APPOINTMENT OF SOLE DISTRIBUTOR FOR SUPPLY OF BULK ITEMS BY THE MANUFACTURER WITH A RIGHT TO PACK THE SAME INTO SMALL PACKINGS
THIS AGREEMENT made at……………..this……………..day of……………..20………….. between XYZ Photo Film Ltd., a company duly incorporated and existing under the laws of USA, having its principal office at …………….. (hereinafter referred to as “XYZ”) and M/s. ABC Photo Films, a partnership firm registered under the Indian laws and having its principal office at……………..(hereinafter referred to as “ABC”).
WITNESSETH
Chapter I
General Provisions
Article 1: Definitions
1.01 The term “Bulk Rolls” shall mean colour negative in the form of Jumbo Rolls which are emulsion coated, dried and rolled by XYZ but which are yet to be converted into finished products to be sold under “XYZ Trademarks”.
1.02 The term “Products” shall mean packing of colour negative film for 24 and 36 photos converted by ABC from “Bulk Rolls” and ready for ordinary marketing with “XYZ Trademarks” affixed.
1.03 The term “Territory” as used herein shall mean India only.
Chapter II
Purchase of bulk rolls by distributor
Article 2: Purchase contracts
2.01 XYZ shall sell the Bulk Rolls to ABC and ABC shall purchase the same from XYZ under such terms and conditions set forth in this Chapter 11, and except as otherwise agreed upon between the parties hereto, such terms and conditions shall also apply to all individual purchase contracts for the purchase of the Bulk Rolls hereunder. Each individual contract shall become effective and binding only when ABC’s order for the Bulk Rolls is accepted by XYZ in writing.
2.02 The parties hereto shall, prior to the first day of each accounting period (April 1st to 30th September and 1st October to 31st March) during the term of this Agreement, fix the tentative quantity (on a monthly basis) of Bulk Rolls to be purchased by ABC during such accounting period; provided, however, that any tentative quantity so fixed shall not become final and binding upon the parties hereto.
Article 3: Purchase prices
3.01 The purchase price of the Bulk Rolls shall be listed on the then effective Price List established and furnished by XYZ. Unless otherwise agreed upon the parties hereto, XYZ shall quote in the Price List the prices of Bulk Rolls on the basis of CIF Bombay by vessel.
Article 4: Payment
4.01 Except as otherwise agreed upon by and between the parties hereto, all payments for the Bulk Rolls supplied to ABC hereunder shall be made on the basis of draft at sight under irrevocable UC in U.S. Dollar to be confirmed by a prime bank in USA.
4.02 Notwithstanding the provisions of Article 4.01, XYZ shall agree that the UC opened by Indian governmental bank is not required to be confirmed by a prime bank in USA.
Article 5: Shipment, transportation and storage
5.01 XYZ shall make all arrangements for shipment of the Bulk Rolls purchased by ABC. XYZ may tranship any shipment of the Bulk Rolls at any port or ports other than its destination or ship the Bulk Rolls covered by any single order in two or more partial shipments, whenever XYZ finds it necessary to do so for the sake of convenience in shipping arrangement. It is expressly agreed that no estimate of delivery time made by XYZ will constitute a guarantee of delivery or deliveries by such date, that all shipping and delivery dates will be approximate, and that XYZ will not be liable for any damages, consequential or otherwise, for delays in delivery.
5.02 Concerning the methods and/or manners of the transportation and storage of Bulk Rolls in India, ABC shall comply with instructions given by XYZ from time to time.
Article 6: Insurance
Marine insurance obtained by XYZ, if any, for the Bulk Rolls in transit shall cover the full invoice value of the Bulk Rolls plus ten per cent (10%) thereof for All Risks on the “Warehouse to Warehouse” basis as provided in the “Institute Cargo Clauses”. XYZ shall, if so requested by ABC or if XYZ finds it necessary to do so, obtain, at the expenses of ABC, a War and S.R.C.C. Risks Insurance for the Bulk Rolls in transit at the rate then prevailing at the time of shipment thereof. XYZ shall in no way be held liable for any portion of ABC’s claim for damages for non‑arrival or loss or any damage or other accident occurred to the Bulk Rolls in transit exceeding the amount actually redeemed by such insurance.
