Non-Exclusive Distributor Agreement

This Non-Exclusive Distributorship Agreement (“Agreement”) ... made ... effective this ______________ (Date), by ... between (“Distributor”) ________________________ (Name ... Address) ... (“Manufacturer”) ____________________________________ (Name ... Address).  Manufacturer desires ... appoint Distributor, ... Distributor desires ... accept appointment, as a non-exclusive distributor of Manufacturer’s products within a defined area as set forth herein.

Therefore, ... consideration of ... mutual agreements ... promises set forth herein, it ... agreed:

1. Rights Granted.

Manufacturer hereby grants ... Distributor ... non-exclusive right, ... the terms ... conditions set forth herein, ... purchase, inventory, promote ... resell “Manufacturer’s Products” (as defined below) within ... following area (the “Territory”):  Nothing herein shall prevent ... prohibit Manufacturer from selling any of Manufacturer’s Products ... other distributors ... directly ... customers other than ... ones as listed as follows:

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2. Products.

The term “Manufacturer’s Products,” ... this Agreement, shall mean ... products, related service parts ... accessories manufactured and/or sold by Manufacturer as follows:

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3. Terms of Sale.

All sales of Manufacturer’s Products ... Distributor shall be made pursuant ... this Agreement at such prices ... on such terms, as Manufacturer shall establish from time ... time with at least thirty (30) days written notice.  All prices are FOB Manufacturer’s plant ... warehouse location, unless otherwise stated ... this Agreement.   Risk of loss due ... damage ... destruction of Manufacturer’s Products shall be ... responsibility of ... Distributor after delivery ... the carrier for shipment.  Manufacturer ... select ... shipper unless Distributor requests a reasonable alternative.  All orders are subject ... acceptance by Manufacturer.  Except as otherwise expressly agreed by Manufacturer ... advance, this Agreement shall control all aspects of ... dealings between ... parties with respect ... the Manufacturer’s Products ... any additional ... different terms ... any Distributor order are hereby rejected unless ... parties specifically agree ... them ... advance of shipment ... mutually sign another agreement ... that effect.

4. Payment.

Distributor shall pay all charges due hereunder within thirty (30) days after ... date of Manufacturer’s invoice.  Payment shall be made as shown ... the invoice.  Manufacturer may impose a late payment charge of one percent (I.5%) per month ... any overdue unpaid balances.

5. Marketing Policies.

Distributor ... at all times maintain adequate inventories of Manufacturer’s Products ... will promote vigorously ... effectively ... sale of Manufacturer’s Products through all channels of distribution prevailing ... the Territory, ... conformity with Manufacturer’s established marketing policies ... programs.  Distributor ... use its best efforts ... sell Manufacturer’s Products ... aggressive, reputable, ... financially responsible dealers providing satisfactory consumer service throughout Distributor’s primary marketing area.  Distributor ... authorized ... enter into written agreements with its dealers relating ... the purchase, resale ... service of Manufacturer’s Products ... forms approved by Manufacturer for this purpose.  ... risk of collection from dealers, however, ... entirely ... risk undertaken by ... Distributor.  ... Distributor may not, under any circumstances, chargeback Manufacturer for unpaid invoices by a dealer ... dealers.

6.    Distributor’s General Duties.

A. Distributor shall maintain a place of business ... the Territory, including suitable
showroom facilities ... display Manufacturer’s Products.  Distributor shall provide
maintenance service ... Manufacturer’s Products sold ... the Territory, using
qualified personnel ... subject ... service policies satisfactory ... Manufacturer.

B.  Distributor shall hire sales personnel ... appoint representatives ... introduce, promote, market ... sell Manufacturer’s Products ... the Territory.  Distributor shall adequately train such personnel and/or representatives.  Distributor shall employ sufficient numbers of sales personnel and/or representatives ... market Manufacturer’s Products ... the Territory.

C. Distributor agrees not ... engage ... the distribution promotion, marketing ... sale
of any goods ... products that compete ... conflict with Manufacturer’s Products.  Distributor agrees ... supply ... Manufacturer a list of items handled by Distributor following Manufacturer’s request ... ensure that no conflict exists.

7. Sales Policies.

A. Manufacturer may establish sales quotas, giving reasonable regard ... past performance ... market potential of ... manufacturer’s Products, from time ... time.  Distributor agrees ... employ sales personnel of demonstrated capacity ... attain such quotas ... consents ... rewards directly ... such personnel by Manufacturer ... recognition of superior performance.

B. Manufacturer ... provide Distributor with merchandising assistance from time ... time ... the form of advertising programs, product ... sales training, ... field sales assistance.

C. Distributor agrees ... use such assistance ... carrying out Manufacturer’s merchandising ... sales promotion policies.

