Distribution Agreement - Template, Sample Form

DISTRIBUTION AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Distribution Agreement (the "Agreement") is made and entered into this ________ day of _____________________, 20______ at City/Municipality of ___________________________, Province of ___________________________, by and between:

________, a stock corporation duly organized and validly existing under and by virtue of the laws of the Philippines, with principal address at ________, represented in this act by ________, who holds the following position: ________, hereinafter referred to as the Supplier

- and -

________, a stock corporation duly organized and validly existing under and by virtue of the laws of the Philippines, with principal address at ________, represented in this act by ________, who holds the following position: ________, hereinafter referred to as the Distributor

The Supplier and the Distributor will be referred to collectively as the "Parties".

WITNESSETH THAT:

WHEREAS, the Parties wish to enter into an Agreement wherein Supplier provides certain Products (further defined below) to Distributor for distribution;

NOW THEREFORE, for and in consideration of the promises and covenants contained herein, the Parties do hereby agree as follows:

I. PRODUCTS

Supplier shall supply and Distributor shall purchase, inventory, promote and resell the the following Products (the "Products"):

________

Distributor shall not modify, change, or alter the Product.

II. TERRITORY

The Products will be be distributed exclusively in the following geographic territory (the "Territory"):

________

III. EXCLUSIVITY

Supplier shall not sell or ship the Products, including any similar products or products with the same or similar trademark or other business identification on the product or package, to anyone in the Territory except Distributor.

Any inquiries received by Supplier about the Products in the Territory shall be directed to Distributor.

IV. DISTRIBUTION TERMS

Distributor shall exercise its best efforts to obtain and promote the sale of the Products in the Territory in accordance with Supplier's marketing policies and programs. Distributor shall abide by the policies, procedures, or other rules regarding the purchase and sale of the Products. Distributor shall conduct its business in a manner that is favorable to and promotional of Supplier and the Products and shall not disparage or tarnish the name, reputation, and goodwill of Supplier and the Products.

Distributor shall maintain adequate inventory of the Products and adequate staff, including adequate sales staff, at all times. Distributor shall provide adequate training to any staff involved in the sale of the Products.

Distributor shall not be permitted to conduct sale, resale, promotion, delivery, installation, service, or other distribution of the Product outside the Territory. If Distributor receives any inquiries for the Products outside the Territory, Distributor shall contact Supplier to determine how Distributor should proceed.

Supplier shall exercise its best effort to fulfill Distributor's orders for the Products but reserves the right to allot available inventory to other distributors and customers at its discretion.

V. PRICE AND TERMS OF SALE

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Risk of loss, destruction, or deterioration of the Products shall pass to Distributor either after Supplier completes delivery to Distributor, if the Products are being personally delivered to Distributor, or when Supplier places the Product to the carrier for shipment. Supplier shall select the carrier unless Distributor requests for a reasonable alternative.

VI. PAYMENT INFORMATION

All charges shall be payable within ________ (________) Days after the date on Supplier's Invoice and all payments shall be made as follows:

________

Supplier may impose a late payment penalty of ________ (________%) Percent per month on any unpaid amounts that are due and demandable.

VII. PERFORMANCE METRICS

Distributor shall be required to use reasonable commercial efforts to meet the following performance metrics (the "Performance Metrics"):

________

Failure of the Distributor to meet the Performance Metrics shall be a ground to renegotiate this Agreement or to remove the exclusivity rights of the Distributor.

VIII. SECURITY INTEREST

Supplier shall retain a security interest on the Products delivered until payment for the Products has been fully received. Supplier shall have all the rights of a secured party in connection thereto.

If Distributor fails to pay for the Products, Supplier is hereby authorized by Distributor to enter Distributor's property to recover the Products without prejudice to any other remedy which Supplier may pursue under this Agreement or under law or equity.

IX. PROMOTIONAL MATERIALS AND ADVERTISING POLICY

Supplier may provide Distributor with promotional materials from time to time which Distributor may use to assist in the sale of the Products. Supplier may likewise provide Distributor with product and sales training to promote sale of the Products.

Distributor agrees to participate in and comply with the terms and conditions of any of Supplier's promotional and marketing campaigns to increase the brand awareness and sales of the Products.

Distributor may conduct their own advertising and promotional activities of the Products provided that the same has been approved by Supplier in advance. Said approval shall not be unreasonably withheld.

