DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT

 

This DISTRIBUTION AGREEMENT, herein referred to as the “Agreement,” is made and entered into on the [NTH] day of [MONTH], [YEAR], by and between:

 

[NAME OF COMPANY], an organization lawfully incorporated operating under the laws of the [COUNTRY, STATE, PROVINCE OR CITY] whose primary place of business is at [COMPLETE BUSINESS ADDRESS], herein referred to as the “Company”;

 

-AND-

 

[NAME OF COMPANY], an organization lawfully incorporated operating under the laws of the [COUNTRY, STATE, PROVINCE OR CITY] whose primary place of business is at [COMPLETE BUSINESS ADDRESS], herein referred to as the “Distributor.”

 

In this Agreement, Company and Distributor are collectively referred to as the “Parties.”

 

WHEREAS, in consideration of the mutual covenants, promises and agreements set forth herein, the Company desires to market and promote the Products in accordance with the descriptions outlined in Schedule A, herein referred to as the “Products,” through the Distributor, the Parties agree and confirm as follows:

 

TERMS AND CONDITIONS

  1. DEFINITIONS

As set forth in this Agreement, the succeeding terms shall have the following prescribed meanings, and such meanings shall apply to terms in the singular and plural form as follows:

 

  1. “Agreement” shall refer to this agreement, including the attached Schedules and supplementary documents attached as reference, as each, at any time, may be revised, modified or amended pursuant to the terms and conditions of this Agreement.

 

  1. “Accessories” pertain to the accessories expressly enumerated in Exhibit A as attached in this Agreement, which include without limits any specific devices or equipment supplied by the Company and utilized in relation to the movement of the Goods. At any time, accessories may be removed from or added to Exhibit A. At its discretion and any given time, Company may modify, revise or change corresponding specifications and design by sending prior written notice of such modifications, revisions or changes to Distributor. Changes shall be executed and implemented within [NUMBER] days from the date notice is transmitted to Distributor.

 

  1. “Affiliate” is defined as any company, organization or business controlling, controlled by, or subjected to common control by the Company. Affiliate pertains to any individual, corporation or other entity:

 

  1. Which has direct or indirect ownership, currently or thereafter, of [PERCENT]% more of any class of shares of Company or is, currently or thereafter, subject to the direct or indirect control of Company.
  2. [PERCENT] or more of any class of shares of which Company, or a party specified in paragraph (i), is the director or indirect owner, currently or thereafter or of which Company, or a party as defined in paragraph (i), has, currently or thereafter, direct or indirect control.

 

  1. “Customer” is the person who makes a purchase or rents Products from Distributor.

 

  1. “Delivery Point” pertains to the facilities of the Company’s facilities located at [COMPLETE FACILITY ADDRESS]. This also means the facilities of the Distributor located at [COMPLETE FACILITY ADDRESS].

 

  1. “Exhibit” refers to a document exhibiting specific pieces of information, attached at the end of the agreement.

 

  1. “Goods” means those items outlined and specified in Exhibit B. Goods may be removed from or added to Exhibit B. The Company may exercise sole discretion at any time to modify, revise or change their specifications and design by sending a prior written notice of such modifications, revisions or changes to Distributor. Changes shall be executed and implemented within [NUMBER] days from the date notice is transmitted to Distributor.

 

  1. “Products” cover the meanings set out under Accessories, Goods and Spare Parts.

 

  1. “Spare Parts” ascribe to the following meanings:

 

all elements and sections of the Goods.

 

any specific device, tools or equipment used in relation to the upkeep or deployment of the Goods. Company guarantees that a full extensive list of Spare Parts is outlined in Exhibit C. Spare parts may be removed from or supplemented to Exhibit C. The Company may exercise sole discretion, at any time, to modify, revise or change their specifications and design by sending a prior written notice of such modifications, revisions or changes to Distributor. Changes shall be executed and implemented within [NUMBER] days from the date notice is transmitted to Distributor.

