Dated:

To:

Dear Sirs,
SUB: DISTRIBUTORSHIP IN DISTRICTS
We refer to your letter dated ..requesting us to appoint you as the Distributor for our
products and the subsequent discussions. We are pleased to appoint you as our
DISTRIBUTOR for K2 brand of Car Care Products (hereinafter referred to as the
products) for the territory as per the details mentioned under clause 1.2.
Your appointment as our DISTRIBUTOR of Auto Dynamics (Private) Limited (hereinafter
referred to as COMPANY) is subject to the terms and conditions here in below set out:
COMPANY AND DISTRIBUTOR are hereinafter collectively referred to as Parties and
individually as Party.
1. RIGHTS GRANTED BY COMPANY TO THE DISTRIBUTOR:
COMPANY hereby grants to the DISTRIBUTOR and the DISTRIBUTOR hereby accepts from the
COMPANY during the term of this Agreement:
1.1 the right to purchase the products, and
1.2 the non exclusive right to distribute the products within .,under the K2
brand name and trademark and COMPANY at its sole discretion reserves the right to delete
and/or add any territory/district and appoint any other DISTRIBUTOR for the same.
2.

DISTRIBUTORS OBLIGATIONS AND DUTIES:

2.1 The DISTRIBUTOR agrees to deal with customers in its own name and on its own behalf
and not to represent itself as an agent of the COMPANY.
2.2 Nothing in this Agreement shall be construed as creating a partnership between the
Parties or as constituting either Party as the agent of the other Party for any purpose
whatsoever and neither Party shall have the authority or power to bind the other Party or
to contract in the name of or create a liability against the other Party in any way or for
any purpose.
1

2.3 The DISTRIBUTOR shall only sell products in containers approved by COMPANY.
2.4 The DISTRIBUTOR shall make no alteration whatsoever to the packages or the quality of
the products supplied by COMPANY.
2.5 The DISTRIBUTOR shall use its best efforts to develop the sale of the products
purchased and maintain/submit such records as may be required from time to time.
2.6 The DISTRIBUTOR will keep COMPANY informed of the progress of the sales of the
products.
2.7 The DISTRIBUTOR shall maintain adequate infrastructure and stock of the products
taking into account the requirements of its customers and market demands for COMPANYS
products and ensuring that the demands thereof is continuously serviced and that the
scarcity or shortfall in respect of the products does not arise.
2.8 The DISTRIBUTOR shall at its own
force/salesman/executives/delivery personnel etc.

cost

maintain

adequate

sales

3. SALE OF PRODUCTS TO THE DISTRIBUTOR:

3.1 Subject to the provisions of this Agreement as herein contained, the terms and
conditions as set out in the COMPANYS trade price list (hereinafter referred to as the
Price List), which may be amended from time to time, shall apply to all sales made to
the DISTRIBUTOR from COMPANY Depot/Plant.
3.2 COMPANY reserves the right to change the price list without giving any notice and/or
delete or add any products from or to the price list.
3.3 Discounts and Product schemes shall be as per attached schedule and subject to
change from time to time as per the sole discretion of the company.
5. PAYMENT:
5.1 DISTRIBUTOR shall be sold products from COMPANYS Depot against payment by Cash or
against cheque incase Bank Guarantee is provided from a reputed Bank or as per the
terms as may be applicable from time to time, on basis of the Price List.
5.2 Should any amount become overdue, the COMPANY shall have the right to demand
immediate payment of all amounts owing whether or not they are overdue.
5.3 The Distributor shall agree to settle the payments within sixty (60) days from the
invoiced date.
2

5.3 Interest (rate of 25% per annum) shall be accrued on overdue payments after Sixty days
(60) from the invoiced date.
5.4 Time of payment is of the essence and in the event of non-payment by the due date,
the COMPANY may suspend further deliveries.
5.5.Both parties agreed that the DISTRIBUTOR shall be responsible for collecting payments
from the dealers and it is not a responsibility of the COMPANY.
6. PROPERTY:
The property in the Products shall not pass to the DISTRIBUTOR until the DISTRIBUTOR has
paid all outstanding amounts due to the COMPANY in relation to the Products sold. Until
such full payments are received by the Company, the DISTRIBUTOR shall hold the Products
as bailee and shall deliver the same to the COMPANY upon demand. DISTRIBUTOR shall not
deal with such Products, except that the DISTRIBUTOR may use the Products or sell them in
the normal course of its business at full market value. The proceeds of any such sale are
to be held by the DISTRIBUTOR on trust and on account of the COMPANY.
7. REPOSSESSION:
If the DISTRIBUTOR receives from the COMPANY a notice to the effect that the
DISTRIBUTOR has failed on the due date for payment of the full purchase price for the
Products or any other amount due to the COMPANY, then the DISTRIBUTOR shall for the
repossession of such Products by the COMPANY allow the COMPANY its employees, servants
and agents to enter upon the land or buildings in or upon which the Products are located.
8.This Distributorship is not transferable by the DISTRIBUTOR either wholly or in part.
9. DISTRIBUTOR shall not change the constitution of the Firm without prior written
approval from the COMPANY.
10. COMPLIANCE WITH THE STATUTES:
It is clearly agreed and understood that the DISTRIBUTOR shall be solely responsible for
complying with all prevailing statutes as may be applicable on him and shall have licences
or permits issued and have them renewed from time to time prior to the date of their
expiry.
11. INDEMNITY:
DISTRIBUTOR shall be solely liable and responsible for any breach of any law or enactment
and shall keep the COMPANY and its Directors, officers and employees harmless and
indemnified against all action claims damages that may arise out of any breach on the part
of DISTRIBUTOR of any of the terms of this agreement or of any of its obligations/duties
3

