Exhibit 10.4

 

REPRESENTATION AGREEMENT

 

1.                                       (a)           You, Encision Inc.,
(“ECI” or “You”) are hereby appointed as a representative of Caldera
Medical, Inc. (“Caldera” or “We”) under the terms of this agreement
(“Agreement”), effective April 1, 2009 (“Effective Date”), for the solicitation
of orders for the products listed on Exhibit 2.

 

(b)                                 Your account list (“ECI Target Accounts”)
will be subject to approval by Caldera management. You will limit all your
activities under this Agreement solely to ECI Target Accounts and ECI Target
accounts that become customers (“ECI Customers”).  You will immediately direct
all inquiries you receive from outside your account list to Caldera.

 

(c)                                  Your ECI Target Accounts are subject to
change with written approval from Caldera, pursuant to the terms in paragraph 8
of this Agreement.  At any given time, no more than five ECI Target Accounts
shall be in effect per ECI sales rep.  When an ECI Target Account becomes an ECI
Customer, you will have the opportunity to add a Target Account such that you
maintain up to five Target Accounts per ECI sales rep.  Facilities that are
eligible to become ECI Target Accounts are any accounts that have not purchased
Caldera products within the most recent 12 consecutive months before being added
to the ECI Target Accounts list.

 

(d)                                 The term of this Agreement will be three
years from April 1, 2009.

 

2.                                       (a)           You agree to provide all
required in-service and customer service as needed, as generally described on
Exhibit 4.  You do not have any obligation for warranty work, installation, or
customer training beyond that described in Exhibit 4.

 

(b)                                 We reserve the right to accept or reject any
orders solicited or obtained by you.

 

(c)                                  We will be responsible for manufacturing,
branding, regulatory affairs, quality, order administration/fulfillment, “train
the trainer” activities, invoicing, collections (although ECI will provide
assistance with collections matters), tax calculations for amounts owed by
customers and tax remittances of such amounts.

 

3.                                       (a)           We will provide you
sample products and sales promotion materials that will be distributed and
monitored. To the extent samples and materials have been provided on a no charge
basis, they remain our property and you agree to return them on demand, or in
any event upon termination of this Agreement by either party. In the event you
may lose any samples, or fail to return any of them to us on demand, you will be
charged for them at a fair price determined by the age and condition of the
items. You agree not to rent, lease, or sell any samples on your own without
written authorization from Caldera.

 

(b)                                 Caldera personnel may conduct an inventory
of samples at any reasonable time upon reasonable notice. Unaccounted for
samples will be your financial responsibility. Caldera may require direct
payment or deduct appropriate amounts from commission otherwise payable to you.

 

 

ECI Initials

 

 

CMI Initials

 

 

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(c)                                  Your signature on this Agreement
constitutes your written authorization for Caldera to deduct the amounts in
paragraph (b) from your commission, including from commissions already earned,
but not paid.  Caldera may withhold amounts Caldera has a reasonable belief are
owing under paragraph (b)), and will pay over the withheld amounts only after
the physical inventory has been completed and any necessary reconciliation has
been accomplished to Caldera’s reasonable satisfaction.  Caldera will act in a
timely fashion to complete the physical inventory and resolve the
reconciliation.

 

4.                                       (a)           Commissions will be paid
to you on all sales to ECI Target Accounts and ECI Customers (“Qualifying
Sales”) which are accepted and fulfilled by Caldera.  The commission schedule is
set forth on Exhibit 1.

 

(b)                                 Commissions are payable to you by the end of
the month following the month in which the shipment occurred. Your account will
be charged back for any commissions paid on products that are returned by the
customer, unless the customer receives credit on the returned products that may
be used for products that you do not receive a commission on. It will also be
charged back for products that are not paid for by the customer within one
hundred twenty (120) days after shipment. In the event that the customer makes
payment after the one hundred twenty (120) days after shipment, then that
commission will be payable to you. Your assistance in collecting outstanding
accounts receivable will be required as requested by Caldera.  This does not
require you to sue the customer. Caldera has the primary responsibility to
collect accounts receivable.

