Distributorship Agreement with Wholesaler

Distributorship Agreement with Wholesaler

This Distributorship 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 Distributor, and

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

Whereas, the purpose of this Agreement is to establish the Distributor as an authorized, wholesale Distributor for the sale and service of products of Wholesaler and to set forth the respective duties, obligations, and responsibilities of Wholesaler and of Distributor in the sale of these products by Wholesaler to the Distributor and the sale and servicing of these products by the Distributor; and

Whereas, Distributor has elected to enter into this Agreement with Wholesaler with confidence in Wholesaler's integrity and expressed intention to deal fairly with its Distributors, and with knowledge of the customer acceptance of products of Wholesaler; and

Whereas, Wholesaler has elected to enter into this Agreement with Distributor with recognition that Wholesaler's 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 Distributor's integrity and ability, and in the Distributor's expressed intention to deal fairly with Wholesaler and its customers, and to perform and carry out Distributor's duties, obligations, and responsibilities as set forth in this Agreement; and

Whereas, 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.

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. Rights Granted

Wholesaler grants to Distributor a nonexclusive right, on the terms and conditions contained below, to purchase, inventory, promote, and resell Wholesaler's Products.

2. Product Coverage

As used in this instrument, the term Wholesaler's Products shall mean and be limited to the service parts and accessories manufactured or sold by Wholesaler in the following categories:

3. Terms of Sale

All sales of Wholesaler's products to Distributor shall be made under and subject to the provisions of this Agreement at such prices and on such terms as Wholesaler shall establish from time to time. Resale prices shall be fixed by Distributor, except that Wholesaler reserves the right to enter into fair trade Agreements to the extent permitted by federal and state laws. At the present time, sales are made on the following credit terms, with it being the sole discretion of Distributor as to which credit terms to use in light of various business, credit and monetary factors.

A. Net 15 days, net 30 days, net 45 days, and net 60 days.

B. Net a certain number of days (like 30) is a form of trade credit which specifies that the net amount is expected to be received in full the number of days after the goods are dispatched by the Wholesaler.

C. Progress Billing with Net 30 day terms may be used for transactions where Wholesaler is building equipment packages, which may take anywhere from 2 months to 12 months.

4. Marketing Policies

Distributor will at all times maintain adequate inventories of Wholesaler's products and will promote vigorously and effectively the sale of Wholesaler's products through all channels of distribution prevailing in Distributor's primary marketing area in conformity with Wholesaler's established marketing policies and programs.

5. Merchandising Policies

Wholesaler will provide Distributor with continuous and comprehensive merchandising assistance in the form of regional advertising programs, product and sales training and sales promotions, and Distributor agrees to make full use of such assistance in carrying out Wholesaler's merchandising and sales promotion policies.

6. Sales Policies

Sales quotas, giving reasonable regard to past performance and market potential of Wholesaler's products, may be established by Wholesaler 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 Wholesaler in recognition of superior performance.

7. Advertising Policies

Wholesaler will cooperate with Distributor and its dealers in providing for continuous and effective advertising and promotion of Wholesaler's products throughout Distributor's 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 Wholesaler may establish and offer to Distributor from time to time.

8. Product Warranty Policies

A. Wholesaler's 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. If any product is proved to Wholesaler's satisfaction to have been defective at time of sale, Wholesaler will make an appropriate adjustment in the original sales price of such product.

B. Wholesaler agrees to protect Distributor and hold Distributor harmless from any loss or claim arising out of inherent defects in any of Wholesaler's product existing at the time such product is sold by Wholesaler to Distributor, provided that Distributor gives Wholesaler immediate notice of any such loss or claim and cooperates fully with Wholesaler in the handling of the same. Distributor agrees to protect Wholesaler and hold Wholesaler harmless from any loss or claim arising out of the negligence of Distributor, Distributor's agents, employees, or representatives in the installation, use, sale, or servicing of Wholesaler's products.

C. If any dealer shall, with respect to any of Wholesaler's products purchased from Distributor, fail to discharge the dealer's obligations to the original consumer pursuant to the terms and conditions of Wholesaler's product warranty and consumer service policies, Distributor agrees to discharge promptly such unfulfilled obligations.

9. Order Processing and Shipment Policies

Wholesaler will employ its best efforts to fill Distributor's orders promptly on acceptance, but reserves the right to allot available inventories as it deems best. Wholesaler shall not be liable for failure to ship Wholesaler's products specified in any accepted order because of strikes, differences with workers, inability to secure transportation facilities, or other circumstances beyond its control.

