Sales Representative Agency

Sales Agency / Sub-Representative Agreement Guidelines SPECIMEN PROVISIONS ONLY Do not use without consulting your attorney. Laws and customs vary. This publication is designed to provide sample information in regard to the subject matter covered. It is furnished with the understanding that the publisher, MANA, is not engaged in rendering legal or other professional service. The services of a competent legal professional should be sought. This Agreement is made as of the _________day of ___________________ in the year of, ____________ by and between __________________________________________ a corporation incorporated (Proper Agency Name) under the laws of the state of ________________________________ having its primary office at (State) _____________________________ , _______________________________________________ (Street Address) (Proper Sub-Representative Name) (City, State and Zip) (“Agency”) and _______________________________________________ operating as a _______________________________ , having its primary office at ________________________, (Proprietorship, Partnership, Corporation) (Street Address) ______________________________________________ . (City, State and Zip) (“Sub-Representative”) to be administered as follows: 1. APPOINTMENT AND ACCEPTANCE. Agency appoints Sub-Representative as its exclusive sub-representative to promote the sale of and solicit orders for the products and services represented by Agency as defined in paragraph 3 herein, in the assigned territory as defined in paragraph 2 herein, and Sub-Representative accepts the appointment and agrees to promote the sale of and solicit orders for the products and services as defined by this Agreement. 2. TERRITORY. Sub-Representative’s assigned territory shall consist of the following: (The assigned territory can be defined as specific states, counties, zip/postal codes or a combination thereof or in any other way which clearly defines the geographical area or the particular accounts.) Rev. 6/29/00 3. PRODUCTS AND SERVICES. The products and services covered by this Agreement are: All the standard and custom products and services of the manufacturers represented by Agency as of the date of this Agreement and any new or custom products or services developed or added during the lifetime of this Agreement. Sub-Representative shall not, during the duration of this Agreement, represent products or services directly competitive with the products or services in the assigned territory. (The products and services can also be defined by referring to a published price list, if one exists, in the case of standard products or services. If custom products or services are involved, list the product lines, categories, types or services with as much definition as required to adequately define the specific product area or service.) 4. COMMISSION. Agency shall pay Sub-Representative a commission for services performed which shall be ______% of the “actual commission received” by Agency for products shipped into or services provided in Sub-Representative’s assigned territory on all customer orders regardless of whether the orders are transmitted to Manufacturer by Sub-Representative or received directly by Manufacturer from the customer or Agency. “Actual commission received” shall mean the net monies in fact received by Agency from its Manufacturers regarding products and services covered by this Agreement. 5. COMPUTATION AND PAYMENT OF COMMISSION. Sub-Representative’s commission is earned when an order is accepted by Manufacturer. “Order” shall mean any agreement to purchase Manufacturer’s products or services which calls for shipment into SubRepresentative’s territory or which is subject to a split commission as defined below and includes but is not limited to all follow-on orders and to all portions of any blanket order or requirements order regardless of when such portions are released or required. Commissions are due and payable within 10 days after actual commissions are received by Agency. At the time of payment of commissions to Sub-Representative, Agency will send SubRepresentative a current commission statement listing all invoices on which commissions are being paid as well as listing all commissions due and owing Sub-Representative from any prior payment periods which have not been paid. Agency shall deduct from any sums due Sub-Representative an amount equal to commissions paid or credited back to Manufacturer by Agency. If sums are received on any delinquent or previously classified “Uncollectible” sale, Agency will pay Sub-Representative its percentage of commission applicable at the time of the original sale upon actual receipt. 6. SPLIT COMMISSIONS. If there is any possibility of a split commission being paid to SubRepresentative, it shall be calculated and paid in accordance with Exhibit A attached to the Agreement. 7. ACCEPTANCE OF ORDERS. All orders are subject to acceptance or rejection by an authorized officer of Manufacturer at its main order entry office and to the approval of Manufacturer’s credit department. Agency shall advise Sub-Representative of any order rejected within 5 days of Agency’s knowledge of such rejection. Manufacturer shall be responsible for all credit risks and collections. Rev. 6/29/00 8. TERMS OF SALE. All sales shall be at prices and upon written terms established by Manufacturer, and it shall have the right, from time to time, to establish, change, alter or amend prices and other terms and conditions of sale. Sub-Representative shall not accept orders in Manufacturer’s name or make price quotations or delivery promises without Manufacturer’s prior approval. 