The following example of
a standard form National Distributorship Agreement is a draft subject to
some negotiation between the parties with respect to annual sales forecasts.
This form of agreement is available ONLY to qualifying distributors who
meet MagneGen System's requirements with respect to financial capacity,
management ability and existing sales forces for the territory requested.
Other versions of this draft with respect to dealers within a territory
or to representatives with or without territories who would not otherwise
qualify as distributors may be negotiated on a case by case basis subject
always to certain standard provisions to provide uniformity worldwide.
This National Distributorship Agreement (hereinafter referred to as the "Agreement"), is made by and between (1) MagneGen Systems, Inc., a Belize corporation incorporated under the International Business Companies Act, 1990, (No. 9 of 1990) with registered head offices at 57 Albert Street, Belize City, BELIZE (hereinafter referred to as "MagneGen Systems") and (2) (insert name of company), a (insert place of incorporation), located at (insert full business address), (hereinafter referred to as "National Distributor"). This Agreement will become effective on the date of actual receipt by MagneGen of payment by National Distributor of the amount referred to in Paragraph 1 below for the first purchase order hereunder (hereinafter referred to as the "Effective Date").
WHEREAS, MagneGen Systems wishes to distribute the MagneGen® SuperMag and the MagneGen® Pipe Protector and such other MagneGen® products as may from time to time be developed and offered for sale in _______ (insert territory) (hereinafter referred to as the ìProducts"); and
WHEREAS, National Distributor represents that it has the requisite financial capacity, management ability, and sales force to adequately make sales of the Products within the Territory (as defined in Paragraph 2 hereunder);
NOW THEREFORE, The parties hereby agree as follows::
1. Appointment: In consideration of National Distributor's first purchase order of (a) ______model ______ SuperMags, (b) _____ model ______ Pipe Protectors and (c) ______ model ______ Pipe Protectors, for a total of U.S. $000,000.00 (________________ Thousand and no/100 United States Dollars) - or such other first purchase order and calculated amount as agreed between MagneGen Systems and National Distributor in accordance with (i) the first annual monthly sales forecast indicated in Paragraph 13 below and specifically incorporated herein by this reference as Exhibit B "Annual Sales Performance Schedule" and (ii) the current "National Distributor Wholesale Price List" specifically incorporated herein by this reference as Exhibit A - such calculated amount to be pre-paid to MagneGen Systems' order; MagneGen Systems hereby appoints National Distributor as MagneGen Systems' exclusive - subject to the provisions of Paragraph 13 below - national distributor for the sale of the Products in the Territory (see Paragraph 2 below). The amount of this first purchase order is calculated at current national distributor prices for the Products in accordance with Exhibit A. MagneGen Systems hereby specifically reserves the right to change prices from time to time based on manufacturing and other costs as well as current market conditions subject to 10 (ten) days' notice to National Distributor, by publishing an updated version of Exhibit A hereto which will then become a unilateral amendment to this Agreement. If National Distributor does not accept the new prices for the Products, National Distributor may terminate this Agreement in accordance with Paragraph 15. Each party hereby specifically acknowledges that no additional or separate consideration or compensation has been paid for the National Distributoship itself; consequently, it is SOLELY National Distributor's performance hereunder - specifically with regard to monthly re-orders - that maintains the appointment herein given. National Distributor hereby accepts this appointment and agrees to promote sales of the Products within the Territory.
2. Territory: For purposes of this Agreement, National Distributor's sales territory shall be deemed to be (insert name of country) (herein referred to as the "Territory"). National Distributor must distribute and sell the Products primarily in and for sales only in the Territory. National Distributor may solicit, distribute and provide the Products in any nearby country where there is no national distributor, without exclusivity, until the appointment of a national distributor in that territory. National Distributor may acquire additional national distributorships at the discretion of MagneGen Systems.
3. Product Non-Competition: National Distributor shall not provide any other magnetic, or other so-called non-chemical treatment product, or allow the Products to be combined with such a product, without prior written consent of MagneGen Systems.
4. Activity: National Distributor may acquire additional distributorships for other products and sell them through the same national distributorship sales channels so long as any such activity does not interfere with or bring discredit upon the Products.
5. Disclosure: National Distributor shall furnish in English to MagneGen Systems upon MagneGen Systems' written request - the name, address and telephone number of National Distributor's every new representative, salesperson, and every new customer (and/or buyer, if a company), and MagneGen Systems may contact any, and/or all, of these customers, buyers, and/or, representatives, salespersons or assignees, at MagneGen Systems' discretion.
6. Reporting Requirement: National Distributor shall furnish MagneGen Systems monthly reports in English within 10 days of the end of each calendar month clearly showing (a) beginning inventory by Products model at the beginning of each month, (b) sales by Products model during the month and (c) closing inventory by Products model at the end of each month.
7. Sales Materials: National Distributor shall furnish MagneGen Systems with copies, together with an English translation thereof, of all sales materials, in any form, to be used by National Distributor, his representatives, or salespersons for USAsian's prompt approval or rejection, BEFORE they are promulgated.
8. Manufacturer's Warranty: The Manufacturer's 5 (Five) year Warranty warrants against manufacturing defects, only, and will be the only warranty provided National Distributor. MagneGen Systems assumes no liabilities, and provides no warranties or guaranties, regarding the Products.
