Exclusive Distributorship Agreement with Factory Warranty and Service Provisions by pellcity27


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									                      Exclusive Distributorship Agreement with
                      Factory Warranty and Service Provisions

Agreement made on the (date), between (Name of Company), a corporation organized
and existing under the laws of the state of (name of state), with its principal office
located at (street address, city, state, zip code), referred to herein as Company, and
(Name of Distributor), a corporation organized and existing under the laws of the state
of (name of state), with its principal office located at (street address, city, state, zip
code), referred to herein as Distributor.

For and in consideration of the mutual covenants contained in this Agreement, and
other good and valuable consideration, the parties agree as follows:

1.    Agreement to Sell Products of Company. Within the bounds of the area of
responsibility allocated to Distributor by Company (specified in Section 2), Distributor
agrees to sell new (name of Products) and parts of Company, hereinafter called the
Products, and to provide adequate facilities for sales and servicing of these Products.

2.     Sales and Services Area. The following is the area of responsibility allocated to
Distributor: (describe sales and service area), hereinafter called the Sales and Service

3.     Satisfactory Sale of Products. Distributorship shall properly develop to
Company's satisfaction the sale of Products in the Sales and Service Area specified in
Section 2. An adequate sales staff and customer relations organization to take care of
the sales potentials in the above area shall be maintained. A minimum sales staff and
customer relations organization shall be defined as (number) of full time
salespersons, each of whom will use the (name of sales management system),
reporting a minimum average of (number) retail sales calls per day.

4.     Demonstrators. Distributor recognizes the value of having display-worthy
Products available to show the public and agrees to own an adequate number
of Products of each current Product in a basic model available for demonstration, with a
minimum of (describe minimums for Products). Company agrees, under this Section,
that one model, (describe demonstration model), which Distributor is to maintain
available for demonstration purposes, may be up to (number) months old.

5.     Dealers. To properly develop the sale of Company Products in Distributor's
Sales and Service Area, the appointment of dealers by Distributor is anticipated. In
appointing dealers, Distributor agrees to carefully consider them in the light of
Company's recommendations as to requirements, classes and commissions set forth in
the current recommended Distributor's dealer agreement. Each appointment will be
subject to Company approval, but in no event will the dealer become a direct agent of

6.     Fleet Buyers. There will sometimes be an opportunity to sell the Products to a
buyer who is classified as a fleet buyer. For the purpose of this Section, a fleet buyer is
one who operates (number) or more Products or purchases (number) or more new
Products at one time for its use. Distributor may, from Distributor's commission, allow a
discount up to ________% on sales to fleet buyers. In the event of a sale to a fleet
buyer who will base the Products in another Distributor's Sales and Service area, the
Distributor making the sale agrees to handle the delivery of the Products outside
Distributor's Sales and Service Area through the Company. Service fee payments will
be applicable as outlined in Section 11 of this Agreement on deliveries out of the
Distributor's Sales and Service Area.

7.    Prices and Commissions. Company agrees to furnish Distributor current prices
of new Company products and to furnish Distributor schedules of commissions and
terms of purchase, and further agrees to keep Distributor advised of any changes in
these prices or schedules of commissions and terms of purchase.

8.     Orders.
       A.     In order to facilitate the orderly scheduling of the shipments of Products,
       Distributor agrees to submit Distributor's orders for new Products as far as
       possible in advance of required delivery. Company will then schedule the
       availability of Products against Distributor's commitment. Distributor agrees to
       accept all Company Products ordered by it. Company will not ship its Products to
       Distributor except on Distributor's orders. All orders are subject to approval and
       acceptance by Company at its principal place of business. Company agrees to
       give careful consideration to all orders received from Distributor and expressly
       reserves the right to follow or depart from such orders in details of equipment,
       trim and color, and Company shall in no way be liable for failure to ship or for
       delay in shipments, however caused, or for shipping over routes other than those
       specified by Distributor.

       B.     If Distributor fails to accept the Products ordered and to pay for the same
       as agreed when notified by Company, Distributor agrees that Company may
       retain Distributor's deposit on the order as liquidated damages for breach of the
       acceptance, and then Company has the right to otherwise dispose of
       the Products with no further liability to Distributor.

       C.     Distributor also agrees to comply with Company's request for estimates of
       Distributor's prospective requirements of Company's Products, but such
       estimates are not to be regarded as orders by Company.