 

  1. This DISTRIBUTION AGREEMENT, herein referred to as the “Agreement,” is made and entered into on the [NTH] day of [MONTH], [YEAR], by and between:

 

[NAME OF COMPANY], an organization lawfully incorporated operating under the laws of the [COUNTRY, STATE, PROVINCE OR CITY] whose primary place of business is at [COMPLETE BUSINESS ADDRESS], herein referred to as the “Company”;

 

-AND-

 

[NAME OF COMPANY], an organization lawfully incorporated operating under the laws of the [COUNTRY, STATE, PROVINCE OR CITY] whose primary place of business is at [COMPLETE BUSINESS ADDRESS], herein referred to as the “Distributor.”“Specifications” refers to the specifications and details expressly outlined in Exhibit D.

 

(k)      “Territory” refers to these specific geographic area or areas: [PROVIDE SPECIFIC DETAILS ABOUT AREA OR AREAS].

 

(l)       “Trademark” is the registered or unregistered logo, service mark, trademark, brand, insignia, label or other commercial moniker or description used to symbolize, show, exemplify, represent or describe the Company’s Products specified in Exhibit E.

 

 

  1. DISTRIBUTOR APPOINTMENT

 

The Distributor is hereby appointed by the Company as the distributor of its Products within the given Territory. Distributorship is nonexclusive and Distributor has expressly accepted the position offered by the Company. The Company understands that it is lawful for distributors located in another place to supply commercial or consumable Products within the given Territory and that it does not have the right under law to prevent distributors from supplying such Products.

 

Distributor is prohibited from selling Products or promote Products for sale beyond the borders of the specified Territory. Distributor is discouraged from setting up an office or warehouse beyond the borders of the specified Territory in order to sell the Products.

 

 

  1. REFERRALS

 

Should any Company or any Affiliate receive an inquiry from any party requesting information about the purchase of Products in the given Territory (besides Distributor or a party authorized by Distributor), the Company shall direct, or shall instruct that Affiliate to direct said party to Distributor for managing.

 

 

  1. RELATIONSHIP OF PARTIES

 

(a)      Distributor is not the authorized representative or agent of Company, regardless of purpose. Distributor is an independent contractor and, as specifically set forth in this Agreement, is not vested with the right or authority to acquire, undertake or develop in writing or otherwise, any warranty over employees under the Company’s complete control as Company is fully accountable for their actions and lapses.

 

(b)      At its own expense, Distributor shall, at its own expense, during the term of this Agreement and any extension thereof, provide a comprehensive insurance plan under any [SPECIFIC LABOR OR COMPENSATION LAW] to be implemented in the [COUNTRY, STATE, PROVINCE OR CITY] or other appropriate jurisdiction, including all persons employed by and tasked to carry out or perform specific provisions or duties and responsibilities of this Agreement. Distributor shall furnish Company with sufficient proof that such insurance has been maintained or enforced in accordance with the Company’s request.

 

(c)      Distributor shall be solely liable for payroll taxes mandates and payroll taxes mandated by [SPECIFIC LAW] or other mandatory fees or payments required under any laws of a similar nature in any appropriate jurisdiction covering persons employed by and assigned to carry out or perform specific duties and responsibilities.

 

(d)      No provision set forth in this Agreement shall be construed as a development of any joint venture agreement or partnership between the Parties.

 

 

  1. NEW PRODUCTS

 

If Company or any Affiliate, at present or thereafter, produces or distributes, or volunteers to  produce or distribute, any product besides the Products outlined in this Agreement, Company shall promptly inform, or cause such Affiliate to inform, Distributor of the other products to be produced or distributed and of all specifications related to that product. Distribution rights may be granted to the Distributor by the Company for that product to be produced or distributed within the specified Territory, or any area thereof. As may be requested, Company shall bestow, or shall cause the specific Affiliate to bestow, such rights to distribute to Distributor subject to terms and conditions, the nature of which should be similar to the provisions on Products set forth in this Agreement.

 

In the event Distributor fails to acquire those distribution rights or acquires them only for certain areas of the given Territory, and consequently, Company or an Affiliate wishes to give those distribution rights, covering an entire Territory or certain areas, to another party, Company shall first, or shall instruct such Affiliate to first, write the offer.

