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Exporting Basics Appendix

APPENDIX: Sample Export Management Agreement

This Agreement (the "Agreement") dated as of the _________ day of __________, 2001, is made between ABC Co., a Maryland corporation with its principal place of business at Baltimore, Maryland ("The Company”) and XYZ Co., a Maryland company with its principal place of business at Baltimore, Maryland (“XYZ)

The parties agree as follows:

1.            Appointment as Exclusive Agent. The Company appoints XYZ as its exclusive representative in the countries and territories covered by this Agreement. XYZ hereby accepts such appointment and agrees to use its best efforts to ["scope of duties"], subject to the provisions and conditions of this Agreement. The parties agree that additional duties may be added to the duties of the Agent by the parties' mutual agreement.

2.            Territory; Other Agreements Not Barred. XYZ's sales territory shall consist of _________ (the "Territory/Country"). [XYZ recognizes that the Company has appointed, or may appoint, other representatives for the (scope of duties) in other territories and has appointed, or may appoint, other sales representatives in the Territory/Countries for purposes other than (scope of duties).]

Additional countries may be added to the Territory/Countries by the parties' mutual agreement.

          [OR EXCLUSIVITY]

3.            Terms of Engagement. If XYZ should develop a lead in a country not covered in paragraph 2, the Company may grant permission by letter to follow through and negotiate a sale naming foreign prospect, the country, and stating that the terms of this Agreement will apply.

         During the period covered by this Agreement, all sales made directly or indirectly to any customer in any of the countries named above will be credited to XYZ.

       All future sales of Products and Materials in the Territory will be credited to XYZ whenever XYZ negotiates the sale or there is a repeat order by a company, organization or individual whose first order was obtained by XYZ. For each such repeat sale, a commission of ___ percent of the selling price will be paid to XYZ.

       All foreign letters of inquiry or orders from countries named in paragraph 2 inadvertently addressed to manufacturer will be forwarded to XYZ for proper disposition.

       XYZ shall be notified immediately of any price changes.

       Terms of payment by overseas customer shall be subject to approval by the Company.

       During the term of this Agreement, XYZ shall receive a commission of ___ percent, based on the sales price (F.O.B. factory) of all products and materials sold within the countries named in paragraph 2 above.

      Commissions due XYZ shall be paid immediately upon receipt of payment from overseas customer.

      This Agreement will remain in effect for a period of two (2) years from this date and will automatically be renewed on a year to year basis after the termination date unless either party desires a cancellation.

      This Agreement may be cancelled by either party upon ninety (90) days written notice.

      Should it be considered desirable at a later date to extend export sales to countries not covered in paragraph 2, the Company agrees to discuss with XYZ the feasibility of incorporating those additional areas into this Agreement.

4.            Company's Duties. The Company will provide XYZ with all necessary sales and promotional literature and any and all technical or other support which XYZ, in its sole discretion, determines to be necessary to allow XYZ to fulfill its obligations under the terms of this Agreement.

              The Company hereby agrees to provide XYZ with samples (If practicable as to size, weight, etc.), catalog sheets, promotional material, price and discount schedules.

         The Company will allow designated personnel from XYZ to visit the Company’s plant, observe production processes and will aid XYZ in acquiring knowledge of the products to be exported and their uses.

         The Company hereby pledges full cooperation in furnishing needed information and assistance pertinent to the development of overseas sales.

         The Company will permit XYZ to use the Company's letterheads and represent itself as the Company's authorized representative or international marketing department in communications with overseas customers.

5.            XYZ's Duties. XYZ shall use its best efforts to [scope of duties], as provided for herein within the Territory/Country, and will abide by the Company's policies as they are communicated to it. Agent will devote such time as may be commercially-reasonably necessary for the purpose of (scope of duties). XYZ will, in a timely fashion, provide the Company with a business report (to be updated on a regular basis, but not less than once a month), including an outline of its sales and marketing plan and the method and manner in which its activities on behalf of the Company will be conducted.

       XYZ will, as the authorized representative or international marketing department of the Company, render the following services:

       Research foreign markets.

