THIS EXCLUSIVE DISTRIBUTION AGREEMENT (this "Agreement" or this "Exclusive Distribution Agreement”) is entered into effective as of (Effective date) (the "Effective Date") by and between [Supplier.Company] ("Supplier") and [Distributor.Company] ("Distributor").
The parties agree as follows:
a. Subject to the terms and conditions of this Exclusive Distribution Agreement, Supplier appoints Distributor, and Distributor accepts such appointment and agrees to act as Supplier's exclusive distributor of the Supplier Products (defined below) within the geographical territory defined as follows (the “Territory"):
b. Distributor agrees to exercise its best efforts to (a) promote the sale of and obtain orders for the Supplier Products in the Territory; (b) abide by Supplier's policies and procedures with regard to the purchase, sale and support of Supplier Products; and (c) conduct its business in a manner that reflects favorably at all times on the Supplier Products and the good name, goodwill and reputation of Supplier or its affiliates. Distributor acknowledges and agrees that it has no rights or claims of any type to the Supplier Products, or any aspect thereof, except such rights as are created by this Exclusive Distribution Agreement. Distributor agrees that it shall not and is not authorized to promote, resell, deliver, install, service or otherwise support the Supplier Products outside of the Territory.
In most cases, the owner would be the supplier (if that’s the scenario, then we recommend editing the start of the agreement to include the owner’s name and title there). However, if your contract has different owners and suppliers, then we suggest adding a definition of Owner here.
Supplier Products consist of the items or classifications of items listed in this Section below, and the purchase price or license fee to Distributor of all Supplier Products delivered pursuant to this Agreement shall be as set forth in this Section below.
Distributor shall obtain, at its own expense, such approvals, consents, certifications, permits and other authorizations, including all approvals as are required to qualify the Supplier Products for sale and use in the Territory for all purposes, both governmental and non-governmental (collectively, the "Approvals"), as soon as is reasonably practicable; provided, however, that Supplier shall not be obligated to deliver any Supplier Products unless and until Distributor provides Supplier with satisfactory evidence that such Approvals have been obtained. Supplier agrees to cooperate with Distributor to obtain such Approvals.
Supplier’s appointment of Distributor in Section 1 of this Agreement is an exclusive appointment to distribute the Products in the Territory. Supplier shall not independently advertise, solicit and make sales of Supplier Products, support Supplier Products or appoint additional distributors for Supplier Products in the Territory.
Distributors shall use reasonable commercial efforts to purchase and sell during each calendar year at least the dollar value of Supplier Products listed in this Section below (the "Annual Target"). If Distributor does not purchase and sell the Annual Target during a given calendar year, Supplier may terminate this Agreement effective immediately upon notice to Distributor (but Supplier may not require Distributor to purchase or sell any additional Supplier Products in order to meet the Annual Target Amount).
The Distribution company shall meet the Supplier’s baseline sales targets, reaching ( Add any amount of units sold or total value of revenues within stated period) every month.
Upon termination of the contract, the Supplier will purchase the corresponding product(s) from the Distribution company: ( Include a complete list of items that the Supplier will buy back from the Distribution company upon termination of this contract)
Distributor shall promote the sale of Supplier Products in the Territory on its website. Notwithstanding the foregoing sentence, Distributor shall not actively advertise or actively solicit orders for Supplier Products outside of the Territory. In the event Distributor receives an order from outside its Territory, Distributor will work with Supplier to fulfill the order in a manner financially beneficial to Supplier, Distributor and the distributor located in the region where the order originated (as determined by Supplier in its sole discretion and in compliance with applicable law).
Distributor shall not sell/license the Supplier Products through third parties (such as original equipment manufacturers, distributors, value added resellers or other dealers or agents) without Supplier’s prior written consent to the proposed relationship (including the specific terms of such relationship).
The Supplier also assures the Distributor it hasn't hired any third party service finders and isn't collaborating with them in correlation with the distribution of Supplier Products within the specified Territory.
When entering into this Agreement or performing any other action related to Supplier Products during the timeline of this Agreement, [Distributor.Company] , as Distributor, assures and guarantees [Supplier.Company] , as Supplier, that Distributor will never be in violation of any aspect of the Agreement it has with Supplier. This includes any third-party reselling or licensing agreements executed by Distributor. If the Distributor is found to be in violation of any part of this Agreement, Supplier may choose to immediately end or alter the working relationship with the Distributor.