9.      Restricted Sales by Company
        Company and Distributor recognize there are certain types of buyers to whom
Company should offer to sell its Products directly. Therefore, Company reserves the
right to sell Products referred to in this Agreement for experimental or development
work, to its employees, to suppliers, to government bodies, or to fleet buyers. Distributor
further agrees not to sell new Company Products to be exported, except where prior
written arrangement with Company has been made.
10.   Advertising.
      A.     Distributor recognizes that advertising of Company's Products may affect
      other Distributors and Company. For the protection of good will of Company's
      Products, Distributor, in the sale of Company's Products, agrees to use only
      advertising that is supplied or approved by Company, or that conforms to the
      policies of Company and other provisions of this Agreement, and agrees to
      forthwith discontinue advertising disapproved by Company when so advised by

      B.     Distributor further agrees to purchase from Company and display a
      (describe) outdoor sign designed by Company for standardization in identification
      as an authorized Company Distributor. In addition, Distributor agrees to enter into
      a program to display such other signs as are necessary to advertise Distributor's
      business properly and display the name (trade name) mutually satisfactory to
      both Company and Distributor. In addition, Distributor agrees to enter into a
      program to use direct mail advertising and other sales tools as provided and/or
      recommended by Company and to carry a satisfactory stock of such sales tools
      for use of Distributor's salespeople and dealers.

11.   Sales and Service Area Service Fee Adjustments
      A.     In the interest of promoting good service to the public and with a view to
      fair dealing between Distributors, Distributor agrees to confine Distributor's sales
      and selling efforts to the Sales and Service Area as provided in Section 2 of this
      Agreement and agrees not to advertise or use salespeople or unofficial
      representation in any other distributor's Sales and Service Area.

      B.    Company recognizes that in the developing of some sales in Distributor's
      Sales and Service Area, it will occasionally be necessary for Distributor to
      demonstrate or call on parties located in another Distributor's Sales and Service
      Area. Calls of this nature are not to be construed as open solicitation.

      C.     Service fees will be payable when Distributor or Distributor's seller sells or
      leases the Products to be based in another Distributor's Sales and Service

      D.      To define what constitutes reason for paying of a service fee, the primary
      consideration will be the principal base of the Products for the first (number)
      days, not where the owner's legal residence happens to be, as in some cases the
      owner could be located in one Distributor's Sales and Service Area and base
      its Products in another. In those cases where the Products is moving from
      location to location or it is located at a short range job during the first (number)
      days, the decision as to its principal base will be made by Company if a service
      fee is claimed. Basing of the Products in the seller's Sale and Service Area may
      be judged a chargeable service fee if deliberate intent is indicated to avoid the
      spirit of the above.
       E.      Payment will be due Company within (number) days after delivery of
       the Products to the purchaser. Payment of this fee will be made to Company for
       distribution to the party or parties entitled to the same. Service fees applying to
       various models shall be furnished to Distributor on the commission schedule as
       provided in Section 7. Involving purchasers in any claim by a Distributor or
       Distributors or sellers will be considered collusion, and settlement will be made in
       favor of other parties involved. Company reserves the right of broad
       interpretation on service fee claims, as it is the spirit of follow-through service to
       the customer and development of sales which the Company is interested in
       protecting; and all decisions of Company will be final.

       F.     The recipient of a service fee payment will be expected to provide the
       owner with the same service and general conveyance of good will as if such
       recipient had originally made the sale.

12.     Sales and Service Area Commission Adjustments. If Distributor or
Distributor's dealer or dealers sells wholesale or pays a commission on the sale or lease
of a new Products to any Company or individual established in the business of
selling the Products who is located outside of Distributor's Sales and Service Area, this
act will be considered a wholesale Sales and Service Area infringement. The Distributor
making the sale agrees to pay Company the difference between Distributor's costs and
manufacturer's suggested retail selling price on such a sale as liquidated damages for
improper selling, as determined by Company. Claims pertaining to wholesale violations
shall be reported to Company within (number) days from delivery to the purchaser. On
all matters arising under this Section, the decision of Company on the collection and
distribution of damage shall be final.

13.    Definition of Used Products. New Company Products will be considered used
and no longer subject to Sections 11 and 12 at the expiration of (number) days from
date of delivery to retail purchaser, or after operations by a Distributor or dealer for a
period of (number) months and (number) hours. New Products affected by a yearly
model change may be considered an obsolete model (number) days after Company
begins regular production deliveries of succeeding models. An obsolete model is not
subject to service fee adjustment.