 

5.                                                                                      
You agree to pay all of your own expenses in connection with your solicitation
and obtaining of orders.

 

6                                                                                         
You agree that you are an independent contractor and not an employee of Caldera
and that you have no authority to make any warranties, representations, or
contractual commitments on our behalf.

 

7.                                       (a)           You agree that, during
the term of the Agreement, neither you nor anyone employed by you or otherwise
affiliated with your business and under your control, will, directly, or
indirectly, handle any products that are competitive to those listed on
Exhibit 2.  If you have a question as to whether a product is competitive, you
may ask Caldera and Caldera will respond within 60 days as to whether or not it
believes the product is competitive.

 

(b)                                 All know-how relating to our business and to
your activities in performance of this Agreement are to be treated as
confidential and proprietary information of Caldera and you will use your best
efforts to safeguard disclosure by you of confidential information of Caldera
given to you by Caldera regarding the patents, copyrights, trademarks, trade
secrets and other proprietary information of Caldera.

 

(c)                                  You recognize and acknowledge that all
knowledge and information which you may acquire in the course of your
relationship hereunder relating to the business, developments, activities, or
products of Caldera, or financial affairs of any individual or firm doing
business with Caldera, such as, but not limited to, customer and supplier

 

 

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lists, cost and selling prices, customer needs and requirements, confidential
data regarding marketing sources and product designs, and other information,
ideas, discoveries, operations, developments, improvements, designs and
processes so acquired are the valuable property of Caldera and shall be held by
you in confidence and trust for the sole benefit of Caldera.

 

(d)                                 You agree not to disclose, divulge, or
publish without the prior written consent of Caldera, either during the term of
the Agreement or at any time subsequent thereto, knowledge of any confidential
information concerning Caldera business about which you become aware in the
course of our relationship under this Agreement. You will take all appropriate
steps to safeguard against improper disclosure of Confidential Information by
you.  As requested by Caldera from time to time and upon the termination of this
Agreement, you shall promptly deliver all copies and embodiments, in whatever
form, of all Confidential Information in your possession or within your control
(including, without limitation, written records, notes, photographs, manuals,
notebooks, documentation, magnetic media, disks, diskettes, tapes and all other 
materials containing any Confidential Information) regardless of the location or
form of such material and, will provide Caldera with written confirmation that
all such materials have been delivered to Caldera.   You may retain one copy of
the Confidential Information in a secure and safe place as necessary for your
business recordkeeping requirements or for potential or actual legal defense or
prosecution purposes. For the purposes hereof, “Confidential Information” means
information that is not generally known to the public and that is used,
developed or obtained by Caldera regarding its products and the conduct of its
business, including, but not limited to, fee, cost and pricing structures;
profit margin information; product information; medical analyses; reports;
studies; third party manufacturing and licensing agreements; manuals and
documentation; accounting and business methods; the identity and information
concerning distributors, representatives, customers and suppliers (prospective
and existing); and any and all similar and related information in whatever form.
Confidential Information does not include any information that has been
published in a form generally available to the public prior to the date you
propose to disclose or use such information (unless such publication constituted
a breach by you of its duties hereunder).  Information will not be deemed to
have been published merely because individual portions of the information have
been separately published, but only if all material features comprising such
information have been published in combination.

 

Caldera agrees to maintain the confidentiality of all confidential information
of ECI and only use it for the advancement of the relationship between the
parties established by this Agreement.

 

(e)                                  Upon written termination of your services,
under terms of this Agreement as stated in paragraph 9, unless Caldera is in
breach of this Agreement on the date of termination or thereafter you shall not
directly or indirectly call on, solicit, sell, or otherwise deal with any
competitive products or services to those listed on Exhibit 2.  This restriction
shall begin upon termination of your services and continue for a period of one
hundred eighty (180) days thereafter.