All orders will be transmitted by Distributor to Supplier and shall be subject to acceptance in writing by Supplier. Supplier may (in its sole discretion) refuse acceptance of any order. Each order submitted shall constitute an offer by Distributor to purchase or license the Supplier Products described in such order and, upon acceptance by Supplier, shall give rise to a contractual obligation of Distributor to purchase or license the said products on the terms and conditions set forth in this Agreement.
Conflicting, inconsistent or additional terms or conditions contained in any order submitted by Distributor shall not be binding unless Supplier specifically accepts such terms or conditions in writing. All expenses arising out of the change or cancellation of an order after acceptance by Supplier, including the cost of diversion, cancellation or reconsignment of shipments, and any reasonable restocking charge, shall be paid by Distributor to Supplier, on demand.
The purchase price shall be quoted and payable in U.S. dollars to the Supplier at the address specified on the invoice. Unless otherwise agreed upon by the parties in writing, payment shall be made by Distributor by wire transfer in advance of shipment from the Supplier facilities. The Supplier Products shall be delivered EXW Supplier's facilities (Incoterms 2020). Risk of loss for the Supplier Products shall pass upon delivery to the named carrier at Supplier's facilities. If Supplier pays any shipping, insurance or handling costs, such costs will be billed to Distributor and will be reimbursed to Supplier by Distributor on demand.
An executory claim or lien on property, products and/or assets that has been utilized as collateral is known as a security interest. In exchange for the right to take back all or a portion of the property in the event that the debtor ceases performing repayment, the lender grants the borrower a security interest in a range of assets. The proceeds from the sale of the confiscated collateral will be used to settle the debt.
Notwithstanding the passage of title, Supplier shall retain a security interest in all Supplier Products delivered until amounts for which Distributor is responsible under this Agreement have been received by Supplier. Supplier shall have all rights of a secured party, including the right to file a financing statement under the Uniform Commercial Code or a comparable law within the Territory to protect Supplier’s security interest.
In the event Distributor defaults in its payment obligations, Supplier will have the right to enter the premises of Distributor to recover possession of all Supplier Products on said premises, to recover all
Supplier Products supplied by Distributor to its customers and associated supplies or software, and to pursue any other remedy existing at law or equity. Distributor, for itself and on behalf of its customers, hereby waives a prior hearing and demand for Supplier’s exercise of such rights.
Distributor shall set the selling price and license fees at which the Supplier Products are sold or licensed by it in the Territory. Distributor shall be solely responsible for the costs involved in the distribution of the Supplier Products, including sales costs, import duties, any and all banking charges, shipping and handling costs, installation costs or other operating expenses, letter of credit costs, wire transfer fees and other costs associated with making payment, and taxes, however designated, except that Distributor shall not be liable for taxes imposed that are based on Supplier’s income.
Supplier agrees to furnish, in English, to Distributor (via email in pdf format) such descriptive literature, advertising materials, technical manuals and sales promotional materials concerning the Supplier Products as Supplier may, from time to time, have available for such purposes. Distributor shall have the right to translate such materials into the languages of the Territory at its own expense. Supplier shall retain ownership of all proprietary rights, including, intellectual property rights to the translated versions of the materials.
Distributor will be solely responsible for the accuracy of the translations and will provide Supplier with a copy of each translated work. Distributor shall promptly revise (at Distributor’s costs) the materials upon notice from Supplier.
If, at any time throughout the duration of this agreement, the Supplier appoints to advertise the Supplier’s or the Manufacturer’s registered business trademark ("Trademark"), the Supplier shall provide to the Distributor a non-exclusive, temporary permit to use (but not own the license to) the Supplier’s and/or Manufacturer’s Trademark for this kind of intent, until the dissolving, alteration, or termination of this Agreement.