10. 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 Distributor's 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 Distributor's duties, obligations, and responsibilities under this Agreement;

B. Pay promptly all amounts due Wholesaler in accordance with terms of sale extended by Wholesaler from time to time;

C. Furnish Wholesaler with financial statements in such form as Wholesaler may reasonably require from time to time for credit purposes; and

D. Furnish, at Wholesaler's request, a detailed reconciliation of Wholesaler's statements of account with Distributor's records, listing all differences, and showing net amount Distributor acknowledges to be due Wholesaler.

11. Use of Wholesaler’s Name

Distributor will not use, authorize, or permit the use of, the name or any other trademark owned by Wholesaler as part of its firm, corporate, or business name or in any way, except to designate products purchased from Wholesaler under the terms of this Agreement.

12. Relationship of the Parties

During the term of this Agreement, the relation between Wholesaler and Distributor is that of vendor and vendee. Distributor, its agents and employees shall, under no circumstances, be deemed agents or representatives of Wholesaler.

13. 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 14.

14. 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 prior to the effective date of such notice.

B. Wholesaler may terminate at any time by written notice given to Distributor not less than days prior to the effective date of such notice in the event Wholesaler decides to terminate all outstanding parts and accessories Distributor Agreements and to offer a new or amended form of Distributor Agreement.

C. Wholesaler 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 10, 11, and 12;

2. Any assignment or attempted assignment by Distributor of any interest in this Agreement without Wholesaler's 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 Wholesaler may affect adversely the ownership, operation, management, business, or interest of Distributor or Wholesaler;

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 Wholesaler's opinion, to affect adversely the operation or business of Distributor or the good name, good will, or reputation of Wholesaler, products of Wholesaler, or Distributor;

7. Submission by Distributor to Wholesaler of false or fraudulent reports or statements, including, but not limited to, claims for any refund, credit, rebate, incentive, allowance, discount, reimbursement, or other payment by Wholesaler.

D. If 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 to the same unless the parties execute a new Agreement superseding this Agreement.

15. Obligations on Termination

On termination of this Agreement, Distributor shall cease to be an authorized Distributor of Wholesaler and:

A. All amounts owing by Distributor to Wholesaler 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 Wholesaler on demand, free and clear of all liens and encumbrances, such of Wholesaler's products and materials bearing Wholesaler's name as Wholesaler shall elect to repurchase, at a mutually agreed price, but not in excess of Wholesaler's 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 Wholesaler or the Distributor or for any other reason whatsoever growing out of such termination.

16. Use of Name Prohibited

On termination of this Agreement, Distributor will remove and not subsequently use any sign containing the name and trademark or any other trademark owned by Wholesaler, and will immediately destroy all stationery, advertising matter and other printed matter in its possession or under its control containing the word or such other trademarks.

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 or other such trademarks.

17. 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 set forth in this Agreement; (2) that in any way tends to change or modify any of the terms of this Agreement or to prevent this Agreement becoming effective; or (3) that in any way affects or relates to the subject matter of this Agreement. Distributor also acknowledges that the terms and conditions of this Agreement, and each of them, are reasonable and fair and equitable.

18. Termination of Prior Agreements

This Agreement terminates and supersedes all prior Wholesaler-Distributor Agreements, if any, between the parties to this Agreement.

19. 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 Wholesaler, which may be withheld by Wholesaler at Wholesaler's absolute discretion.

20. No Implied Waivers

Except as 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.

21. Effect of Determination by Wholesaler

Any determination to be made, opinion to be formed or discretion to be exercised by Wholesaler in connection with any provision of this Agreement shall be made, formed, or exercised by Wholesaler alone and shall be final, conclusive, and binding on the parties to this Agreement.

22. 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 Wholesaler shall be delivered to or addressed to the office of the secretary of Wholesaler at the address set forth above; notices to Distributor shall be delivered to or addressed to Distributor at the address set forth above.

23. Amendment

Notwithstanding anything set forth in this Agreement to the contrary, Wholesaler 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 Wholesaler that might affect materially the relationship between Wholesaler and Distributor.

24. Execution on Behalf of Wholesaler

This Agreement shall bind Wholesaler when it bears the signature of the president of Wholesaler and is delivered to Distributor. Distributor acknowledges notice that no one except the president of Wholesaler is authorized to make or execute any other Agreement relating to the subject matter of this Agreement on behalf of Wholesaler, or in any manner to enlarge, vary or modify the terms of this Agreement, or to terminate this Agreement on behalf of Wholesaler, and then only by an instrument in writing.

25. Governing Law

This Agreement has been signed by Distributor and sent to Wholesaler for final approval and execution, and has been signed and delivered on behalf of Wholesaler. The parties to this Agreement intend this Agreement to be executed as an Agreement made and executed in and to be construed in accordance with the laws of .

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