| 1.
Appointment of DISTRIBUTOR
Manufacturer hereby appoints Distributor for exclusive Distribution of
the products of Manufacturer set forth in the attached Exhibit "A"
labeled LIST OF PRODUCTS AND TRADEMARKS containing a detailed list,
which is hereby made a part of this Agreement together with other
products, trademarks and product modifications as may be added in the
future. Distributor shall have the right of first refusal to serve as
distributor of all additional medical products that Manufacturer may
manufacture in the future.
2. Territory
The territory covered by this Agreement is
described in the attached Exhibit "B" labeled TERRITORY, which is hereby
made a part of this Agreement. The Manufacturer agrees not to appoint
other distributors within the territory, or to sell direct within the
territory.
3. Obligations of Manufacturer
A. Provide
effective advertising, convention participation, catalogues and
literature at no cost to Distributor to enhance Distributor's sales
efforts as Manufacturer deems necessary.
B. Keep
Distributor informed of promotional activities, new products and
policies of Manufacturer.
C. Refer all
product inquiries from the Distributor's territory to Distributor.
D. Provide
assistance and pertinent sales and technical information to the
Distributor organization by holding periodic sales seminars, meetings
and training programs. When possible, such sessions will be held within
a reasonable distance of Distributor's place of business.
E. Do all
that is necessary in order to keep its products current with or ahead of
the state of the art.
F.
Manufacturer will provide Distributor with representative samples in
accordance with the prevailing sample policy, either at no charge or at
Manufacturer cost. During the pendency of this Agreement when samples
are returned they will either be exchanged or credited to the
Distributor's account at Distributor's cost, if any.
G. Insofar
as possible, Manufacturer will make its products available in quantities
to meet Distributor's reasonable requirements in Distributor's
territory. Shipment of accepted orders is subject to reasonable delays
due to labor troubles, transportation difficulties, government
regulations, inability to obtain raw materials, and other circumstances
beyond Manufacturer's reasonable control.
H.
Manufacturer will extend its technical expertise to Distributor and
Distributor's sales people and customers, for the mutual benefit of
Manufacturer and Distributor.
I.
Manufacturer may periodically sponsor special incentive programs for
Distributors to promote various Manufacturer's products. Such programs
will be held at Manufacturer's discretion. Guidelines, quotas and
accounting of such incentive programs will be conducted by Manufacturer.
J.
Manufacturer will immediately notify the Distributor of any customer
complaint Manufacturer receives from the Distributor's territory, and
advise Distributor of the customer making such complaint, and the
nature of the complaint to permit Distributor to respond to said
complaint.
K. The
Manufacturer and Distributor agree not to employ or engage the services
of any employee or agent of the other during the term of this agreement,
and for two years from the effective date of termination or nonrenewal
nor to employ anyone who has left the other's employment or has ceased
being its agent within six months of the date the ex-employee or agent
ceased such employment or service.
L.
Manufacturer shall repair or replace (within the limitations of such
applicable express written warranty as may be issued by it) any
products or parts thereof that prove to be defective in workmanship or
material.
M.
Manufacturer will accept full responsibility and liability for its
products that are distributed by Distributor and will furnish the
Distributor with an appropriate rider on Manufacturer's liability
policy.
N.
Manufacturer agrees to indemnify Distributor for reasonable attorney
fees and costs incurred as a result of a lawsuit initiated against
Distributor arising out of the sale of Manufacturer's products.
O. Payment for Freight
Manufacturer will pay the cost of freight
for all orders over $ .
P. Inventory Adjustment
During the pendency of this Agreement,
Manufacturer will accept for credit at Distributor's cost, all inventory
which Distributor returns provided that the product is sealed and in its
original carton and is in the current catalog. Distributor shall pay
the freight charges for any returned inventory. Manufacturer shall not
charge any handling, restocking or similar fees.
4. Obligations of Distributor
A.
Distributor agrees to aggressively promote the sale of Manufacturer's
products in the territory and shall take no action that might invalidate
any of Manufacturer's trademarks.
B.
Distributor agrees to meet and/or exceed mutually agreed upon quotas.
Such quotas are to be established by mutual agreement after the first
six months of the contract period and annually thereafter and attached
as an addendum to this Agreement. Manufacturer shall disclose to
Distributor the projected annual sales for Manufacturer in the
Continental United States and the percentage of Manufacturer’s sales
represented by sales in Distributor’s territory for the preceding year.
Distributor's quota for any year shall not increase over the previous
year's sales by a greater percentage than the projected increase in
Manufacturer's Continental United States sales over the previous year.
If Distributor's sales are at least 75% of quota or bear the same or
better ratio to quota as does Manufacturer's Continental United States
sales, then Distributor shall be deemed to have attained quota. In the
event of significantly changed circumstances, including, but not limited
to an expansion of the number of geographic regions in which
Manufacturer's products are sold, quota shall be adjusted accordingly.