14.    Factory Warranty. Company warrants each new Product manufactured by it to
be free from defects in material and workmanship under normal use and service,
provided, however, that this warranty is limited to making good at Company's factory,
any part or parts, which shall, within (number) days after delivery of such Products to
the purchaser, be returned to Company with transportation charges prepaid, and which
on Company's examination shall disclose to Company's satisfaction to have been thus
defective. This warranty is expressly in lieu of all other warranties expressed or implied
and all other obligations or liabilities on the part of Company. Company neither assumes
or authorizes any other person to assume for it any other liability in connection with the
sale of its Products. This warranty shall not apply to any Products which shall have
been repaired or altered outside of Company's factory in any way so as, in its judgment,
to affect its stability or reliability, nor which has been subject to misuse, negligence or

15.    Purchase and Supply of Parts. Distributor and Company recognize the
importance to them, to the public, and to the owners of Company's Products, that its
Products be safe and operable in accordance with Company's standards of
manufacture. Distributor, therefore, agrees that Distributor will not sell for use on
Company's Products any parts except those purchased from or having the approval of
Company. Distributor agrees at all times to keep on hand at Distributor's place of
business a current supply of genuine factory parts sufficient to supply adequately the
requirements of the Sales and Service Area assigned to Distributor. Distributor agrees
to maintain an adequate stock record system, and agrees on request, but not more than
once in each calendar year, to provide Company with detailed itemized inventories of
the genuine Company parts in Distributor's stock. These records and inventories are for
the purpose of enabling Company to counsel with Distributor on the continuous and
adequate stock of parts consistent with the requirements of Distributor's territory.
Distributor agrees to confine Distributor's selling efforts to Distributor's Sales and
Service Area. In case of parts or accessory sales to a purchaser in another Distributor's
Sales and Service Area, a maximum discount of ______% shall be allowed to any
operator or dealer.

16.     Customer Complaints. Distributor will receive, investigate, and handle all
complaints received from customers or prospective buyers with a view to protecting the
good will of Company and Distributor in the sale of the Products. Recognizing the
importance of owner good will, Distributor will make every reasonable effort to satisfy
owners of the Products in the Sales and Service Area described in this contract and to
satisfy all persons purchasing the Products, establish regular contact either by
correspondence or personal interview with such owners or purchasers. All complaints
received by Distributor which cannot be readily remedied shall be promptly reported to
Company; Company will then undertake to remedy such complaints, and Distributor will
be relieved of primary responsibility in this connection.

17.    Care of Owner. Recognizing that all parties to this Agreement have a mutual
interest in maintaining owner good will, that to retain this good will prompt and
satisfactory service at reasonable costs must be furnished each owner, and that the
primary responsibility for furnishing this service rests on Distributor, Distributor agrees:

       A.    To maintain a complete service department capable of repair and major
       overhaul of all Company Products and to purchase all special tools developed by
       Company which Company deems essential.

       B.     To install Company flat rate charges for labor, as recommended and
       furnished by Company.

       C.     To execute and deliver to each purchaser of new Products, an owner's
       service policy on forms furnished by Company and to supply to each owner an
       initial and (number) hours no charge inspection in accordance with the Products
       owner's service policy.

       D.    To supply at Distributor's place of business, to each owner who purchases
       new Products from Distributor, warranty labor at no charge.

       E.     To complete transfer of title to the owner in accordance with federal and/or
       state regulations in terms of sale.

18.    Distributor is not Agent. For the protection of both Distributor and Company,
the relationship created by this Agreement between Company and Distributor is not that
of principal and agent, and under no circumstances shall Distributor be considered an
agent of Company.

19.     Use of Trade Names. Distributor and Company desire to protect the public from
confusion, uncertainty, or misrepresentation. Therefore, Distributor agrees not to use in
Distributor's corporate, firm or individual name, or allow it to be used by others in their
corporate, firm or individual names, insofar as Distributor has any power to prevent such
use, the words “(first word),” “(second word),” or any other name adopted by Company
for the Products, parts, accessories or service, and any words or names or combination
of words or names closely resembling such words will not be used. On termination of a
dealer by the Distributor, Distributor agrees to promptly work with the dealer to
discontinue the use of names, trademarks, signs, stationery, advertising or anything
else that might make it appear that the dealer is still handling Company Products.

20.      Distributor’s Place of Business. Distributor a
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