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SAMPLE DISTRIBUTION AGREEMENT
This distribution agreement is between
The Supplier is engaged in the marketing and sale of the Products (as defined below and listed in Exhibit A).
The Distributor is experienced in the promotion, distribution, and sale of products similar to the Products.
The Supplier wishes to appoint the Distributor as its
The parties therefore agree as follows:
1. PURPOSE, APPOINTMENT, AND EXCLUSIVITY.
None Exclusive Appointment. The Supplier hereby appoints the Distributor to distribute, offer for sale,and sell the Supplier's products listed in Exhibit A (the "Products"), in the Territory (as defined in section ) on a n nonexclusive basis, and the Distributor accepts this appointment. Nothing contained in this agreement limits the Supplier's right, in its sole discretion, to discontinue the manufacture, sale, or distribution of any Product at any time.
- (b) Limitations.
Not withstanding the Distributor's exclusive appointment, t The Supplier reserves the right at any time to offer, license, and sell any Products, directly or indirectly, with no obligation to pay compensation to the Distributor, to the customers described in section .
2. TERM AND TERMINATION.
- (a) Term. This agreement will become effective as described in section
and continue for an initial term of year(s) (the "Term"). Unless either party gives written notice to the other at least days before the end of the Term, this agreement will renew automatically for automatically for an additional -year term. This automatic extension extension will continue to apply at the end of each extended period until the agreement is terminated. However, this agreement may not remain effective for more than years.
- (b) Termination. This agreement may be terminated:
- (i) by either party, on provision of
days' written notice before the end of a Term;
- (ii) automatically, if the Distributor is in breach of section
of this agreement;
- (iii) by either party for a material breach of any provision of this agreement (except for section
) by the other party, if the other party's material breach is not cured within days of receipt of written notice of the breach; or
- (iv) by the Supplier at any time and without prior notice, if the Distributor is convicted of any crime or offense, fails or refuses to comply with the written policies or reasonable directives of the Supplier, or is guilty of serious misconduct in connection with performance under this agreement
. ; or (v) automatically, on the death of the Distributor.
- (i) by either party, on provision of
- (c) Effect of Termination. After the termination of this agreement for any reason, the Supplier shall promptly pay the Distributor for Services rendered before the effective date of the termination.
- (a) The Distributor shall provide all of the usual and customary services of a distributor, including:
- (i) compliance with the laws and regulations that govern its business;
- (ii) devotion of the time, energy, and skill necessary to distribute, promote the sale of, and sell the Products through all channels of distribution in the Territory in conformity with the Supplier's established marketing policies and programs;
- (iii) delivering the Products promptly to buyers and ensuring that the Products and their packaging arrive to the end user in their original, unmodified, unopened condition;
- (iv) maintenance of adequate inventories of the Products;
- (v) accurate representation and statement of the Supplier's policies to all potential and present customers;
- (vi) prompt payment of all amounts owed to the Supplier in accordance with the Supplier's terms of sale;
- (vii) informing the Supplier if the Distributor intends to advertise the Products outside of the Territory or solicit sales from customers located outside of the Territory;
- (viii) maintaining contact with the Supplier via telephone, email, or other agreed on means with reasonable frequency to discuss sales activity within the Territory;
- (ix) disclosure of any problems concerning customers (including Existing Customers) to the Supplier;
- (x) performance of such other sales-related services with respect to the customers as the Supplier may reasonably require;
- (xi) furnishing the Supplier with financial statements in such form and at such time as the Supplier may reasonably require;
- (xii) full disclosure of all circumstances that currently exist or that could arise during the Term that could be (or could cause) a conflict of interest between the respective interests of the parties
. ; and (xiii) .
- (b) The Supplier shall:
- (i) comply with the laws and regulations that govern its business;
- (ii) prepare samples for potential customers, as reasonably requested by the Distributor, if the Distributor gives the Supplier adequate notice of this request;
- (iii) carry reasonable amounts of insurance, whether through self-insurance or otherwise, to cover its responsibilities with respect to indemnification under section
below. The Distributor may examine the Supplier's insurance policies on request;
- (iv) answer any questions the Distributor may have about the Products;
- (v) provide the Distributor with merchandising assistance in the form of advertising programs, promotions, manuals, product and sales training, and sales promotions;
- (vi) cooperate with the Distributor and its dealers in providing advertising and promotion of the Products through the Territory
. ; (vii) .
- (a) Targeted Customers. The Distributor's distribution and sales efforts shall be directed toward the following:
. These customers are intended only to be examples of the nature and type of market to which the Supplier desires that the Products be sold, and should not be construed as a limitation on the sales that can be made by the Distributor.
- (b) Supplier's Existing Customers. The Distributor acknowledges that the Supplier has existing relationships with the customers listed in Exhibit B (the "Existing Customers"), and that nothing in this agreement prevents the Supplier from selling its Products to the Existing Customers.
- (a) The Distributor shall pay the Supplier a per unit price as set forth in Exhibit A. Prices are subject to change on
days' written notice from the Supplier.
- (b) All prices are FOB the Supplier's shipping point and are exclusive of applicable sales, use, or other taxes, import and export fees, duties, or tariffs, and any other taxes, duties, or fees of any kind that may be levied in connection with the transactions covered hereby. The Distributor shall pay for these charges. However, the Supplier is responsible for all taxes based on its net income.
