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Source: WWW.SEC.GOV

 

 

PRODUCT DISTRIBUTION AGREEMENT

 

This Product Distribution Agreement (“Agreement”), effective as of ___________ (the “Effective Date”), is made by and between ________________, having an office at ________________________, South Africa, and its affiliates (“Company”), and _____________________ having its principal place of business at __________________, South Africa (“Distributor”).

 

In consideration of the mutual covenants and agreements herein set forth, the parties agree as follows:

 

I. RIGHT TO SELL. 

 

Company has developed ____________________________ (hereinafter “PRODUCT”). In accordance with this Agreement, Company grants Distributor the right to sell and market PRODUCT license agreements on behalf of Company under the terms of this Agreement listed below.

 

Company agrees to deliver such products necessary for contracts generated by Distributor.

 

Distributor agrees to devote its best efforts to the sale of PRODUCT license agreements, which includes, but is not limited to, (1) providing an adequate, trained sales and technical staff to promote the sale and support of PRODUCT, (2) undertaking promotional campaigns and canvassing prospective users to stimulate the sales of PRODUCT, and (3) generating and maintaining relationships with prospective and current customers.

 

II. RIGHT TO EXECUTE AGREEMENTS. 

 

Company may grant Distributor the authority to execute agreements on behalf of Company upon completion of the form in Appendix A of this agreement, such authority not being unreasonably withheld.

 

Any agreements pertaining to Company products and services signed by Distributor without written approval by Company will result in breach of contract.

 

III. PROCEEDS OF SALES. 

 

Company will pay to Distributor a commission on the sales proceeds for marketing the PRODUCT and supporting services in cases where Distributor is involved in marketing the product and introduces Company to complete the licensing arrangement with the customer.

 

The commission rate for each individual sales opportunity will be added as an addendum to this agreement. Commissions will likewise be paid on second tier sales generated from referrals of customers from Distributor and will be added as an addendum to this agreement.

 

This commission will be paid for sales processed and closed directly by Company resulting from marketing efforts of Distributor, where Distributor is not involved in the delivery or support of the PRODUCT product. Licenses of PRODUCT engaged through Distributor, with their assistance in delivery or support of the product, will not include a commission but will fall under the direction of Section VIII — Revenue Sharing.

 

IV. RECORDS. 

 

Distributor and Company shall keep accurate records regarding the quantities of the PRODUCT licenses that are sold. Company and Distributor shall have the right to inspect such records from time to time after providing reasonable notice of such intent to the other party.

V. DISTRIBUTION RIGHTS 

 

Distributor has the right to represent Company in the negotiation and sale of PRODUCT licenses. Distributor will bring clients to Company who will execute a license agreement with said client or grant Distributor the authority to execute a license agreement on Company’s behalf upon completion of the form in Appendix A of this agreement. Distributor does not have rights to execute license agreements or other legal contracts on Company’s behalf, and can only obtain this right through written authority for each contract. Company has an inherent right to make sales through its own organization as well. If Distributor generates a contact that ends in the execution of a contract, commissions will be paid in accordance with Section VIII of this Agreement. If Company generates a sale it can assign the customer service and support to Distributor in accordance with Section IX.

 

VI. SUPPORT 

 

Distributor shall receive the support of Company in its efforts to market PRODUCT licenses. ___________, or if not available, an appropriate substitute, shall make appearances at key events, attend key meetings, and endorse (through letters, video, audio, media’s, etc.) Distributor as Company’s partnership organization. Company shall support its business technology systems, deliverance of technology to consumer sector, and expertise in handling technical questions. Company shall provide training on its products and services to Distributor and its agents and contractors. Once trained, Distributor will become a technical implementation partner with Company with the capabilities of training all future contractors, agents, distribution outlets, etc.

 

Any costs incurred by Distributor in the marketing and distribution of the Company Technology are the sole responsibility of Distributor. Such costs include, but are not limited to, travel, entertainment, printing and marketing.

 

Any costs incurred by Company in the support of Distributor, including collateral materials and travel expenses, will be the sole responsibility of Company.

 

VII. USE OF COMPANY NAME. 

 

Company expressly prohibits any direct or indirect use, reference to, or other employment of its name, trademarks, or trade name exclusively licensed to Company, except as specified in this Agreement or as expressly authorized by Company in writing. All advertising and other promotional material will be submitted to Company at least two weeks in advance and will only be used if Company consents thereto, which consent shall not be unreasonably withheld.