 

Terms and conditions of the offer shall be expressly provided. Said offer shall have an extensive description of the product, its elements and operations related to its production or distribution.

 

Further details about the product or the offer may be requested by the Distributor and Company shall provide, or shall instruct the appropriate Affiliate, to provide the specific details in a timely manner. In the event Distributor is unable to commit to such offer, Company or its Affiliate may offer the product to another party for manufacture or distribution in the specified Territory. However, the Company or its Affiliate shall not make an offer with conditions more favorable than those previously presented to Distributor. Should the Company or the Affiliate negotiate the offer to a different party, Company shall first, or shall instruct the Affiliate first to, negotiate the terms and conditions with the Distributor while faithfully complying with the procedures outlined above.

 

 

  1. SERVICE, STORAGE FACILITIES AND SERVICE OF DISTRIBUTOR

 

(a)      At its expense, Distributor shall employ the services of and manage an organization specializing in company sales and marketing, servicing and handling materials within the Territory, staffed with competent personnel, as may be required, so that Distributor is able to deliver or perform the terms and conditions set forth this Agreement.

 

(b)      At its expense, Distributor shall oversee facilities and staff within the Territory so that inspections, maintenance activities and other relevant servicing of Products sold and marketed by Distributor are not only reasonably priced, but also performed in a timely and adequate manner. Company shall be responsible for providing maintenance and service trainings, free of charge, to Distributor’s personnel, as designated by Distributor, in order to facilitate important functions of maintenance and servicing carried out by the Distributor.

 

(c)      At its expense and at all times, Distributor shall implement proper storage and maintenance practices for the inventory of Products. Such practices must comply with existing, appropriate instructions designated by Company on an indefinite basis.

 

(d)      At its expense, Distributor shall provide each Customer a copy of Company’s present, applicable operation and maintenance manual during the sale period. At such period and at its expense, Distributor shall supply to the customer a detailed explanation and demonstration of how to properly operate and maintain the Products.

 

(e)      Throughout the duration of the distributorship executed and implemented by this Agreement, including any extended period, Distributor shall send to the Company a prior written notice of the address of each product’s storage location, and the location of each facility built by Distributor for the purpose of selling, marketing and servicing the Products. Through its assigned agent and anytime during regular business hours, Company may inspect all aforementioned locations and facilities, including the operations being conducted.

 

 

  1. DISTRIBUTOR TRAINING

 

Following the execution and implementation of the Agreement, Company shall promptly and as may be practicable send to Distributor pertinent information, specifications, list of materials, instruction manuals and other technical records and documents necessary to empower Distributor to carry out the duties and responsibilities contemplated in this Agreement and, specifically, to comply with the warranty repairs outlined in Article 4 of this Agreement. Throughout the term of this Agreement and any extended period thereafter, Company shall continue to provide technical assistance to Distributor as the latter may reasonably require from time to time. All reasonable costs or expenses incurred by Company while providing technical assistance to Distributor shall be reimbursed by the Distributor.

 

 

  1. SPARE PARTS AND ACCESSORIES

 

Distributor shall maintain and store sufficient quantities of Spare Parts and Accessories in order to service the Goods. Spare Parts or Accessories that are not produced by Company shall not be utilized to service the Goods, unless the Company has released an express written approval.

 

 

  1. CANCELLATION AND TERMINATION OF THE AGREEMENT

 

9.1 Events of Default

 

The following transactions, situations or circumstances shall be construed as material incidents or events of default, referred to as “Event of Default,” by the appropriate party, referred to as the “defaulting party” in this Agreement.

 

In addition, without curtailing any other rights and remedies afforded to the non-defaulting party by law or in equity and with all due objectivity, the non-defaulting party, at its exclusive discretion, may choose to immediately terminate this Agreement by sending prior written notice of immediate termination to the other party within [NUMBER] days from the day the Event of Default occurred, explaining and providing adequate facts and information to support and prove the existence of such Event of Default.

