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DISTRIBUTION AGREEMENT

BETWEEN:

registered office situated at, registered at the


Trade and Companies’ Registry in , represented by hereinafter called
the «Company»;

AND

registered office situated at, registered at the


Trade and Companies’ Registry in , represented by hereinafter called
the « Exclusive Distributor»

WHEREAS:

_________________ engaged in the distribution of various products in the State


____________________ Territory.
 is an company specialised in exporting and
commercialisation of European FMCG
 The Company and the Distributor, willing to enter into a Distribution Agreement for the
Exclusive distribution of products in ---------------

IT IS NOW HEREBY AGREED AS FOLLOWS:

ARTICLE 1 – DEFINITIONS

1.1 “Agreement” means this agreement and any appendices hereto.

1.2 “Territory” means State of _________________

1.3 “Products” means -----------------------------Products in the available sizes in the Territory.

1.4 “Trademark” means------------- trademark (s).

ARTICLE 2 – PURPOSE OF THE AGREEMENT

2.1 The Company hereby grants the Exclusive Distributorship, and the Exclusive Distributor
hereby accepts a right to distribute the Products, both bearing the Trademark, in the
Territory of State of _________________.

To this end, the Distributor shall purchase and resell the Products in its own name and on
its own behalf. It shall act as an independent trader, both with respect to the Company and
with respect to its own clientele, with whom it trades at its own risk and peril.

2.2 The Agreement has been entered into on the basis of each party’s personal knowledge of
the other. Accordingly neither the Distributor nor the Company shall assign or otherwise
transfer this Distribution Agreement in any manner whatsoever to a third party, including
its rightful successors, without the prior written consent of the other party to this

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Agreement. Furthermore, in the event of a material change in the business, financial or
legal position of a party to this Agreement, or in the event of a change in control of a party
to this Agreement or a change in control of the current owner of a party to this Agreement
(which shall be notified to the counter party thereof not later than 3 months after occurrence
of the said change), the other party to this Agreement shall have the right to terminate this
Agreement within a SIX months notice, unless the two parties will decide differently
through a Supplemental Agreement.

The Distributor shall be free to negotiate and enter into any contract necessary for the
proper performance of its undertakings hereunder. Notwithstanding, the Company shall not
be bound by the Distributor’s written or verbal undertakings to any third party unless the
Company has consented to be so bound in writing, in which case Distributor shall be held
liable for any improper performance by the third party.

2.3 In the event of new Products generated by the Company for the market, it shall offer the
distribution of such products to the Distributor and the Distributor shall be free to accept
or refuse. Where applicable, the Parties shall enter into a supplemental agreement setting
forth the terms and conditions relating to the distribution of the new products by the
Distributor.

2.4 If, for any reason (i.e. low volumes, production constraints, legal enforcement, etc.), the
Company is forced to cease distribution of one or more of the Products, or to alter the
conditions of sale thereof, the Company will give prompt written notice of SIX months and
the Distributor shall not be entitled to damages or compensation for any resulting decrease
in its business.

ARTICLE 3 –EXCLUSIVE DISTRIBUTORSHIP

3.1 In view of the right granted to the Distributor, the Company hereby undertakes as follows
throughout the entire duration of the Agreement:

 not to approach any prospective clients;


 not to negotiate any specific agreements;
 not to sell

either directly or through an intermediary. This undertaking is binding for the Products
and in the Territory, only.

However, it is understood that the Company cannot prevent any other party from shipping
or selling Products in the Territory, the occurrence of which shall not be deemed a breach
by the Company of this Agreement. Notwithstanding this, upon written notification from
the Distributor that another party is shipping or selling Products in the Territory, the
Company will do its best efforts to prevent that third party to continue selling such Product
in the Territory.

3.2 The Company undertakes to forward to the Distributor any orders, enquiries or
correspondence relating to the Products which may reach it from persons or legal entities
inside the Territory, and to make it clear that the Distributor alone is authorised to sell the
Products in the Territory under the terms of its distributorship.

3.3 The distributorship granted by the Company is restricted to the Territory and the Distributor
accordingly undertakes throughout the entire duration of the Agreement not to sell or
distribute the Products outside the Territory without the prior written consent of the
Company.

