintiff with a copy of the Agreement that did not include the change to Paragraph 16 made by the Plaintiff. 10. Plaintiff's stipend of $2,500 per month was to be paid by the Defendant in two equal installments of $1,250 each on the 15th and 30th day of each month. 11. In addition to the stipend of $2,500 per month, Plaintiff earned a straight ten (10%) percent sales commission for all sales made by him during the course of his employment relationship with the Defendant. month. The commission was payable by Defendant on the 15th of each 12. During the month of September 2002, the Plaintiff earned $2,500 in stipend and $390 in commissions on sales of $3,900. 13. In October 2002, the Plaintiff earned commissions on sales of $19,192. $2,500 in stipend and $1,919.20 in 2 14. In November 2002, the Plaintiff earned $2,500 in stipend and $1,698.70 in commissions on sales of $16,987. (In calculating the commission due for November 2002, Plaintiff has assumed that one sale classified as a "review upon submission" sale resulted in a net sales revenue of $2,500 with a resultant $250 commission.) 15. In December 2002, the Plaintiff earned $2,500 in stipend and $2,509 in commissions on sales of $25,095. 16. On December 13, 2002, the Defendant paid Plaintiff $1,919.20 in commissions (presumably for October 2002 commissions earned) and $1,250 in stipend. 17. In January 2003, the Plaintiff earned $2,500 in stipend and $3,063.98 in commissions on sales of $30,639.88. 18. By January 31, 2003, the Plaintiff had earned $12,500 in stipend and $9,580.88 in commissions. As of the date of the filing of this complaint, Defendant has paid Plaintiff all of the $12,500 in earned stipend, but only $1,919.20 in earned commissions. 19. Despite the Defendant's express commitment and agreement to pay Plaintiff the earned stipend on the 15th and 30th of each month, the Defendant repeatedly paid the Plaintiff late. Many times, the check date and the mailing envelope postmark differed significantly. 20. On January 17, 2003, the Plaintiff, who had been paid only a single commission check for $1,919.20 since beginning his employ on September 1, 2002 despite having made sales exceeding $95,000, tendered his resignation to the Defendant, effective January 31, 2003. 21. Plaintiff continued in good faith to make sales and earn commissions until January 31, 2003, even though Defendant had incurred a significant commission arrearage. 22. In the last two weeks of January 2003, Plaintiff inquired of Defendant several times as to the reason for Defendant's non-payment of Plaintiff's stipend arrearages and commission arrearages. Plaintiff. 23. Defendant did not provide any suitable explanation for refusing to tender payment to On January 31, 2003, the Defendant issued two checks to Plaintiff, one for $1,000 and another for $2,750. The Defendant mailed the checks on February 3, 2003. These checks eliminated the stipend arrearage, albeit by yet another late payment. 24. As of the date of the filing of the Complaint, the Defendant has refused Plaintiff's demands for payment of commission arrearages, without any logical or lawful explanation of its position. 25. Pursuant to the terms of Plaintiff's employment with Defendant, Defendant currently owes Plaintiff a total of $7,661.68 in earned but unpaid commissions. 26. Defendant has breached the terms of Plaintiff's employment agreement by failing timely to remit all stipends and to pay all earned commissions owing to Plaintiff. 27. At the time the Plaintiff terminated his employment with the Defendant, the Defendant was obligated to make payment of $7,661.68 to Plaintiff, said amount composed of earned but unpaid commissions. 28. Plaintiff at no time was in breach of his employment contract with Defendant. 29. The Plaintiff performed all obligations required of him under the employment contract and satisfied all conditions requisite to his payment of both the stipends and the commissions at issue in this matter. 30. The Defendant is not entitled to any set-off or deduction from the earned and unpaid stipends and commissions due to Plaintiff by Defendant. 31. The Defendant's retention of funds earned by Plaintiff is without legal justification. COUNT I VIOLATION OF PENNSYLVANIA WAGE PAYMENT AND COLLECTION ACT 32. Paragraphs 1 through and including 31 are incorporated herein by reference as though fully set forth. 33. The Defendant's actions and omissions set forth above are in violation of the Pennsylvania Wage Payment and Collection Act, 43 P.S. § 260.1, et seq. (hereinafter "WPCA"), thus entitling Plaintiff to the entire amount of wages due and owing. 34. The amounts due and owing to Plaintiff for unpaid commissions are "wages" as defined by the WPCA. 35. Pursuant to Defendant's violation of the WPCA, Plaintiff is entitled to an award of reasonable attorney fees pursuant to 43 P.S. § 260.9(a). 36. Pursuant to Defendant's failure to make payment for unpaid wages for more than thirty (30) days beyond the established and required payment date, Plaintiff is entitled to liquidated damages in an amount equal to twenty-five (25%) percent of the total wages due, or $500, whichever is greater. 