Publications & Resources
ERA Contract Guidelines for Negotiating an Agreement with Sub-Representatives
THIS SUB-REPRESENTATIVE AGREEMENT (the "Agreement") is made
as of this _____ day of ________, 200__, between __________, a __________
corporation (the "Manufacturers' Representative"), and __________,
a __________ corporation (the "Sub-Representative").
W I T N E S S E T H
WHEREAS, The Manufacturers' Representative and the Principal (the "Principal")
whose name is set forth on Schedule A attached hereto, as the same may
be amended from time to time, are parties to a Sales Representative Agreement
(the "Sales Agreement"), pursuant to which the Manufacturers'
Representative is the exclusive sales representative in a designated territory
(the "Territory") for the sale of certain products (the "Products")
of the Principal; and
WHEREAS, Manufacturers' Representative and Sub-Representative desire
that Sub-Representative represent the Products within the Territory in
accordance with the terms, conditions and covenants set forth in the Sales
Agreement and this Agreement;
NOW, THEREFORE, in consideration of the premises, and of the covenants,
representations, and warranties made herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE. Manufacturers' Representative appoints
Sub-Representative as its exclusive sub-representative of the Products
in the Territory, and Sub-Representative accepts the appointment and agrees
to sell and promote the Products within such Territory. The Sub-Representative
shall solicit orders for Products solely within the Territory, and shall
not solicit orders for Products in any geographic area other than the
Territory. Manufacturers' Representative agrees that, during the term
of this Agreement, it will not appoint any other sub-representative to
sell any Products in the Territory.
2. PRODUCTS.
(a) The Products to be promoted and sold by the Sub-Representative shall
at all times be all of those Products which Manufacturers' Representative
is authorized to promote and sell in accordance with the Sales Agreement;
Manufacturers' Representative shall give prompt written notice to Sub-Representative
of any additions or deletions which may be made by the Principal to the
Products to be promoted and sold by the Manufacturers' Representative
and the Sub-Representative.
(b) Unless otherwise authorized by Manufacturers' Representative in writing,
Sub-Representative shall not, during the term of this Agreement, act as
a representative for, or otherwise sell or promote, products which compete
with the Products.
3. COMPENSATION.
(a) Sub-Representative shall be entitled to receive from Manufacturers'
Representative as compensation for the services rendered hereunder a commission
in an amount equal to Manufacturers' Representative's Gross Commissions
(as hereinafter defined) multiplied by ________ percent (__%). For purposes
of this Agreement, Gross Commissions means the gross amounts actually
received by the Manufacturers' Representative from the promotion and sale
by the Sub-Representative of the Products. All amounts due pursuant to
this Section shall be paid not later than the fifteenth (15th) day of
each month for all commissions actually received by the Manufacturers'
Representative from the Principal during the immediately preceding month.
(b) Manufacturers' Representative shall provide the Sub-Representative,
not later than the fifteenth (15th) day of each month, an accounting of
all orders shipped and all payments actually received on account thereof
during the immediately preceding month for which the Sub-Representative
is eligible to receive compensation hereunder. Upon reasonable notice
and during regular business hours, the Sub-Representative shall have access
to the Manufacturers' Representative's books and records pertaining to
its sales revenues and related expenses in order to verify the accounting
called for in this Section 3(b).
(c) Manufacturers' Representative shall have the right to charge against
any amounts payable to the Sub-Representative under this Agreement, an
amount equal to ________ percent (__%) of any chargeback made by the Principal
against commissions payable by the Principal to the Manufacturers' Representative.
4. TERM AND TERMINATION. This Agreement shall be effective as of the
date hereof, and shall continue until terminated by either party upon
not less than ninety (90) days' prior written notice given by the terminating
party to the non-terminating party; provided, however, that this Agreement
may be terminated for "cause" upon not less than ten (10) days'
prior written notice given by the terminating party to the non-terminating
party. For purposes of this Agreement, "cause" means a material
breach of a material obligation or duty of the non-terminating party contained
in this Agreement. Following the termination of this Agreement, the Manufacturers"
Representative shall continue to pay the Sub-Representative in accordance
with Section 3 above all commissions payable with respect to orders booked
on or prior to the effective date of such termination.