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3.4 The Distributor commits not to commercialise, distribute or handle in the Territory any
State of _________________., no matter which brand, competing directly or indirectly
with the Products.

ARTICLE 4 – TERMS AND CONDITIONS OF SUPPLY

4.1 The commercial terms and conditions of the sales to be made between the Parties, such
as prices, terms of payment, orders procedure, transport and delivery terms will be
mutually agreed by them for each transaction and recorded by any written means.

Distributor’s orders shall be binding only upon Company’s express acceptance. Orders
are deemed to have been accepted in case the Company fails to confirm acceptance within
15 days after order’s receipt.

4.2 Minimum Stock

The Distributor shall constitute and hold a minimum stock of Products in terms of number
of days sales order to meet customer demand and to avoid running out of stock which may
compromise positive sales growth.

4.3 Reservation of Title

The Company shall retain full title to the Products sold to the Distributor until full and final
settlement thereof.
If the Distributor fails to pay for the Products, the Company may repossess all unpaid goods
by any means it deems appropriate, without prejudice to any legal remedies it might have
at its disposal. Any cost incurred in recovering the goods shall be borne by the Distributor.

4.4 Minimum volumes

During the Initial Term of the Agreement, the Distributor undertakes to purchase from the
Company the agreed minimum volumes of the Products as defined in Appendix 1. In case
of renewal, these agreed minimum volumes shall be annually revised by mutual agreement
of the Parties.

If the Distributor fails to comply the agreed minimum volumes, the Company keeps the
right, at its own discretion, to eventually terminate the agreement or eventually the
Distributor shall loose its distributorship, with no right to compensation of any kind. Before
termination the Company will give the Distributor reasonable opportunity to remedy the
failure.

If the Company ceases the production of any of the Products, the minimum volumes
defined in Appendix 1 will be revised accordingly by mutual agreement of the parties

4.5 Marketing

The parties may jointly set up marketing plans to successfully promote the sale of the
Products in the Territory, in which case they will determine the share of costs.

In any case, any publicity or promotional action shall not be executed without the prior
written consent of the Company.

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ARTICLE 5 – TERMS AND CONDITIONS OF DISTRIBUTION OF THE PRODUCTS

Immediately upon execution hereof, the Distributor undertakes to promote the sale and
distribution of the Products throughout the Territory.

5.1 The Distributor shall be solely responsible for its commercial policy, notably with respect
to supplying and storage of the Products, transportation of the Products within the Territory,
management of customer orders, invoicing, management of sales force, etc.

5.2 Distributor shall diligently promote the distribution and sale of the Products in the Territory
and will maintain an adequate sales organization and sales facilities for the distribution of
the Products. Distributor shall ensure that the quality of the Products is maintained
throughout the distribution process, observing and complying with all laws and regulations
applicable thereto.

Further, Distributor shall keep the Company, during the entire execution of this Agreement,
fully advised about any legal requirements existing in the Territory related to the quality,
packaging, labelling or any other aspect connected with the distribution of the Products in
the Territory, being the sole responsible for any harm or damages that might arise from the
non fulfilment of this obligation.

5.3 The Company shall be responsible of the compliance of the Products in conformity to the
standards of the Ministry of Health, State of _________________) and shall be confirmed
by the Quality Certificates issued by the Company
Distributor hereby guarantees that said specifications are in compliance with all applicable
laws and regulations in the Territory. The Company shall not be liable if such non-
compliance derives from wrong or defective storage or conservation conditions or in case
Distributor fails to discharge its commitment as per the second paragraph of article 5

Distributor shall approve the packaging and labelling of the Products, being sole
responsible of its accordance to all applicable laws and regulations in the Territory.

5.4 The Company–-----------------will always try to ensure that Fresh Stock is shipped and
in the event of supply/shipping of any short/exhausted shelf life or expired products,
it will be the entire responsibility of Company to compensate the damage.

5.5 In order to improve and develop their co-operation, the Parties agree that the Distributor
shall regularly notify the Company of the following on a quarterly basis:

 trends in its business;


 comments or criticisms made by its customers with respect to the Products;
 any information on specific regulatory requirements in the Territory;
 conditions and trends in the market for the Products in the Territory;
 competitive conditions and trends in the Territory;
 selling prices in the Territory both for the Products and for competitors’ products;
 advertising and promotional campaigns undertaken in the Territory by the
competition ;
 conditions and selling prices applied to the trade.