8. Advertising Policies.

Manufacturer ... cooperate with Distributor ... its dealers ... providing for continuous ... effective advertising ... promotion of Manufacturer’s Products throughout ... Territory, ... Distributor agrees at Distributor’s expense ... participate in, actively promote ... faithfully comply with ... terms ... conditions of such cooperative advertising ... merchandising programs as Manufacturer may establish ... offer ... Distributor from time ... time.  Nothing herein shall prevent Distributor from separately advertising ... marketing ... Manufacturer’s Products within ... Territory, provided ... form ... content of ... advertising ... marketing materials are approved by Manufacturer ... advance.

9.    Warranty Policies.

If any of Manufacturer’s Products are proven ... Manufacturer’s satisfaction ... have been defective at time of sale ... Distributor, Manufacturer ... make an appropriate adjustment ... the original sales price of such product or, at Manufacturer’s election, replace ... defective product.  Manufacturer shall provide ... Distributor information with respect ... Manufacturer’s limited warranty extended ... the original consumer of Manufacturer’s Products.  MANUFACTURER MAKES NO WARRANTY ... DISTRIBUTOR, ... ITS CUSTOMERS, WITH RESPECT ... THE PRODUCTS, EITHER EXPRESS ... IMPLIED, INCLUDING, WITHOUT LIMITATION, ... IMPLIED WARRANTIES OF MERCHANTABILITY ... FITNESS FOR A PARTICULAR PURPOSE.

10.    Indemnification.

A. Manufacturer agrees ... protect Distributor ... hold Distributor harmless from any loss ... claim arising out of inherent defects ... any of Manufacturer’s Products existing at ... time such product ... sold by Manufacturer ... Distributor, provided that Distributor gives Manufacturer immediate notice of any such loss ... claim ... cooperates fully with Manufacturer ... the handling thereof.

B. Distributor agrees ... protect Manufacturer ... hold Manufacturer harmless from any loss ... claim arising out of ... negligence of Distributor, Distributor’s agents, employees ... representatives ... the installation, use, sale ... servicing of Manufacturer’s Products ... arising out of any representation ... warranty made by Distributor, its agents, employees ... representations with respect ... Manufacturer’s Products that exceeds Manufacturer’s limited warranty.  Further, ... the event that any of Distributor’s dealers shall, with respect ... any of Manufacturer’s Products purchased from Distributor, fail ... discharge ... dealer’s obligations ... the original consumer pursuant ... the terms ... conditions of Manufacturer’s product warranty ... consumer service policies, Distributor agrees ... discharge promptly such unfulfilled obligations.

11. Order Processing ... Returns.

A. Manufacturer ... employ its best efforts ... fill Distributor’s orders promptly ... acceptance, but reserves ... right ... allot available inventories among distributors ... end user customers at its discretion.

B. Except for Manufacturer’s products that are defective at ... time of sale ... Distributor, Manufacturer shall not be obligated ... accept any of Manufacturer’s Products that are returned.  ... the event such returns are accepted, Manufacturer may impose a reasonable restocking charge.

12. Financial Policies.

Distributor acknowledges ... importance ... Manufacturer of Distributor’s sound financial
operation ... Distributor expressly agrees that it will:

A. Maintain ... employ ... connection with Distributor’s business ... operations under this Agreement such working capital ... net worth as may be required ... enable Distributor properly carry out ... perform all of Distributor’s duties, obligations ... responsibilities under this Agreement;

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

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

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

In addition ... any other right ... remedy ... which Manufacturer may be entitled, shipments may be suspended at Manufacturer’s discretion ... the event that Distributor fails ... promptly ... faithfully discharge each ... every obligation ... this Section.

13. Use of Manufacturer’s Name.

Distributor ... not use, authorize ... permit ... use of, ... name ... any other trademark ... trade name owned by Manufacturer as part of its firm, corporate ... business name ... any way.  Distributor shall not contest ... right of Manufacturer ... exclusive use of any trademark ... trade name used ... claimed by Manufacturer.  Distributor may, subject ... Manufacturer’s policies regarding reproduction of same, utilize Manufacturer’s name, trademarks ... logos ... advertising, ... stationery ... business cards, ... on its website.

14. Relationship of ... Parties.

The relationship between Manufacturer ... Distributor ... that of vendor ... vendee.  Distributor, its agents ... employees shall, under no circumstances, be deemed employees, agents ... representatives of Manufacturer.  Distributor ... not modify any of Manufacturer’s Products without written permission from Manufacturer.  Neither Distributor nor Manufacturer shall have any right ... enter into any contract ... commitment ... the name of, ... on behalf of ... other, ... to bind ... other ... any respect whatsoever.

15. Term ... Termination.

Unless earlier terminated as provided below, ... term of this Agreement shall commence ... ________________ (Date) ... shall continue until  ______________ (Date).  At ... end of ... term, ... Agreement shall continue until terminated by either party ... at least 30 Days prior notice.

A. Manufacturer may terminate at any time by written notice given ... Distributor not less than ninety (90) days prior ... the effective date of such notice ... the event Manufacturer decides ... terminate all outstanding distributor agreements for Manufacturer’s Products ... to offer a new ... amended form of distributor agreement.