Article 7: Defective Bulk Rolls
7.01 All Bulk Rolls must be examined by ABC immediately after receipt of them. Any defects thus found out shall promptly be reported by ABC without fail to XYZ otherwise the Bulk Rolls shall be deemed as accepted.
7.02 Complaints relating to defects in Bulk Rolls shall be submitted in writing by ABC to XYZ within a period of fifteen days of receipt of Bulk Rolls by ABC together with particulars of the emulsion batch number and sample of the Bulk Rolls forming the subject of the complaints.
In the event of a justified complaint, XYZ shall provide compensation only in the form of Bulk Rolls of an equal kind and quantity as the Bulk Rolls forming the subject of the complaint. No replacement can be made for Bulk Rolls of which the guarantee period on the log sheet has already expired at the time of sending the sample pertaining to the complaint.
7.03 XYZ shall not make any warranty with respect to the quality of the products converted by ABC hereunder except that Bulk Rolls shall conform to XYZ’s quality standard applicable at the date of shipment.
7.04 If XYZ is compelled to supply Bulk Rolls which are partially defective, XYZ shall notify details of the defects to ABC by means of the log sheets pertaining to such Bulk Rolls. The price of the partially defective Bulk Rolls shall be determined taking into consideration the effective square meters of said Bulk Rolls reasonably excluding the defective parts.
Chapter III
Converting of Bulk Rolls
Article 8: Converting of Bulk Rolls
ABC shall convert all Bulk Rolls supplied to it hereunder into the packing of colour negative films for 24 and 36 photos, in accordance with the instructions issued by XYZ. XYZ will train ABC’s engineers and technicians for converting the Bulk Rolls into products and ABC will construct and maintain necessary workshop for converting the Bulk Rolls into products at its own cost. ABC shall manufacture packing material of small films and sample of each batch of packing material will be sent to XYZ for inspection and if XYZ finds any batch of packing material defective or not upto the mark, ABC shall destroy the entire remaining packing material of that batch.
Chapter IV
Distribution of products
Article 9: Distributorship
XYZ hereby grants to ABC the non‑exclusive right to sell, market or otherwise distribute the products in the territory, subject to the terms and conditions hereinafter set forth.
Article 10: Sales
10.01 ABC shall sell the products at its own risk and for its own account under such terms and conditions as it may think fit. ABC shall in no way be considered as representative or agent for XYZ and it shall have no power or authority to set or incur any liability on behalf of XYZ.
10.02 Except as otherwise agreed upon by and between the parties hereto, ABC shall not, either directly or indirectly, sell, transfer or otherwise make available the products outside the territory, nor shall it sell the products to any party in the territory who ABC knows or has reasons to believe intends to resell or re‑export the products outside the territory.
Chapter V
Inventory and sales promotion
Article 11: Inventory
ABC shall always maintain inventory of the products sufficient to meet in a timely manner all reasonably expected demands for the products in the territory. XYZ may from time to time give ABC advices on the size of inventory to be maintained by ABC. ABC shall properly store or cause to be properly stored all products kept in its inventory under such appropriate storage condition or conditions as the nature of the products will require.
Article 12: Marketing and sale promotion
12.01 ABC undertakes that it shall conduct sales and marketing of the products in the territory at its own risk and expense and that it shall exert its best efforts to maximise the sale of the products in the territory.
12.02 For the purpose of implementing its undertakings set forth in Article 12.01, ABC shall establish and maintain and/or cause to be established and maintained adequate sales organisations and operate the same efficiently, taking XYZ’s advices. The term “sales organisations” as used herein shall mean and include sales organisations, channels and outlets for the products, their storage and after sales service facilities.
12.03 XYZ shall, from time to time when it finds it necessary to do so, furnish ABC without cost to ABC with advertisement materials prepared or designed for the sales promotion of the products, such as pamphlets, leaflets, catalogues and posters.
Chapter VI
Prohibition of marketing
Article 13: Products unsuitable for marketing
13.01 For the purpose of examining the marketability of the products kept in ABC’s inventory, XYZ shall be entitled to inspect ABC’s inventory of the products at any time and from time to time during the term of this Agreement, and ABC shall, from time to time upon XYZ’s request, promptly furnish XYZ with a list of inventory of the products in ABC’s hand and/or a list of their batch number.
