The Sub Distribution Agreement is a crucial document used when a main distributor wishes to expand their distribution network by appointing sub-distributors in Hong Kong and potentially surrounding regions. This arrangement is common in Hong Kong's dynamic trading environment, where businesses often leverage local partners to expand market reach. The agreement details the relationship between the main distributor and sub-distributor, including territory rights, product specifications, performance targets, and compliance requirements. It must comply with Hong Kong's legal framework, particularly regarding competition law, trade practices, and intellectual property protection. The document is essential for businesses operating in Hong Kong's distribution sector, providing clear guidelines for operations while protecting the interests of all parties involved in the distribution chain.
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1. Parties: Identification of the main distributor and sub-distributor, including full legal names and registered addresses
2. Background: Context of the agreement, including reference to the main distribution agreement and authority to appoint sub-distributors
3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and interpretation rules
4. Appointment and Territory: Terms of appointment, territory definition, and whether exclusive or non-exclusive
5. Products: Description of products covered by the agreement and any restrictions on their sale
6. Term and Renewal: Duration of the agreement and conditions for renewal
7. Sub-Distributor's Obligations: Key responsibilities including sales targets, marketing, reporting, and compliance requirements
8. Main Distributor's Obligations: Support, supply terms, and other obligations to the sub-distributor
9. Ordering and Delivery: Process for ordering products, delivery terms, and acceptance procedures
10. Prices and Payment: Pricing structure, payment terms, and invoicing requirements
11. Intellectual Property: Usage rights and restrictions regarding trademarks and other IP
12. Confidentiality: Protection of confidential information and trade secrets
13. Warranties and Indemnities: Product warranties and mutual indemnification provisions
14. Termination: Grounds for termination and termination procedures
15. Post-Termination: Obligations and rights after agreement termination
16. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law
1. Minimum Purchase Requirements: Include when specific purchase quotas or targets are required
2. Marketing and Promotion: Include when specific marketing obligations or restrictions apply
3. Training Requirements: Include when product complexity requires specific training programs
4. Customer Support: Include when after-sales service is a significant component
5. Insurance Requirements: Include when specific insurance coverage is mandatory
6. Data Protection: Include when personal data processing is involved
7. Anti-Corruption Compliance: Include for high-risk territories or when dealing with government entities
8. Import/Export Compliance: Include for cross-border distribution arrangements
9. Environmental Compliance: Include for products with environmental implications or requirements
1. Schedule 1 - Products: Detailed list of products covered by the agreement, including specifications and prices
2. Schedule 2 - Territory: Detailed description of the geographic territory, including any excluded areas
3. Schedule 3 - Performance Targets: Specific sales targets and performance metrics
4. Schedule 4 - Commission Structure: Detailed commission calculations and payment terms
5. Schedule 5 - Trademark Usage Guidelines: Specific rules for using the manufacturer's trademarks
6. Schedule 6 - Technical Support Requirements: Details of required technical support and service levels
7. Schedule 7 - Reporting Requirements: Templates and timing for required reports
8. Appendix A - Main Distribution Agreement Extract: Relevant excerpts from the main distribution agreement
9. Appendix B - Quality Control Procedures: Required quality control and product handling procedures
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