 

This Distribution Agreement shall be discontinued and its affairs shall be deemed completed under the following conditions or situations:

 

(a)      Any party commits a material breach or violation of any material covenant, promise or representation stipulated in this Agreement, wherein defaulting party is unable to remedy such breach or violation within [NUMBER] days after written notice has been served, or within a specified remedy period as clearly expressed within the terms and conditions of this Agreement

 

(b)      A party attempts to arrange, for the sake of creditors or creditors of a party, any voluntary or involuntary insolvency, bankruptcy or assignment or should any action or undertaking commence in connection with any of the succeeding provisions and the same is not dismissed within [NUMBER] days after such institution.

 

(c)      Either party fails to pay payables set out in this Agreement in a timely or adequate manner. Unless otherwise provided by the provisions herein, in the event this Agreement is terminated for any reason, no party shall be free of or discharged from any obligation, responsibility or liability contemplated hereunder, accumulated at the time of termination.

 

9.2 Termination by the Company

 

This Agreement shall be terminated immediately by Company under any of the following conditions or situations:

 

(a)      If any of the parties shall be proclaimed insolvent or bankrupt.

(b)      In the event a petition is placed on any court declaring either of the party bankrupt, or if a restructuring provided under the [SPECIFIC BANKRUPTCY LAW] or any relevant statute, and such petition is not dissolved within [NUMBER] days or should a Bankruptcy Trustee or a Receiver or related entity is assigned to either party.

 

(c)      If Distributor is unable to pay Company within [NUMBER] days from the date payments are due as stated in this Agreement.

 

(d)      If Distributor otherwise materially breaches or violates the provisions of this Agreement, and such breach is not remedied within [NUMBER] days after written notice of breach or violation is served by Company.

 

9.3 Withdrawal

 

Parties may willingly withdraw from this agreement in accordance with any of the following circumstances, and provided said withdrawal is notified in writing, the effect of which is similar to the termination of this Agreement:

 

(a)      Either party becomes bankrupt, dies, is incapacitated, or resigns.

 

(b)      [NAME OF COMPANY] has a management or ownership change.

 

(c)      The sale, marketing or deployment of [NAME OF COMPANY]’s assets and properties.

 

(d)      One of the parties is found guilty of grave misconduct or any unauthorized action.

 

(e)      [OTHER]

 

9.4 Duties Upon Termination

 

  1. As long as termination does not stem from a material breach or violation of Section 13 and Section 25, the parties agree and confirm to continue their cooperation so as to systematically terminate the relationship.

 

  1. Immediately after termination, Distributor shall not be entitled to order or receive any supplementary copies of the Products. Consequently, Distributor’s rights, powers and licenses expressly provided in this Agreement shall likewise be terminated. Not more than [NUMBER] days from date of termination, all duplicates of any marketing materials, promotional documents, reports and other written information related to the Products that have been provided by Company should be returned by Distributor.

 

  1. All financial obligations or Products due or paid in advance shall be transmitted to owed party not more than [NUMBER] days from the time termination notice was served by the terminating party.

 

 

  1. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

 

Written information, designs, drawings, plans, engineering methods, documents, reports, technical instructions and technical data referring to the Products are considered by Distributor as trade secrets and thereby confidential and the exclusive property of Company.

 

At all times, for all intents and purposes, those confidential items shall be treated by Distributor in an off-the-record manner and, without the prior written consent of Company, shall not:

 

(i) be relayed by Distributor to any individual, corporation or entity, except to Distributor’s compensated employees who are obliged to use such items to sell, market, investigate, repair, maintain or service Products throughout the duration of the distributorship implemented by this Agreement or any extended period thereafter

 

(ii) be relayed to any individual, corporation or entity, or duplicated or utilized by Distributor, its staff, authorized representatives or agents from time to time after the natural expiration or early termination of the distributorship set forth in this Agreement or any extended period thereafter, except in the event such use of confidential information is deemed indispensable to the maintenance or servicing of Products still subject to the warranty during the period of expiration or termination. Further, in accordance with this Section, Company may set as a provision to any disclosure by Distributor that any compensated staff to whom disclosure is to be made, is covered in this confidential agreement, enforceable by Company and contemplating terms favorable to the Company

 

 

  1. TERMS OF PURCHASE AND SALE OF PRODUCTS

 

(a)      Distributor shall purchase Product requirements from Company. Said requirements shall include:

 

(i) purchasing and managing sufficient supplies and quantities of Products, so that Distributor is able to perform its duties and responsibilities under this Agreement

(ii) a minimum of one (1) demonstration model or sample of the Goods and Accessories.