9. SUB-REPRESENTATIVE RELATIONSHIP AND CONDUCT OF BUSINESS. SubRepresentative shall promote the sale of and solicit orders for the products and services in the assigned territory and will conduct all its business in its own name and in such a manner as it may see fit, pay all its own expenses including all commissions, salaries, bonuses, and expenses of employees and salespersons and any and all taxes properly and lawfully associated with doing business as an independent contractor in the assigned territory. Sub-Representative is not an employee of Manufacturer for any purpose whatsoever, but is an independent contractor with limited authority. Sub-Representative shall have sole control of the manner and means of performing under this Agreement. Agency shall not have the right to require Sub-Representative to do anything which would jeopardize the relationship of independent contractor between Agency and Sub-Representative. Nothing in this Agreement shall be construed to constitute Sub-Representative as a partner, employee or general agent of Agency nor shall either have any authority to bind the other in any respect. Sub-Representative shall abide by Manufacturer’s terms and conditions pertaining to the sale of its products and services and shall communicate same to customers. Agency shall hold SubRepresentative harmless from and shall indemnify Sub-Representative for all liability, loss, costs, expenses or damages, including court costs and reasonable attorneys’ fees, caused by or arising from negligent or wrongful acts or omissions of Agency. Sub-Representative shall hold Agency harmless from and shall indemnify Agency for all liability, loss, costs, expenses or damages, including court costs and reasonable attorneys’ fees, caused by or arising from negligent or wrongful acts or omissions of Sub-Representative. Agency shall include Sub-Representative in its product liability insurance coverage and list Sub-Representative as an “additional insured” in the insurance policy. Agency shall furnish Sub-Representative, at no expense to Sub-Representative, when available from Manufacturer, samples, catalogs, literature, demonstration equipment and any other material necessary for the proper promotion and solicitation of orders for its products and services in the assigned territory. If for any reason Sub-Representative takes possession of Manufacturer’s products, reasonable use and care of the products shall be exercised by Sub-Representative while in its possession but the risk of loss or damage to the products is to be covered by Manufacturer’s insurance at Manufacturer’s cost. Any literature which is not used or samples, demonstration equipment or other items belonging to Agency or to Manufacturer shall be returned by SubRepresentative to Agency or Manufacturer, as the case may be, upon request and reasonable notice. Agency or Sub-Representative shall not, during the term of this Agreement or for one year after termination thereof, hire or employ salespersons, employees or individuals that were employed by each other’s firm unless otherwise agreed to by both parties in writing. 10. TERM OF AGREEMENT, NON-RENEWAL AND TERMINATION. This Agreement shall be effective on the date listed on page 1 and shall continue in force without no-cause termination rights for a _____-year term (“initial term”). During the initial term, neither party may Rev. 6/29/00 terminate the Agreement without cause. This Agreement shall automatically renew for successive ______-year terms after the initial term unless it is non-renewed or terminated as provided below. During the period of time from the date any notice of termination is given until the effective date of termination (“notice period”), both parties shall continue to fulfill their obligations under this Agreement. During the notice period, Agency has the right to interview, evaluate, select and train a replacement sub-representative or employee for the assigned territory. During the notice period, SubRepresentative has the right to interview, evaluate, select and become trained by a replacement agency or employer. This Agreement may be non-renewed: (a) By either party giving the other party not less than 60 days notice of intent not to renew the Agreement effective at the end of any term. This Agreement may be terminated: By Agency, if Sub-Representative, without Agency’s written consent, promotes the sale of or solicits orders for any product or service which is competitive with any product or service represented by Agency in the assigned territory. Agency shall give written notice of the alleged breach of the Agreement to Sub-Representative. If the alleged breach is not cured or otherwise resolved within 15 days after receipt of such notice by Sub-Representative, Agency may give written notice of termination to SubRepresentative effective immediately. By Sub-Representative, if Agency, without Sub-Representative’s written consent offers, promotes or sells any product or service within the assigned territory which is competitive with any product or service Sub-Representative is promoting for sale for any other Agency. Sub-Representative shall give written notice of the alleged breach of the Agreement to Agency. If the alleged breach is not cured or otherwise resolved within 15 days after receipt of such notice by Agency, Sub-Representative may give written notice of termination to Agency effective immediately. By either party: (i) (But not effective during the initial term of the Agreement), for no cause upon at least 60 days’ prior written notice to the other party; (ii) By mutual written agreement to be terminated at any time mutually agreed upon; or (iii) After 30 days’ written notice if either party has filed or has filed against it a petition in bankruptcy (which is not dismissed within 30 days after it is filed) or after 30 days’ written notice if either party has other cause. 