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Exclusive Dealing Agreement
MANUFACTURERS MARKETING AGENT AND DISTRIBUTOR
Agreement made __________ (date), between ___________________, a corporation organized and established under the laws of _____________ (state), having its principal place of business at ___________ (address), __________ (city), ____________ County, __________ (state), referred to as marketing agent, and _____________, of ____________ (address), __________ (city), __________ County, __________ (state), referred to as distributor.
Distributor desires to obtain from marketing agent, and marketing agent desires to grant to distributor, the exclusive right and license to sell and promote the sale of _________ (specify product) referred to below as products in _________________ (specify territory) referred to below as territory, at wholesale and retail.
In consideration of the mutual promises and covenants contained in this agreement, the parties agree:
1.1. Marketing agent appoints distributor as the exclusive distributor for the sale of the products at wholesale and retail in the territory.
1.2. During the continuance of this agreement, marketing agent agrees to notify, in writing, all other distributors of the products that distributor is the exclusive distributor for such products and has the sole right to sell such products at wholesale and retail in the territory.
RIGHT TO USE NAME
2.1. Marketing agent hereby grants to distributor the right to use the trade name, trademark, labels, copyrights, pending patents and patents, licenses and any and all other advertising media in the marketing of the products which, and to the same extent as, marketing agent now has, or may subsequently acquire, the right to use.
2.2. Distributor shall have the right to purchase product labels from marketing agent at marketing agents cost, or to produce such labels at its own expense.
2.3. Distributor shall not produce or use any other label, name or trademark on the products.
2.4. On the termination of this agreement for any reason, distributor shall discontinue the use of the __________ (specify) trade name, trademark, labels, copyrights, pending patents or patents and other advertising media, and shall remove all signs and displays relating thereto; and, in the event of distributors failure to do so, marketing agent may itself remove such article and material at distributors expense.
2.5. On the termination of this agreement for any reason, marketing agent shall have the option to repurchase the products then in the possession of distributor, and available for sale, at prices originally billed to distributor plus actual freight on the shipment of them to distributor, and with deductions from moneys due or to become due to marketing agent under this agreement. As to any of marketing agents products not repurchased by it within (--) days of such termination, distributor shall have the right to dispose of such products in the regular course of its business, and for this purpose, the restrictions of the preceding Subsection 2.4 shall be deferred until (--) months after the termination of this agreement.
The term of this agreement shall begin on the date first written above, and shall end on __________ (date), subject to the following:
3.1. Provided distributor is not in default in this agreement, or any of its terms or provisions, distributor may elect, by written notice to marketing agent at least (--) days prior to the end of the original term of this agreement, to extend this agreement on the same terms and conditions, for a period of (--) years, commencing __________ (date).
3.2. Distributor may, on (--) days written notice to marketing agent, terminate this agreement for any reason, without cause, but without prejudice to any rights of either party to moneys due or to become due under this agreement.
3.3. In the event of the breach by marketing agent, or its failure to perform any of the terms or conditions of this agreement, distributor may terminate this agreement on (--) days written notice, which notice shall be effective at the expiration of the (--) day period. However, failure by marketing agent to deliver any order to distributor within (--) days of its date shall not be deemed a breach or failure to perform by marketing agent, if such failure to deliver is the direct result of revolutions, insurrections, riots, wars, acts of enemies, acts of God, national emergency, strikes or floods (referred to below as force majeure), and the existence of such force majeure is disclosed, in writing, to distributor within (--) days of its occurrence and actual delivery of the order affected by the force majeure is not delayed more than (--) days from such notice.
3.4. If distributor is in default in any payment to marketing agent for a period of (--) days after demand for payment from marketing agent, or if distributor defaults in performing any of the other terms, conditions or promises of this agreement, and continues in default for a period of (--) days after written notice thereof, marketing agent shall have the right at the expiration of the (--) day notice of default, to terminate this agreement on giving written notice of the termination at the (--) day period.
3.5. If distributor is or becomes insolvent, or enters into a composition with its creditors, or if a receiver is appointed for it, or if distributor files any petition or application under any bankruptcy laws or acts, or is adjudicated a bankrupt, then marketing agent shall have the right to terminate this agreement on giving notice to distributor at least (--) days before the time when such termination is to take effect, and at the expiration of the (--) days, this agreement shall become null and void, but without prejudice to the rights of either party to moneys due or to become due under this agreement.
PURCHASE PRICE MINIMUM SALES
Distributor hereby agrees to purchase no fewer than ________ (specify quantity) units in any calendar year, commencing on (date). The minimum number of units to be purchased by distributor shall increase by ______ percent (-%) for each calendar year after (year). The purchase price for each unit purchased by distributor shall be __________ ($__________) per unit.