 

(b)      Each order placement for Products transported by Distributor to Company shall be subject to the written consent and express acceptance of Company, and Company may, at its sole discretion, accept or reject Product orders without justification to Distributor as to its reason for rejecting an order.

 

(c)      Company shall furnish sufficient Products to Distributor and in doing so, enables Distributor to meet expected Product demand within the specified Territory.

 

(d)      All orders placed for Products transported by Distributor to Company shall be considered accepted by Company during the time such orders are received by Company, so long as such orders faithfully comply with the provisions of this Agreement and Company shall deliver all accepted orders accordingly. Company shall notify Distributor of its receipt and acceptance of each written order within [NUMBER] days from the date order is received.

 

(e)      Except for those Products required by Distributor to carry out advertising campaigns or for the purpose of demonstration, all Products that the Distributor has purchased shall be purchased exclusively for the purpose of lease or commercial resale.

 

 

  1. ORDER PROCEDURE

 

(a)      Each order placed on Products that the Distributor issues to Company under this Agreement shall state that it is an order and shall further clarify or expressly note the delivery date or dates and the specific description and volume of Products to be transported and delivered on each of the specified dates. An order placed for Products shall not set a delivery date less than [NUMBER] days after the date order is made effective and delivered to Company.

 

(b)      The individual contracts for the sale of Products established after Distributor has forwarded order to Company in compliance with the terms of this Agreement shall naturally incorporate, for as long as appropriate, the terms and conditions set forth herein, shall be governed only by those terms and conditions and shall not be affected by any contradictory or supplemental provisions added to any exchanged documents.

 

 

  1. CANCELLATION OF ORDERS

 

Should Distributor cancel orders, such cancellation shall be made in writing. If cancellation is not initially relayed in writing, it shall consequently be confirmed in writing. In the event Distributor cancels an order that has already been accepted by Company, Distributor shall be responsible for refunding the Company for any cost resulting from such order, incurred by Company before it was notified by Distributor of said cancellation.

 

 

 

 

  1. PURCHASE PRICE

 

The prices and applicable discounts for Goods, and other appropriate perks, are expressly outlined in Exhibit B. The prices and applicable discounts for Accessories, along with other perks, are specified in full in Exhibit A. The prices and applicable discounts for Spare Parts, along with appropriate perks, are completely stated in Exhibit C. All prices are Free on Board (FOB) the Delivery Point. In the event the price for any Product is not expressly specified on Exhibits A, B and C and Distributor proceeds to order such a Product from Company, the parties, after agreeing on a reasonable price and after negotiating in good faith, shall declare their intention to effect a contract of sale for that Product, the terms of which will be mutually determined by the Parties.

 

 

  1. PRICE CHANGES

 

In the exercise of its sole discretion, the Company has the right to change or modify prices or implement discounts appropriate to the Products. Company shall provide prior written notice to Distributor in the event it decides to modify or alter prices within [NUMBER] days before modifications or changes are set to take effect. As a result, based on the date indicated in the Distributor’s receipt, price change or discount notices shall remain enforceable to all orders received by the Company before the effective date of modification.

 

 

  1. PACKAGING

 

At its expense, Company shall package all Products in strict compliance with Company’s established packing standards and procedures, which shall be necessary to allow shipment of the Products across the given Territory; however, under the condition that Distributor requires a modification, revision or alteration of standards and procedures, Company shall oversee the requested modification, revision or alteration and Distributor shall be accountable for any reasonable Company expense arising from the implementation and execution of such altered standards and procedures or which go beyond the costs and expenses the Company normally incurs in compliance with standards and procedures.

