Question: We are a Mexican Corp. and have a DISTRIBUTION AND REPRESENTATION AGREEMENT with a US Company, which is trying to initiate an anticipated cancellation of our contract arguing that we have not made enough efforts and showed sales results..We want to know is they have any legal basis to do that and if we have or not Mexico's TERRITORY EXCLUSIVITY.
CLAUSES
1. Services to be rendered. " YYYY, LLC " hereby retains " XXXX, LLC " to provide the sales services to " YYYY, LLC " as a Distributor and Sales Representative with the following terms:
a) Territory: Mexico and Centro America with the exclusion of ABC SA DE CV in Piedras Negras, Coahuila which has been assigned to another distributor.
b) " YYYY, LLC " reserves the right to sell to Original Equipment Manufacturers and non mining & aggregate end users
Responsibilities of " XXXX, LLC ":
a). Identify customers for " YYYY, LLC "s products;
b). Within such limitations relating to price, delivery and other key terms as " YYYY, LLC " may from time to time specify in writing, and subject to acceptance by " YYYY, LLC " (by e-mail or US postal) negotiate sales contracts as " YYYY, LLC " 's sales representative.
c). Monitor Requests for Quotations, Purchase Orders, Supply Contracts, negotiations, and performance by " XXXX, LLC "'s customers and END USERS, including acceptance of quality, product performance, delivery, payment terms, etc.
2. Compensation to " XXXX, LLC ":
a). End Users' Sales price of XXXX, LLC ", will be defined by " XXXX, LLC " according the competitive and market conditions for the specific product and/or services in the territory or region where " YYYY, LLC"'s products are sold.
b). Considering that " YYYY, LLC " price list' is quoted, FOB its Falkville, Alabama, USA, Plant, parties agree that " XXXX, LLC " will add the corresponding freight charges up to the Mexican border or to the final location of the customers plus the corresponding payable import tax to Mexico (if any), for every product or group of products to be shipped.
c). When acting as " YYYY, LLC "'s Distributor, " XXXX, LLC " will directly invoice the products and services provided by " YYYY, LLC" to end users and will be obliged to pay " YYYY, LLC" according the terms and payment conditions agreed between " YYYY, LLC" and " XXXX, LLC ".
(d) When acting as " YYYY, LLC "'s Sales Representative which will apply for special large customer's orders, " XXXX, LLC " will act only as a technical and selling liaison between " YYYY, LLC "'s and end users. In this case "YYYY, LLC " will be responsible for invoicing and collection of the amounts due, if credit was granted to the customers. " YYYY, LLC" will be, at the same time obliged to pay " XXXX, LLC " the sales' commissions agreed for these specific large purchase orders.
e). All payments to " YYYY, LLC" shall be in US dollars.
f). All payments to " XXXX, LLC " shall be in US dollars.
g) All payments to " XXXX, LLC " shall be deposited at the following Bank
Account number: # 111111111 of IXY Bank (IXY Bank) with ABA /RT No. 1111111111 under the name of XXXX, LLC .
3. Term of Aqreement. Effective from March 1st. 2011 and shall expire on March 1ST 2016 unless
Earlier terminated by i) mutual written agreement or ii) for not meeting objectives listed below. Neither expiration or termination of this Agreement shall terminate the obligation of "YYYY, LLC " to pay " XXXX, LLC " for services rendered with respect to sales following such date that result from orders received prior to such date and/or commissions described in clause4 -d) and 4-e).This agreement will be automatically renewed for an additional years for meeting, as shown below:
Objective (US Dollars)
Year 1 $200,000
Year 2 $500,000
Year 3 $750,000
Year 5 $1,000,000.
CLAUSES
1. Services to be rendered. " YYYY, LLC " hereby retains " XXXX, LLC " to provide the sales services to " YYYY, LLC " as a Distributor and Sales Representative with the following terms:
a) Territory: Mexico and Centro America with the exclusion of ABC SA DE CV in Piedras Negras, Coahuila which has been assigned to another distributor.
b) " YYYY, LLC " reserves the right to sell to Original Equipment Manufacturers and non mining & aggregate end users
Responsibilities of " XXXX, LLC ":
a). Identify customers for " YYYY, LLC "s products;
b). Within such limitations relating to price, delivery and other key terms as " YYYY, LLC " may from time to time specify in writing, and subject to acceptance by " YYYY, LLC " (by e-mail or US postal) negotiate sales contracts as " YYYY, LLC " 's sales representative.
c). Monitor Requests for Quotations, Purchase Orders, Supply Contracts, negotiations, and performance by " XXXX, LLC "'s customers and END USERS, including acceptance of quality, product performance, delivery, payment terms, etc.
2. Compensation to " XXXX, LLC ":
a). End Users' Sales price of XXXX, LLC ", will be defined by " XXXX, LLC " according the competitive and market conditions for the specific product and/or services in the territory or region where " YYYY, LLC"'s products are sold.
b). Considering that " YYYY, LLC " price list' is quoted, FOB its Falkville, Alabama, USA, Plant, parties agree that " XXXX, LLC " will add the corresponding freight charges up to the Mexican border or to the final location of the customers plus the corresponding payable import tax to Mexico (if any), for every product or group of products to be shipped.
c). When acting as " YYYY, LLC "'s Distributor, " XXXX, LLC " will directly invoice the products and services provided by " YYYY, LLC" to end users and will be obliged to pay " YYYY, LLC" according the terms and payment conditions agreed between " YYYY, LLC" and " XXXX, LLC ".
(d) When acting as " YYYY, LLC "'s Sales Representative which will apply for special large customer's orders, " XXXX, LLC " will act only as a technical and selling liaison between " YYYY, LLC "'s and end users. In this case "YYYY, LLC " will be responsible for invoicing and collection of the amounts due, if credit was granted to the customers. " YYYY, LLC" will be, at the same time obliged to pay " XXXX, LLC " the sales' commissions agreed for these specific large purchase orders.
e). All payments to " YYYY, LLC" shall be in US dollars.
f). All payments to " XXXX, LLC " shall be in US dollars.
g) All payments to " XXXX, LLC " shall be deposited at the following Bank
Account number: # 111111111 of IXY Bank (IXY Bank) with ABA /RT No. 1111111111 under the name of XXXX, LLC .
3. Term of Aqreement. Effective from March 1st. 2011 and shall expire on March 1ST 2016 unless
Earlier terminated by i) mutual written agreement or ii) for not meeting objectives listed below. Neither expiration or termination of this Agreement shall terminate the obligation of "YYYY, LLC " to pay " XXXX, LLC " for services rendered with respect to sales following such date that result from orders received prior to such date and/or commissions described in clause4 -d) and 4-e).This agreement will be automatically renewed for an additional years for meeting, as shown below:
Objective (US Dollars)
Year 1 $200,000
Year 2 $500,000
Year 3 $750,000
Year 5 $1,000,000.