RETURN OF DEFECTIVE PRODUCTS
Distributor may return any products that are defective within (--) days of delivery thereof, and marketing agent shall immediately replace all such defective products at marketing agents expense.
Marketing agent hereby represents, covenants and warrants as follows:
6.1. Marketing agent is a ___________ corporation duly formed and in good standing in ______________ (state), and is not now operating in bankruptcy, or pursuant to an arrangement with its creditors under any chapter of the federal bankruptcy laws.
6.2. Marketing agent has the worldwide exclusive rights to market the products covered by this agreement and has the right to grant exclusive and nonexclusive rights to others to market such products worldwide.
6.3. A copy of the Patent Application will be provided by marketing agent to distributor.
6.4. Marketing agent has not granted and will not, without prior written consent of distributor, grant to any person, entity or organization, the right to sell or market the products covered by this agreement whether at wholesale or at retail, in the territory covered by this agreement and will not itself or by its employees or agents make any such sales.
6.5. Provided distributor is not in default in its payments, or otherwise not in default under this agreement as set forth below, marketing agent shall supply distributor with the products covered by this agreement in the regular course of its business within (--) days of its receipt of any order.
6.6. During the term of this agreement, marketing agent shall maintain in full force and effect its present rights to use the tradename, trademark, labels, copyrights, pending patents and patents affiliated with the products covered by this agreement and shall at its own expense exercise its common-law and statutory rights against any infringements of its right to so use such tradename, trademark, labels, copyrights, pending patents and patents. In the event marketing agent shall fail to do so, distributor may itself elect, in the name and at the expense of marketing agent, to exercise such rights. For any payments or expenses incurred by distributor in the exercise of such rights, marketing agent shall forthwith indemnify distributor; and if marketing agent shall default, distributor, without prejudice to other rights, shall be entitled to deduct the amounts of such payments for moneys then due or to become due to marketing agent.
REPRESENTATIONS OF DISTRIBUTOR
Distributor covenants and warrants as follows:
7.1. Distributor is a __________ corporation duly formed and in good standing in __________ (state).
7.2. Distributor shall use its best efforts to market and sell at wholesale or retail the products covered by this agreement in the territory specified.
7.3. Distributor shall maintain an inventory of the products at all times adequate to satisfy for a period of (--) days the demand therefor in the territory covered by this agreement. At no time shall such inventory be valued at less than __________ dollars ($_______), based on marketing agents wholesale price to distributor. Distributor agrees to purchase not less than (--) units per month, but when more than (--) units in any one month are purchased, the excess will be credited against the following months or months minimum (--) unit purchases.
POSSIBLE PRICE MODIFICATION
Marketing agent acknowledges that the suggested retail price for the products are __________ (specify price) per unit. It is agreed that in the event the suggested retail price for the product shall be reduced or increased, marketing agent will, at that time, reduce or increase the price to be paid by distributor to marketing agent. However, distributor is not obliged to sell the products at the suggested retail price or at any other price specified by marketing agent.
This agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties. No supplement, modification or amendment of this agreement shall be binding unless executed in writing by all the parties to this agreement. No waiver of any of the provisions of this agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.
BINDING EFFECT ON SUCCESSORS AND ASSIGNS
This agreement shall be binding on and shall inure to the benefit of the successors and assigns of the parties to this agreement.
If any legal action or other proceeding is brought for the enforcement of this agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorney fees and other costs incurred in that action or proceeding, in addition to any other relief to which it may be entitled.
All notices, requests, demands and other communications under this agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing, if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, postage prepaid, and unless either party should notify the other of a change of address, properly addressed, as follows:
TO MARKETING AGENT:
This agreement shall be governed by the laws of __________ (state).
TIME OF THE ESSENCE
Time is of the essence in all portions of this agreement.
The subject headings of the sections and subsections of this agreement are included for purposes of convenience only and shall not affect the construction or interpretation of any of its provisions.
In the event any section, paragraph or portion of this agreement shall be or be deemed to be by any court having lawful jurisdiction of the subject matter of this agreement void, voidable or invalid for any reason, this agreement shall be otherwise valid and enforceable as if the void, voidable or invalid section, paragraph or portion of this agreement had not been a part of it in the first instance.
AUTHORITY TO BIND
Each person executing this agreement hereby warrants that the person has full and legal authority to execute this agreement for and on behalf of the respective corporations and to bind such corporations.
In witness whereof, the parties have executed this agreement at _________________________ (specify place of execution) on the date and year first above written.