Distribution Agreement

№ _____

_____ _____

_____, hereinafter referred to as the "Supplier", on the one hand, and _____. hereinafter referred to as the "Buyer", on the other hand, jointly referred to as the "Parties", have concluded this Contract for the supply of goods (hereinafter referred to as the "Contract") as follows:

1. Subject of the Contract

1.1. Under this Contract, the Supplier undertakes to deliver the goods (hereinafter referred to as the "Goods"), and the Buyer undertakes to accept and pay for the Goods in accordance with the terms hereof.

1.2. The Parties shall agree on the terms for the name, quantity, price of the Goods to be supplied, by sending the appropriate invoice to the Buyer (hereinafter referred to as the "Invoice"), drawn up on the basis of the Buyer's Application for the Supply of Goods (hereinafter - the "Application for the Supply of Goods") and acceptance of the said Invoice by the Buyer by paying it.

1.3. The Invoice shall be issued by the Supplier on the basis of the Application for the Supply of Goods approved by the Parties. An Application for the Supply of Goods shall be sent by the Buyer to the Supplier via e-mail, at the address specified in section 11 hereof, or by calling the telephone number specified in the section 11 hereof. The Supplier within 1 (One) business day shall confirm the receipt of the Application for the Supply of Goods by a letter of reply or by phone. The Application for the Supply of Goods shall be considered agreed upon by the Parties and accepted for execution from the moment of confirmation of its acceptance by the Supplier. 

1.4. Invoices issued by the Supplier to the Buyer and accepted by the Buyer shall be an integral part hereof.

2. Name, Quantity and Quality of the Goods

2.1. The price per unit of the Goods, the quantity of the Goods and the total amount for the Goods are reflected in the Invoice. The price includes the cost of tare, packing and delivery on DDP terms (Delivered duty paid).

2.2. The quality of the Goods shall comply with the requirements of the existing rules, norms, standards. The quantity of the Goods at the time of acceptance shall be determined in the same units of measurement as specified in the accompanying documents (commodity waybill).

2.3. If a shortage of the Goods is detected, the Buyer shall notify the Supplier's representative by e-mail specified in the Supplier's details in section 11 hereof within 1 (one) business day from the moment of detection of the short delivery. 

2.4. The Buyer shall check the quality of the Goods within 3 (three) business days from the date of delivery of the Goods. 

2.5. If a delivery of defective Goods is detected, the Buyer shall draw up a claim to the quality of the Goods and forward it to the Supplier by e-mail or by fax, specified in the Supplier's details in section 11 hereof within 3 (three) business days from the date of detection of the delivery of the Goods of inadequate quality.

3. Terms of Delivery of the Goods

3.1. The right of ownership for the goods and the risk of loss or damage to the Goods passes to the Buyer at the time the Supplier or the authorized carrier sends the Goods to the Consignee at the delivery address specified in the relevant Invoice.

3.2. The Supplier undertakes to provide the Buyer with the following documents:

a. the original of the invoice;

b. the original of the corresponding waybill.

c. The Supplier's obligation to supply shall be deemed to be fulfilled at the time of receipt of the Goods by the Buyer at the address specified in the Invoice. 

3.3. Goods delivery time: 90 calendar days from the date of payment of the Invoice. The Goods shall be delivered to the address indicated in the Invoice on the basis of DDP terms (Delivered duty paid).

4. Obligations of the Parties

4.1. The Supplier shall: 

4.1.1. Transfer to the Buyer the Goods of proper quality and to the address specified in the Invoice, in the amount, at the price and within the period specified in the Contract. 

4.1.2. Immediately notify the Buyer of all circumstances that impede or make it impossible for the Supplier to fulfill its obligations to deliver the Goods.

4.2. The Buyer shall:

4.2.1. Ensure the presence of a representative of the Buyer authorized to accept the Goods at the delivery address of the Goods at the time of transfer of the Goods to the Buyer. If necessary, ensure the loading (unloading) of the Goods by its own efforts. 

4.2.2. Carry out an inspection when accepting the Goods in terms of quantity, quality and range (name), sign the corresponding waybills.

4.2.3. Promptly notify the Supplier of the defects observed during the acceptance or in course of operation (within the period established by the current legislation) of the sold Goods.

4.2.4. Pay for the purchased Goods within the period established hereby.

5. Packing and Marking

5.1. Tare (packing) shall ensure complete safety and protect the Goods from damage during transportation.

5.2. The Goods shall be supplied in disposable tare (package) which shall remain at the Buyer's disposal.

5.3. The cost of tare (packing) is included in the price of the Goods.

6. Payment Method and Settlement Procedure 

6.1. The settlement for the Goods shall be carried out in Euro in the form of non-cash settlements by transferring funds from the Buyer's settlement account to the settlement account of the Supplier.

6.2. The Buyer's obligation to pay for the Goods shall be considered fulfilled from the moment of receipt of funds in the Seller's settlement account. 

6.3. Invoice due date: 5 business days from the date of invoicing.

6.3. Another procedure for payment may be provided by the Parties in the Supplementary Agreement.

6.4. The Parties agreed that in the event that the present Contract and / or appendices to it provide for prepayment, deferment or payment by installments, the specified procedure will not be a commercial loan. 