       Analyze export potential for manufacturer's products.

       Use its best efforts to promote and generate export sales.

       Correspond with foreign buyers and prospective buyers, translating and responding in foreign languages when necessary.

       Assemble cost figures for quotations including cost of product, inland freight, overseas packing, marine cargo insurance, freight forwarding, documentation, ocean freight or air freight, etc., all included and quoted on pro-forma invoices per agreement of the Company and foreign customer (typically FOB, C&F or CIF foreign port).

       Assure and handle payment arrangements through banks experienced in international banking through letters of credit, sight or time drafts, Foreign Credit Insurance, etc.

       Recommend and arrange appropriate exhibition and promotion of the Company’s products in foreign countries.

       Travel overseas to promote the Company’s products and screen prospective distributors, dealers, agents, etc. Allowances for extensive travel, extra activities and sales promotions will be negotiated before incurred.

       Help with preparation and distribution of advertising and sales promotional literature to meet requirements of foreign buyers.

       Research and recommend overseas advertising, publicity, and sales promotional ideas to best promote manufacturer's products in selected international markets

6.     Covenant Not to Compete. Neither party, nor any affiliated company (which the parties agree shall mean any entity in which either party holds, directly or indirectly, at least 20% of the issued share capital) shall engage, directly or indirectly, for the duration of this Agreement and for a period of five (5) years following the termination of this Agreement in the solicitation of contracts or work for any company having an organization, purpose and business plan substantially similar to those of the other party to this Agreement.

7.     Confidentiality Assured; Remedies. Except as may be required by law, neither party shall use or disclose confidential information obtained, either directly or indirectly, from the Company, as the case may be, concerning the other party's business development and strategy, internal operations, financing or business activities.

         The parties acknowledge and agree that it would be difficult to fully compensate the other for damages resulting from the breach or threatened breach of the on-going provisions, and, accordingly, agrees that the aggrieved party shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions, permanent injunctions, to enforce such provisions upon proving that it has suffered or that there is a substantial probability that it will suffer irreparable harm, and without the necessity of posting any bond or other undertaking in connection therewith. This provision with respect to injunctive relief shall not however, diminish the aggrieved party's right to claim and recover damages.

8.            Assignment and Delegation. Neither party may assign any rights or delegate any duties hereunder, without the express written consent of the other.

9.            Modification. This contract contains the entire agreement of the parties. No representations were made or relied upon by the other party, other than those that are expressly set forth. No agent, employee or other representative of either parties are empowered to alter any term of this Agreement, unless done in writing and signed by an executive officer of each of the respective parties.

10.        Controlling Law. The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of Maryland, without regard to conflict of law principles.

11.        Arbitration. Any and all claims, disputes, controversies, or differences arising between the parties out of or in relation to or in connection with this Agreement, or the breach thereof, which cannot be satisfactorily settled by correspondence or mutual conference between the parties shall be determined by arbitration upon the written request of either party hereto, in accordance with Rules of Arbitration of the International Chamber of Commerce; provided, however, the site of arbitration shall be (______) if XYZ is the respondent and Baltimore, Maryland, if the Company is the respondent. The decision of an arbitrator or arbitrators, as the case may be, in such arbitration shall be final and binding upon the parties, and judgment thereon may be entered in any court having jurisdiction thereof or application may be made to such court for judicial acceptance of the award and/or order of enforcement, as the case may be.

12.        No Waiver. Any waiver or the failure of either party to this agreement to object to or take affirmative action with respect to any conduct of the other which is in violation of the terms of this Agreement shall not be construed as a waiver of the violation of breach, or of any future violation, breach or wrongful conduct.

13.        Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

14.        Third-Party Agreements Barred. In consideration of XYZ's diligent representation and performance of its duties on behalf of the Company, the Company covenants and agrees not to enter into any agreement with any third-party to which XYZ has introduced it, or with which XYZ has worked or in any other way dealt on behalf of the Company, during the term of this Agreement, and any continuation or renewal thereof, and for a period of five (5) years thereafter.


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