So long as Distributor’s market share in its Territory exceeds
Manufacturer’s market share in the United States, Distributor will be
deemed to have met its quota.
C.
Distributor will provide Manufacturer with an annual forecast for each
forthcoming year in order to enable Distributor to properly service all
accounts, insure prompt service to customers and avoid out-of-stock
conditions.
D.
Distributor retains the right to select its own customers and to sell at
such prices and on such terms and conditions as it may elect. Title
shall pass and risk of loss shall be on Distributor from time of
delivery to Distributor.
E.
Distributor will not alter original packages or repackage products in
any way prior to resale, except those products designated as loaners.
F.
Distributor agrees to set up and implement any control procedures
required to conform to existing state or federal laws or regulations.
G.
Distributor will give fair representation and sales efforts to products
at conventions. Distributor's costs of exhibiting at local conventions
are to be shared equally between Manufacturer and Distributor.
Distributor shall invoice Manufacturer for such costs.
H.
Distributor agrees to maintain a level of expertise necessary to promote
and service Manufacturer's products.
5. Competitive Products
Distributor agrees that Distributor will
not sell competitive products during the pendency of this Agreement. If
however, the Manufacturer, after the date of this Agreement, adds to its
product line, product(s) that are competitive with product(s) of a
company that Distributor already represents, then Distributor can
continue to sell such competitive product(s). If a company that
Distributor already represents adds product(s) to its product line that
compete with those of Manufacturer, then if Distributor can
contractually refuse to sell such product(s), Distributor will do so,
otherwise Distributor shall be entitled to sell said products or product
lines. Manufacturer recognizes that Distributor's representation of the
following companies may involve some competition between certain
products, but recognizes the advantage of Distributor carrying all of
these lines:
(List Companies)
6. National Contracts
If Manufacturer enters into agreements
with national accounts or buying groups, Distributor shall at its sole
option service said entities that purchase pursuant to such agreements
and that are located in Distributor's territory. If Distributor elects
to participate in servicing these customers, Distributor shall be paid
by Manufacturer a commission as follows: Distributor shall receive the
difference between Manufacturer's hospital list price and its wholesale
price to distributors less 50 percent of the difference between the
hospital list price and the price the customer pays to Manufacturer, but
in no event, less than 75 percent of the difference between
Manufacturer's hospital list price and its wholesale price to
distributors. Freight charges and taxes will not be included in the
calculation of commissions due Distributor. Commissions will be paid
within 30 days of the date Manufacturer invoices customer. Commissions
paid to Distributor on any goods later validly returned to Manufacturer
by customer will be returned to Manufacturer by Distributor within 30
days of receipt of notice in writing of entitlement to such return.
[Note: In paragraph 7, the gross
margin as a percentage of hospital list must be filled in.]
7. Prices to Distributor
Prices to Distributor shall be
Manufacturer's list prices in effect at the time of acceptance of
Distributor's orders less any applicable Distributor discounts.
Discounts off list to Distributor shall in no event be less than
___percent. Manufacturer's current terms and conditions shall be
applicable to all orders placed pursuant to this Agreement, so long as
those terms and conditions do not conflict with any of the provisions of
this Agreement. Manufacturer will exert its best efforts to meet all
orders in whole or in part placed by Distributor. Manufacturer shall
give the Distributor at least 30 days’ advance notice of a price
increase. Moreover, if Distributor has entered into a supply contract
at set or formula pricing with a customer which Manufacturer has
approved, Manufacturer will not increase prices to Distributor during
the pendency of that supply contract for goods to be sold to that
customer.
8. Payment
Terms of payment shall be discount of two
percent for payment within 10 days, net 30 days, unless longer terms are
specified on the invoice. A separate invoice will be issued for each
shipment. If Distributor is delinquent, without basis, or without
mutual written agreement, subsequent shipments may be on a C.O.D.
basis. Delinquency in excess of 90 days shall be cause for termination
of this Agreement.
9. Legal Relationship
Distributor is an independent contractor
and the relationship between Manufacturer and Distributor is that of
vendor and vendee. Nothing herein is intended or shall be construed to
authorize Distributor to create or assume any liability or obligation of
any kind for or on behalf of Manufacturer. Distributor is not the agent
of Manufacturer for any purpose.
10. Assignment
Distributor shall have the right to assign
this Agreement with Manufacturer's written consent, which will not
unreasonably be withheld.
11. Applicable
Law
Any controversy or claim relating to this
Agreement, or its breach, or the relationship created by this
Agreement shall be settled by any appropriate court in the state where
the Distributor has its principal place of business. The laws of that
state shall control as to all such matters. If any portion of this
Agreement itself is contrary to law, the remaining provisions shall
remain valid.