The Distributor shall not be permitted to print, post or otherwise use letterhead, calling cards, literature, signage or other representations in the name of Supplier (or any of its affiliates, including all Manufacturers) or to represent itself as Supplier (or any of its affiliates) or make commitments on behalf of Supplier (or any of its affiliates) without the express, written permission of Supplier. Distributor expressly agrees that no license to use Supplier (or any of its affiliates' trademarks, trade names, service marks or logos; collectively, the "Supplier Trademarks") is granted by this Agreement. Distributor may, however, indicate in its advertising and marketing materials that it is a distributor for Supplier Products and may, as necessary and with permission, incidentally use the Supplier (and/or its affiliates’) Trademarks in its sales/marketing efforts.
Upon request by Supplier, Distributor will place proper trademark, copyright and patent notices in its advertisements, promotional brochures and other marketing materials for Supplier Products. Supplier reserves the right to review Distributor's marketing and sales materials prior to their publication or use. No rights shall be granted to Distributor as a result of any such use or reference, and all such rights, including goodwill, shall remain to the benefit of and be vested in Supplier.
Upon the termination of this Agreement, neither Supplier’s nor its affiliates’ logos, branding or promotional material shall be regarded as property of the Distributor. This includes the right to utilize these materials or any equity associated with them unless otherwise granted or sublicensed to the Distributor by the Supplier, and with the written understanding that the materials and any associated rights to use them will only be used in good faith for marketing/promotional activities.
Upon termination of this Agreement for any reason, Distributor will immediately cease using the Supplier Trademarks as allowed in this Section and shall immediately take all appropriate and necessary steps to (a) remove and cancel any listings in public records, telephone books, other directories, remove any visual displays or literature at Distributor's location, the Internet and elsewhere that would indicate or would lead the public to believe that Distributor is the representative of Supplier (or any of its affiliates) or Supplier's (or any of its affiliates') products or services; and (b) cancel, abandon or transfer (as requested by Supplier) any product licenses, trade name filings, trademark applications or registrations or other filings with the governments of the Territory (whether or not such filings were authorized by Supplier) that may incorporate the Supplier Trademarks or any marks or names confusingly similar to the Supplier Trademarks.
Upon Distributor's failure to comply with this paragraph, Supplier may make application for such removals, cancellations, abandonments or transfers in Distributor's name. Distributor shall render assistance to and reimburse Supplier for expenses incurred in enforcing this paragraph.
Distributor will cooperate fully with and assist Supplier in its efforts to protect Supplier's intellectual property rights within the Territory and shall exercise reasonable diligence to detect and shall immediately advise Supplier if Distributor has knowledge of any infringement of any patents, trademarks, copyrights or other intellectual property rights owned or used by Supplier.
The Distributor also agrees to not infringe, breach, or misuse any of the Supplier or Owner’s intellectual property (such as copyrighted works or innovations), unless explicit permission has been granted by the rightful owner (Supplier and/or Owner, as applicable) of the intellectual property.
Supplier may provide Distributor with certain confidential or proprietary information ("Confidential Information"). Confidential Information includes information, whether written, electronic or oral, which Distributor knows or reasonably should know is proprietary, confidential or a trade secret of Supplier, including any and all technical or business information, the Software including its source codes and documentation, specifications and design information for the Supplier Products, servicing information, customer lists, pricing information, marketing information, policies, procedures and manuals regarding Supplier's distributors or distribution channels, research and development and other proprietary matter relating to the Supplier Products or business of Supplier.
Distributor will refrain from using the Confidential Information except to the extent necessary to exercise its rights or perform its obligations under this Agreement. Distributor will likewise restrict its disclosure of the Confidential Information to those who have a need to know such Confidential Information in order for Distributor to perform its obligations and enjoy its rights under this Agreement. Such persons will be informed of and will agree to the provisions of this Section and Distributor will remain responsible for any unauthorized use or disclosure of the Confidential Information by any of them.
Upon termination of this Agreement (or earlier, upon request by Supplier), Distributor shall cease to use all Confidential Information and promptly return to Supplier (or destroy, upon request by Supplier) any documents (whether written or electronic) in its possession or under its control that constitutes Confidential Information. During the term of this Agreement and thereafter, neither Distributor, nor Distributor's employees, independent contractors nor other agents shall (a) reverse engineer, decompile or otherwise disassemble the Supplier Products from the products themselves or from any other information made available to them, or (b) otherwise use any of the Confidential Information or Supplier provided training to support, maintain or otherwise service a third party's products or services.