13.02 Except as otherwise agreed between the parties hereto, ABC shall not market or cause to be marketed the products whose date of expiry has gone out or the products which XYZ shall have previously informed ABC to be no longer suitable for marketing due to the reason of quality.
13.03 In the event that XYZ gives any instructions to ABC with respect to the disposition of such unsuitable products, ABC shall promptly dispose of such products in accordance with such instructions.
Chapter VII
Reporting requirement
Article 14: Reporting requirements
14.01 During the term of this Agreement, ABC shall, as soon as practicable after the end of each of its semi‑annual fiscal periods, furnish XYZ with a report in writing setting forth the conditions of the market in the territory during the previous six‑months period, including, but not limited to, its achievements in the sale of products and information about their competitive product.
14.02 In addition to regular reports to be furnished under Article 14.01, ABC shall, from time to time upon XYZ’s request and when finds it appropriate to do so, furnish XYZ with the following information in such manner or manners as XYZ may from time to time request or ABC may from time to time consider fit:
(i) information about the terms and conditions under which ABC shall sell the products, including, but not limited to, their sales prices;
(ii) information about any new legislations or any amendments or abolitions of any existing laws or regulations which shall in any way affect or which are likely to affect in any way the marketing of the products in the territory; and
(iii) such other information as XYZ may require for its marketing operations.
Chapter VIII
Trademarks
Article 15: Trademarks
15.01 XYZ hereby authorises and permits ABC to use during the term of this Agreement any and all trademarks with and to the extent reasonably necessary for the marketing and publicity of the products in the territory.
15.02 When ABC uses any of the trademarks in accordance with Article 15.01, it shall fully comply with such instructions as XYZ may from time to time give to ABC with respect to the manners and styles of type in which to use such trademarks. When using any trademarks, ABC shall not add any letters, words, designs or marks to such trademarks or otherwise alter such trademarks nor shall it use such trademarks in combination with any other trademark, without XYZ’s prior written consent.
15.03 ABC may authorse and permit its sub‑distributors, wholesalers, dealers in the territory to use all or any of the trademarks which ABC is authorised and permitted to use under Article 15.01, in connection with and to the extent reasonably necessary for the marketing and publicity of the products in the territory; provided, however, that such sub‑distributors, wholesalers, dealers shall be subject to the same obligations as those which ABC has under Article 15.02.
15.04 ABC shall not transfer or otherwise dispose of the right to use the trademarks granted to it under Article 15.01 to any third party except as permitted under Article 15.03.
15.05 Without XYZ’s prior written consent, ABC shall not use any of the Trademarks or XYZ’s corporate name or trade name as a part of its corporate name or trade name, nor shall it make any representations or use any names which may or are likely to cause the public to mistake or confuse ABC for or with XYZ.
15.06 In the event that ABC obtains knowledge of any actual or threatened suit with respect to the trademarks against ABC in the territory for an alleged infringement of the right of any third party by reason of use of trademarks or of any actual infringement by any third party or any of XYZ’s rights, it shall promptly notify XYZ thereof and take appropriate measures at XYZ’s cost in accordance with such instructions as XYZ may give to ABC from time to time.
Article 16: Secrecy
ABC shall keep strictly confidential any and all technical and business information including, but not limited to XYZ’s know‑how marketing programmes and sales volumes, which may be disclosed or confided to it by XYZ or which it may obtain from XYZ during the course of performance of this agreement, and shall not disclose the same to any third party provided, however, ABC shall disclose any of such information upon XYZ’s prior written consent to Indian Government authorities, if the authorities require the same. ABC shall be responsible for seeing to it that its officers, employees and agents shall also keep such know‑how and information strictly confidential and shall not disclose the same to any third party.
Chapter X
Term and termination
Article 17: Term
The term of this Agreement shall be from the date first above written until ………..
Article 18: Termination
18.01 In the event that either party breaches any of the provisions of this Agreement or any individual purchase contract for the purchase of the Bulk Rolls hereunder the other party may terminate this Agreement at any time by giving the defaulting party a three‑months prior written notice of termination.
18.02 XYZ may immediately terminate this Agreement by written notice to ABC in the event of ABC’s bankruptcy or insolvency, in the event that ABC shall make an assignment for the benefit of its creditors, in the event that a petition shall be filed against ABC under a bankruptcy law, a corporate reorganization law or any other law for relief of debtors (or similar law analogous in purpose or effect), or in the event that ABC shall enter composition proceedings.
