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Distributorship Agreement
DISTRIBUTORSHIP AGREEMENT
This agreement, made and executed on [Date of Agreement], is between [Name of Seller], of [Address of Seller], [City of Seller], [State of Seller], referred to as seller, and [Name of Distributor], of [Address of Distributor], [City of Distributor], [State of Distributor], referred to as distributor.
RECITALS
A. The purpose of this agreement is to establish the distributor as an authorized, wholesale distributor for the sale and service of products of seller and to set forth the respective duties, obligations and responsibilities of seller and of distributor in the sale of these products by seller to the distributor and the sale and servicing of these products by the distributor.
B. Distributor has elected to enter into this agreement with seller with confidence in sellers integrity and expressed intention to deal fairly with its distributors, and with knowledge of the customer acceptance of products of seller.
C. Seller has elected to enter into this agreement with distributor with recognition that sellers success depends on financially sound, responsible, efficient, vigorous and successful independent wholesale distributors whose business conduct is free of false, deceptive or misleading advertising, merchandising, pricing and service practices, and with competence in distributors integrity and ability, and in the distributors expressed intention to deal fairly with seller and its customers, and to perform and carry out distributors duties, obligations and responsibilities as set forth in this agreement.
D. It is the expectation of each of the parties that by entering into this agreement, and by the full and faithful observance and performance of its duties, obligations and responsibilities, a mutually satisfactory relationship between them will be established and maintained.
In consideration of the mutual agreements and acknowledgments made in this agreement, the parties agree as follows:
SECTION ONE
RIGHTS GRANTED
Seller hereby grants to distributor a non-exclusive right, on the terms and conditions contained below, to purchase, inventory, promote and resell sellers products.
SECTION TWO
PRODUCT COVERAGE
As used in this instrument, the term sellers products shall mean and be limited to the service parts and accessories manufactured and/or sold by seller in the following categories: [Description of Categories].
SECTION THREE
TERMS OF SALE
All sales of sellers products to distributor shall be made under and subject to the provisions of this agreement at such prices and on such terms as seller shall establish from time to time. Resale prices shall be fixed by distributor, except that seller reserves the right to enter into fair trade agreements to the extent permitted by federal and state laws.
SECTION FOUR
MARKETING POLICIES
Distributor will at all times maintain adequate inventories of sellers products and will promote vigorously and effectively the sale of sellers products through all channels of distribution prevailing in distributors primary marketing area in conformity with sellers established marketing policies and programs. Distributor will use its best efforts to sell sellers products to aggressive, reputable, and financially responsible dealers providing satisfactory consumer service throughout distributors primary marketing area. Distributor is authorized to enter into written agreements with its dealers relating to the purchase, resale and service of sellers products on forms approved by seller for this purpose.
SECTION FIVE
MERCHANDISING POLICIES
Seller will provide distributor with continuous and comprehensive merchandising assistance in the form of national advertising programs, product and sales training and sales promotions, and distributor agrees to make full use of such assistance in carrying out sellers merchandising and sales promotion policies.
SECTION SIX
SALES POLICIES
Sales quotas, giving reasonable regard to past performance and market potential of sellers products, may be established by seller from time to time. Distributor agrees to provide sales personnel of demonstrated capacity to attain such quotas and consents to rewards to such personnel by seller in recognition of superior performance.
SECTION SEVEN
ADVERTISING POLICIES
Seller will cooperate with distributor and its dealers in providing for continuous and effective advertising and promotion of sellers products throughout distributors principal marketing area and distributor agrees to participate in, actively promote and faithfully comply with the terms and conditions of such cooperative advertising and merchandising programs as seller may establish and offer to distributor from time to time.
SECTION EIGHT
PRODUCT WARRANTY POLICIES
(a) Sellers products are sold to distributor at prices that contemplate that such products are free from defect in manufacture and workmanship at the time of sale. In the event that any product is proved to sellers satisfaction to have been defective at time of sale, seller will make an appropriate adjustment in the original sales price of such product.
(b) Seller agrees to protect distributor and hold distributor harmless from any loss or claim arising out of inherent defects in any of sellers product existing at the time such product is sold by seller to distributor, provided that distributor gives seller immediate notice of any such loss or claim and cooperates fully with seller in the handling thereof. Distributor agrees to protect seller and hold seller harmless from any loss or claim arising out of the negligence of distributor, distributors agents, employees or representatives in the installation, use, sale or servicing of sellers products.
(c) In the event that any dealer shall, with respect to any of sellers products purchased from distributor, fail to discharge the dealers obligations to the original consumer pursuant to the terms and conditions of sellers product warranty and consumer service policies, distributor agrees to discharge promptly such unfulfilled obligations.