X. INTELLECTUAL PROPERTY

Distributor hereby acknowledges and agrees that Supplier retains all rights in and to Supplier's intellectual property, including all patents, trademarks, service marks, trade secrets, copyrights, or other intellectual properties (the "Supplier's IP"). Distributor may, however, receive a limited license to the Supplier's IP while this Agreement is in force and effect for the use of any promotional materials or trademarks or service marks on the Products specifically as Supplier shipped them. Distributor may not add any Supplier IP to any other product or material.

XI. WARRANTY

If any of the Products are proven, to Supplier's satisfaction, to be defective at the time of sale and delivery to Distributor, Supplier shall, at Distributor's discretion, adjust the original sales price of the defective product or replace the same.

Supplier shall provide Distributor information regarding the limited warranty extended to the original original consumer of the Products, if any. Distributor shall not make any representations and warranties to its customers regarding the Product other than those made by Supplier and included in the Packaging of the Product or any literature provided by Supplier.

Except as herein provided, Supplier makes no other warranties, express or implied, or promises or obligations with respect to the Products. Supplier disclaims any and all warranties, including the warranties of fitness for a particular purpose.

XII. CONFIDENTIALITY

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A. Confidential Information refers to any information which is confidential and commercially valuable to either of the Parties. The Confidential Information may be in the form of documents, techniques, methods, practices, tools, specifications, inventions, patents, trademarks, copyrights, equipment, algorithms, models, samples, software, drawings, sketches, plans, programs, or other oral or written knowledge and/or secrets and may pertain to, but is not limited to, the fields of research and development, forecasting, marketing, personnel, customers, suppliers, intellectual property, and/or finance or any other information which is confidential and commercially valuable to either of the Parties.

Confidential Information may or may not be disclosed as such, through labeling, but is considered any information which ought to be treated as confidential under the circumstances through which it was disclosed.

Confidential Information shall not mean any information which:

1. is known or available to the public at the time of disclosure or became known or available after disclosure through no fault of the Receiving Party;

2. is already known, through legal means, to the Receiving Party;

3. is given by the Disclosing Party to third parties, other than the Receiving Party, without any restrictions;

4. is given to the Receiving Party by any third party who legally had the Confidential Information and the right to disclose it; or

5. is developed independently by the Receiving Party and the Receiving Party can show such independent development.

B. "Trade Secret Information" shall be defined specifically as any formula, process, method, pattern, design, or other information that is not known or reasonably ascertainable by the public, consumers, or competitors through which, and because of such secrecy, an economic or commercial advantage can be achieved.

C. Both Parties hereby agree they shall:

1. Not disclose the Proprietary Information via any unauthorized means to any third parties throughout the duration of this Agreement and the Parties' relationship with each other;

2. Not disclose the Confidential Information via any unauthorized means to any third parties for a period of Three (3) Years following the termination of this Agreement;

3. Not disclose the Trade Secret Information forever, or for as long as such information remains a trade secret under applicable law, whichever occurs first, to any third party at any time;

4. Not use the Confidential Information or the Trade Secret Information for any purpose except those contemplated herein or expressly authorized by the Disclosing Party.

XIII. INDEMNIFICATION

Supplier shall indemnify and hold harmless from and shall defend against any and all losses, claims, or damages of every kind arising out of any inherent defect, failure, malfunctions of the Product existing at the time the Product is sold by Supplier to Distributor, provided that Distributor gives Supplier immediate notice of any such loss, claim, or damage and fully cooperates with Supplier in the handling thereof.

Distributor shall indemnify and hold harmless from and shall defend against any and all losses, claims, or damages of every kind arising out of or attributed directly or indirectly to the conduct, operations, performance, acts or negligence of Distributor and its agents, employees, dealers, or representatives in the installation, use, sale, or servicing, of the Products including any warranties and representations relating to the Products which exceeds Supplier's limited warranty.

XIV. FORCE MAJEURE

Neither party shall be liable to the other for failure to perform due to causes beyond its reasonable control including, but not limited to, acts of God, acts of civil authorities, acts of military authorities, riots, embargoes, acts of nature and natural disasters, and other acts which may be due to unforeseen events or though foreseen could not be reasonably avoided.

XV. TERM AND TERMINATION

This Agreement shall commence on ________ and shall continue until ________. At the end of the term, the Agreement shall automatically renew until either Party gives a notice of termination at least Thirty (30) Days prior to the date of termination.

Either party may terminate this Agreement for any reason or no reason at all prior to the natural expiration of the term upon the following notice: ________.

In the event that proper notice has not been submitted for termination, either party may still terminate this Agreement but hereby agrees to pay a monetary penalty of ________ (₱________) for said failure to provide the proper notice.