 

 

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CMI Initials

 

 

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8.                                                                                      
We reserve the right, with your consent, to make additions, deletions, or other
changes to your ECI Target Accounts.  Any such additions, deletions or changes
will take effect ten (10) days from the date of our written notification to you
and your agreement to the change.

 

9.                                       (a)           A three year quarterly
dollar forecast of sales (“Forecast”) has been mutually agreed upon and is
listed on Exhibit 3.  The Forecast period will begin on April 1, 2009. If
mutually agreed upon, the Forecast may be revised on a look-forward basis during
the term of this Agreement.  Neither party is guaranteeing that the Forecast
will be achieved.

 

(b)                                 If ECI does not achieve at least 80% of
Forecast for two consecutive quarters, Caldera may terminate this Agreement with
45 days written notice, so long as such notice is given within 90 days of
quarter end.  ECI will not be required to achieve at least 80% of Forecast for
the first two quarters that begin on April 1, 2009.  (However, a failure to
achieve a Forecast is not a breach by ECI.) Otherwise, with the exception of a
breach by ECI, Caldera may terminate this Agreement with 30 days written notice
at any time, and will be required to pay ECI a lump sum payment equal to two
times the last quarterly commission payout. Notwithstanding the foregoing,
Caldera’s payment to ECI of any amounts pursuant to this Section 9 (b), shall be
expressly conditioned upon (i) Caldera first receiving an executed release
agreement from ECI, pursuant to which ECI, on behalf of itself and its
successors and assigns, releases and forever discharges Caldera and its
affiliates, agents, officers, directors, employees and representative, from any
and all claims, known and unknown, arising out of or in any way connected with
this Agreement; (ii) ECI providing such reasonable  transition assistance as
Caldera may reasonable request during such post-termination period, which shall
not include ECI making new customer calls or extend for more than 90 days after
termination; and (iii) reconciliation of sample products provided to you per
Section 3. With the exception of a breach, ECI may terminate this Agreement with
30 days written notice at any time.  Either party may terminate this Agreement
upon a material breach by the other party, if the other party has not cured such
breach within 10 days after notice of such breach from the non-breaching party.
Termination will occur at the end of that 10 day period if the breach is not
cured.

 

10.                                                                                
Upon termination of this Agreement, ECI will be entitled to receive commissions
for Qualifying Sales which are received by us prior to the effective termination
date and which are paid by the customer within one hundred twenty (120) days
after shipment. We will process all Qualifying Sales orders in a timely manner
and not delay accepting appropriate orders. ECI will have no right to
commissions on any order accepted after the effective date of termination. Your
signature on this Agreement constitutes your written authorization for Caldera
to withhold any post-termination commissions in an amount up to the value of the
entire unreturned inventory of samples, demonstration and sales promotion
materials, which withheld commission payment shall not be due until physical
receipt of the entire inventory of samples, demonstration and sales promotion
materials and reconciliation to the reasonable satisfaction of Caldera of any
discrepancy in the inventory.  Caldera will act promptly to reconcile such
amounts.

 

 

ECI Initials

 

 

CMI Initials

 

 

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11.                                                                                
Both parties recognize the necessity of making expenditures in preparing to
perform and in performing this Agreement, and recognize the possibility and the
likelihood of losses or damages resulting from termination. Both parties agree
nevertheless that neither party shall be liable in any way to the other for any
damages of any sort for termination of this Agreement, other than the payments
provided for herein, including without limitation, for any business losses,
consequential damages or damage to reputation resulting from or relating to such
termination.

 

12.                                 (a)           Caldera may assign this
Agreement (or may assign its rights under this Agreement or delegate its
obligations under this Agreement), in whole or in part, to any purchaser of, or
successor to, Caldera or to all or substantially all of Caldera’s business.

