Distribution Agreement - Template, Sample Form Online Pro · US-law

DISTRIBUTION AGREEMENT

State of ________

This Distribution Agreement (this "Agreement") is entered into and made effective as of ________ (the "Effective Date"), by and between ________ (the "Supplier"), a corporation organized and existing under the laws of the State of ________, having its principal place of business at:

________

and ________ (the "Distributor"), a corporation organized and existing under the laws of the State of ________, having its principal place of business at:

________

The Supplier and the Distributor may each be referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, the Supplier is engaged in the business of manufacturing and/or supplying the Products (as defined below) and desires to appoint the Distributor to distribute such Products within the Territory (as defined below);

WHEREAS, the Distributor desires to purchase the Products from the Supplier for resale and distribution within the Territory upon the terms and conditions set forth herein;

WHEREAS, the Parties wish to set forth in a written instrument the terms and conditions governing their relationship;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — PRODUCTS

§ 1.1 The Supplier agrees to supply, and the Distributor agrees to purchase and distribute, the following products (the "Products"):

________

§ 1.2 The Supplier may, from time to time and in its sole discretion, modify, add, or discontinue Products upon written notice to the Distributor.

ARTICLE 2 — TERRITORY

§ 2.1 The Products shall be distributed exclusively within the following geographic territory (the "Territory"):

________

ARTICLE 3 — DISTRIBUTION OBLIGATIONS

§ 3.1 The Distributor shall use its best efforts to obtain, promote, and maximize the sale of the Products within the Territory and shall maintain adequate staff, including adequate sales personnel, at all times.

§ 3.2 The Distributor shall comply with all reasonable policies, procedures, and rules of the Supplier regarding the purchase and sale of the Products, and shall conduct its business in a manner favorable to the Supplier and the Products and shall not disparage or impair the name, reputation, or goodwill of the Supplier.

§ 3.3 No sale, resale, promotion, delivery, installation, servicing, or other distribution of the Products by the Distributor shall be permitted outside the Territory. The Distributor shall promptly notify the Supplier of any material change to its distribution network.

§ 3.4 The Distributor acknowledges that its rights with respect to the Products are limited to those expressly granted herein, and all other rights are reserved to the Supplier.

§ 3.5 The Supplier shall use its best efforts to fulfill the Distributor's orders for the Products.

ARTICLE 4 — EXCLUSIVITY

§ 4.1 The Supplier agrees not to sell or ship the Products in the Territory to any person or entity other than the Distributor, and not to sell or ship in the Territory any similar products, or products bearing the same or similar trademark or business identification, to any person or entity other than the Distributor.

§ 4.2 Any inquiries received by the Supplier concerning the Products in the Territory shall be directed to the Distributor.

ARTICLE 5 — PRICE AND PAYMENT

§ 5.1 The purchase price for the Products (the "Purchase Price") shall be set forth on each invoice issued to the Distributor and shall be negotiated by the Parties prior to the first shipment. The Purchase Price shall be payable in U.S. Dollars and may be paid by the following methods:

________

§ 5.2 The Purchase Price may include shipping fees, product insurance, and other handling costs, which the Distributor agrees to pay.

§ 5.3 The timing of payment for the Purchase Price shall be as follows:

________

§ 5.4 Any past-due amounts shall bear interest at the rate of ________ percent per annum, or the maximum rate permitted by applicable law, whichever is less.

Lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat duis aute irure dolor in reprehenderit voluptate velit esse cillum dolore eu fugiat nulla pariatur lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris.

§ 5.6 Risk of loss for the Products shall pass to the Distributor when the Supplier completes delivery to the Distributor (if personally delivered) or when the Supplier places the Products with the shipping carrier, consistent with Article 2 of the Uniform Commercial Code as adopted in the governing State.

ARTICLE 6 — SECURITY INTEREST

§ 6.1 Title to the Products shall pass to the Distributor upon delivery; however, the Supplier shall retain a purchase-money security interest in the Products and the proceeds thereof until the Purchase Price has been paid in full.

§ 6.2 The Supplier shall have all rights and remedies of a secured party under Article 9 of the Uniform Commercial Code as adopted in the governing State. The Distributor authorizes the Supplier to file any financing statements (UCC-1) and take such other action as may be necessary to perfect and maintain the Supplier's security interest.

§ 6.3 Upon the Distributor's default in payment, the Supplier may, subject to applicable law, repossess and recover the Products and pursue any other remedy available under this Agreement, at law, or in equity.

ARTICLE 7 — PROMOTIONAL MATERIALS

§ 7.1 The Supplier may furnish promotional materials to the Distributor from time to time to assist in the sale of the Products. The Distributor may use such materials but acknowledges that the Supplier retains ownership of all proprietary and intellectual property rights therein.

