Exclusive Distributorship Agreement

Exclusive Distributorship Agreement with Factory Warranty and Service Provisions

Agreement made on the , between , a corporation organized and existing under the laws of the state of , with its principal office located at

referred to herein as Company, and , a corporation organized and existing under the laws of the state of , with its principal office located at

referred to herein as Distributor.

Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Agreement to Sell Company's Products

Within the bounds of the area of responsibility allocated to Distributor by Company (specified in Section Two), Distributor agrees to sell new and parts of Company and to provide adequate facilities for sales and servicing of these products and parts.

2. Sales and Service Area

The following is the area of responsibility allocated to Distributor:

3. Satisfactory Sale of Products

Distributor shall properly develop to Company's satisfaction the sale of products in the sales and service area specified in Section Two. An adequate sales staff and customer relations organization to take care of the sales potentials in the above area shall be maintained. A minimum sales staff and customer relations organization shall be defined as of full time salespersons, each of whom will use the , reporting a minimum average of retail sales calls per day.

4. Demonstrators

Distributor recognizes the value of having display-worthy Company products available to show the public and agrees to own an adequate number of of each current production basic model available for demonstration, with a minimum of

Company agrees, under this Section, that one model, , which Distributor is to maintain available for demonstration purposes, may be up to months old.

5. Dealers

To properly develop the sale of Company products in Distributor's sales and service area, the appointment of dealers by Distributor is anticipated. In appointing dealers, Distributor agrees to carefully consider them in the light of Company's recommendations as to requirements, classes and commissions set forth in the current recommended Distributor's dealer agreement. Each appointment will be subject to Company approval, but in no event will the dealer become a direct agent of Company.

6. Prices and Commissions

Company agrees to furnish Distributor current prices of new Company products and to furnish Distributor schedules of commissions and terms of purchase, and further agrees to keep Distributor advised of any changes in these prices or schedules of commissions and terms of purchase.

7. Orders

A. In order to facilitate the orderly scheduling of production and shipments, Distributor agrees to submit Distributor's orders for new as far as possible in advance of required delivery. Company will then schedule production against Distributor's commitment. Distributor agrees to accept all Company products ordered by it. Company will not ship its products to Distributor except on Distributor's orders. All orders are subject to approval and acceptance by Company at its principal place of business.

B. Company agrees to give careful consideration to all orders received from Distributor and expressly reserves the right to follow or depart from such orders in details of equipment, trim and color, and Company shall in no way be liable for failure to ship or for delay in shipments, however caused, or for shipping over routes other than those specified by Distributor.

C. If Distributor fails to accept ordered and to pay for the same as agreed when notified by Company, Distributor agrees that Company may retain Distributor's deposit on the order as liquidated damages for breach of the acceptance, and then Company has the right to otherwise dispose of the with no further liability to Distributor.

D. Distributor also agrees to comply with Company's request for estimates of Distributor's prospective requirements of Company's products, but such estimates are not to be regarded as orders by Company.

8. Restricted Sales by Company

Company and Distributor recognize there are certain types of buyers to whom Company should offer to sell its products directly. Therefore, Company reserves the right to sell any products referred to in this Agreement for experimental or development work, to its employees, to suppliers, to government bodies, or to fleet buyers. Distributor further agrees not to sell new Company products to be exported, except where prior written arrangement with Company has been made.

9. Advertising

A. Distributor recognizes that advertising of Company's products may affect other Distributors and Company. For the protection of good will of Company's products, Distributor, in the sale of Company's products, agrees to use only advertising that is supplied or approved by Company, or that conforms to the policies of Company and other provisions of this Agreement, and agrees to forthwith discontinue advertising disapproved by Company when so advised by Company.

B. Distributor further agrees to purchase from Company and display a outdoor sign designed by Company for standardization in identification as an authorized Company Distributor. In addition, Distributor agrees to enter into a program to display such other signs as are necessary to advertise Distributor's business properly and display the name mutually satisfactory to both Company and Distributor. In addition, Distributor agrees to enter into a program to use direct mail advertising and other sales tools as provided and/or recommended by Company and to carry a satisfactory stock of such sales tools for use of Distributor's salespeople and dealers.