 

(b)                                 ECI may not assign this Agreement to any
other entity, including by merger or transfer of all or substantially all of
your assets, and that any change in your ownership so that one person and its
affiliates beneficially owns more than 50% of the stock of ECI, shall be deemed
to be a prohibited assignment. ECI agrees to give Caldera prompt notice of any
such event.

 

13.                                                                                
You agree that any person(s) employed by you will comply with all of the
requirements of this Agreement including, without limitations, to avoid
affiliation with representation of competitive products and services.

 

14.                                                                                
You acknowledge that during the term of this Agreement, you will have the
opportunity to develop relationships with existing employees, clients,
distributors, representatives, and prospective clients, vendors, suppliers and
other business associates of Caldera, which relationships constitute goodwill of
Caldera and that Caldera would be irreparably damaged if you were to take
actions that would damage or misappropriate such goodwill. You accordingly agree
that during the period commencing on the Effective Date and ending on the second
anniversary of the termination of this Agreement, you shall not, directly or
indirectly, either for the benefit of yourself or any other person or entity, do
any of the following:

 

(A)                                  SOLICIT ANY EMPLOYEE OF CALDERA TO
TERMINATE HIS OR HER EMPLOYMENT WITH CALDERA, OR EMPLOY OR USE IN A CONSULTING
CAPACITY ANY SUCH INDIVIDUAL DURING HIS OR HER EMPLOYMENT WITH CALDERA AND FOR A
PERIOD OF TWELVE MONTHS AFTER SUCH INDIVIDUAL TERMINATES HIS OR HER EMPLOYMENT
WITH CALDERA;

 

(b)                                 Solicit any distributor, representative,
vendor, supplier or customer, or prospective distributor, representative,
vendor, supplier or customer, of Caldera to terminate his or her relationship
with Caldera or accept any business from any such distributor, representative,
vendor, supplier or customer, or prospective distributor, representative,
vendor, supplier or customer, of the Company; or

 

(c)                                  In the context of the business of Caldera,
make any public statement, comment or remark that disparages the integrity or
competence of a Caldera officer, director, employee, or shareholder, that
disparages any product or service of Caldera, or that are reasonably likely to
cause injury to the relationships between Caldera and any existing or
prospective distributor, representative, client, lessor, lessee, contractual
counterparty,

 

 

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vendor, supplier, customer, employee, consultant or other business associate of
Caldera.  This shall not restrict any statements made in the context of
litigation or arbitration.

 

15.                                                                              
We acknowledge that during the term of this Agreement, we will have the
opportunity to develop relationships with distributors, representatives, and
sales, strategic development and marketing people of yours, which relationships
constitute goodwill and important relationships of yours and that you would be
irreparably damaged if we were to take actions that would damage or
misappropriate such goodwill or relationships. We accordingly agree that during
the period commencing on the Effective Date and ending on the second anniversary
of the termination of this Agreement, we shall not, directly or indirectly,
either for the benefit of us or any other person or entity, do any of the
following:

 

(A)                                  SOLICIT ANY EMPLOYEE OR INDEPENDENT SALES
REPRESENTATIVE OF YOURS TO TERMINATE HIS OR HER EMPLOYMENT  OR REPRESENTATIVE
RELATIONSHIP WITH YOU, OR EMPLOY OR USE IN A CONSULTING CAPACITY ANY SUCH
INDIVIDUAL DURING HIS OR HER EMPLOYMENT WITH YOU AND FOR A PERIOD OF TWELVE
MONTHS AFTER SUCH INDIVIDUAL TERMINATES HIS OR HER EMPLOYMENT WITH YOU;

 