under this agreement and/or owing to the engaging of or employing any servant,
employee, workman etc. by DISTRIBUTOR.
12. DURATION:
The period of the Agreement shall be for a term of 24 MONTHS with effect from .
to .. unless otherwise terminated by either party in terms of clause 13 given
hereinunder.
13. TERMINATION:
13.1 COMPANY & the Distributor have equal right to terminate this Agreement without
assigning any reason whatsoever by giving the other party thirty (30) days written notice.
13.2 It is clearly agreed and understood by the DISTRIBUTOR that the right of termination
can be exercised by the DISTRIBUTOR only after making full and final payment to COMPANY
of the products purchased and clearing all his outstanding as appearing in the Statement of
Accounts of COMPANY.
14. On the expiry or sooner determination or purported determination of this Agreement,
the DISTRIBUTOR shall not deal, act or hold itself out in any manner whatsoever as the
Distributors or represent or being any way connected with the COMPANY.
15. ARBITRATION:
Any disputes or differences between the parties arising out of or in connection with this
agreement or its performance shall, so far as it is possible, be settled amicably between
the parties.
15.1 If after 30 days of consultation, the parties have failed to reach an amicable
settlement on any and all disputes or differences arising out of or in connection with this
agreement or its enforcement such disputes or differences shall be referred to an
independent Sole Arbitrator, nominated and appointed by COMPANY and rules made there
under from time to time shall apply. In the event of the arbitrator to whom the matter is
originally referred being transferred or vacating his office or being unable to act for any
reason, COMPANY as aforesaid, at the time of such transfer, vacation of office or inability
to act, shall designate another person to act as Arbitrator in accordance with the terms of
the Agreement. Such person shall be entitled to proceed with the reference from the point
at which it was left by his predecessor. The award of the arbitrator shall be final,
conclusive and binding on all the parties to the Agreement. The venue for such arbitration
shall be the Registered Office of COMPANY.
15.2 The Language of the Arbitration shall be English. .
15.3 The parties agree that the award of the arbitrators shall be final and binding.
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16. JURISDICTION
This agreement has been made in Colombo and all payments there under shall be due and
made in Colombo unless otherwise directed by COMPANY. Subject to clause 15, the Courts
in the city of Colombo alone shall have exclusive jurisdiction to entertain any suit,
application or other proceedings in respect of any claim or dispute arising under this
agreement or after the expiry of this Agreement.
17. FORCE MAJEURE
17.1 The COMPANY shall not be responsible for damages caused by delays, failure to
perform in whole or in part any obligation hereunder, or non-compliance with any of the
conditions hereof when such delay, failure or non-compliance is due to our results from a
case of Force Majeure. For the purpose of this condition, Force Majeure means causes
beyond the reasonable control of the COMPANY, including, without limitation, acts of God,
Terrorism, fires, war (declared or undeclared), embargoes, accidents, the case of
industrial action, strikes, labour disputes.
17.2 This article shall not apply in relation to the obligation to make payments or carry out
any financial obligations under this Agreement by the DISTRIBUTOR.
18. ASSIGNMENT AND NO WAIVER
The DISTRIBUTOR shall not assign, transfer or purport to assign or transfer whatsoever the
contract or its rights and obligations hereunder. No waiver by either party of any provision
of the Agreement shall be binding unless made expressly and expressly confirmed in
writing and duly signed by person having title similar or superior to the title of signatory of
this Agreement.
19. MODIFICATION OF AGREEMENT
This Agreement shall be modified by the parties hereto only in writing duly signed by the
authorized representative of both parties. If any modifications are not so made, the same
shall be void and of no effect and not binding upon the parties hereto.
Provided however it is clarified that authorized representative would mean the person
having title similar or superior to the title of signatory of this Agreement.
20. ENTIRE AGREEMENT:
This Agreement contains the entire contract of the parties with respect to the subject
matter hereof and supersedes all prior agreement of understandings between the parties,
if any, there being no extraneous agreements. This Agreement constitutes the entire

Understanding between the parties hereto and there are no promises or assurances,
express or implied, written or verbal other than those contained in this Agreement.
This letter is being issued in two originals. Please return one original countersigned in
acceptance of the contents mentioned therein. within 15 days. Non receipt of
acceptance copy will be deemed as acceptance of the above terms and conditions.
Thanking You

We accept and confirm

___________________________
Auto Dynamics (Private) Limited
Title:
Witness 1 :

Witness 2 :

______________________________________

Title:
Witness 1 :

Witness 2 :

Schedule 1:
Discounts:
The Distributor shall be entitled to a Discount of 12 when purchase is made in basis of Cash
in Delivery, and a 10% Discount when purchasing on 60 Days credit against Bank Guarantee
and a Post Dated Cheque issued at time of purchase.
Product Schemes:
The following product schemes are offered until further notice.
K2 Express 1 Ltr:
Kuler Koncentrate 1Ltr:
Kuler Koncentrate 5 Ltr:
Kuler RTU 5 Ltr:

Buy 10
Buy 10
Buy 10
Buy 10

and
and
and
and

get
get
get
get

2
2
2
2

free
free
free
free