[Note: In paragraph 12, the length of
this Agreement is subject to negotiation.]
12. Duration of Agreement
This Agreement shall continue in full
force and effect for five years from date of execution and shall be
binding upon and inure to the benefit of the parties hereto and their
successors and assigns including purchasers of Manufacturer's assets
constituting a bulk sale of assets pursuant to the provisions of the
Uniform Commercial Code. Termination shall be for cause as specified
below.
A. The
Agreement may be terminated by Manufacturer if Distributor fails to meet
its quota as set in accordance with paragraph 4B above, provided such
failure was not caused by Manufacturer's actions or failure to act.
B. The
Agreement may be terminated by one party if the other party commits an
act of bankruptcy, files a voluntary petition for bankruptcy or
reorganization, is the subject of an involuntary petition for
bankruptcy, has its affairs placed in the hands of a receiver, enters
into a composition for the benefit of creditors, or is insolvent.
C. Should
either party be in material breach or material non-compliance of any of
the terms of this Agreement, the other party may terminate this
Agreement by giving of written notice of such breach or noncompliance
and the right to correct the breach. If the breach is not corrected or
compliance not made within 60 days of the date of such notice, this
Agreement may be terminated immediately at the end of said sixty 60 day
period.
This agreement will automatically be renewed for successive five
year periods unless, at least 120 days prior to its expiration date one
party notifies the other by registered mail, return receipt requested,
of its intention not to renew.
The following additional paragraphs (three alternatives) should only
be added if you are willing to agree to termination without cause. In
such event, the terms should be negotiated.
This Agreement may also be terminated as
follows:
Alternative A
In the event that termination is without
cause, Manufacturer shall pay Distributor an amount equal to the total
gross margins and commissions earned by Distributor during the 12 month
period immediately prior to such termination. If this Agreement has not
been in effect for 12 months, then the amount paid on termination shall
be 12 times the average monthly gross margins and commission earned by
Distributor during the effective period of this Agreement. Gross
margins are defined as the difference between the price Distributor paid
to Manufacturer and the price paid to Distributor by its customer for
the products.
Alternative B
In the event that termination is without
cause, Manufacturer shall give Distributor six months’ notice of the
effective date of termination, shall honor all orders placed by
Distributor during the six month notice period and for a period of six
months following the effective date of the termination.
Alternative C
In the event that termination is without
cause, Manufacturer shall give Distributor three months' notice of the
effective date of termination and shall honor all orders placed by
Distributor during the three month notice period and for a period of
three months after the effective date of the termination.
13. Obligations Upon Termination or Nonrenewal
Upon termination or nonrenewal of this
Agreement, Distributor will promptly return to Manufacturer all
inventory (including, but not limited to instruments) of Manufacturer's
products and all samples and literature relating to Manufacturer's
products. Manufacturer shall promptly pay Distributor for all such
inventory, samples and literature at Distributor's cost with no
reduction for shipping, handling or restocking or any other cause.
14. Stock Options
Distributor is hereby granted options on
___________ shares of the common stock of Manufacturer on the terms and
conditions set forth in the agreement attached hereto as Exhibit "D".
In the event that the shares can be registered, and as soon as they can
be registered, Manufacturer will register said shares at its sole cost
and expense.
15. Indemnification
Manufacturer hereby agrees to indemnify
and hold Distributor harmless from any and all claims, causes of action,
suits, debts, losses, costs or expenses, judgments, liabilities, and
demands relating to or arising from the sale of Manufacturer's products
to third parties and for product liability and/or patent and/or
trademark infringement. This paragraph 15 shall survive the termination
of this Agreement.
16. Complete Agreement
This Agreement constitutes the entire
contract between the Distributor and Manufacturer. No modifications of
its terms or conditions shall be binding on either party unless made in
writing and signed by both parties. This Agreement supersedes and
cancels any and all previous contracts, arrangements, or understandings
that may have existed or may exist between the parties. There are no
understandings, representations or warranties of any kind expressed or
implied between the parties that are not expressly set forth herein.
17. Notices
All notices required under this Agreement
shall be sent registered mail, return receipt requested, as follows:
If to Manufacturer:
If to Distributor:
Either party may change its address for notice purposes by notifying
the other party of such change of address, such notice to be as required
herein.
IN WITNESS WHEREOF, the parties hereto
have executed this
Agreement as of the date and year indicated below.
_______________________________ ___________________________
Distributor
Manufacturer
By____________________________ By_________________________
Title_________________________ Title______________________
Date__________________________ Date____________________________
EXHIBIT "A"
List of Products and Trademarks
EXHIBIT "B"
Exclusive Territory
EXHIBIT "C"
Mutually agreed to quotas
The following quota shall be for the one year period commencing six
(6) months after the effective date of this Agreement.
EXHIBIT "D"
Terms and Conditions of Stock Options
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