M A N U F A C T U R E R / R E P R E S E N T A T I V E A G R E E M E N T
This Agreement, made this ________ day of ___________, 20_____by and between ______________________, a corporation, incorporated under the laws of the State of __________________, having its principal office at_____________________________ [“Principal”] and _______________________________, a_______________________ organized under the laws of the State of California, having its principal office at _________________________________ [“Representative”] is as follows:
FOR AND IN CONSIDERATION of the mutual promises hereinafter set forth, the parties hereto do hereby agree that:
1. Exclusive Right to Represent
Principal grants to Representative the exclusive right to represent Principal in the specific territory defined in Paragraph 2 in connection with all sales, rentals and leases of Principal’s products and services described in Paragraph 3. Representative hereby accepts said appointment.
2. Territory
The Representative’s Territory consists of the geographical areas and/or locations set forth in Appendix A, attached hereto and incorporated herein by reference.
3. Products
This Agreement covers all products and services currently offered for sale, rent or lease by Principal as well as those products and services developed or added by Principal during the term of this Agreement, hereinafter collectively referred to as “Products.”
4. Duties of Representative
Representative has the following responsibilities:
A. Use its best efforts to promote, solicit and procure orders for the Products within the Territory on behalf of the Principal under the Principal’s standard terms and conditions of sale.
B. Maintain a sales office in the Territory which shall be open and staffed during normal business hours. Representative will conduct all of its business in its own name and in such manner as it may seem fit. Representative will pay all expenses of its office and activities and be responsible for the acts and expenses of its employees
C. Evaluate potential customers’ needs and relate these requirements to Principal.
D. Report periodically to Principal information concerning sales referral activities relating to the Products.
E. Cooperate with and assist Principal in promotional and merchandising campaigns in an agreed upon number of activities and share of expenses to be mutually agreed upon in writing.
F. Furnish Principal with copies of all quotations and correspondence to prospective customers relating to the Products.
G. Representative shall not, without Principal’s prior written approval, alter, enlarge, or limit orders, or make representations or guarantees concerning the Products, other than those extended by Principal, or accept the return of or make any allowance for the Products.
H. Furnish to Principal’s credit department, on request, information which it may have relative to the credit standing of a customer.
I. Representative shall not use Principal’s trade names or trademarks as part of Representative’s corporate or business name. Representative may, however, indicate on stationery, calling cards and other promotional or sales material that it is an authorized sales Representative for the Principal’s Products.
J. Assist other sales representatives at the request of the Principal on orders which originate in the Territory but are shipped outside and on orders which originate outside but are shipped into the Territory in consideration of additional commissions payable on a split basis.
5. Duties of Principal
Principal has the following responsibilities:
A. Keep Representative informed on a timely basis of changes and innovations in manufacture, performance, serviceability, uses and applications of the Products.
B. Furnish Representative, without charge, with sufficient quantities of Principal’s promotional and advertising materials, literature and catalogues, pricing and sales information, samples and technical data related to the Products.
C. Provide, at no charge, to Representative such demonstration equipment as shall be necessary to support sales of the Products within the Territory.
D. Provide training for personnel designated by Representative in the advertising, sales, promotion, marketing and servicing of the Products in order to assist Representative in the facilitation of the sale of the Products.
E. Exhibit at appropriate trade shows and provide literature at conventions which will facilitate sales.
F. Provide complete support for quotations, including proposals, applications, engineering and other technical assistance as may facilitate procuring an order.
G. Provide Representative with copies of all quotations, order acknowledgments, purchase orders, follow on orders, invoices, sales reports, contract renewals and correspondence on a monthly basis relating to customers and orders for which Representative is entitled to commissions. In the event Principal fails to provide such documentation, he is subject to a 1.5% charge per month on the total of said amounts in the event of a dispute.
H. Principal is solely responsible for the design, development, supply, manufacture and performance of the Products and the protection of its intellectual property rights.
I. Principal is solely responsible for all credit risks, collections and bad debts.
J. Principal indemnifies and holds Representative harmless from all liabilities, losses, damages, costs and expenses, including reasonable attorney’s fees and court costs, however caused, which may be incurred or sustained by Representative by reason of any Product [whether or not defective] or any act or omission of Principal including, but not limited to, the assertion by any third party that the Products infringe any intellectual property rights; breach of warranty; allegations that the Products caused injury or death to any person or damage to property or both; or any injury to business, character or reputation, or any violation of a municipal, state or federal law or regulation governing the Products or their sale.
K. Principal shall include Representative as an additional insured on its product liability insurance policy when requested in writing by Representative.
L. Principal will not sell directly into Representative’s Territory with the exception of those “House Accounts” described in Appendix A.
6. Acceptance of Orders
All orders solicited by Representative are subject to acceptance by the Principal. Representative shall not accept orders in Principal’s name.
7. Terms of Sale
Principal shall establish the terms of sale of the Products, including prices and customer charges [“Sales Policies.”] The Sales Policies are those currently in effect in Principal’s price books, bulletins and other authorized releases. Principal shall have the right, in its sole discretion, from time to time, to establish or change prices and other terms of sale. Principal shall give Representative at least thirty [30] days prior written notice of each change to its Sales Policies.
8. Representative’s Compensation
A. Principal shall pay to Representative commissions as set forth in Appendix B, attached hereto and incorporated herein by reference, of the Net Invoice Price [as hereinafter defined] on all orders for Products which are accepted by the Principal and originate from and/or are shipped into the Territory as compensation for services performed hereunder.
B. “Net Invoice Price” means the total price at which an order is invoiced to the customer [calculated to include any increase or decrease in the total amount of the order subsequent to acceptance of the order], less shipping costs, taxes, insurance and any allowances or discounts expressly granted to the customer.