43 P.S. § 260.10. Plaintiff is entitled, therefore, to an additional $1,915.42 in liquidated damages. WHEREFORE, Plaintiff, Christopher C. Frey, respectfully requests that the Court enter judgment in his favor and against the Defendant, Surgical Resources, Inc. in the amount of $7.661.68 plus reasonable attorney fees, liquidated damages equal to twenty-five (25%) percent of the total wages due (or an additional $1,915.42), costs of suit, and all other relief that this Court deems just. 37. fully set forth. 38. COUNT II - BREACH OF CONTRACT Paragraphs 1 through and including 36 are incorporated by reference as though The Plaintiff and the Defendant had a contract, the terms of which entitled Plaintiffto compensation in the form of a stipend and in the form of commissions. 39. During his employ, the Plaintiff earned in excess of $7,661.68 in commissions that the Defendant agreed to pay to Plaintiff. 40. The Defendant retained $7,661.68 in earned but unpaid commissions unlawfully and in breach of the agreement between Plaintiff and Defendant. 41. Plaintiff has suffered damages in the amount of $7,661.68, plus interest, as a result of the Defendant's breach of the contract between the Plaintiff and Defendant. WHEREFORE, Plaintiff demands judgment in his favor and against the Defendant in the amount of $7,661.68, plus interest, counsel fees and costs. 42. fully set forth. 43. COUNT III - CONVERSION Paragraphs 1 through and including 41 are incorporated by reference as though In the alternative, Defendant has converted the funds at issue because it has refused to return the fimds earned by Plaintiff. 44. The Defendant's retention of the funds at issue is without Plaintiff's consent and without lawful justification. 45. The Defendant has exercised and continues to exercise wrongful control over the money at issue earned by Plaintiff. WHEREFORE, Plaintiff demands judgment in his favor and against the Defendant in the amount of $7,661.68 plus interest, counsel fees and costs. 46. Paragraphs though fully set forth. 47. In the alternative, Plaintiff is entitled to return of the funds of the issue because retention of those funds by Defendant will result in the Defendant's unjust enrichment. 48. The Defendant's retention of commissions earned by Plaintiff conferred a benefit on the Defendant, which the Defendant appreciated by retention of the funds. 49. Retention of the funds at issue by the Defendant would be unjust and inequitable. 50. Retention of the funds at issue by the Defendant would be unconscionable under the circumstances. 51. Plaintiff did not intend for the Defendant to enjoy the benefit of the commissions earned by the Plaintiff, especially as the Defendant retained its own 10% commission on the sales at issue in this matter. WHEREFORE, Plaintiff demands judgment in his favor and against the Defendant in the amount of $7,661.68 plus interest, counsel fees and costs. COUNT IV - UNJUST ENRICHMENT 1 through and including 45 are incorporated herein by reference as DATED: March 28, 2003 Respectfully submitted, Scott'S0 Malatesta Hawke & McKeon LLP 100 North 10th Street Harrisburg, PA 17105 (717) 236-1300 Counsel for Christopher C. Frey 7 INDEPENDENT CONTRACTOR ~REEMENT Surgical Resources of PA, Inc., a Pennsylvania corporation, ("Hiring Party") enters into this Independent Contractor Agreement ("Agreement") with Chris Frey, ("Independent Contractor"), as of Septembers 2002. RECITALS: Hiring Party is in the business of distributing, marketing, and selling sport and medical devices manufactured by Orthologic Incorporated and desires to retain Independent Contractor to market and sell those products as set forth in Addendum A and in the territory described in Addendum B. Independent Contractor is in the business of marketing and selling medical products. In consideration of the mutual promises set forth in this Agreement, the parties intending to be legally bound, agree as follows: 1. SCOPE OF SERVICES The services to be performed by.Independent Contractor include only the services described on Addendum A. Independent Contractor shall furnish all labor, tools, equipment, vehicles, licenses, and registrations necessary to perform these services. Independent Contractor will complete the services according to Independent Contractor's own lawful means and methods of work, which shall be in the exclusive charge and control of Independent Contractor and which shall not be subject to the control or supervision of Hiring Party, except that such services shall be performed in accordance with the professional and quality control standards generally accepted in the healthcare sales industry. 2. EMPLOYEES OF INDEPENDENT CONTRACTOR Independent Contractor agrees that it is solely responsible for its own acts and omissions and for those of its employees (if any) and that Independent Contractor and employees working for Independent Contractor are the sole responsibility of 55869.1 Independent Contractor for the purposes of any and all legal requirements, including, but not limited, to obligations and liabilities in the following areas: Workers' Compensation Insurance Federal and State Unemployment taxes Federal and State tax withholding and reporting requirements Unemployment Compensation insurance 3. PERIOD OF INDEPENDENT CONTRACTOR AGREEMENT This Agreement shall be effective for one (1) year from the date on which it is signed by the parties. Thereafter, this Agreement will continue on a month to month basis until it is renewed or terminated. 