SECTION NINE
ORDER PROCESSING AND SHIPMENT POLICIES
Seller will employ its best efforts to fill distributors orders promptly on acceptance, but reserves the right to allot available inventories as it deems best. Seller shall not be liable for failure to ship sellers products specified in any accepted order because of strikes, differences with workers, inability to secure transportation facilities or other circumstances beyond its control. Distributor shall not be liable for failure to accept shipments of products ordered from seller when such failure is due to strikes or any other cause beyond distributors control, provided seller receives notice in writing to suspend such shipments prior to delivery to carrier.
SECTION TEN
FINANCIAL POLICIES
It is the intent and understanding of the parties, and the essence of this agreement that distributor shall:
(a) Maintain and employ in connection with distributors business and operations under this agreement such net working capital and net worth as may be required to enable distributor properly and fully to carry out and perform all of distributors duties, obligations and responsibilities under this agreement;
(b) Pay promptly all amounts due seller in accordance with terms of sale extended by seller from time to time;
(c) Furnish seller with financial statements in such form as seller may reasonably require from time to time for credit purposes; and
(d) Furnish, at sellers request, a detailed reconciliation of sellers statements of account with distributors records, listing all differences, and showing net amount distributor acknowledges to be due seller.
Shipments may be suspended at sellers discretion in the event that distributor fails to promptly and faithfully discharge each and every provision of this paragraph.
SECTION ELEVEN
USE OF SELLERS NAME
Distributor will not use, authorize or permit the use of, the name [sellers name] or any other trademark owned by seller as part of its firm, corporate or business name or in any way, except to designate products purchased from seller under the terms of this agreement. Distributor shall not contest the right of seller to exclusive use of any trademark or trade name used or claimed by seller.
SECTION TWELVE
RELATIONSHIP OF THE PARTIES
During the term of this agreement, the relation between seller and distributor is that of vendor and vendee. Distributor, its agents and employees shall, under no circumstances, be deemed agents or representatives of seller. Distributor will not modify any of sellers products without written permission from seller. Neither distributor nor seller shall have any right to enter into any contract or commitment in the name of, or on behalf of the other, or to bind the other in any respect whatsoever.
SECTION THIRTEEN
TERM OF AGREEMENT
This agreement shall continue in full force and effect from and after the date as of which this agreement has been executed until terminated by either party under the provisions of SECTION FOURTEEN.
SECTION FOURTEEN
TERMINATION
The following provisions shall govern the termination of this agreement:
(a) Either party may terminate this agreement without cause by written notice given to the other party not less than [Days to notify of termination] days prior to the effective date of such notice.
(b) Seller may terminate at any time by written notice given to distributor not less than (30) days prior to the effective date of such notice in the event seller decides to terminate all outstanding parts and accessories distributor agreements and to offer a new or amended form of distributor agreement.
(c) Seller may terminate by notice given to distributor, effective immediately, in any of the following events: (1) failure of distributor to fulfill or perform any one or more of the duties, obligations or responsibilities undertaken by distributor pursuant to SECTIONS TEN, ELEVEN and TWELVE; (2) any assignment or attempted assignment by distributor of any interest in this agreement without sellers written consent; (3) any sale, transfer or relinquishment, voluntary or involuntary, by operation of law or otherwise, of any material interest in the direct or indirect ownership or any change in the management of the distributor; (4) failure of distributor for any reason to function in the ordinary course of business; (5) a disagreement between or among managers, principals, partners, officers or stockholders of distributor, which in the opinion of seller may affect adversely the ownership, operation, management, business or interest of distributor or seller; (6) conviction in a court of competent jurisdiction of distributor, or a manager, partner, principal officer or major stockholder of distributor for any violation of law tending, in sellers opinion, to affect adversely the operation or business of distributor or the good name, good will, or reputation of seller, products of seller, or distributor; or (7) submission by distributor to seller of false or fraudulent reports or statements, including, without limitation, claims for any refund, credit, rebate, incentive, allowance, discount, reimbursement or other payment by seller.
(d) In the event either party has any business relations with the other party after termination of this agreement, such relations shall not be construed as a renewal of this agreement or as a waiver of such termination, but all such transactions shall be governed by terms identical with the provisions of this agreement relating thereto unless the parties hereto execute a new agreement superseding this agreement.