ARTICLE 8 — INTELLECTUAL PROPERTY

§ 8.1 The Distributor acknowledges that the Supplier retains all rights in and to the Supplier's intellectual property, including all patents, trademarks, service marks, trade secrets, copyrights, and other intellectual property ("Supplier IP").

§ 8.2 During the term of this Agreement, the Supplier grants the Distributor a limited, non-exclusive, non-transferable license to use the Supplier IP solely as necessary to promote and sell the Products as shipped by the Supplier. The Distributor shall not add, alter, or affix any Supplier IP to any product or other material.

ARTICLE 9 — COMPLIANCE WITH LAWS

§ 9.1 The Distributor shall comply with all applicable federal, state, local, and foreign laws, rules, and regulations, including all applicable export control laws and regulations and the Foreign Corrupt Practices Act.

ARTICLE 10 — CONFIDENTIALITY

§ 10.1 Each Party acknowledges that it may have access to certain non-public Confidential Information and Trade Secret Information (collectively, the "Proprietary Information") of the other Party. "Receiving Party" refers to the Party receiving Proprietary Information, and "Disclosing Party" refers to the Party disclosing it.

Lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat duis aute irure dolor in reprehenderit voluptate velit esse cillum dolore eu fugiat nulla pariatur lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et.

I) is or becomes known or available to the public through no fault of the Receiving Party;

II) is already lawfully known to the Receiving Party;

III) is disclosed by the Disclosing Party to third parties without restriction;

IV) is lawfully obtained by the Receiving Party from a third party having the right to disclose it; or

V) is independently developed by the Receiving Party without reference to the Disclosing Party's Proprietary Information.

§ 10.3 "Trade Secret Information" means any formula, process, method, pattern, design, or other information that derives independent economic value from not being generally known or readily ascertainable, and that is the subject of reasonable efforts to maintain its secrecy, consistent with applicable trade secret law, including the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1836 et seq.) and the Uniform Trade Secrets Act as adopted in the governing State.

§ 10.4 Each Party agrees that it shall:

I) not disclose the Proprietary Information by any unauthorized means to any third party during the term of this Agreement;

II) not disclose the Confidential Information by any unauthorized means to any third party for a period of three (3) years following termination of this Agreement;

III) not disclose the Trade Secret Information at any time for so long as such information remains a trade secret under applicable law; and

IV) not use the Confidential Information or Trade Secret Information for any purpose except as contemplated herein or as expressly authorized by the Disclosing Party.

§ 10.5 Nothing in this Agreement shall prohibit disclosure of Proprietary Information to the extent required by law, regulation, or valid court or governmental order, provided the Receiving Party gives prompt notice to the Disclosing Party (where legally permitted) and cooperates in seeking protective treatment.

ARTICLE 11 — WARRANTIES

§ 11.1 The following specific warranties are applicable to the Products:

________

§ 11.2 EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SUPPLIER MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

§ 11.3 LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER IN CONTRACT, TORT, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 12 — INDEMNIFICATION AND INSURANCE

§ 12.1 Each Party shall indemnify, defend, and hold harmless the other Party and its officers, directors, employees, and agents from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees) arising out of the indemnifying Party's breach of this Agreement, negligence, or willful misconduct.

§ 12.2 The Distributor shall maintain, at its own expense, commercial general liability insurance and such other coverage as is customary, with minimum coverage of ________, and shall provide certificates of insurance to the Supplier upon request.

ARTICLE 13 — TERM AND TERMINATION

§ 13.1 This Agreement shall commence as of the Effective Date and continue for an initial term of ________ years.

§ 13.2 Upon expiration of the initial term, this Agreement shall automatically renew for successive periods until either Party submits a written Notice of Termination to the other Party.

§ 13.3 Either Party may terminate this Agreement for any reason or no reason prior to its natural expiration upon the following notice: ________.

§ 13.4 If proper notice is not submitted, either Party may nonetheless terminate this Agreement upon payment of a monetary penalty for early termination in the amount of $________.

§ 13.5 Either Party may terminate this Agreement upon a material breach by the other Party that remains uncured sixty (60) days after written notice describing the breach. If the breach is cured within such period, this Agreement shall continue in full force and effect.

§ 13.6 The Supplier may terminate this Agreement upon written notice if:

a) the Distributor declares bankruptcy, requires a guardianship, or enters into any financial compromise or assignment for the benefit of creditors;

b) the Distributor fails to maintain any required federal, state, or local license;

c) the Distributor fails to maintain required insurance;

d) the Distributor undergoes a material change in the structure or ownership of its business; or

e) the Distributor fails to meet the Performance Metrics set forth below.

