I. Introduction

This Term Sheet outlines the preliminary terms and conditions under which [Your Company Name] and the Distributor agree to enter into a formal distribution agreement. This document serves as a foundational agreement, summarizing the key points and frameworks that will be detailed further in the contractual agreement. It is intended to guide the subsequent negotiations and ensure a mutual understanding of the core terms before finalizing the official distribution contract.

This Term Sheet does not constitute a legal commitment but aims to outline the intentions of both parties. All terms mentioned herein are subject to further negotiation and will be binding only upon execution of the final contract endorsed by authorized representatives from [Your Company Name] and the Distributor.

II. Parties Involved

• [Your Company Name], located at [Your Company Address]

• Distributor: [Distributor Name], located at [Distributor Address]

III. Terms of Agreement

The following are the principal terms of the distribution agreement:

1. Product Range: The Distributor will handle the distribution of the following products: [List of Products].

2. Exclusive Rights: The Distributor will have exclusive/non-exclusive rights to distribute the products in [Territory].

3. Pricing Terms: Prices at which [Your Company Name] will sell the products to the Distributor will be based on [Specific Pricing Strategy].

4. Sales Targets: The Distributor agrees to meet the minimum quarterly sales target set at [Specify Amount].

5. Marketing: The Distributor is required to adhere to the marketing guidelines prescribed by [Your Company Name] and engage in promotion and advertising by [Specified Marketing Strategies].

6. Term of Agreement: The initial term of the agreement shall be [Period] commencing on [Start Date] and ending on [End Date] unless extended by mutual consent.

7. Termination: Either party may terminate the agreement by providing at least [Notice Period] notice period, under the conditions specified in the termination clause.

IV. Conditions Precedent

The effectiveness of this Term Sheet and subsequent distribution agreement is conditional upon the following:

• Finalization and mutual approval of the detailed Distribution Agreement.

• Approval of this Term Sheet and the final agreement by the legal departments of both parties.

• Due diligence findings are satisfactory to both parties concerning financial, legal, and market conditions.

V. Confidentiality and Non-Disclosure

Both parties agree to keep the terms of this agreement and any sensitive information exchanged during negotiations confidential. Disclosure of any such information to third parties without written consent from both parties will be subject to legal action.

This confidentiality clause shall remain in effect even in the event the final distribution agreement is not executed.

VI. Dispute Resolution

In the event of any disputes arising under or in connection with this agreement, the parties agree to first attempt to resolve the dispute through good-faith negotiations. If the dispute cannot be resolved amicably within [number] days, either party may initiate legal proceedings by the laws of [jurisdiction].

VII. Miscellaneous

A. Governing Law:

This agreement shall be governed by and construed by the laws of [jurisdiction].

B. Entire Agreement:

This Term Sheet constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral.

VIII. Signatures

In witness whereof, the parties have executed this Term Sheet as of the date first written above.

[YOUR COMPANY NAME]

[DATE SIGNED]

[DISTRIBUTOR NAME]

[DATE SIGNED]

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