 

VIII. REVENUE SHARING. 

 

Distributor and Company shall share revenues on the sale of PRODUCT licenses for all customers brought to Company by Distributor. Revenue sharing agreements will be included as an addendum for each sale. The Revenue Share provision is in effect for license deals with customers actively worked and closed by Distributor, and where Distributor is involved in the delivery and/or support of PRODUCT with the respective customer. Otherwise, the clause in Section III — Proceeds of Sales will govern the arrangement for commission payment. 

 

IX. CUSTOMER (END-USER) SERVICE AND SUPPORT. 

 

For contracts with which Distributor is to be responsible for the customer (end-user) support, Distributor will provide adequate, trained technical staff to provide first level customer support. If the first level contact is unable to resolve the customer issue, Distributor will provide adequate, trained technical staff to provide second level customer support. If the second level contact is unable to resolve the customer issue, the matter will be referred to Company to resolve the customer issue. For contracts with which Distributor provides the first and second level customer support, revenue share will be split accordingly at the support rate, which will be included in an addendum to this agreement in accordance with Section VIII.

 

X. TAXES

 

A. Payroll taxes. 

 

Distributor shall be exclusively liable for, and shall indemnify Company against such liability for, all employee payroll taxes and insurance arising out of wages payable to persons employed by Distributor in connection with the performance of this Agreement.

 

B. Taxes. 

 

Company is not liable for any taxes that Distributor is legally obligated to pay in connection with this Agreement, and all such taxes (including but not limited to net income or gross receipts taxes, franchise taxes, and/or property taxes) will be the financial responsibility of Distributor.

 

XI. DEFAULTS. 

 

Either Company or Distributor may terminate this Agreement on written notice if the other party materially breaches this Agreement and such material breach remains uncured for forty-five (45) days following written notice of same from the other party.

 

XII. INDEPENDENCE OF PARTIES. 

 

Nothing contained in this Agreement shall be construed to make Distributor the agent for Company for any purpose, and neither party hereto shall have any right whatsoever to incur any liabilities or obligations on behalf or binding upon the other party. Distributor specifically agrees that it will solicit orders for PRODUCT as an independent contractor in accordance with the terms of this Agreement; and that it will not at any time represent orally or in writing to any person or corporation or other business entity that it has any right, power, or authority not expressly granted by this Agreement.

 

XIII. ARBITRATION. 

 

All disputes under this Agreement that cannot be resolved by the parties shall be submitted to arbitration under the rules and regulations of the American Arbitration Association. Either party may invoke this paragraph after providing 30 days’ written notice to the other party. All costs of arbitration shall be divided equally between the parties. Any award may be enforced by a court of law.

 

XIV. WARRANTIES. 

 

Neither party makes any warranties with respect to the use, sale or other transfer of PRODUCT by the other party or by any third party. In no event will Company be liable for direct, indirect, special, incidental, or consequential damages, that are in any way related to PRODUCT.

 

XV. TRANSFER OF RIGHTS. 

 

This Agreement shall be binding on any successors of the parties. Neither party shall have the right to assign its interests in this Agreement unless the prior written consent of the other party is obtained.

 

XVI. TERMINATION. 

 

This Agreement may not be terminated by either party unless there are violations of the Agreement or either party is not performing its duties as outlined in this document, in which case termination requires party to provide 45 days written notice to the other party.

 

XVII. INDEMNITY. 

 

Distributor agrees to hold Company free and harmless from any and all claims, damages, and expenses of every kind or nature whatsoever (a) arising from acts of Distributor; or (b) as a direct or indirect consequence of termination of this Agreement in accordance with its terms.

 

XVIII. ENTIRE AGREEMENT. 

 

This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties with respect to the subject matter of this Agreement.

 

XIX. AMENDMENT. 

 

This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.

 

XX. SEVERABILITY. 

 

If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

 

XXI. WAIVER OF CONTRACTUAL RIGHT. 

 

The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement.

 

XXII. APPLICABLE LAW. 

 

This Agreement shall be governed by the laws of the Republic of South Africa.

 

 

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