9. Obligations: National Distributor will assume all liabilities - except with respect to manufacturing defects in accordance with Paragraph 8 above - for the Products and/or their performance, and provide MagneGen Systems with English translations together with local language current copies of all city, state and country licenses, permits, and insurance, as required by National Distributor's local authorities in National Distributor's Territory. National Distributor will exercise due diligence with regard to competitors and protect and defend the Products from any false advertising and/or infringement by copying or counterfeiting or fraudulent filing of patents or trademarks in National Distributor's country only. Nothing in this Agreement shall be construed to constitute National Distributor as the partner, employee or agent of MagneGen Systems nor shall either party have the authority to bind the other in any respect, it being intended that each shall remain an independent contractor responsible for its own actions.
10. Payments: National Distributor agrees to place all National Distributor purchase orders, by Fax or e-mail, with a bankwire to MagneGen Systems' order, for the full amount of the purchase order, FOB MagneGen Systems' release point. MagneGen Systems shall do no shipping. MagneGen Systems shall provide commercial invoices only to National Distributor.
11. Technical Assistance: MagneGen Systems agrees, at its option, to provide access to technical and application engineering consultation, to National Distributor, by telephone or Fax or e-mail. On-site consultation services may be arranged by MagneGen Systems at costs and on terms to be agreed upon with National Distributor.
12. Minimum Ordering Requirements: National Distributor hereby agrees to place with MagneGen Systems monthly minimum purchase orders in accordance with the Annual Sales Performance Schedule set forth in Exhibit B hereto commencing 30 days after the Effective Date, with no shelving allowed (shelving for purposes of this agreement is hereby agreed to be the accumulation of more than 90 days' purchases by National Distributor). MagneGen Systems agrees to provide National Distributor's orders on a timely basis barring holidays, strikes, acts of God, previous orders, etc.
13. Performance: National Distributor will use his best efforts and good faith in promoting the distribution of the Products within the Territory and MagneGen Systems shall fully support National Distributor's efforts by providing quality Products on a timely basis and such other technical and sales assistance as may be necessary from time to time. A monthly sales forecast shall be agreed for each 12 month period hereunder and formally agreed in writing as the Annual Sales Performance Schedule. The first such 12 month period shall commence on the Effective Date of this Agreement. This Annual Sales Performance Schedule shall be reviewed on an annual basis on the anniversary of the Effective Date and may be increased or decreased at MagneGen Systems' reasonable discretion after taking into account the then current market conditions. In the event that MagneGen System and National Distributor are unable to agree on an Annual Sales Performance Schedule for the then current period, MagneGen Systems reserves the right to appoint such additional new national distributors as may be necessary in order to ensure that the Territory is being adequately developed, such a determination to be made in the sole and absolute discretion of MagneGen Systems.
14. Violations of Agreement, Failure to Perform, Insolvency and Criminal Conduct: In the event that National Distributor violates any of the provisions of this agreement, fails to perform without cause, becomes insolvent or files for protection from creditors or commits any crime or illegal act that may discredit Products or MagneGen Systems; National Distributor shall forfeit National Distributorship, at the time of the act, along with all existing accounts.
15. Termination: MagneGen Systems, taking into account MagneGen System's unilateral right to appoint such additional new national distributors as may be necessary in order to ensure that the Territory is being adequately developed, shall have no right to unilateral termination except for cause which for purposes of this Agreement shall mean a violation of this Agreement. National Distributor may terminate this Agreement, by post or fax or e-mail, at any time, whereupon MagneGen Systems shall appoint a new national distributor and require the new national distributor to buy National Distributor's residual inventory, at National Distributor's costs. In the event that MagneGen Systems is unable to find a replacement national distributor within 90 (ninety) days, National Distributor's residual inventory, if any, shall be forfeit to MagneGen Systems and National Distributor shall surrender such residual inventory to MagneGen Systems immediately upon MagneGen Systems' demand. The parties acknowledge that each has considered the ramifications of termination in making expenditures of money and time in preparing for the performance of this Agreement, and further the possible loss or damage on account of the loss of prospective profits or anticipated sales or on account of expenditures resulting from the termination of this Agreement.
16. Entire Agreement: This Agreement contains the parties' entire understanding with respect to sales of the Products within the Territory and may not be modified except in writing signed by both parties. This Agreement may not be assigned or transferred without the prior written consent of MagneGen Systems.
17. Choice of Law: This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any controversies or claims relating to any aspect of this Agreement shall be settled by arbitration under the rules of the Arbitration Association of the State of California. The parties agree to abide by the arbitrator's decision and also agree that a judgment may be entered upon his award in a court in the respective jurisdictions of the parties. This choice of law shall not be construed as any agreement by the parties to submit to the jurisdiction of the State of California or any other jurisdiction it being understood that the appropriate jurisdictions are the respective countries or states of incorporation of the parties hereto. If any provision of this Agreement is held to be contrary to law, the remaining provisions shall remain valid.
18. Notices: All notices between the parties shall be in writing and effective when sent by facsimile transmission or e-mail confirmed by international mail to addresses reasonably believed by both parties to be correct at the time of sending of such notices.
Agreed to this _____ day
of ___________, 2001
By: ________________________________________
authorized signatory
for and on behalf of MagneGen
Systems, Inc.
By: ________________________________________
(insert name of authorized
signatory and corporate title))
for and on behalf of (insert
name of company)
Exhibit A - National Distributor Wholesale Price List
(See current computer generated
"National Distributor Wholesale Price List" as of _____ )
Exhibit
B - Annual Sales Performance Schedule
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Last modified: November 1, 2001