4. TERMINATION OF AGREEMENT Hiring Party shall have the right at its sole discretion to immediately terminate this Agreement upon the occurrence of any of the following events: A. Breach of this Agreement that goes uncured for thirty (30) days; B. Failure to perform any of the services described in Addendum A for a period of thirty (30) days; C. Conviction of the Independent Contractor or any of its officers, directors or partners of a felony; D. Conviction of the Independent Contractor or any of its officers, directors, or partners of any other crime that occurred in connection with or was otherwise related to the services provided by Independent Contractor; E. Failure to achieve sales quotas over a ninety (90) day period; F. Independent Contractor's failure to participate in or comply with training, procedures, programs, recalls or other rules and regulations established by governmental agencies, other third party payors, or Hiring Party; 5869.1 2 G. Independent Contractor's discontinuation of its standard operating procedures or normal business functions for a period of five (5) days for any reason; H. The termination by Orthologic of its distribution agreement with Hiring Party. Upon termination of this Agreement for any reason, Hiring Party shall pay to Independent Contractor all co~nissions due as those commissions are reconciled in Hiring party's usual course of business. No commission will be paid on any sales for which appropriate documentation has not been received by Hiring Party prior to or after the effective termination date. Independent Contractor agrees to return to Hiring Party all medical and surgical products, Consigned Products, training materials, customer lists, advertising materials or any other property belonging to Hiring Party within fifteen (15) days after termination of this Agreement. The Hiring Party will withhold the release of all commissions owed to the Independent Contractor until these items are returned to the Hiring Party. 5. FEES TO INDEPENDENT CONTRACTOR Independent Contractor will be paid commissions for sales as set forth in the commission schedule attached as Addendum 'C'. Independent Contractor will be paid commissions only upon sales for which the required paperwork has been received by Hiring Party and such paperwork results in a billable unit. Independent Contractor will not be paid a salary or an hourly rate. Independent Contractor will be paid by Hiring Party upon the Hiring Party's receipt of monthly quotas from Orthologic. In addition to any other right and remedy, Hiring Party may deduct from payments to Independent Contractor any amount necessary to protect Hiring Party, in Hiring Party's reasonable opinion, from loss or liability caused by Independent Contractor's breach of this Agreement. 6. STATUS OF INDEPENDENT CONTRACTOR The parties intend that this Agreement create only an independent contractor relationship. Independent Contractor shall complete the services described in Addendum A according to its own means and methods of work, which shall be in the exclusive control of Independent Contractor and which shall not be subject to the control or supervision of Hiring Party except to the results of the work. The parties agree that this Agreement will not entitle Independent Contractor or its employees (if any) to workers' compensation benefits, unemployment compensation 55869.1 3 benefits, or any other benefits or protections that accrue from an employment relationship. Independent Contractor is not required to perform work exclusively for Hiring Party. Hiring Party will not provide tools to Independent Contractor or its employees.Hiring Party will not provide Independent Contractor or its employees any business registrations or licenses that may be required. Hiring Party will not dictate the number of hours Independent Contractor or its employees are required to work. Hiring Party will not terminate this Agreement before expiration except as provided herein. Hiring Party will not combine business operations with Independent Contractor. Independent Contractor will be paid as set forth herein and will not be paid a salary or hourly rate and Hiring Party will pay the Independent Contractor only in the name appearing on this Agreement. Neither Independent Contractor nor its employees or agents are to be considered agents or employees of Hiring Party for any purpose, including that of federal and state taxation, and neither Independent Contractor nor its employees or agents are entitled to any of the benefits that Hiring Party may provide to its employees. It is understood and agreed that Hiring Party does not require Independent Contractor to provide services exclusively to Hiring Party and that Independent Contractor is free to contract to provide services to other companies, except as limited by Section EIeven (11) of this Agreement, while it is under contract of Hiring Party. 