7. MINIMUM COMMITMENTS.
The Distributor shall order and provide buyers for, during each of the periods set forth in Exhibit A, at least the minimum quantities of each Product indicated in Exhibit A for such periods. The Supplier, at its sole discretion, may amend Exhibit A on 30 days' prior written notice to the Distributor. If the Distributor fails to order and find buyers for the minimum quantities during any period, within 30 days of the end of that period it will provide the Supplier with a written report explaining its failure to meet its minimum quantity, and the Supplier will determine in its sole discretion which of the following steps is appropriate:
- (a) mutual agreement to revise future minimum quantities; or
- (b) an undertaking by the Distributor to effect steps necessary to ensure that it will meet its minimum quantities for subsequent periods.
8. PRODUCT WARRANTY.
The Supplier makes no warranty or representation about the Products, except those, if any, made under its standard warranty.
- (a) The Distributor shall deliver a copy of the applicable warranty to every buyer of the Products from the Distributor, pursuant to written instructions from the Supplier.
- (b) If a Product is defective in material or workmanship, the Supplier shall furnish the Distributor with a replacement. If a customer makes a claim under a warranty other than the latest applicable warranty with respect to which the Supplier has notified the Distributor, the Distributor shall promptly refer such claim to the Supplier before taking any other action on that claim.
9. PRODUCT RECALLS.
10. NO CONFLICT OF INTEREST.
11. NATURE OF RELATIONSHIP.
The relationship of the parties under this agreement is one of independent contractors, and no joint venture, partnership, agency, employer-employee, or similar relationship is created in or by this agreement. Neither party may assume or create obligations on the other party's behalf, and neither party may take any action that creates the appearance of such authority.
12. SUPPLIER REPRESENTATIONS.
The Supplier hereby represents that the Product:
- (a) is and shall be manufactured in conformity with all applicable laws, rules, regulations, and orders of governmental entities relating to the manufacture, promotion, sale, or distribution of the Product; and
- (b) does not violate or infringe any patent, trademark, trade name, or other interest of any person or entity.
13. RETURN OF PROPERTY.
- (a) Of Supplier by Distributor. At all times after the effective date of this agreement, the Distributor shall indemnify the Supplier against any award, charge, claim, compensatory damages, cost, damages, exemplary damages, diminution in value, expense, fee, fine, interest, judgment, liability, settlement payment, penalty, or other loss (a "Loss") or any attorney's or other professional's fee and disbursement, court filing fee, court cost, arbitration fee, arbitration cost, witness fee, and each other fee and cost of investigating and defending or asserting a claim for indemnification (a "Litigation Expense") arising out of:
- (i) the Distributor's gross negligence or willful misconduct arising from the Distributor's carrying out of its obligations under this agreement;
- (ii) the Distributor's breach of any of its obligations or representations under this agreement.
- (b) Of Distributor by Supplier. The Supplier shall at all times indemnify the Distributor against a Loss or Litigation Expense arising out of:
- (i) the Supplier's gross negligence or willful misconduct arising from the Supplier's carrying out of its obligations under this agreement;
- (ii) the Supplier's breach of any of its obligations or representations under this agreement;
- (iii) defects in the Products caused by the Supplier; or
- (iv) the failure of the Supplier to provide any Products to a customer that has properly ordered through the Distributor.
15. USE OF TRADEMARKS.
- (a) Use by Distributor. The Supplier hereby grants to the Distributor a nonexclusive license for the duration of the Term, with the right to grant sublicenses to subdistributors, of all service marks, trademarks, and trade names used by the Supplier on or for the Products (collectively the "Product Trademarks") for the sole purpose of distributing, offering for sale, and selling the Products to Approved Customers in the Territory.
- (b) Retention of Rights. The Distributor recognizes the Supplier's interest in the Product Trademarks and shall not engage in activities or commit acts, directly or indirectly, that may contest, dispute, or otherwise impair the Supplier's interest in them, nor shall the Distributor cause diminishment of value of the Product Trademarks through any act or representation. The Distributor shall not apply for, acquire, or claim any right, title, or interest in or to any such Product Trademarks, or others that may be confusingly similar to any of them, through advertising or otherwise. Effective as of the termination of this agreement, the Distributor shall stop using the Product Trademarks.
16. CONFIDENTIAL INFORMATION.
17. GOVERNING LAW.
- (a) Choice of Law.
The laws of the state of govern this agreement (without giving effect to its conflicts of law principles).
- (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in
- (c) Attorneys' Fees. If either party employs attorneys to enforce any rights arising out of or relating to this agreement, the losing party shall reimburse the prevailing party for its reasonable attorneys' fees.
No amendment to this agreement will be effective unless it is in writing and signed by a party or its authorized representative.
19. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
20. COUNTERPARTS; ELECTRONIC SIGNATURES.
- (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
- (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.
If any one or more of the provisions contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable.
- (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
- (b) Addresses. A party shall address notices under this section to a party at the following addresses:
- If to the Supplier:
- If to the Distributor:
- (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
24. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
27. NECESSARY ACTS; FURTHER ASSURANCES.
Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
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Each party is signing this agreement on the date stated opposite that party's signature.
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The following products are the subject of this distribution agreement. Any products not specifically listed are excluded from this agreement:
|PRODUCT NAME||INITIAL PRICE||MINIMUM QUANTITIES/TIME PERIOD|
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Who the supplier is
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Who the distributor is
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Whether the agreement is exclusive
Know whether the distributor has exclusive rights to their region or not.
What's a distribution agreement?
Your products are ready to go, now get some help getting them to the right markets at the right time. Distributors can promote, deliver, and sell your products throughout a certain area, sometimes with exclusive regional rights, sometimes not.