10. Sales and Service Area Service Fee Adjustments

A. In the interest of promoting good service to the public and with a view to fair dealing between Distributors, Distributor agrees to confine Distributor's sales and selling efforts to the sales and service area as provided in Section Two of this Agreement and agrees not to advertise or use salespeople or unofficial representation in any other Distributor's sales and service area.

B. Company recognizes that in the developing of some sales in Distributor's sales and service area, it will occasionally be necessary for Distributor to demonstrate or call on parties located in another Distributor's sales and service area. Calls of this nature are not to be construed as open solicitation.

C. Service fees will be payable when Distributor or Distributor's seller sells or leases to be based in another Distributor's sales and service areas.

D. To define what constitutes reason for paying of a service fee, the primary consideration will be the principal base of the for the first days, not where the owner's legal residence happens to be, as in some cases the owner could live in one Distributor's sales and service area and base his or her in another. In those cases where the is moving from location to location or it is located at a short range job during the first days, the decision as to its principal base will be made by Company if service fee is claimed. Basing of in the seller's sale and service area may be judged a chargeable service fee if deliberate intent is indicated to avoid the spirit of the above.

E. Payment will be due Company within days after delivery of the to the purchaser. Payment of this fee will be made to Company for distribution to the party or parties entitled to the same. Service fees applying to various models shall be furnished to Distributor on the commission schedule as provided in Section Seven. Involving purchasers in any claim by a Distributor or Distributors or sellers will be considered collusion, and settlement will be made in favor of other parties involved. Company reserves the right of broad interpretation on service fee claims, as it is the spirit of follow-through service to the customer and development of sales which the Company is interested in protecting; and all decisions of Company will be final.

F. The recipient of a service fee payment will be expected to provide the owner with the same service and general conveyance of good will as if such recipient had originally made the sale.

11. Sales and Service Area Commission Adjustments

If Distributor or Distributor's dealer or dealers sells wholesale or pays a commission on the sale or lease of a new to any Company or individual established in the business of selling who is located outside of Distributor's sales and service area, this act will be considered a wholesale sales and service area infringement. The Distributor making the sale agrees to pay Company the difference between Distributor's costs and manufacturer's suggested retail selling price on such a sale as liquidated damages for improper selling, as determined by Company. Claims pertaining to wholesale violations shall be reported to Company within days from delivery to the purchaser. On all matters arising under this section, the decision of Company on the collection and distribution of damage shall be final.

12. Definition of Used (Name of Product)

New Company will be considered used and no longer subject to Sections Ten and Eleven at the expiration of days from date of delivery to retail purchaser, or after operations by a Distributor or dealer for a period of months and hours. New affected by a yearly model change may be considered an obsolete model days after Company begins regular production deliveries of succeeding models. An obsolete model is not subject to service fee adjustment.

13. Factory Warranty

Company warrants each new manufactured by it to be free from defects in material and workmanship under normal use and service, provided, however, that this warranty is limited to making good at Company's factory, any part or parts, which shall, within days after delivery of such to the purchaser, be returned to Company with transportation charges prepaid, and which on Company's examination shall disclose to Company's satisfaction to have been thus defective. This warranty is expressly in lieu of all other warranties expressed or implied and all other obligations or liabilities on the part of Company. Company neither assumes nor authorizes any other person to assume for it any other liability in connection with the sale of its . This warranty shall not apply to any which shall have been repaired or altered outside of Company's factory in any way so as, in its judgment, to affect its stability or reliability, or which has been subject to misuse, negligence or accident.