7. INDEMNITY Independent Contractor shall be entirely and solely responsible for its actions and the actions of its employees and subcontractors while providing services under this Agreement. Independent Contractor agrees to indemnify and hold Hiring Party harmless against all claims, demands, suits, awards, and judgments made or recovered by any persons or entities due to the actions of Independent Contractor or its employees and/or agents during the rendering of services to Hiring Party under this Agreement. 8. INSURANCE Independent Contractor agrees to maintain such insurance as will fully protect Independent Contractor and Hiring Party from any and all claims under any workers'compensation statute or unemployment compensation laws, and from any and all other claims of any kind or nature for damage to property or personal injury, including those made by anyone that may arise from work or other. activities carried on, under or facilitated by this Agreement, either by Independent Contractor, its employees and/or agents, or by anyone directly or indirectly engaged or er~ployed by Independent Contractor or its agents. 55869.1 4 Independent Contractor further agrees to maintain automobile liability insurance, naming Hiring Party as co-insured, that will fully provide Independent Contractor and Hiring Party insurance coverage for bodily injury, property damage, and theft claims arising out of the ownership, maintenance or use of the owned, hired, leased, rented, or borrowed motor vehicles used by Independent Contractor, its employees or agents, while providing services under this Agreement. Independent Contractor shall provide Hiring Party with a copy of the binder of such insurance, thereby confirming its effective date, as well as quarterly updates evidencing that such insurance is being maintained by Independent Contractor. 9. COMPLIANCE WITH LAWS AND REGULATIONS Ail services rendered by Independent Contractor and its employees and/or subcontractors under or pursuant to this Agreement shall conform with and be in full compliance with all applicable laws, rules, ordinances and regulations adopted or required by any federal, state, city or town governmental agency. Independent Contractor shall obtain all necessary permits and licenses required. Independent Contractor shall be entirely and solely responsible for the payment of the employee and employer payroll taxes, contributions and/or assessments, whether pertaining to federal, state or local requirements, workers' compensation insurance or other insurance for Independent Contractor and all of its employees providing services under this Agreement. Independent Contractor shall indemnify and hold Hiring Party harmless from any and all claims, loss, expense, damage or harm arising from failure to comply with any such laws and regulations. 10. NONDISCLOSURE OF CONFIDENTIAL INFORMATION "Confidential Information" means any information or compilation of information that is proprietary to Hiring Party and relates to Hiring Party's existing or reasonably foreseeable business including, but not limited to, trade secrets and information containing or relating to marketing or brokering methods, processes, techniques, sales techniques, marketing plans or proposals, existing or potential customer lists, and all other customer information. Such information will be presumed to be Confidential Information and will be treated as Confidential Information irrespective of its source and whether or not identified by Hiring Party as being 'Confidential" or "Trade Secrets." During the term of this Agreement .and at all times after the end of the term, Independent Contractor agrees to hold in strictest confidence and to never disclose, furnish, communicate, or make accessible to any person or use in any way for Independent Contractor's own or another's benefit or permit to be used in coK~etition with Hiring Party any Confidential Information. Independent Contractor will refrain from such acts and omissions that would reduce the value to Hiring Party of the Confidential Information. 55869.1 5 Independent Contractor expressly acknowledges and agrees that any disclosure of Hiring Party's Confidential Information would reduce the value of Hiring Party's Confidential Information. Independent Contractor agrees to take all reasonable steps to secure the secrecy of Hiring Party's Confidential Information, including without limitation: (1) maintaining all Confidential Information in a secure place; (2) limiting access to Hiring Party's Confidential Information to agents of Independent Contractor who have a need to know such information in order to complete the services described in Addendum 'A" to this Agreement; and (3) assuming and satisfying all liability for any disclosure or use of any Confidential Information to any agent or Independent Contractor that violates the terms of this Agreement. Independent Contractor acknowledges and agrees that any solicitation of Hiring Party's customers on behalf of Hiring Party's competition will inevitably result in the disclosure of Confidential Information. For this reason Independent Contractor agrees not to solicit any customer or potential customer of Hiring Party on behalf of any entity or person marketing, selling, or brokering products similar to those manufactured, distributed, or sold by Orthologic for a period of one (1) year after termination of affiliation with Hiring Party. 