7. Force Majeure

7.1. The Parties shall be relieved from liability for partial or full default hereunder should such default result from force majeure circumstances affecting the ability to fulfill obligations hereunder assumed which took place after its signing. Force majeure is understood as war, civil unrest, strikes, lockouts, accidents, epidemics, government actions and any other emergency event that the Parties could neither foresee nor prevent, directly or indirectly, delaying or impeding the commencement or continuation of the performance by the Parties of the obligations assumed hereunder.

7.2. A party that fails to fulfill its obligations due to force majeure circumstances shall, in writing, not later than within 10 (Ten) business days from the date of the said circumstances, notify the opposite Party of their occurrence, and subsequently - their termination, by any available means of communication. Failure to inform the other Party of the occurrence of force majeure circumstances deprives the Party, who has fallen under the influence of such circumstances, of the right to refer to them as the basis for the failure of that Party to fulfill its obligations hereunder.

7.3. In case when the circumstances specified in clause 7.1 hereof, occur, the period of the Party's execution of the obligations under the present Contract shall be extended according to the time during which such circumstances and any of consequences thereof actually lasted.

7.4. If the full or partial default of the obligations continues for more than 3 (Three) months, each of the Parties shall have the right to refuse the further fulfillment of the obligations hereunder.

8. Liability of the Parties 

8.1. In case of non-fulfillment of the rules by the Buyer provided for by subclauses 4.2.2, 4.2.3, the Supplier shall have the right to refuse in whole or in part the satisfaction of the Buyer's claims for the transfer of the missing quantity of the Goods, the replacement of the Goods that do not comply with the terms hereof, if it proves that failure to comply with this rule by the Buyer entailed inability to satisfy its requirements or entails for Supplier incommensurable costs compared to what it would have incurred if it had been notified in time of the breach of the Contract.

8.2. In cases where the Buyer in violation of the law, other legal acts or the present Contract does not accept the Goods or refuses to accept it, the Supplier may require from the Buyer to take the Goods or withdraw from the Contract. Herewith, the Buyer shall be obliged to pay to the Supplier a fine in the amount of 10% (Ten percent) of the value of the corresponding batch of the Goods, to pay the Supplier the costs for transporting and storing the Goods in full and to compensate for losses in the form of lost profits from the sale of this batch of the Goods. 

8.3. If the Supplier refuses to hand over the Goods sold to the Buyer, the Buyer shall have the right to refuse to perform this Contract.

8.4. If the Supplier has transferred a smaller quantity of the Goods in violation of this Contract to the Buyer that is determined hereby, the Buyer shall have the right to demand the transfer of the missing quantity of the Goods.

8.5. If the Supplier has transferred the Goods to the Buyer in the amount exceeding the amount specified in this Contract, the Buyer shall notify the Supplier thereof within one (1) business day. In the event that within 5 (five) business days after receipt of the message from the Buyer, the Supplier does not dispose of the relevant part of the Goods, the Buyer shall be entitled to accept the entire batch of the Goods. Should the Buyer accept the Goods in the amount exceeding the amount specified in the Application for the Supply of Goods, the additional Goods received shall be paid for at the price determined for the Goods accepted in accordance with the Application for the Supply of the Goods if another price is not determined by the agreement of the Parties.

8.6. In case of an untimely shipment of the Goods by the Supplier, the Supplier shall pay a penalty of 0.1% (zero point one percent) of the amount of the batch of Goods. The penalty shall not be accrued when the Supplier delivers the Goods of inadequate quality or incomplete, however, the Buyer does not require it to be replaced, or the shortcomings to be eliminated or completed by the Supplier of such Goods, and they are not accepted by the Buyer for safekeeping.

8.7. A Party that has not fulfilled or improperly fulfilled its obligations hereunder shall be obligated to reimburse the other Party for losses not covered by penalties stipulated herein.

9. Dispute Settlement

9.1. The Parties shall resolve all disagreements and claims arising in the performance of this Contract in a claim procedure. The period for claim settlement of the dispute is 10 (Ten) business days from the date the Party receives a written claim. 

9.2. Should the Parties fail to reach an agreement, all disputes shall be resolved in the Court of Arbitration of the Estonian Chamber of Commerce and Industry.

9.3. The applicable law hereunder is Estonian law.

10. Miscellaneous

10.1. The Contract shall enter into force on the date of signature indicated on the first page of the Contract and shall be valid for one (1) year. If none of the Parties notifies the other Party within 30 (thirty) business days prior to the expiration of the validity period of this Contract of intention to terminate the Contract or extend it under other terms, the Contract shall be deemed prolonged for the following year under the same terms.

10.2. In the event of expiration of this Contract, the Parties shall not be released from liability for its violation.

10.3. Amendments and additions to this Contract shall be made in writing and shall be its inseparable parts in case they are signed by authorized representatives of the Parties.

10.4. The Contract may be terminated at the will of either of the Parties after the fulfillment of financial obligations to the other Party, with a mandatory written notification 30 (thirty) business days prior to the proposed termination date.