14. Purchase and Supply of Parts

Distributor and Company recognize the importance to them, to the public, and to the owners of Company's products, that its products be safe and operable in accordance with Company's standards of manufacture. Distributor, therefore, agrees that Distributor will not sell for use on Company's products any parts except those purchased from or having the approval of Company. Distributor agrees at all times to keep on hand at Distributor's place of business a current supply of genuine factory parts sufficient to supply adequately the requirements of the sales and service area assigned to Distributor. Distributor agrees to maintain an adequate stock record system, and agrees on request, but not more than once in each calendar year, to provide Company with detailed itemized inventories of the genuine Company parts in Distributor's stock. These records and inventories are for the purpose of enabling Company to counsel with Distributor on the continuous and adequate stock of parts consistent with the requirements of Distributor's territory. Distributor agrees to confine Distributor's selling efforts to Distributor's sales and service area. In case of parts or accessory sales to a purchaser in another Distributor's sales and service area, a maximum discount of % shall be allowed to any operator or dealer.

15. Customer Complaints

Distributor will receive, investigate, and handle all complaints received from customers or prospective buyers with a view to protecting the good will of Company and Distributor in the sale of products. Recognizing the importance of owner good will, Distributor will make every reasonable effort to satisfy owners of products in the sales and service area described in this contract and to satisfy all persons purchasing products, establish regular contact either by correspondence or personal interview with such owners or purchasers. All complaints received by Distributor which cannot be readily remedied shall be promptly reported to Company; Company will then undertake to remedy such complaints, and Distributor will be relieved of primary responsibility in this connection.

16. Care of Owner

Recognizing that all parties to this Agreement have a mutual interest in maintaining owner good will, that to retain this good will prompt and satisfactory service at reasonable costs must be furnished each owner, and that the primary responsibility for furnishing this service rests on Distributor, Distributor agrees:

A. To maintain a complete service department capable of repair and major overhaul of all Company manufactured products and to purchase all special tools developed by Company which Company deems essential.

B. To install Company flat rate charges for labor, as recommended and furnished by Company.

C. To execute and deliver to each purchaser of a new , an owner's service policy on forms furnished by Company and to supply to each owner an initial and hours no charge inspection in accordance with the owner's service policy.

D. To supply at Distributor's place of business, to each owner who purchases a new from Distributor, warranty labor at no charge.

E. To complete transfer of title to the owner in accordance with Federal and State regulations in terms of sale.

17. Distributor is not Agent

For the protection of both Distributor and Company, the relationship created by this agreement between Company and Distributor is not that of principal and agent, and under no circumstances shall Distributor be considered an agent of Company.

18. Use of Trade Names

Distributor and Company desire to protect the public from confusion, uncertainty, or misrepresentation. Therefore, Distributor agrees not to use in Distributor's corporate, firm or individual name, or allow it to be used by others in their corporate, firm or individual names, insofar as Distributor has any power to prevent such use, the words or , or any other name adopted by Company for , parts, accessories or service, and any words or names or combination of words or names closely resembling such words will not be used. On termination of a dealer by the Distributor, Distributor agrees to promptly work with the dealer to discontinue the use of names, trademarks, signs, stationery, advertising or anything else that might make it appear that the dealer is still handling Company products.

19. Distributor's Place of Business

Distributor agrees to maintain a place of business located near the trade center of Distributor's sales and service area. The selection of the location of the trade center must be satisfactory to Company. The place of business shall be equipped with private sales offices, display room or display facilities, parts department with display counters and adequate service department satisfactory to Company.

20. Financial Conditions and Reports

A. Distributor recognizes the importance of a strong financial position and, therefore, agrees to maintain adequate finances for satisfactory execution of this Agreement. Distributor recognizes that Company, in the conduct of its manufacturing operation, in the incurring of its commitment for raw materials, and in its employment of labor, needs, for the intelligent direction of its affairs, up-to-date and accurate information on Distributor's and dealers' stock of new and other used and all Distributor's and dealers' retail sales. Therefore, Distributor agrees to cooperate with Company by reporting for Distributor and Distributor's dealers such information once each month on forms furnished by Company.