§ 13.7 Upon termination prior to natural expiration, the Supplier may, at its sole discretion, repurchase the Distributor's existing inventory of Products, or require the Distributor to sell such inventory to another distributor, in each case at the cost the Distributor paid, provided the Products have been maintained in good and saleable condition as determined by the Supplier's reasonable examination.

ARTICLE 14 — PERFORMANCE METRICS

§ 14.1 The Distributor shall use reasonable commercial efforts to meet the following performance metrics (the "Performance Metrics"):

________

ARTICLE 15 — OUTSIDE TERRITORY TRANSACTIONS

§ 15.1 The Distributor shall not sell, attempt to sell, promote, advertise, or otherwise solicit orders for any Products outside of the Territory. If the Distributor receives any inquiry for Products outside the Territory, it shall contact the Supplier to determine how the Supplier wishes to proceed.

§ 15.2 Any transaction, sale, or distribution of the Products outside the Territory shall constitute a material breach of this Agreement. In such event, the Supplier may terminate this Agreement immediately upon written notice and pursue any and all remedies available under this Agreement, at law, or in equity. The Distributor further agrees to remit to the Supplier all profits and proceeds derived from any unauthorized transaction outside the Territory.

ARTICLE 16 — GENERAL PROVISIONS

A) GOVERNING LAW AND VENUE: This Agreement shall be governed by and construed in accordance with the laws of the State of ________, without regard to its conflict-of-laws principles, and any applicable federal law. The Parties consent to the exclusive jurisdiction and venue of the state and federal courts located in ________, State of ________. This choice of law, venue, and jurisdiction provision is mandatory and not permissive.

B) LANGUAGE: All communications and notices made or given pursuant to this Agreement shall be in the English language.

C) ASSIGNMENT: This Agreement, and the rights granted hereunder, may not be assigned, sold, leased, or otherwise transferred, in whole or in part, by either Party without the prior written consent of the other Party, except in connection with a merger or sale of substantially all of the assigning Party's assets.

D) AMENDMENTS: This Agreement may be amended only by a written instrument signed by both Parties.

E) NO WAIVER: No term of this Agreement shall be deemed waived by any act or acquiescence of either Party. Only a written agreement may constitute a waiver. No waiver of any term shall constitute a waiver of any other term or of the same term on a future occasion.

F) SEVERABILITY: If any provision of this Agreement is held unenforceable, this Agreement shall be deemed amended to the extent necessary to render such provision, and the remainder of this Agreement, valid and enforceable. If a court declines to so amend, the invalidity of any provision shall not affect the validity or enforceability of the remaining provisions, which shall remain in full force and effect.

G) RELATIONSHIP OF THE PARTIES: Nothing in this Agreement shall create a partnership, joint venture, agency, or employment relationship between the Parties. Each Party is an independent contractor, and neither Party shall have authority to bind the other.

H) ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous understandings, whether written or oral.

I) HEADINGS: Headings are for convenience only and shall not affect the interpretation of this Agreement.

J) COUNTERPARTS AND ELECTRONIC SIGNATURES: This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures transmitted electronically or by facsimile, and electronic signatures, shall be valid and binding in accordance with the federal E-SIGN Act and the Uniform Electronic Transactions Act as adopted in the governing State. If the dates of signature differ, this Agreement shall be effective as of the later date.

K) FORCE MAJEURE: Neither Party shall be liable for any failure or delay in performance due to causes beyond its reasonable control, including acts of God, acts of civil or military authority, riots, embargoes, epidemics, natural disasters, and other unforeseen circumstances.

L) NOTICES (ELECTRONIC COMMUNICATIONS PERMITTED): i) Any notice under this Agreement shall be in writing and sent by first-class mail, overnight courier, or email to the address of the relevant Party set out at the head of this Agreement or to the email address set out below, or such other address as a Party may notify in accordance with this clause. Contact information is as follows:

Supplier:

________

Distributor:

________

Notices shall be deemed received three (3) working days after posting (first-class mail), the next working day after dispatch (overnight courier), or the next working day after sending (email).

ii) In proving the giving of notice, it shall be sufficient to prove that the notice was transmitted by email to the relevant email address, or that the envelope containing the notice was properly addressed and posted. This clause does not apply to the service of proceedings or documents in any legal action, arbitration, or other method of dispute resolution.

EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.

SUPPLIER:

Name: ________

By: ________________________________________

Representative Name: ________

Representative Title: ________

Date: ________

DISTRIBUTOR:

Name: ________

By: ________________________________________

Representative Name: ________

Representative Title: ________

Date: ________