11. RESTRICTIVE COVENANT Independent Contractor hereby covenants, and agrees that- Independent Contractor shall not coK~ete with Hiring Party for a period of twelve (12) full consecutive months after the termination of this Agreement, directly or indirectly, either on Independent Contractor's own behalf or as a partner, joint venturer, officer, director, employer, employee, consultant, agent, lessor, lessee, creditor, or in any other manner or capacity in connection with any other persons by: (a) engaging in the business of selling, manufacturing, distributing, or marketing Orthologic sport or medical devices in any geographic area as set forth in Addendum B; (b) interfering, directly or indirectly through any person or entity as described above, with the Hiring Party's business by persuading or inducing, or attempting to persuade or induce, Orthologic to discontinue its business relationship with the Hiring Party or entering into any relationship with any person or entity as described above who manufactures, distributes, markets, and/or sells products similar to those of KMI in the same geographic area as Orthologic; (c) interfering with the business of the Hiring Party by persuading or inducing, or attempting to persuade or induce, any person or entity that is or may a be a customer or purchaser of the Hiring Party, or that was a customer or purchaser of the Hiring Party at any time or times during the sixty (60) calendar months immediately preceding the date hereof to discontinue its business with the Hiring Party or to do business with any other person or entity who is or may be in competition, directly or indirectly, with the Hiring Party's marketing or selling of Orthologic products; 6 (d) persuading or inducing any employee to resign employment with the Hiring Party, or interfering with or disrupting the Hiring Party's relationship with its employees, representatives or agents, or soliciting or hiring any of the Hiring Party's said employees, representatives or agents or attempting to do any of the foregoing or (e) contracting directly with Orthologic or rendering services for another person or entity as described above who has contracted with Orthologic to distribute, market, or sell Orthologic's products in the same geographic area as Hiring Party under Hiring Party's agreement with Orthologic. It is intended and agreed that in the event any portions of this covenant are determined and held by any court of competent jurisdiction to be invalid or unenforceable, for whatever reason, such invalid or unenforceable portions shall be treated as severed herefrom and this covenant shall be deemed revised and limited in such manner and to such extent as may be necessary to make the remaining provisions of this covenant valid and fully enforceable. The parties hereto agree that if any court of competent jurisdiction so determines any portions of this covenant to be invalid or unenforceable, such court shall be and is hereby authorized to reform the provisions of this covenant so as to make the same reasonable and valid, and as so reformed, fully enforceable in equity and at law. Should a court of competent jurisdiction find and determine that Independent Contractor has violated the provisions of this covenant, the provisions of this covenant shall remain and continue in full force and effect until the expiration of the twelfth (12th) full month after the date of such final judicial determination or if the twelve (12) month period under this covenant is reduced by such court, as aforesaid, then for such shorter time as so reduced by the court. 12. INVENTORY Hiring Party may, from time to time, deliver or have delivered to Independent Contractor inventory to hold on a preemptory basis for the purpose of filling orders for such inventory from customers in Independent Contractor's territory ("Inventory").Independent Contractor agrees to hold all Inventory in trust for Hiring Party's account. The amount and type of Inventory to be maintained by Independent Contractor will be determined by Hiring Party. Independent Contractor agrees, at Independent Contractor's expense, to keep all Inventory at Independent Contractor's principal place of business. Inventory may be consigned to hospitals or surgical groups with written approval from Hiring Party following receipt of a consignment purchase order from the hospital to the Hiring Party. 