B. Distributor recognizes the value of proper records and accounts and agrees to keep up-to-date accounting systems and procedures. Distributor agrees to furnish Company once each month a complete and accurate financial and operating statement with supporting data covering the preceding month's operation, showing the true and actual condition of Distributor's business. Distributor agrees to submit this statement on forms supplied by Company and Company agrees to hold these forms in strictest confidence. Company undertakes to cooperate with Distributor in developing data and information for the purpose of improving Distributor's operations and profit possibilities through consultation and advice based on the comprehensive study of the information furnished by Distributor.

C. It is recognized that the growth of both Distributor and Company is dependent on increased sales. Therefore, Distributor agrees to use a sales managing system as prescribed by Company, the reports to be supplied to Company for study purposes, to be mailed not later than of each week.

D. Company agrees to prepare and supply consolidated sales management system reports to Distributor based on reports supplied by Distributors.

21. Terms and Title

Title to all Company products shall be and remain with Company until receipt by Company of the full purchase price in United States dollars. In case Distributor makes payment by check or by paying draft attached to bill of lading, Distributor shall pay the cost of exchange, if any, and receipt from Distributor or Distributor's bank of any check, draft, or other commercial papers shall not constitute payment until Company has received cash in the full amount.

22. Definition of

The words or , wherever used in this Agreement, shall be interpreted to mean all models of manufactured by Company and offered for sale to the public.

23. Collection of Indebtedness

Company shall have the right to apply on the payment of any amount due Company from Distributor any sum of money belonging to Distributor which may be in Company's possession. Company may, at its option, collect any sum owing by Distributor to Company by separate drafts or by including such sums in any draft covering the purpose of . Distributor shall pay, with the amount of each draft, all exchange and collection charges.

24. Change of Design

Company reserves full right to change the design of its products at any time it is deemed necessary. Company is not to be held responsible for making such design changes on constructed and/or shipped by Company prior to the incorporation of such design changes.

25. Termination without Advance Notice

While it is the desire of Company to establish lasting arrangements with Distributor, it is recognized that certain conditions may arise in which it is impracticable for this agreement to continue in effect. In the interest of friendly relations between Distributor and Company, it is important that the circumstances be set forth so they may be thoroughly understood by both parties to this agreement. Accordingly, it is agreed that this agreement shall terminate on the expiration of the terms of this agreement, or immediately by its own force without notice from either party in the event of:

A. An attempted assignment of this agreement by Distributor without Company's written consent;

B. An assignment by Distributor for the benefit of creditors;

C. The admitted insolvency of Distributor;

D. The institution of voluntary or involuntary proceedings by or against Distributor in bankruptcy or under insolvency laws or for corporate reorganization, or for a receivership or for the dissolution of Distributor;

E. The admitted insolvency of any member of Distributor if a partnership;

F. The discontinuance of Distributor's distribution and resale in Distributor's sales and service area of the product referred to in this agreement;

G. In case Distributor or any of Distributor's officers or managers shall convert any property or embezzle any money either of third parties or of Distributor in the case of officers or managers; or

H. In case Distributor fails to secure a dealer's license or a renewal in those states requiring dealer's licenses, or in case Distributor's license is revoked or suspended.

Termination under this section shall not impose any liability on Company under the provisions of Section 26 of this Agreement. It is further agreed by Distributor that Distributor will immediately advise Company in writing of the occurrence of any event specified in this Section. Company or Distributor may terminate this Agreement immediately by delivering to the other party written notice of termination if the other party violates or fails to comply with any term or provision of this agreement for which termination is not otherwise specifically provided for in this section.

26. Termination by Notice

It is also recognized that certain other conditions may arise under which either party may desire to terminate this Agreement by giving reasonable notice to the other party. Accordingly, this Agreement may be terminated at any time on not less than days' written notice by Company or on not less than days' written notice by Distributor, but either of these periods may be reduced by mutual written consent of Distributor and Company. Termination under the provisions of this section by Company shall not be effective unless the notice bears the written approval of the Company.

27. Termination – Sums Due Company

On termination of this Agreement, Distributor will immediately pay to Company all sums due Company at the time of the termination.