5. CONFIDENTIAL INFORMATION. During the term of this Agreement and for
a period of two (2) years thereafter, neither party shall disclose to
any third person Confidential or Proprietary Information of the other
party. For purposes of this Agreement, "Confidential or Proprietary
Information" includes, but is not limited to, methods, operations,
plans for doing business, trade secrets, customer lists, and other business
matters peculiar to and pertaining to its business. Information already
in the public domain through no fault of either party hereto shall not
be Confidential or Proprietary Information.
6. SUB-REPRESENTATIVE'S DUTIES AND RELATIONSHIP TO MANUFACTURERS' REPRESENTATIVE.
During the term of this Agreement:
(a) Sub-Representative shall conduct all of its business in the name of
Manufacturers' Representative; and in connection therewith, Sub-Representative
shall maintain a sales office and sales and support staff, and use its
best efforts to sell and promote the Products within the Territory.
(b) Sub-Representative shall pay all expenses whatsoever of its office
and activities and be responsible for the acts and expenses of its employees.
(c) Sub-Representative shall not, without Manufacturers' Representative's
or the Principal's prior written approval, alter, enlarge, or limit orders,
make representations or guarantees concerning Products, or accept the
return of, or make any allowance for, Products.
(d) Sub-Representative shall furnish to Manufacturers' Representative
any information which it may have from time to time relative to the credit
standing of any of its customers for Products.
(e) If for any reason Sub-Representative takes possession of any Products,
the risk of loss or damage to, or destruction of, such Products shall
be borne by the Sub-Representative, and the Sub-Representative shall indemnify
and hold Manufacturers' Representative harmless against all losses, costs,
damages or expenses whatsoever, including reasonable attorney's fees and
costs, resulting from any such loss, damage or destruction.
(f) Sub-Representative shall attend, at its own expense, all meetings,
conventions, and trade shows reasonably required by Manufacturers' Representative.
7. MANUFACTURERS' REPRESENTATIVE'S DUTIES AND RELATIONSHIP TO SUB-REPRESENTATIVE.
During the term of this Agreement:
(a) Manufacturers' Representative shall furnish Sub-Representative, at
no expense to Sub-Representative, samples, catalogs, literature and any
other materials available from the Principal for the promotion and sale
of its Products. All literature, samples, or other materials so provided
remaining in the possession of Sub-Representative shall be returned to
Manufacturers' Representative upon its reasonable request.
(b) Manufacturers' Representative shall at all times keep Sub-Representative
informed about the Principal's sales and promotional policies and programs
affecting the Territory, and shall refer all inquiries it receives from
within the Territory to Sub-Representative.
(c) Manufacturers' Representative shall furnish Sub-Representative with
copies of all correspondence, quotations, orders, invoices and shipping
documents sent or received by it relating to sales of Products in the
Territory.
(d) The parties hereto acknowledge that (i) all orders are subject to
acceptance or rejection by the Principal; (ii) the Principal has exclusive
control over its prices, discounts, specifications, and the terms governing
the sale of its Products; (iii) neither Manufacturers' Representative
nor Sub-Representative may accept orders in the Principal's name or make
price quotations or delivery promises without the Principal's prior approval;
and (iv) the collection of payments from customers is the responsibility
of the Principal.
8. REPRESENTATIONS AND WARRANTIES.
(a) Manufacturers' Representative represents and warrants to the Sub Representative
as follows:
(i) Manufacturers' Representative is a corporation duly organized and
validly existing under the laws of the State of__________.
(ii) All necessary corporate and other actions have been taken by Manufacturers'
Representative to authorize it to enter into this Agreement and perform
in accordance with this Agreement. This Agreement is binding on the
Manufacturers' Representative and enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general equitable principles.
(iii) Neither the execution, delivery, or performance of this Agreement
will violate or conflict with any provision of the Articles of Incorporation
or Bylaws of the Manufacturers' Representative, or cause a violation
or breach of any material statute, rule, ordinance, lease, bond, agreement,
or other instrument to which it is a party or by which it is bound,
including, but not limited to, any applicable Sales Agreement.
