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contact with customers and did not solicit sales of Safeguard
products. By the end of 1987, petitioner was aware that a few
distributors had given up their distributorships and that their
customer bases had not been purchased. Petitioner was interested
in becoming a distributor, and she communicated her interest to
her supervisor.
Petitioner was laid off from the branch sales manager
position effective January 31, 1988. As of February 1, 1988, she
began acting as a Safeguard distributor with respect to three
existing customer lists in the Dallas area. Petitioner acquired
the rights associated with two of these customer lists effective
February 1, 1988. Petitioner did not immediately acquire the
rights to the third customer list but instead she solicited sales
under a temporary "babysitting" agreement. Petitioner was to
receive standard commission payments less amounts payable as
"territory payback". A territory payback (also referred to as
territory repayments) represents amounts due to the former
distributor for the right to receive commissions on sales to
customers on the former distributor's list. Petitioner acquired
the right to the commissions related to the third list effective
December 1, 1988.
The Regional Distributor Agreement (the agreement) between
Safeguard and petitioner bears an effective date of February 1,
1988, but the terms were not finalized and the agreement was not
signed until December 1988. Petitioner had the right to solicit
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