A Party may terminate this Agreement at any time without prior notice upon failure of the other Party to correct a breach of this Agreement within Thirty (30) Days after receipt of notice of the breach from the former. If the breach breach has been cured, this Agreement will continue in full force and effect.

Supplier may likewise terminate this Agreement upon notice to Distributor for the following:

1. Distributor fails to meet the performance metrics;

2. Upon commencement of insolvency proceedings against Distributor, either voluntary or involuntary;

3. Failure of Distributor to operate in the ordinary course of business for any reason;

4. Distributor has a material change in the structure of its business, including a change in ownership; and

5. Submission by Distributor to Supplier of any false statements or reports.

XVI. OBLIGATIONS UPON TERMINATION

Distributor shall no longer be a distributor of Supplier and all unshipped orders shall immediately be cancelled without liability of either party to the other.

All amounts owing to the Supplier by Distributor shall not be affected by the termination or expiration of this Agreement except that the same shall immediately become due and demandable notwithstanding any prior terms of sale.

Supplier may, at its sole and exclusive discretion, repurchase the existing Products in Distributor's inventory from Distributor or may require Distributor to sell the Product to another distributor. The purchase price of the sale back to Supplier or another distributor shall be cost Distributor paid for the Products. The sale shall only take place if Distributor has maintained the Products in good condition upon Seller's examination and approval.

XVII. RELATIONSHIP OF THE PARTIES

The relationship between the Supplier and Distributor shall be that of vendor and vendee. Distributor shall, under no circumstances, be considered an employee, agent, or representative of Supplier and shall not have any right to enter into any agreements or obligations on behalf of Supplier.

XVIII. ASSIGNMENT

This Agreement, or the rights granted hereunder, may not be assigned, sold, leased, or otherwise transferred in whole or in party by either Party.

XIX. SUPPORTING DOCUMENTS AND ADDITIONAL ACTS

The Parties agree to execute such other documents as are reasonable and necessary for the proper implementation of this Agreement.

XX. NOTICES

Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by registered mail, or transmitted by electronic mail to the addresses of the Parties first written above, or to such other address as either Party may designate in writing. Notice shall be deemed received upon actual receipt, or in the case of registered mail, five (5) Days after posting.

XXI. GOVERNING LAW

This Agreement shall be governed by, construed, and interpreted in accordance with the laws of the Republic of the Philippines.

XXII. DISPUTE RESOLUTION

Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall first be settled amicably by the Parties through good faith negotiations. Should the Parties fail to reach an amicable settlement, the dispute shall be submitted to the proper courts of the Philippines, to the exclusion of all other venues.

XXIII. SEVERABILITY

In the event that any provision of this Agreement is held to be invalid, illegal, or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid, legal, and enforceable as though the invalid, illegal, or unenforceable parts had not been included herein.

XXIV. CUMULATIVE RIGHTS

The rights of the Parties under this Agreement and the law are cumulative and shall not be construed as exclusive unless otherwise required by law.

XXV. HEADINGS

Headings are for convenience only and do not affect the interpretation of this Agreement.

XXVI. SUCCESSORS AND ASSIGNS

This Contract shall be binding on the successors and assigns of both Parties.

XXVII. ENTIRETY OF AGREEMENT

This Agreement represents the entire agreement between Supplier and Distributor and supersedes all prior negotiations, representations, agreements, either oral or written.

XXVIII. AMENDMENTS AND MODIFICATIONS

This Agreement may be amended only by a written instrument signed and agreed upon by both Parties.

IN WITNESS WHEREOF, the Parties have hereunto affixed their signatures on the date and place first stated above.

________
Supplier

By:

________
________

________
Distributor

By:

________
________

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES )
PROVINCE OF ________________________ )
CITY OR MUNICIPALITY OF ________________________ )S.S.

BEFORE ME, a Notary Public, for and in the CITY OR MUNICIPALITY OF ________________________, ________________________, this _______ day of ________________________, 20______, personally appeared the following persons:

1. ________, the duly-authorized representative of ________, with the following competent proof of identification: Driver's License with number ________ which expires on ________

2. ________, the duly authorized representative of ________, with the following competent proof of identification: Driver's License with number ________ which expires on ________

all known to me and to me known to be the same persons who executed the foregoing Distribution Agreement constituting of _________ pages, including this page where the Acknowledgement is written, and they acknowledged to me that the same is their free and voluntary act and deed.

WITNESS MY HAND AND SEAL on the day and place first written above.

Doc No. ________;
Page No. ________;
Book No. ________;
Series of ________.