Distribution Agreement (with Sub-Distribution Rights)

This is a Distribution Agreement that outlines the relationship between two parties; the Company, which seeks to expand sales to a specific territory, and the Distributor, who is willing to distribute the Company's products in the given area. The agreement establishes that the distributor is appointed as an exclusive distributor for the company's products for a particular application in the defined territory, subject to certain terms and conditions. Additionally, the distributor may sell the products either directly to end-users or indirectly through sub-distributors, provided that sub-distributors comply with the agreement's terms and conditions. The agreement specifies the meaning of several terms used throughout the agreement, such as Business Day, Business Plan, Distribution Rights, Intellectual Property, Materials, Products, Sub-Distributorship, Trademarks, and Force Majeure.

The agreement further stipulates that the distributor must prepare an annual business plan, which includes a proposed marketing plan, financing arrangements, capital expenditures, and other activities that comply with the Distribution Rights. The business plan must also contain minimum purchase and sales figures for specific periods. The agreement also requires that the distributor obtain the Company's prior written approval before entering into any sub-distributorship agreements. The Company must approve the terms and conditions of the sub-distributorship agreement, as well as the proposed sub-distributor.

If a force majeure event occurs, either party may suspend performance without penalty until the event ceases to affect the party's ability to perform. The party invoking the force majeure clause must promptly inform the other party of the event's occurrence and how it affects the party's ability to perform.

In conclusion, the Distribution Agreement between the Company and the Distributor establishes a framework for a business relationship in which the Distributor is granted exclusive rights to distribute the Company's products in a specific territory. The agreement sets out the terms and conditions under which the distributor may operate and defines key terms used in the agreement. It also specifies that the distributor must obtain the Company's approval before entering into any sub-distributorship agreements, and both parties can suspend performance in the event of force majeure.

How to use this Document? 

This document is a Distribution Agreement, which outlines the terms and conditions that apply to the appointment of a distributor by a company. It is important to follow these steps to use this document effectively:

1. Interpretation: It is important to understand the definitions of the expressions used in the agreement, such as Business Day, Business Plan, Distribution Rights, Intellectual Property, Materials, Products, Sub-Distributors, Sub-Distributorship Agreement, Territory, Trademarks, and Force Majeure.

2. Appointment and Term: The company appoints the distributor to be its exclusive distributor for the Products within the specified Territory for a specific period.

3. Distribution Rights: The distributor is granted the exclusive right to distribute the Products within the Territory.

4. Marketing Plan: A Business Plan is required, outlining the proposed marketing plan, finance arrangements, capital expenditures, and other activities in the exercise of the Distribution Rights.

5. Minimum Purchase and Sales: A budget must be specified, including an estimate of the income to be received and the expenses to be incurred in carrying out the Business Plan. It should also specify Minimum Purchase and Minimum Sales figures for particular periods.

6. Sub-Distributorship: The distributor may sell the Products either directly to end-users or indirectly through Sub-Distributors by entering into Sub-Distributorship Agreements within the Territory.

7. Approval: Each specific Sub-Distributorship Agreement requires the prior written approval of the Company as to both the terms and conditions of the agreement and the Sub-Distributor.

8. Intellectual Property: The Intellectual Property in the Products and any advertising and promotional material and any technical materials associated with the supply of the Products belong to the Company.

9. Trademarks: The Trademarks belong to the Company, and the distributor is granted a limited license to use them only in connection with the distribution of the Products.

10. Confidentiality: The distributor shall keep confidential any information received from the Company, including Materials and any technical information.

11. Termination: The Agreement may be terminated by either party for any reason, subject to certain notice requirements.

12. Governing Law: The Agreement is governed by the laws of the country in which the Company is based.

Following these steps will ensure that the Agreement is executed correctly, and all parties are aware of their rights and obligations under the Agreement. This will lead to a successful business relationship between the Company and the distributor, benefiting both parties.