55869.1 7 Independent Contractor will make best efforts to assure turnover of Inventory within three (3) days. There will be no charge to Independent Contractor for Inventory. The absolute right to all Inventory will remain with Hiring Party until the Inventory has been* sold to customers in the territory subject to purchase orders accepted in writing by Hiring Party. Upon Hiring Party's written request Independent Contractor will return to Hiring Party, at Hiring Party's expense, such Inventory as is in Independent Contractor's possession or under Independent Contractor's control. Hiring Party may at any time inspect and examine the Inventory in Independent Contractor's possession or under Independent Contractor's control and Independent Contractor will give Hiring Party access to such Inventory. Hiring Party will require Independent Contractor to report the location of all Inventory on a monthly basis. Hiring Party will send a Serialized Inventory Report to Independent Contractor monthy and Independent Contractor will have fourteen (14) days to complete the report and return to Hiring Party. Independent Contractor will be responsible to Hiring Party for any Inventory in Independent Contractor's possession, control, or in the possession of Independent Contractor's customers in the territory that are missing, or that otherwise cannot be accounted for by Independent Contractor. Independent Contractor will be liable to Hiring Party for such lost or missing Inventory in accordance with Hiring Party's policies regarding Inventory as they may change from time to time. Subject to the next sentence, Hiring Party will be responsible for all losses or expenses resulting from damage or destruction of Inventory while in the Independent Contractor's possession or control. Independent Contractor will provide and maintain insurance, naming Hiring Party as co-insured, and pay all insurance deductibles respecting any insured damage or destruction of Inventory and any uninsured damage or destruction Inventory. Independent Contractor will reimburse Hiring Party for all losses and expenses Hiring Party may incur that results from any levy or attachment or lien, not concurred to by Hiring Party in writing, on Inventory while any such Inventory is in Independent Contractor's possession or under Independent Contractor's control. Independent Contractor will pay all personal property tax or other similar taxes levied on Inventory in Independent Contractor's possession or under Independent Contractor's control. Independent Contractor will keep proper books of account and true records of all Inventory, including the names and addresses of the parties in possession of Inventory, the q~antities of Inventory and the catalog and lot numbers of the Inventory. Independent Contractor will at any time give Hiring Party access to such records at Hiring Party's request. 55869.1 8 13. ENTIRE AGREEMENT This instrument contains the entire agreement, including the Addendums attached hereto, of the parties and no representations, warranties or inducements have been made by either of the parties except as expressly set forth herein. 14. BINDING AGREEMENT AND ASSIGNMENT This Agreement shall be binding upon the parties and their heirs, legal representatives, successors, and assigns. Independent Contractor may not assign this Agreement without prior written consent of Hiring Party. 15. INJUNCTIVE RELIEF Hiring Party shall be entitled to injunctive relief to enforce the terms of this Agreement without having to show actual damage sustained, the nonexistence of an adequate remedy at law, or irreparable harm, and shall not thereby be deemed to have elected its remedies. 16. ATTORNEY FEES AND LEGAL EXPENSE If any action shall be brought by the Hiring Party to recover any amount under this Agreement, or for any breach of, or to enforce or interpret any of the terms, covenants, or conditions of this Agreement, the~--B~shall be ~warded.its reasonable costs and expenses, including reasonablelattorney,s fees lncurrea. ~A~46 ~ 17. SEVERABILITY ' ~ - ' ' If any one or more of the provisions of this Agreement are held to be invalid, illegal, or unenforceable in any respect by a court or arbitrator of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 18. VENUE AND GOVERNING LAW This Agreement has been negotiated and entered into in the Commonwealth of Pennsylvania and shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. Venue for any action concerning this Agreement shall lie only in the Court of Common Pleas, Dauphin County, Pennsylvania, and the parties hereby consent to the jurisdiction of this court for all purposes hereunder. 55869.1 9 19. WAIVER No breach of this Agreement can be waived except in writing. Waiver of any breach shall not be deemed to be a waiver of any other breach of the same or any other provision of this Agreement. 20. NOTICES Any notices or demand to be given hereunder by either party shall be effected by personal delivery in writing or by registered mail, postage prepaid, return receipt requested, and shall be deemed communicated forty-eight (48) hours after emailing or upon receipt by the recipient, whichever occurs first. Mailed notices shall be sent or delivered to the recipients address as set forth below. 