You are on page 1of 4


This binding memorandum of understanding is intended to aid the business discussions between Company Incorporated and ______________. (Distributor) with respect to their proposed distribution agreement. As such, the terms and conditions set forth below shall be binding on the parties, who have agreed as follows:

1. 2. 3. 4. 5. 6.

Effective Date: This agreement becomes effective upon shipment of Distributors first order. If order does not ship within 60 days of signing, agreement is considered void. Term: Six Months Territory: _________________ Products; COMPANYs Products Pricing: Per Exhibit A Payment: Distributor shall pay in full for Products prior to shipping. Payment shall be made either in cash or check in U.S. Dollars to Companys principal place of business or through wire transfer to an account designated by COMPANY prior to shipment. Distributor shall pay all shipping, customs, duty and taxes on the Products. Exclusivity. Company shall not contract with any other distributor to sell Products in the Territory during the Term of this Agreement, nor shall sell any products directly into the Territory during the Term of this Agreement, without the prior consent of Distributor. Starting on the Effective Date Company shall refer to the Distributor any orders or inquiries which it receives for shipment of the Products to any place of business within the Territory including, without limitation, mail order and internet orders or inquiries. Company shall use it best efforts to prevent or limit the sale of Products by any other person into the territory. Company shall not sell its Products to any third party Company knows or has reason to believe is reselling such Products in the Territory. Distributor acknowledges and agrees that the exclusive rights granted herein are limited to the extent that Company and its subsidiaries or affiliates expressly retain the right to sell and distribute in the Territory products bearing a trademark other than the Trademark. Sales Aids: Company shall supply the Distributor with samples of all marketing, advertising and promotional materials (the Marketing Materials) created and produced by COMPANY in connection with the Products. The Distributor may reproduce the Marketing Materials in their local language, or use the Marketing Materials as guidelines for the creation of marketing, advertising and promotional materials designed to target the market in the Territory. In the event that Distributor translates any Marketing Materials, or creates any of its own materials for use in the Territory, Distributor must obtain COMPANYs prior written consent before Distributors materials may be circulated. All copyrights which may be available, issued, or applied for in the Territory or elsewhere with respect to Marketing Materials, or translation thereof, whether such Marketing Materials were created by COMPANY or created by Distributor subject to COMPANYs approval, shall be issued or applied for in the name of COMPANY, and shall be the sole property of COMPANY. Distributor agrees to sign and deliver to COMPANY such copyright assignments or other documents as may be necessary to vest ownership in all such copyrights in COMPANY. to Distributor is free from defects. If Distributor receives defective product, COMPANY will issue an immediate credit against future purchases. At the request of COMPANY, Distributor agrees to return any defective Product, but COMPANY will be responsible for any shipping expense.



9. Defective or Non-Conforming Product: COMPANY warrants that the product supplied

10. End-User Warranty: COMPANY agrees to honor any end-user warranties in effect in
the U.S. at the time Product is sold to Distributor. In the event of a warranty claim,

COMPANY will provide either credit or replacement to Distributor at its sole discretion.

11. Confidential Information: In the process of doing business COMPANY may disclose

Confidential Information. Examples of such Confidential Information include, but are not limited to product concepts, strategies, marketing plans, technical specifications, drawings, product assemblies, and information related to its clients and suppliers. Distributor acknowledges that Confidential Information comprises valuable trade secrets and is proprietary to COMPANY. The Distributor shall hold the Confidential Information in strict confidence and shall not disclose the same to any other person, firm, or corporation except as reasonably required to perform its obligations under the Agreement. The foregoing obligation shall not extend to information that is or becomes public through no fault of the Distributor. Distributor agrees not to ship Products outside of the Territory, and to agrees not to sell Products under circumstances in which Distributor has reason to suspect that any of such Products are intended for resale outside of the Territory. the Territory. The sales and support functions in respect of Products sold to customers shall be carried out by Distributor. Distributor shall: (a) maintain a sufficient staff of personnel who are trained and qualified to perform such support services at least once/year; (b) maintain sufficient inventories of Product and ensure timely delivery thereof; and (c)deal with any customer complaints concerning the Products in a timely manner and to take any action reasonably requested by customer or Manufacturer to resolve such complaints. suppliers other than COMPANY , and to notify COMPANY if it is solicited by any supplier regarding the purchase of Products.

12. Distribution Limited to Territory.

13. Sales and Support. Distributor agrees to provide excellent support to customers in

14. Exclusive Supplier. Distributor agrees not to purchase COMPANY Products from 15. Local Web Presence. This agreement does not grant Distributor permission to use

COMPANY trademarks or other intellectual property to create a web storefront or other web presence that gives the appearance of being operated by COMPANY. This includes, but is not limited to sites such as Facebook, MySpace and eBay. agreement in good faith and to finalize it no later than _________. If the parties are unable to reach agreement, COMPANY at its sole discretion may terminate the relationship with Distributor, in which case the following will apply:

16. Definitive Agreement. The parties mutually agree to negotiate their definitive


Wind up Period. Distributor shall provide COMPANY with an inventory of the Products on hand within fifteen (15) days of the expiration or termination. COMPANY will then have (15) days to request the return of all Products on hand. If return of Products it requested by COMPANY, it will be required to pay Distributor the original purchase price, plus all shipping costs. If termination is due to breach of Agreement by Distributor, COMPANY will not be required to pay shipping costs. After the expiration or termination of this Agreement, all rights granted to Distributor hereunder shall forthwith revert to COMPANY. Reversion of Rights. Distributor shall refrain from further use of the Trademarks or any further reference to it, directly or indirectly, in connection with the manufacture, sale or distribution of Products. Distributor shall turn over to COMPANY all materials that reproduce the Trademarks or, if requested by COMPANY, shall give COMPANY satisfactory evidence of their destruction. Distributor also shall from and after the termination or expiration date hereof, cease use of any and all references to the Trademarks including, but not limited to any use of the Trademarks in marketing, promotional or website materials, at trade shows or other events, in press releases or in any other materials.



Customer list. Upon the expiration or termination of this Agreement, the Distributor shall deliver to the Manufacturer a complete list of customers to whom Product was sold. Customer list shall include company name, address, telephone and email contact information where available.

17. Governing

Law & Dispute Resolution. This Agreement shall be governed by and construed according to the laws of the Territory applicable therein. The parties hereby waive the provisions of the United Nations Convention on Contracts for the International Sale of Goods and exclude its application to this Agreement and to the relationship between the parties hereto. Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be finally settled by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules and judgment on the award rendered by the arbitrator shall be final and binding upon the parties and may be entered in any court having jurisdiction thereof. Arbitration will take place in Los Angeles California and will be in the English language. The arbitration shall be conducted by one (1) arbitrator who shall be selected in accordance with the rules above.


ACCEPTED AND AGREED COMPANY Print Name: ____________________ Distributor __________________________