18.03 In the event that there arises any substantial change in the management or ownership of ABC, it shall promptly notify XYZ thereof. In such case, if XYZ finds such change to be disadvantageous or inconvenient to it, it may, at its sole discretion, immediately terminate this agreement by giving a written notice to ABC within three months from the date on which XYZ became aware of such change.
Article 19: Surviving provisions
The provisions of Articles 13, 16, 20, 24, 25 and 26 shall survive any termination or expiration of this Agreement.
Article 20: Rights and obligations upon termination
20.01 Notwithstanding any termination or expiration of this agreement, any and all rights and obligations of the parties hereto which shall have accrued before the effective date of such termination or expiration under this agreement or any individual purchase contract and which then remain outstanding shall still be governed by this agreement.
20.02 Upon termination or expiration of this agreement, ABC shall immediately discontinue and cause its sub‑distributors, if any, to discontinue all marketing and publicity relating to the products or all uses of the trademarks.
20.03 XYZ shall have the right subject to Indian Government regulations/approval, if necessary but not obligation, to purchase and/or have its assignee purchase at landed cost all or any part of the products, the Bulk Rolls and packaging materials supplied by XYZ which remain in the hand of ABC upon termination or expiration of this Agreement and which are in a good and marketable condition by giving written notice to ABC. Any and all other materials including advertisement and publicity materials supplied by XYZ and remaining in the hand of ABC upon termination or expiration of this Agreement shall be disposed off in India by ABC in accordance with XYZ’s instructions.
20.04 Notwithstanding the provision of Article 20.02, in the event that XYZ does not or fails to give ABC a notice of its intention to exercise its right to purchase or have its assignee purchase ABC’s inventory of the products as provided in Article 20.03, ABC may continue to sell the products in its inventory for a period of six months following termination or expiration of this agreement.
20.05 After the said six‑months period following termination or expiration of this agreement or after its receipt from XYZ of a notice referred to in Article 20.04, whichever is earlier, ABC shall not sell any products nor shall it use any trademarks.
Chapter XI
Miscellaneous
Article 21: Non‑assignability
ABC shall not transfer or assign any of its right and obligations hereunder to any third party without XYZ’s prior written consent.
Article 22: Force majeure
Neither party shall be held liable for any failure or delay in the performance of any of the obligations on its part to be performed hereunder, if and to the extent such failure or delay is caused by any cause or causes beyond reasonable control of such party including but not limited to fire, storm, flood, earthquake, explosion, accident, military operation, war, rebellion, riot, wreck, epidemic, quarantine regulations, labour dispute, shortage of manpower, embargo, failure or delay in transportation, inability to obtain required raw materials or machines and any laws, regulations or other governmental action.
Article 23: Amendments
This agreement may be amended only by a writing signed by the duly authorised representatives of both parties and specifically referring to itself as amendment to this agreement.
Article 24: Arbitration
Any and all disputes, controversies and differences arising between the parties hereto out of or in relation to this Agreement or any breach thereof shall be finally settled by arbitration to be conducted in New York, USA in accordance with the Rules of the International Chamber of Commerce, to which the parties hereto shall be bound.
Article 25: Governing law
This agreement shall be governed by and construed in accordance with the laws of USA.
Article 26: Government approval
Before signing and delivery of this agreement and in the course of execution of this agreement, each party hereto, at its own expense, shall seek necessary approval by any government authorities. However, each party hereto understands that no approval of this agreement by any government authorities on each side is required in order for it to become effective or for its lawful performance.
Article 27
Every notice required or contemplated by this agreement by any party shall be delivered by postage prepaid, registered airmail, addressed to the other party at its address specified below or at such other address as the intended recipient previously shall have designated by a written notice and such notice shall become effective ten days after the date of despatch of such notice.
IN WITNESS WHEREOF the parties aforementioned have executed this agreement on the date and year first hereinabove written.
WITNESSES Signed and delivered by XYZ Photo Film Co. Ltd., by
- the hands of Shri……………..Marketing Director,
- Signed and delivered by ABC Photo Films by its partner
Its duly authorised official