21. WARRANTIES AND REPRESENTATIONS Independent Contractor agrees to make no false or misleading representations with respect to Hiring Party or Orthologic products. Independent Contractor shall make no express or implied warranties to customers or prospective customers, hospitals or surgical clientele, or to any other party on behalf of Hiring Party with respect to any products Hiring Party markets, distributes, or sells without first obtaining Hiring Party's written consent. Independent Contractor agrees to hold Hiring Party harmless from all damages resulting from Independent Contractor's breach of this paragraph. In no event shall Independent Contractor be liable for consequential or special damages, nor, except as it may otherwise specifically agree in writing shall Hiring Party be liable for transportation, labor or other charges for adjustments, repairs, replacement of parts, installation, or other work that may be done upon or in connection with products sold by Independent Contractor. For Hiring Party Surgical Resources, Inc. A Pennsylvania Corporation Date: ~/~/69 ~ Address: For Independent Contractor By: Its: Date: Address: ADDENDUM A Independent Contractor agrees to use its best efforts to develop demand for and promote Orthologic sport and medical devices on behalf of Hiring Party in assigned Territory. In furtherance of this objective, Independent Contractor shall perform at least the following tasks: A. Attend all training and sales courses requested by Hiring Party relating to Orthologic sport and medical devices. Hiring Party shall pay the cost of attendance of all training and sales programs provided that any materials obtained by Independent Contractor as a result of attendance are given to Independent Contractor upon termination of this Agreement or upon tern-dnation or resignation of Independent Contractor. B. Maintain an adequate supply of promotional material and literature on all Orthologic products offered for sale by Independent Contractor on behalf of Hiring Party. C. Promptly follow through on all inquiries or leads developed by Hiring Party. D. Not solicit any sales for Hiring Party outside the designated Territory. E. Carry a communication device provided by Hiring Party so that Hiring Party's clients and prospective customers may contact Independent Contractor in order to purchase Orthologic sport and medical devices from Independent Contractor. F. Carry and provide Hiring Party's business cards and promotional materials to prospective customers. G. Maintain an adequate and sufficient understanding of all Orthologic products subject to the satisfaction of Hiring Party. 55869.1 ADDENDUM B Your Pennsylvania territory consists of: Adams County, Pennsylvania Lackawanna County, Pennsylvania Berks County, Pennsylvania Lebanon County, Pennsylvania Bradford County, Pennsylvania Lancaster County, Pennsylvania Bucks County, Pennsylvania Lehigh County, Pennsylvania Carbon County, Pennsylvania Luzerne County, Pennsylvania Centre County, Pennsylvania Lycoming County, Pennsylvania Mifflin County, Pennsylvania Clinton County, Pennsylvania Monroe County, Pennsylvania Columbia County, Pennsylvania Cumberland County, Pennsylvania Montour County, Pennsylvania Dauphin County, Pennsylvania Northhampton County, Pennsylvania Delaware County, Pennsylvania Northumberland County, Pennsylvania Franklin County, Pennsylvania Perry County, Pennsylvania Fulton County, Pennsylvania Pike County, Pennsylvania Huntingdon County, Pennsylvania Potter County, Pennsylvania Juniata County, Pennsylvania Scuylkill County, Pennsylvania Snyder County, Pennsylvania Sullivan County, Pennsylvania Susquehanna, County Pennsylvania, Tioga County, Pennsylvania Union County, Pennsylvania Wayne County, Pennsylvania Wyoming County, Pennsylvania York County, Pennsylvania Clearfield County, Pennsylvania Cameron County, Pennsylvania Bedford County, Pennsylvania Blair County, Pennsylvania 55869.1 ADDENDUM C If Independent Contractor meets or exceeds sales quotas as established by Orthologic, Independent Contractor shall be paid a commission of 10% for the net sales of Orthologic products for which the required documentation has been received by Hiring Party. 55869.1 VERIFICATION I, Christopher C. Frcy, verify that the information provided in the foregoing document is true and correct to the best of my knowledge, information and belief. I understand that false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unsworn falsification to authorities. Christopher C. Frey CHRISTOPHER C. FREY, Plaintiff SURGICAL RESOURCES, INC., a/k/a SURGICAL RESOURCES OF PA, INC., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 03-1447 Civil Term PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Pursuant to Pa. R.C.P. 229, discontinued." please mark the above-captioned matter "settled and Respectfully submitted, Sc~'tt T. W~etl[d, I.D. 52660 Malatesta Hawke & McKeon LLP 100 North 10th Street Harrisburg, PA 17105 (717) 236-1300 Counsel for Plaintiff, Christopher C. Frey DATED: April 24, 2003 CERTIFICATE OF SERVICE I hereby certify that I have this day served a copy of the Praecipe to Discontinue upon the persons named and in the manner indicated below. Service by First-Class Mail: Steven M. Montresor, Esquire Latsha, Davis & Yohe Post Office Box 825 Harrisburg, PA 17108-0825 DATED: April 24, 2003 ScoXtttT. W~a,a~, I.D. 52660 2