 

 

  1. DELIVERY AND RISK OF LOSS

 

All Products sold and delivered by Company to Distributor in compliance with the obligations under this Agreement shall be made title to and Free on Board (FOB) the Delivery Point, upon which risk of loss of Products shall be sent from Company to Distributor. Distributor shall take charge of the transport and mobilization of Products, but if required by the Distributor, Company shall, at the expense of Distributor, help Distributor in finalizing such arrangements. Distributor shall also obtain insurance for the transported and delivered Products, and it is imperative that said insurance shall be the type and have provisions relevant to the port of shipment. Should Company be required to assist Distributor in scheduling the transportation and mobilization of Products, Distributor shall refund the Company for all incurred applicable costs immediately after their delivery to Distributor, including, but not limited to, insurance, transportation, handling, loading and unloading, servicing and storage. Distributor shall take responsibility for all financial obligations and charges, such as customs duty, sales tax and other pertinent fees acquired with regard to the Products, after the Products are sent for Delivery to the forwarder or carrier.

 

 

  1. INSPECTION AND ACCEPTANCE

 

Immediately after receiving the shipped Products, Distributor shall inspect and check the quality of the shipment to ascertain whether any item or items added to the shipment are sufficient in quantity, and if it is damaged or destroyed. Not more than [NUMBER] days after receiving the shipment, Distributor shall send a written notice to the Company regarding defects, damage or quantity shortage, which Distributor asserts occurred during the time of delivery. Not more than [NUMBER] days after receiving such notice, Company will inspect incidents of defects, damages or shortages and report to Distributor its verdict. Company shall also request Distributor to replace any defect or damage or fill in any shortage that transpired at the time of delivery, as determined by the company in its sole discretion.

 

 

  1. PAYMENT

 

Company may send an invoice to Distributor for specified Products upon delivery and acceptance. Each applicable invoice shall be paid not more than [NUMBER] days after Distributor receives the invoice. After Company sends a written notice Company to Distributor, Payment shall be made in [SPECIFIC CURRENCY] to a prescribed bank account.

 

 

  1. ENTIRE AGREEMENT

 

This Agreement serves as the entire agreement and understanding of the parties and no covenants, commitments, agreements, or understandings shall be entered into by the parties other than those stipulated herein. No alteration, waiver, change, revision, modification, or amendment shall be made, except in writing and unless signed by the parties of this Agreement.

 

 

  1. Settlement of Disputes, Governing Law & Arbitration

 

  1. Any dispute and/or difference arising out of, or relating to this agreement including interpretation of its terms will be resolved through joint discussion by the authorized representatives of both the parties. Moreover, if the disputes are not resolved by discussion then the matter will be referred for adjudication to the Arbitration of a Sole arbitrator.

 

  1. This Agreement shall be governed by the laws of India. The Courts in Mumbai (City Name) shall have exclusive jurisdiction over the subject matter of this Agreement.

 

  1. In the event of any dispute or differences arising out of or in connection with this agreement, the parties hereto, agree to resolve their dispute by a sole arbitrator chosen by the parties in fast track procedure under the provision of Sec29B of Arbitration and Conciliation act of 1996. The award under this section shall be made within a period of 6 months from the date of commencement of the arbitral tribunal proceedings.

 

  1. The arbitration proceedings shall be conducted in English. The place of Arbitration shall be Mumbai (City Name). The award passed in the arbitration proceedings shall be final and binding on both the parties.

 

  1. The cost of arbitration proceedings shall be equally borne by both the parties.

 

  1. Each party shall individually bear the fees of their respective Advocate/Counsel for the proceedings.

 

  1. SECRECY

 

Distributor agrees not to convey or utilize, except as may be necessary to the Distributor’s duties from time to time, any information connected to or obtained by Distributor throughout the duration of this Agreement. Distributor agrees and confirms that all confidential information shall be the Company’s sole and exclusive property.

 

IN WITNESS WHEREOF, the Company and Distributor have expressly executed and made effective this Agreement on [NTH] day of [MONTH], [YEAR].

 

 

 

SIGNED, SEALED AND DELIVERED by:

 

COMPANY            

 

Authorized Signature

Name and Title in Print

 

 

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