ARTICLE 6 – LIABILITY AND INSURANCE

6.1 The Distributor hereby represents that it has an in-depth knowledge of the Products, their
composition and their physical, chemical and nutritional characteristics.

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The Distributor undertakes to notify the Company of any information he might be aware
of related to any regulations in force or likely to be introduced in the Territory that might
affect the Products, their composition, manufacture, packaging, labelling, approval or
licence for sale. The Distributor undertakes inter alia to furnish the Company with any
wording that must appear by law on the packaging or labelling of the Products in the
language habitually used in the Territory.

6.2 The Distributor shall store the Products delivered to it in suitable warehouse premises and
shall have sole responsibility for maintaining the Products in good condition, and
undertakes to implement all the security measures necessary to protect the Products from
theft, fire, flood or other damage that might arise due to poor storage conditions. The
Distributor shall insure the warehouses and the Products at its own cost and shall furnish
the Company upon request with copy of the insurance policies and with evidence that the
insurance premiums have been paid.

The Distributor undertakes to keep the Products in the aforesaid warehouses in their
original packaging until full and final payment has been made thereof, such that the
Products can be easily identified as belonging to the Company. This will not apply where
credit terms are agreed.

6.3 The Distributor shall notify the Company of any claim for patent defect of the Products
by registered letter no later than 60 days after collection or delivery of the Products,
failing which the Products shall be deemed to be as per order and free of patent defect.

6.4 In case of default causing selling impossibility, the Distributor will keep the Products in a
reserved area. The Company will have the right to mandate an expert appraisement to its
own costs. The Company will have to re-supply the Distributor in the shortest delay,
provided the cause of deficiency is attributable to the Company.

6.5. The Company undertakes to contract an insurance policy for product liability covering not
less than USD$ 1.000.000 per event/year.

ARTICLE 7 – INTELLECTUAL PROPERTY RIGHTS

7.1 The right to use the Trademark is granted by the Company in connection with the
performance of this Agreement only. Therefore, the Distributor shall under no
circumstances use the Trademark for any products other than the Products.

7.2 The Company hereby represents that it owns, or holds a licence to, the patents and the
Trademark under which the Products are sold in the Territory.

The Company shall hold the Distributor harmless against any action taken by a third party
with a view to contesting said rights or their scope.

The Company undertakes to defend the right it holds over the Trademark under which the
Products are sold against any usurpation, fraudulent use, imitation or infringement of other
kind.

7.3 The Agreement shall under no circumstances vest in the Distributor any right of title to the
patents and the Trademark under which the Products are sold.

The Distributor undertakes not to infringe the patents or the Trademark under which the
Products are sold in any way whatsoever; more specifically undertakes not to register or

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cause to be registered either in the Territory or elsewhere a patent or a trademark identical
or similar to the patents and Trademark under which the Products are sold.

The Distributor undertakes to notify the Company of any known or presumed infringement
of the Company’s patents and Trademark in the Territory

ARTICLE 8 – NON-COMPETITION

8.1 The Distributor undertakes not to enter into competition with the Company, either directly
or indirectly, by distributing and/or representing any …………………… products in the
Territory of such nature as to compete with the Products. This undertaking shall remain
valid throughout the duration of the Agreement.

ARTICLE 9 – CONFIDENTIALITY

9.1 Each Party agrees to treat as confidential all information furnished to it by the other Party
under the terms of the Agreement, and more specifically any information in connection
with the Products and the process of manufacturing the Products. The Parties undertake not
to disclose or communicate the same to any third party, nor to use same for purposes other
than those stipulated in the Agreement. This undertaking shall remain valid throughout the
duration of the Agreement.

9.2 The Parties hereto further undertake to use their best endeavours to procure that none of
their employees who obtain confidential information or data or receive samples disclose or
communicate same to any third party throughout the duration of their employment contract
with the Party concerned, and to procure that they comply with the same confidentiality
undertakings made by the Parties hereto.

ARTICLE 10 – ADMINISTRATIVE AND FISCAL CONSIDERATIONS

10.1 The Distributor undertakes to carry out any fiscal and administrative formalities in
connection with the Agreement required pursuant to legislation in force for the time being
in the Territory, and to bear any costs incurred in so doing.