28. Termination – Unfilled Orders

Termination of this Agreement shall operate as a cancellation of all unfilled orders for , parts and accessories. Company shall, within days, refund any deposits placed on such unfilled orders.

29. Termination – Signs, Names, Trademarks, and Trade Names

A. On termination of this Agreement, Distributor agrees that Distributor will immediately discontinue the use of names, trademarks, signs, stationeries, advertising or anything else that might make it appear that Distributor is still handling Company products. Company agrees to buy and Distributor agrees to sell, the outdoor sign purchased by Distributor from Company under Section 9 of this Agreement. It is recognized by Company and Distributor that the prompt discontinuance of the use of this sign, other signs, names, trademarks, stationery, advertising, and the like, will be beneficial to both Company and Distributor on termination of this Agreement.

B. It is further recognized by Company that certain costs may be incurred in the discontinuance. Therefore, it is agreed by Distributor and Company that Company shall make the following payments:

1. $ for discontinuance of all items above if accomplished within days after the date of termination.

2. $ for return of the sign mentioned above if made within days after the date of termination.

3. Failure to discontinue use of names, trademarks, signs, stationery, advertising or anything else that might make it appear that Distributor is still handling Company products within the day period specified shall relieve Company of its responsibility to make the above-stated payment but shall not relieve Distributor of Distributor's obligation to comply with this section of the agreement.

4. Failure to return the sign within the days specified shall not relieve Distributor of Distributor's obligation to return the sign but shall relieve the Company of its obligation to make the above payment. For purposes of clarification, delivery of the sign to a transportation agency will constitute date of return to Company. The transportation charges on the shipment of the sign to Company will be prepaid by Distributor; and if the sign is not in good repair and in operating condition, Distributor agrees that labor and material costs to put the sign in good repair and in operating condition may be deducted from the selling price.

30. Termination – Parts

On termination of this Agreement, Company, at its option, may buy and Distributor agrees to sell within days after the effective date of termination, at the same price paid by Distributor to Company, less % for handling, the part purchased from Company for current models that are new and re-saleable which Distributor has on hand, when returned to Company transportation charges prepaid.

31. Change in Prices

A. Company shall have the right, at any time, without notice, to reduce or increase its list price of any of its current models of . Should Company make any such reduction or reductions, Company will refund or allow a proportionate amount on the price paid by Distributor for all new and unused of such current models as may have been purchased, and paid for, by Distributor from Company during the months immediately preceding the date of such reduction and which are in Distributor's stock unsold at the time such reduction may be made. Distributor shall be entitled to the amount equal to the difference between the price Distributor may have paid for any such and the amount Distributor would have paid for the same if sold to Distributor in accordance with the terms of this Agreement after such reduced price has become effective.

B. The above-mentioned refund or allowance will not be made on any used by Distributor for demonstration purposes, nor will any such refund or allowance be granted unless claim is made by Distributor in writing within days from the date such reduction becomes effective, and all such claims must be supported by evidence satisfactory to Company.

C. This refund or allowance as set forth above and under the same conditions shall likewise be made by Distributor on all new and unused in the stock of Distributor's dealers operating under a Distributor's dealer agreement, as a dealer. Such refund or allowance will be made to Distributor who agrees to make a like refund to the dealer for the dealer's proportionate share.

D. If the is covered by a mortgage, Company reserves the right to pay a proportionate share of the difference in price to the holder of the mortgage.

E. Should the Company produce at any time, after the date of this agreement, a new or different model of than those above set forth, Distributor shall have no claim for any refund on any previously purchased by Distributor under this agreement, such reductions only applying to models of actually in existence at the date of such reduction and whose price may be reduced by Company as provided in this agreement.

38. Term

This Agreement shall continue in force and govern all relationships and transactions between the parties until .

39. Force Majeure

Neither Company nor Distributor will be liable for failure to perform its part of this agreement when the failure is due to fire, flood, strikes or other industrial disturbances, inevitable accident, war, riot, insurrection or other causes beyond the control of the parties.

WITNESS our signatures as of the day and date first above stated.