B. Manufacturer may terminate this Agreement upon notice ... Distributor ... any of ... following events: (1) failure of Distributor ... fulfill ... perform any one of ... duties, obligations ... responsibilities of Distributor ... this Agreement, which failure not cured within 30 Days notice from Manufacturer; (2) any assignment by Distributor of any interest ... this agreement ... delegation of Distributor’s obligations without Manufacturer’s written consent; (3) any sale, transfer ... relinquishment, voluntary ... involuntary, by operation of law ... otherwise, of a material interest ... the direct ... indirect ownership ... any change ... the managers of Distributor; (4) failure of Distributor for any reason ... function ... the ordinary course of business; (5) conviction ... a court of competent jurisdiction of Distributor, ... of a significant partner, principal officer ... major stockholder of Distributor for any violation of law that, ... Manufacturer’s opinion, ... affect adversely ... operation ... business of Distributor ... the good name, goodwill, ... reputation of Manufacturer, products of Manufacturer, ... Distributor; ... (6) submission by Distributor ... Manufacturer of fraudulent reports ... statements, including, without limitation, claims for any refund, credit, rebate, incentive, allowance, discount, reimbursement ... other payment by Manufacturer.

16. Obligations ... Termination.

On termination of this Agreement, Distributor shall cease ... be an authorized distributor.
All amounts owing by Distributor ... Manufacturer shall, notwithstanding prior terms of sale, become immediately due ... payable;

A. All unshipped orders shall be cancelled without liability of either party ... the other;
B. Distributor ... resell ... deliver ... Manufacturer ... demand, free ... clear of liens ... encumbrances, such of Manufacturer’s Products ... materials bearing Manufacturer’s name as Manufacturer shall elect ... repurchase, at a mutually agree price, but not ... excess of Manufacturer’s current price ... distributors for such products ... materials, provided that Manufacturer shall not be obligated ... pay Distributor for any item originally provided free of charge;

C. Neither party shall be liable ... the other because of such termination for compensation, reimbursement ... damages ... account of ... loss of prospective profits ... anticipated sales, ... on account of expenditures, investments, lease ... commitments ... connection with ... business ... goodwill of Manufacturer ... Distributor ... for any other reason whatsoever growing out of such termination.

D. ... sum, both parties acknowledge that termination of this Agreement at some point ... highly probable ... should be treated ... the ordinary course of business with both parties exerting their best efforts ... end ... relationship amicably.

17.  Notices.

Any notice required by this Agreement ... given ... connection with it, shall be ... writing ... shall be given ... the appropriate party by personal delivery ... recognized overnight services such as Federal Express.

If ... Manufacturer: _______________________________________________________.
(Name & Address)

If ... Distributor:  ________________________________________________________.
(Name & Address)

18.  No Waiver.

The waiver ... failure of either party ... exercise ... any respect any right provided ... this agreement shall not be deemed a waiver of any other right ... remedy ... which ... party may be entitled.

19.  Entirety of Agreement.

The terms ... conditions set forth herein constitute ... entire agreement between ... parties ... supersede any communications ... previous agreements with respect ... the subject matter of this Agreement.  There are no written ... oral understandings directly ... indirectly related ... this Agreement that are not set forth herein.  No change can be made ... this Agreement other than ... writing ... signed by both parties.

20.  Governing Law.

This Agreement shall be construed ... enforced according ... the laws of ... State of ____________________ ... any dispute under this Agreement must be brought ... this venue ... no other.

21.  Headings ... this Agreement

The headings ... this Agreement are for convenience only, confirm no rights ... obligations ... either party, ... do not alter any terms of this Agreement.

22.  Severability.

If any term of this Agreement ... held by a court of competent jurisdiction ... be invalid ... unenforceable, then this Agreement, including all of ... remaining terms, ... remain ... full force ... effect as if such invalid ... unenforceable term had never been included.

In Witness whereof, ... parties have executed this Agreement as of ... date first written above.

_________________________                _______________________
Manufacturer                            Distributor

Distributorship Agreement – Non-Exclusive
Review List

This review list ... provided ... inform you about ... document ... question ... assist you ... its preparation.

1.  ... Manufacturer should be alert ... the dangers ... establishing any long-term exclusive relationship with a Distributor.  This non-exclusive agreement sidesteps most of those issues.

2.    This agreement creates a non-exclusive right ... behalf of ... Distributor ... market ... products ... the territory defined by ... parties.   This ... a relatively benign agreement with limited recourse of ... Distributor against ... Manufacturer.

Manufacturers still need ... also be alert that terminating a Distributor with   ... without cause, can lead ... serious legal charges being brought against ... Manufacturer involving everything from ... broad category of “good faith” dealing ... antitrust claims.  This ... an area ripe with dangerous legal traps that are different ... many states.  Before entering into a non-exclusive Distributor Agreement we strongly recommend you consult with a knowledgeable business attorney about ... implications ... your state ... the Distributor’s state regarding such agreements.  Having said this, there are far fewer risks associated with a non-exclusive than with an exclusive agreement.

3.   Print two copies of ... Agreement ... each party can have a copy that ... an original.

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