10.5 All notices, demands and other arrangements between the Parties shall be made in writing and duly transmitted to the details specified in this Contract to the Party to which such notification, demand or arrangement is addressed. The notices shall be deemed duly executed if they are sent using the details specified in section 11 of the Contract:

 registered mail with delivery confirmation;

 by e-mail with delivery confirmation;

 by telegraph;

 personally delivered with receipt against signature of the relevant officials.

10.6. The Parties agreed that for them, as well as for any third parties, any appendices, additions to this Contract received by e-mail specified in section 11 hereof with seals and signatures of authorized persons shall have legal force and be equal to the original documents, shall be appropriate proof of conclusion and execution of the transaction prior to their replacement by originals signed by an authorized person and stamped.

10.7. The Parties are obliged to notify each other in writing on the change of addresses and payment details specified in Section 11 hereof within three (3) business days after the change. Prior to the receipt of the notification of changes in addresses and payment details, all actions performed in accordance with the requisites specified in this Contract shall be deemed lawful and count towards the fulfillment by the Parties of their obligations.

10.8. When issuing invoices, commodity waybills, the Supplier shall have the right to use a facsimile, which is manufactured by laser engraving using laser engraving machines with the obligatory condition of affixing the seal of the Supplier. 

10.9. This Contract is made in English in 2 (two) identical original copies, on the part of the Supplier it is signed by its original or facsimile signature in Section 11 of this Contract, as well as on each page by the original signature of the Supplier's employee who has drawn up the Contract, and the original signature of the Buyer.

10.10. The Buyer's payment of the invoice means additional confirmation of the Buyer's unconditional acceptance of all the terms of this Contract.

11. Details of the Parties

 

APPENDIX №1

to the CONTRACT № _____, dated _____

DISTRIBUTION AGREEMENT

 

_____ _____

 

Limited Liability Company _____, hereinafter referred to as the "Seller" on the one hand, and the company __________ hereinafter referred to as the “Buyer” (“Distributor”), have concluded the present Distribution Agreement as annex to the Contract № _____.

 

Section I. TERMS AND DEFINITIONS.

1. Territory – designated area in terms of sales (countries, cities, territorial entities), where the Distributor exclusively (if otherwise is not stated in p. 3) runs sales and promotional activities.

2. Recommended Retail Price (RRP) – official, (including VAT) recommended retail price for the Goods given by the Seller, recommended for all retail trading companies. The supplier places and updates the recommended retail price on the website _____ It is mandatory to use the RRP only (the deviation of the price to a greater amount is acceptable): in the price list, website, Internet, point of sale.

3. One Price Policy (OPP) – a set of actions in order to manage retail prices (RRP) to increase guaranteed profit level for all Partners, selling the Goods of the Seller.

4. Distributor – a company, who has become a business partner, which receives and distributes the Goods of the Seller within the terms of the present Distribution Agreement in accordance with the conditions and limitations of the designated Territory with the compliance of One Price Policy and other terms of the present Agreement.

Section II. Obligations of the Seller and the Distributor.

1. Under the terms of the present agreement, the Seller assigns the Distributor as an official representative on assigned territory: Czech Republic, Slovakia, Romania (hereafter «Territory»).

2. Distributor make wholesale and retail sales of the Goods on the Territory and must follow other conditions of this Agreement.

3. The Seller and the Distributor set the limit for the number of local Distributors, which are registered and operating on the designated Territory: not more than 1 (one). All other requests received by Seller from designated territory, must be passed to acting local distributors.

4. Should the Distributor fail to dispatch the Goods to the clients, the Seller has the right to sell the Goods to the third parties within the Territory.

5. The Seller has the right to reassign the borders of Territories according to the Distributor’s performance within the terms of the present Distribution Agreement. The Seller has to inform the Distributor not later than 30 days in advance.

 

Section III. One Price Policy.

1. The Seller is required to set RRP for the Goods and keep the One Price Policy for all of the partners and contractors.

2. The Seller has the right to change RRP unilaterally. The Seller has an obligation to inform the Distributor not later than 7 (seven) calendar days before the new price list is in effect. The Seller makes the RRP adjustments on the website within one business day starting from the moment of an official price change date.

3. Distributor follows and controls the RRP compliance within his designated Territory and is liable for his clients’ and the points of sales RRP compliance. Shall the Distributor breach the obligations regarding RRP compliance, the Seller issues an official warning and gives 15 (fifteen) calendar days to solve the situation. Shall the partner not change the prices and send an official notification letter to the Seller concerning the results of adjusting the prices according to the Seller’s OPP, the Seller has the right to change the discount value given to the Distributor for 3 calendar months from the moment of RRP non-compliance disclosure, or discontinue supplies of the Goods. The distributor has to inform the Seller of other Distributors’ of RRP infringement issues within his Territory.

 

Section IV. Penalties.

Shall the Distributor not comply with the statements of the present Distribution Agreement, the Seller has the right unilaterally apply the following penalties:

1. Change distributor discount value;

2. Cancellation of the Distributor’s status;

3. Assign a new Distributor to the Territory.