IN THE CONTEXT OF THE BUSINESS OF ECI, MAKE ANY PUBLIC STATEMENT, COMMENT OR
REMARK THAT DISPARAGES THE INTEGRITY OR COMPETENCE OF AN ECI OFFICER, DIRECTOR,
EMPLOYEE, OR SHAREHOLDER, THAT DISPARAGES ANY PRODUCT OR SERVICE OF ECI, OR THAT
ARE REASONABLY LIKELY TO CAUSE INJURY TO THE RELATIONSHIPS BETWEEN ECI AND ANY
EXISTING OR PROSPECTIVE DISTRIBUTOR, REPRESENTATIVE, CLIENT, LESSOR, LESSEE,
CONTRACTUAL COUNTERPARTY, VENDOR, SUPPLIER, CUSTOMER, EMPLOYEE, CONSULTANT OR
OTHER BUSINESS ASSOCIATE OF ECI.  THIS SHALL NOT RESTRICT ANY STATEMENTS MADE IN
THE CONTEXT OF LITIGATION OR ARBITRATION.

 

16.                                                                              
ECI has no liability for any Caldera representation or warranty concerning
Caldera’s products or services.  ECI will not store or ship products to or from
customers to Caldera.

 

17.                                                                              
This Agreement (which includes the Exhibits hereto) constitutes the entire
agreement between us, superseding all previous agreements between us of any
sort. You agree that no representations have been made to you other than as are
contracted herein and in the written warranties and product descriptions that
accompany products. This Agreement may be amended or superseded only in writing
from an officer of Caldera and the written agreement of ECI.

 

18.                                                                              
The invalidity or enforceability for any reason of one or more of the provisions
of this Agreement shall not affect the validity or enforceability of the
remaining provisions of the Agreement.

 

19.                                                                              
The laws of the State of California shall govern this Agreement.

 

20.                                                                              
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration before one (1) arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment

 

 

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CMI Initials

 

 

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upon the award rendered by the arbitrators may be entered in any Court having
jurisdiction thereof. The arbitration is to be held in Los Angeles, California.
The arbitrator shall be empowered to award equitable relief and shall award the
costs or expenses of the arbitration, including reasonable attorney’s fee.
Disbursements, arbitration expenses, arbitrator’s fees and the administrative
fees of the AAA, shall be awarded to the prevailing party, which award shall
reflect the determination of the arbitrator on the merits. In addition to the
foregoing remedy of arbitration, each party shall be entitled to seek from a
court of competent jurisdiction such preliminary relief or other provisional
remedy as such party may be entitled to under applicable law. The parties
irrevocably agree that service of the demand for arbitration, or summons and
complaint, or any other process, which may be served in any suit, action, or
proceeding contemplated in this Agreement may be affected by mailing by
Certified Mail a copy of such process to the parties at the address set forth
herein.  A copy of any such notice shall be sent to ECI at 6797 Winchester
Circle, Boulder, CO 80301.

 

21.                                                                              
You represent that you have completely read, fully understand and agree to the
terms of this Agreement and have so indicated by your signature below.

 

22.                                                                                   
Subject to the limitations of paragraph 11, Caldera shall indemnify and hold ECI
harmless against any loss or liability incurred by ECI arising out of or related
to any product performance related or patent infringement claim. Caldera shall
indemnify and hold ECI harmless for any liability, loss, costs, expenses
(including, without limitation, attorney’s fees, other than fees between the
parties which are addressed in paragraph 20) or damages howsoever caused by
reason of its breach of this Agreement or any act, negligence, default, or
omission of Caldera or any of Calderas’ employees or other representatives.

 

23.                                                                                   
Subject to any limitations of paragraph 11, ECI shall indemnify and hold Caldera
harmless for any liability, loss, costs, expenses (including, without
limitation, attorney’s fees, other than fees between the parties which are
addressed in paragraph 20) or damages howsoever caused by reason of its breach
of this Agreement or any act, negligence, default, or omission of ECI or any of
ECI’s employees or other representatives.

 

 

 

 

Encision Inc.

 

Caldera Medical, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

By:

 

 

 

Jack Serino

 

Bryon L. Merade

 

 

Chief Executive Officer

 

Chief Executive Officer

 

 

 

 

 

Date:                           2009

 

Date:                          2009

 

 

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