10.2 All taxes, duties or other similar charges other than income or taxes levied on the Company
in connection with the Agreement payable pursuant to legislation in force for the time being
in the Territory shall be paid by the Distributor and the Distributor hereby undertakes to
pay same promptly.

ARTICLE 11 – TERM AND EARLY TERMINATION

11.1 This Exclusive Agreement shall become effective on the date set forth below and shall
remain in effect for a period of 1 YEAR (the “Initial Term”), unless it is otherwise
terminated in accordance with the terms of this Agreement. At the end of the Initial Term,
unless written notice of an intention to terminate to be given by either party at least ninety
(90) days prior to the end of said term, this Agreement shall thereafter continue in effect
for successive annual periods until terminated by notice of either party given to the other
in writing not less than ninety (90) days in advance of the date of termination of each
renewal period.

It is expressly understood that the termination of this Agreement with the above mentioned
notice, shall not give rise to any form of compensation for any reason as between the

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Parties.

11.2 Notwithstanding the foregoing, either Party may terminate the Agreement and claim for
any damages or loss if the other Party fails to perform any of its undertakings hereunder
and has not remedied said failure within a period of 90 days following receipt of a notice
of non-compliance by registered mail.

Further, the Company may terminate the Agreement with immediate effect following
receipt of a written communication by registered mail, if any of the following occurs:

 the Distributor fails to comply with the provisions of Articles 3


(distributorship), 8 (Non-competition), 9 (Confidentiality) and 7
(Intellectual Property Rights);
 the Distributor fails to reach the minimum volumes as set forth in Article
4.4 and Appendix 1
 there is a material change in the Distributor’s financial position or the
Distributor makes an arrangement or composition with its creditors or the
Distributor ceases, suspends or alters its business.
 Failure of payment (or reiterated delays) of the Company’s invoices.
 The transfer, lease or assignment by Distributor of the rights and
obligations arising form this Agreement.

11.3 Upon termination of the Agreement, irrespective of cause, the Company may at its sole
discretion:

 authorise the Distributor to run down stocks of the Products in its possession during a
period to be determined by the Company or
 repurchase the stock at the landed cost plus a 5% of warehousing and logistic costs
providing said stock is in marketable condition and still appears in the Company’s sale
catalogue or purchased by the Distributor less than six months ago.

The Distributor shall further immediately return to the Company or to any other person
expressly designated by the Company all technical and commercial documents in
connection with the Products and any materials the Company has furnished to the
Distributor, notably advertising materials.

ARTICLE 12 – FORCE MAJEURE

12.1 Any event outside the control of the Parties which occurs after execution of the Agreement
and hampers its proper performance shall be deemed to be an event of force majeure and
shall cause the Agreement to be suspended.

12.2 The Party invoking an event of force majeure under the terms of the preceding paragraph
shall notify the other Party thereof immediately upon its occurrence and again upon its
extinction.

12.3 Should the event of force majeure subsist for a period of more than six months, either Party
may exercise the right to terminate the Agreement.

ARTICLE 13 – VALIDITY AND ALTERATIONS TO THE TERMS OF THE

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AGREEMENT

13.1 If one or more of the provisions hereof is declared null and void, illegal or ineffective, all
the other provisions of the Agreement shall notwithstanding remain in full force and effect.
Where necessary, the Parties shall use best endeavours to replace the invalid provision with
another valid provision, which reflects the understanding of the Parties and the spirit of the
Agreement.

13.2 The Agreement may only be altered by written agreement of both Parties.

ARTICLE 14 – CHOICE OF LAW, LANGUAGE OF THE AGREEMENT AND


SETTLEMENT OF DISPUTES

14.1 For all matters not expressly ruled by this agreement, the United Nations Convection on
Contracts for the International Sale of Goods shall apply.

14.2 The Agreement has been drawn up in the English language and the original version in
English shall be the only version binding upon the Parties.

14.3 All disputes arising out of or in connection with the present contract shall be finally settled
under the Rules of Arbitration of the International Chamber of Commerce by one or more
arbitrators appointed in accordance with the said rules.

Signed and delivered in duplicate


on ……………………………..
in -----------------------

The Company The Distributor

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ANNEX/
APPENDIX 1