(b) Sub-Representative represents and warrants to the Manufacturers'
Representative as follows:
(i) Sub-Representative is a corporation duly organized and validly
existing under the laws of the State of ________.
(ii) All necessary corporate and other actions have been taken by Sub-Representative
to authorize it to enter into this Agreement and perform in accordance
with this Agreement. This Agreement is binding on the Sub-Representative
and enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally or by general
equitable principles.
(iii) Neither the execution, delivery, or performance of this Agreement
will violate or conflict with any provision of the Articles of Incorporation
or Bylaws of the Sub-Representative, or cause a violation or breach
of any material statute, rule, ordinance, lease, bond, agreement, or
other instrument to which it is a party or by which it is bound.
9. RELATIONSHIP OF THE PARTIES.
(a) Nothing in this Agreement shall be construed to constitute either
the Manufacturers' Representative or the Sub-Representative as the partner
or employee of the other, or to constitute Sub-Representative as the partner
or employee of the Principal, it being intended that Sub-Representative
is and shall remain an independent contractor solely responsible for its
own actions.
(b) The Sub-Representative shall not have any right, power, or authority
to enter into any agreement, arrangement, or understanding, or to incur
any indebtedness, for or on behalf of the Manufacturers' Representative,
or to bind the Manufacturers' Representative in any way, and any such
act in violation of this Section 9(b) shall be null and void and of no
effect.
10. ARBITRATION.
(a) Any controversy, claim or dispute arising out of or relating to this
Agreement, including the formation, validity, or breach thereof, whether
arising during or after the period of this Agreement, shall be settled
by arbitration in accordance with the rules of the American Arbitration
Association, and the decision of the arbitrator shall be final and binding
upon the parties. Nothing in this paragraph, however, shall prevent the
parties from seeking injunctive or other equitable relief from a state
or federal court of competent jurisdiction.
(b) The arbitration shall be conducted by one neutral arbitrator, who
shall be selected in accordance with the rules of the American Arbitration
Association. Any arbitration proceedings hereunder shall take place in
the location closest to the principal place of business of the Manufacturers'
Representative in which the American Arbitration Association maintains
an office. The arbitrator shall issue a written decision and set forth
the reasons for said decision. Judgment upon the award rendered by the
arbitrator may be entered in any federal or state court having competent
jurisdiction thereof. The costs of arbitration, including the fees of
the arbitrator, shall be borne equally. Each side shall bear its own attorneys'
fees and costs, and punitive damages shall not be allowed.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State in which the Manufacturers' Representative has its
principal place of business.
(b) All Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given
(i) by personally delivering the notice; or
(ii) by mailing the notice by certified mail, return receipt requested,
with postage prepaid. Notice is deemed to be served and effective when
received. Any party may change the address to which notices and other
communications hereunder are to be sent to such party by giving the
other party written notice thereof in accordance with this provision.
Notices shall be given as follows:
If to Manufacturers' Representative:
_____________________
_____________________
Attn: _______________
If to Sub-Representative:
_____________________
_____________________
Attn: _______________
(c) No party may assign any of its rights or obligations under this Agreement
without the prior written consent of the others. This Agreement shall
be binding upon the parties hereto, and their respective successors and
permitted assigns.
(d) This Agreement is the entire Agreement between the parties pertaining
to the subject matter hereof, and supersedes all previous agreements,
negotiations or understandings, written or oral, between the parties.
(e) This Agreement may only be modified, amended or supplemented by a
writing executed by the parties hereto.
(f) No term or provision of this Agreement shall be deemed waived, and
no breach or default shall be deemed excused, unless such waiver, consent
or excuse is in writing, and signed by the parties hereto. A waiver by
a party hereto of any breach or default by the other party to this Agreement
shall not constitute a continuing waiver, or a waiver of any subsequent
breach or default hereunder by the other party.
(g) The headings herein are inserted for convenience of reference only,
and same shall not serve to limit, expand or interpret the paragraphs
to which they apply, and shall not be deemed a part of this Agreement.
(h) In case any one or more of the provisions in this Agreement should
be declared by a court, arbitrator, or governmental agency or department
to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
(i) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Sub-Representative Agreement
to be executed and delivered as of the day and year first above written.