11. RIGHTS UPON TERMINATION. Upon termination of this Agreement for any reason: (a) Sub-Representative shall be paid commissions on all orders calling for shipment into Sub-Representative’s assigned territory which are dated or communicated to Manufacturer Rev. 6/29/00 (a) (b) (c) prior to the effective date of termination, or during any added period authorized by this Agreement as set forth below regardless of when such orders are shipped or fulfilled. (b) Sub-Representative shall be paid commissions on all orders dated or communicated to Manufacturer after the effective date of termination and during the added period described below, regardless of when such orders are shipped or fulfilled, predicated on the length of service (time this Agreement has been in effect) as follows: Length of time Agreement has been in effect Less than two years Two to four years Four to five years Five to six years Six years or more Added period for orders transmitted after effective date of termination or reduction 0 30 days added. 60 days added. 90 days added. 120 days added. (c) Sub-Representative shall be paid commissions for the full lifetime of the customer’s program or product in which Manufacturer’s product, part or service is being purchased by blanket orders, by requirements orders, by monthly, annual or multi-year orders and by follow-on agreements to purchase Manufacturer’s products or services that were designed in or selected by the customer during the lifetime of this Agreement. (d) Sub-Representative shall be paid its share of any split commissions on orders as defined in paragraph 6 of this Agreement. (e) Agency shall continue to furnish Sub-Representative copies of orders and invoices and other documentation on all customer business in the assigned territory on which SubRepresentative has earned or is to be paid a commission under this Agreement until the date of the final commission payment to Sub-Representative. (f) Both parties have the right to audit (and shall retain such right after the effective date of termination of this Agreement) all documentation related to this Agreement. Such audit shall be scheduled on a date mutually agreed upon but no greater than 30 days after written request, allowing the other party or its duly appointed representative to audit documents of the other party, to be limited to documents relating to products sold or services produced, shipments, invoices, customer purchase orders, customer communications, customer payments, quotes and commission on sales in the assigned territory. 12. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the entire understanding of the parties, shall supersede any other oral or written agreements, and shall be binding upon successors and assigns. It may not be modified in any way without the written consent of an officer or owner of both parties. Rev. 6/29/00 In the event the parties desire to decrease or reduce either the territory, accounts, products or services set forth in this Agreement, the party seeking the decrease or reduction must give at least 60 days’ notice of such desire. Agency shall pay commissions to Sub-Representative during any applicable period under paragraph 11(b) above as if there had been no such decrease or reduction. 13. SURVIVABILITY OF AGREEMENT. If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be considered deleted from this Agreement and shall not invalidate the remaining provisions of this Agreement. 14. CONSTRUCTION OF AGREEMENT. This Agreement shall be construed according to the laws of the State of . 15. WAIVER. The failure of either party to enforce, at any time or for any period of time, any provisions of this Agreement shall not be construed as a waiver of such provision or of the right of such party thereafter to enforce such provision. 16. ASSUMABILITY OF AGREEMENT. This Agreement will be binding upon any purchaser of Agency’s or Sub-Representative’s business entity if ownership transfer or a sale of assets occurs prior to the effective date of termination of this Agreement. 17. DISPUTES AND MEDIATION. The parties agree that any disputes or questions arising hereunder, including the construction or application of this Agreement shall be submitted to mediation between Agency and Sub-Representative. Any mediation settlement by the parties shall be documented in writing. If such mediation settlement modifies the language of this Agreement, the modification shall be set to writing, signed by both parties and added to this Agreement as an attachment. If mediation between the parties does not result in a mutual settlement within 180 days after submission to mediation, then each party will have the right to enforce the obligations of this Agreement in any court of law in the United States of America with all reasonable attorney fees, court costs and expenses incurred by the prevailing party in such litigation to be paid by the other party. 18. NOTICES. All notices, demands or other communications by either party to the other shall be in writing and shall be effective upon personal delivery, or if sent by mail, 72 hours after deposited in the United States mail, first class certified postage prepaid and all such notices given by mail shall be sent and addressed to the addresses set forth on page 1 until such time as another address is given by notice pursuant to this provision 18. IN WITNESS WHEREOF, the officers or owners of both parties hereto have executed this Agreement to be effective on the day and year listed on page one of this Agreement written in multiple counterparts, each of which shall be considered an original. _______________________________ (Agency) ____________________________ (Sub-Representative) By: _______________________________ (Signature) By: ___________________________ (Signature) __________________________________. (Title) _______________________________ (Title) Rev. 6/29/00