Vena Marilyn Wofford - Page 6

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               as a rider.  We will continue to make these monthly                     
               withholdings until we have withheld the total sum of                    
               $588,019.52.  This amount is for the protected right to earn            
               future commissions on sales of Systems to the customers                 
               listed in Attachment B [the customer lists] under this                  
               Agreement.  It represents the price that the transferor of              
               such rights has set, * * *.                                             
               No Territory Payback Schedule was executed or attached to               
          the agreement.  A proposed payment schedule requiring payment                
          over a 10-year period was sent to petitioner in December 1988,               
          but she rejected it, desiring a longer payback period.  No                   
          interest rate was ever stated in connection with petitioner's                
          payment obligation.                                                          
               If the agreement was terminated for any reason before                   
          petitioner had paid the full amount remaining with respect to the            
          customer account rights assigned to her (the customer bases),                
          petitioner had no further liability for additional payments.                 
          However, petitioner's right to future commissions with respect to            
          sales to customers on the lists was subject to reduction                     
          depending on the nature of the termination, and any commissions              
          payable were to be reduced by any amounts remaining due as                   
          territory repayments.                                                        
               If the commissions earned by a distributor were not                     
          sufficient to cover the territory repayments due in that month,              
          as a matter of practice, Safeguard nevertheless would pay the                
          former distributor the amount of the payments due.  Safeguard                
          considered any such amounts to be an advance to the current                  
          distributor and would deduct such amounts in the future.                     




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Last modified: May 25, 2011