SECTION FIFTEEN
OBLIGATIONS ON TERMINATION
On termination of this agreement, distributor shall cease to be an authorized distributor of seller and:
(a) All amounts owing by distributor to seller shall, notwithstanding prior terms of sale, become immediately due and payable;
(b) All unshipped orders shall be cancelled without liability of either party to the other;
(c) Distributor will resell and deliver to seller on demand, free and clear of all liens and encumbrances, such of sellers products and materials bearing sellers name as seller shall elect to repurchase, at a mutually agreed price, but not in excess of sellers current distributor price for such products and materials; and
(d) Neither party shall be liable to the other because of such termination for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales, or on account of expenditures, investments, leases or commitments in connection with the business or good will of seller or the distributor or for any other reason whatsoever growing out of such termination.
SECTION SIXTEEN
USE OF NAME PROHIBITED
On termination of this agreement, distributor will remove and not thereafter use any sign containing the name and trademark [sellers name], or any other trademark owned by seller, and will immediately destroy all stationery, advertising matter and other printed matter in its possession or under its control containing the word [sellers name], or such other trademarks. Distributor will not at any time after such termination use or permit any such trademark to be used in any manner in connection with any business conducted by it or in which it may have an interest, or otherwise whatsoever as descriptive of or referring to anything other than merchandise or products of seller. Regardless of the cause of termination, distributor will immediately take all appropriate steps to remove and cancel its listings in telephone books, and other directories, and public records, or elsewhere that contain the name [Name of Seller] or other such trademarks. If distributor fails to obtain such removals or cancellations promptly, seller may make application for such removals or cancellations on behalf of distributor and in distributors name and in such event distributor will render every assistance.
SECTION SEVENTEEN
ACKNOWLEDGMENTS
Each party acknowledges that no representation or statement, and no understanding or agreement, has been made, or exists, and that in entering into this agreement the party has not relied on anything done or said or on any presumption in fact or in law, (1) with respect to this agreement, or to the duration, termination or renewal of this agreement, or with respect to the relationship between the parties, other than as expressly set forth in this agreement; or (2) that in any way tends to change or modify the terms, or any of them, of this agreement or to prevent this agreement becoming effective; or (3) that in any way affects or relates to the subject matter hereof. Distributor also acknowledges that the terms and conditions of this agreement, and each of them, are reasonable and fair and equitable.
SECTION EIGHTEEN
TERMINATION OF PRIOR AGREEMENTS
This agreement terminates and supersedes all prior seller-distributor agreements, if any, between the parties to this agreement.
SECTION NINETEEN
ASSIGNMENT
Neither this agreement nor any right under this agreement nor interest in this agreement may be assigned by distributor without the prior express written approval of seller, which may be withheld by seller at sellers absolute discretion.
SECTION TWENTY
NO IMPLIED WAIVERS
Except as expressly provided in this agreement, waiver by either party, or failure by either party to claim a breach, of any provision of this agreement shall not be, or held to be, a waiver of any breach or subsequent breach, or as affecting in any way the effectiveness of such provision.
SECTION TWENTY-ONE
EFFECT OF DETERMINATION BY SELLER
Any determination to be made, opinion to be formed or discretion to be exercised by seller in connection with any provision of this agreement shall be made, formed or exercised by seller alone and shall be final, conclusive and binding on the parties to this agreement.
SECTION TWENTY-TWO
NOTICES
Any notice required or permitted by this agreement, or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by first-class registered mail, postage prepaid. Notices to seller shall be delivered to or addressed to the office of the secretary of seller at [Complete mailing address of Seller]; notices to distributor shall be delivered to or addressed to distributor at [Complete mailing address of Distributor].
SECTION TWENTY-THREE
AMENDMENT
Notwithstanding anything set forth in this agreement to the contrary, seller shall have the right to amend, modify or change this agreement in case of legislation, government regulation or changes in circumstances beyond the control of seller that might affect materially the relationship between seller and distributor.
SECTION TWENTY-FOUR
EXECUTION ON BEHALF OF SELLER
This agreement shall bind seller when it bears the signature of [Authorized officer to sign with Seller] of seller and is delivered to distributor. Distributor acknowledges notice that no one except [Authorized officer to sign with Distributor] of seller is authorized to make or execute any other agreement relating to the subject matter hereof on behalf of seller, or in any manner to enlarge, vary or modify the terms of this agreement, and to terminate this agreement on behalf of seller, and then only by an instrument in writing.
SECTION TWENTY-FIVE
GOVERNING LAW
This agreement has been signed by distributor and sent to seller for final approval and execution, and has been signed and delivered on behalf of seller. The parties to this agreement intend this agreement to be executed as an agreement made and executed in [State of Execution] and to be construed in accordance with the laws of [State of Jurisdiction].
In witness whereof, the parties have executed this agreement at [Designated place of execution] the day and year first above written.
Signature
Signature