C. “Order” shall mean any commitment to purchase, rent or lease the Products which calls for shipment or performance in Representative’s Territory or which is subject to split commission in accordance with this Paragraph 8. An order will be considered accepted for the purpose of commissions, unless the Principal notifies Representative in writing that the order is rejected within thirty [30] days of submission of the order to Principal, whether submitted by Representative, Reseller, customer or through some other source.
D. In the instances where the engineering, execution or shipment of an order involves different territories, Principal will split the full commission among the representatives whose territories are involved subject to the minimum percentages set forth in this paragraph, unless otherwise set forth herein in writing and initialed by each party. The decision as to the portion of split commission that each involved Representative will receive rests solely with the Principal and will be made known to the Representative at or prior to the time of quotation of the order. The sum of the split commission shares shall add up to a full commission. No Representative whose territory is involved will receive less than twenty-five [25] percent. The following guidelines will be used in Principal’s determination:
1. 50% commission to the engineering point territory;
2. 25% commission to the execution of order point territory;
3. 25% commission to the “ship to” location territory.
E. If Principal establishes during the term of this Agreement a network of distributors, resellers of remarketers [“Resellers”] who ship Products to customers within the Territory, Representative shall receive a full commission as set forth in Appendix B of the Net Invoice Price of each such order shipped to customers in the Territory. Principal will receive monthly point of sales reports from each Reseller and will submit copies of these reports to Representative. Each such point of sale report shall list all shipments of Products into the Territory and shall contain at a minimum: the customer name, zip code, Product serial and/or model number, sales price of each Product and total sales price of order.
F. In the event Representative is responsible for establishing a new customer in his Territory who thereafter moves its location to another territory, Representative shall receive a split commission for as long as said customer remains a customer of Principal. The percentage amount shall be determined mutually and set forth in writing herein. In the event no amount is set forth, then the provisions of Paragraph 8 D, subparagrah 2 shall apply.
9. Payment of Commissions
A. Commissions on orders accepted by the Principal are earned and paid in the following manner:
1. Commissions are fully earned on the date of order by Customer.
2. Commissions are fully payable on or before the 30th day of the month following the month in which the Principal invoices the customer.
B. Commissions on orders for shipment by Resellers of Products to customers within the Territory are payable in full on or before the 15th day of the month following the month in which the transaction is listed on the Reseller’s monthly point of sales report to Principal.
C. If a customer cancels an order and Principal assesses any cancellation charges, Principal shall pay Representative a percentage of such cancellation charges equal to the commission applicable at the time of the original order.
D. Commissions not paid when due will accrue a late charge of 1.5% per month from the date due until paid in full.
E. For purposes of this Agreement, the terms “orders dated” and “date of the order by Customer” shall mean the date on which the customer issues its order for the Products regardless of when the order is accepted by Principal or when the order is shipped by Principal.
F. Each month Principal will provide Representative with the following:
1. A list of all orders accepted by Principal during that month and copies of each such order which originate in and are shipped into the Territory.
2. Copies of invoices pertaining to orders invoiced during that month relative to the Territory.
3. A commission statement showing the manner of computing Representative’s commissions, all commissions earned and all commissions payable to Representative during that month.
4. Resellers’ point of sales reports relative to the Territory.
G. There shall be deducted from any sums due Representative:
1. An amount equal to commissions previously paid on orders for Products which have been shipped by Principal, returned by the customer and for which Principal has given the customer full refund or credit for the purchase price on such Products.
2. An amount equivalent to commissions previously paid on orders for which Principal has not been fully paid by the customer within 180 days and Principal renders the account uncollectable. If any sums are ever realized upon such uncollectable accounts, Principal will pay Representative its percentage of commission applicable at the time of the original sale upon the net proceeds of such collection.
H. Nothing herein contained shall defeat the right of Representative to a commission as a result of the occurrence of any of the following circumstances:
1. The delivery of Products in varying quantities upon successive release dates.
2. The election of a customer to take less than the entire amount of Products as set forth in the order under a volume price agreement, bill-back agreement or other similar arrangement. However, it is understood that commissions shall be paid only on the basis of the amount of Products delivered to customer.
3. No modification of this Agreement shall in any way affect the commission rate then in existence, unless there is mutual written agreement to such modification and specific reference is made therein to the commission rate affecting purchase orders then in existence.
10. Term of Agreement and Termination
A. The term of this Agreement shall be for _____ year[s] commencing on the effective date of ____________________. This Agreement shall renew automatically for additional one [1] year periods upon all anniversary dates hereof unless otherwise terminated as provided herein.
B. This Agreement may be terminated at any time, without cause, by either party upon giving the other party at least six [6] months prior written notice by certified mail, return receipt requested. Such termination shall be effective six months hence from the date of such notice. Notwithstanding the foregoing, neither party shall have the right to terminate this Agreement without cause during the first one [1] year period of the initial term unless such termination is by mutual written agreement.
C. This Agreement may be terminated immediately for cause by either party in the event the other party fails to perform any of its material obligations under this Agreement so as to be in default hereunder, and after receiving written notice specifying in detail the nature of the material breach from the non-defaulting party, fails to cure such default within thirty [30] days thereafter.
D. In the event of termination of this Agreement for any reason, then Representative shall be entitled to:
1. Full commissions on all orders which originate from and ship into Representative’s Territory which are dated prior to the effective date of termination, regardless of when such orders are accepted by Principal and regardless of when such orders are shipped; and
2. Its share of split commissions on all orders dated prior to the effective date of termination, regardless of when such orders are accepted by Principal and regardless of when such orders are shipped; and