Distribution Agreement

Distribution Agreement

This Distribution Agreement is made on [AGREEMENT DATE][ (the "Effective Date")] between [DISTRIBUTOR NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [DISTRIBUTOR ADDRESS] (the "Distributor") and [COMPANY NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [COMPANY ADDRESS] (the "Company").

The parties agree as follows (the capitalized terms used in this agreement, in addition to those above, being defined in section 36 (Definitions)):

1. Appointment of Distributor

1.1. Authorized Distributor. The Company hereby appoints the Distributor as its authorized distributor of the Products in the Territory, and the Distributor accepts this appointment, in accordance with the terms of this agreement.

1.2. Definition of "Products." In this agreement, "Productsmeans the products listed in Schedule A[, and includes all parts].

1.3. Definition of "Territory." In this agreement, means [DESCRIBE RESTRICTED TERRITORY].

2. Exclusivity. [The Distributor will act as the Company's exclusive distributor of Products in the Territory for the first [EXCLUSIVITY PERIOD] years of the term of this agreement. ]The Distributor shall not obtain any Products for resale from any Person other than the Company.

3. Product Supply. The Company shall

(a) fulfill all purchase orders for Products that the Distributor places with it, and

(b) replace or repair defective Products that are under Warranty,

in accordance with this agreement.

4. Product Materials. The Company shall provide to the Distributor the Product Materials that the Company generally provides to other distributors of the Products. The Product Materials will be provided in the English language only. Upon reasonable request by the Distributor, the Company shall supply all necessary documentation to enable the Distributor to comply with the regulatory requirements of all Governmental Authorities in the Territory.

5. New Products. The Company shall supply the Distributor with new Products unless the Company has indicated otherwise on a particular purchase order.

6. Changes to Products. The Company may discontinue or modify the Products, modify the Product specifications, or replace the Products with other Company or third party products, except for Products that are subject to an outstanding purchase order that has already been accepted by the Company, unless otherwise required by Law.

7. Product Field Actions

7.1. Notice of Product Field Action. If the Company determines that it is required to carry out a product correction that requires giving an advisory notice to customers (a "Product Field Action"), the Company shall give prompt Notice to the Distributor and the Distributor shall perform the required Product Field Action.

7.2. Reimbursement for Expenses. The Company shall reimburse the Distributor for all reasonable, documented out-of-pocket expenses that it incurs at the Company's request in carrying out a Product Field Action.

8. Minimum Purchase Quantity

8.1. Initial Purchase Order. Upon signature of this agreement, the Distributor shall place an initial purchase order of Products as detailed in Schedule A.

8.2. Determining the Quantity. The Minimum Purchase Quantity for the first calendar year is detailed in Exhibit A. The parties shall establish a Minimum Purchase Quantity for the four quarters of each calendar year at least [60] days before the start of each year, which in no event will be lower than the then-current Minimum Purchase Quantity.

8.3. Minimum Purchase Quantity. Each calendar quarter, the Distributor shall purchase a minimum quantity of Products from the Company each quarter (the "Minimum Purchase Quantity").

8.4. Failure to Meet Quota. If the Distributor fails to meet the Minimum Purchase Quantity for any quarter, the Company may, upon Notice to the Distributor, either convert the Distributor's exclusive rights in the Territory to non-exclusive rights for the remainder of the Term or terminate this agreement in accordance with section 30 (Termination). 

9. Promotion and Marketing

9.1. Promotion. The Distributor shall vigorously promote and sell the Products in the Territory. In doing so, it shall, at its own expense,

(a) employ on its own behalf a sufficient number of trained and qualified personnel to promote and sell the Products,

(b) maintain a professional sales and service organization as necessary to provide training and customer service for the Products, and

(c) otherwise operate its business in a professional and ethical manner,

in each case in accordance with this agreement.

9.2. Annual Marketing Plan

(a) First Annual Marketing Plan. The Distributor shall, within [60] days of the Effective Date of this agreement, provide for the Company's review and approval, the first Annual Marketing Plan.

(b) Updated Plans. At least [60] days before each anniversary of the date that the Company approved the first Annual Marketing Plan, the Distributor shall update the Annual Marketing Plan and provide the updated Plan to the Company.

(c) Implementation. Upon the Company's approval, the Distributor shall implement the Annual Marketing Plan.

9.3. Monthly Forecast, Sales, and Marketing Reports. During the first week of each calendar month, the Distributor shall provide to the Company a monthtly Product sales and marketing report, together with the Forecast, in the form of Exhibit A (the "Monthly Forecast, Sales, and Marketing Report").

9.4. Definition of "Annual Marketing Plan""Annual Marketing Plan" means a sales and marketing plan that

(a) lists sales goals for the following 12-month period for each Product,

(b) specifies the Distributor's planned media activities in support of each Product,

(c) identifies key opinion leaders on which sales and marketing efforts will be focused, and

(d) establishes an audit plan for customer accounts to assess Product usage.

10. Training

10.1. Participation in Training. Before selling any Products, the designated Distributor personnel must participate in the Company Training Program. The parties shall agree on the number of the Distributor personnel who will attend the Company Training Program based on the size of the Territory, the number of potential customers, and the Distributor's actual or potential sales of Products.

10.2. Training Location. The Company shall offer the Training Program at its offices.

10.3. Training Costs. The Distributor will be responsible for all travel-related expenses of its personnel who attend the Company Training Program.

11. Customer Support

11.1. Distributor Responsibility. The Distributor will be solely responsible for

(a) obtaining orders from customers,

(b) providing a level of support to customers at least at the level that Certified Personnel are trained to provide in accordance with the Company Training Program ("First-Level Support"),

(c) [providing training to customers for Products that it has sold,] and

(d) handling all other interactions with customers in the Territory relating to the Products.

11.2. Understanding of Products. The Distributor shall maintain a sufficient level of understanding of the Products to enable it to

(a) provide basic technical information to customers regarding the Products,

(b) effectively sell and service the Products, and

(c) obtain customer orders and provide assistance to customers in determining and fulfilling their Products requirements.

11.3. No Other Company Obligations. The Company has no other obligations to respond to or otherwise interact with any customers in the Territory.

12. Product Service

12.1. Requirements. The Distributor shall offer and provide product service for Products in and out of Warranty to all customers in the Territory. For out-of-Warranty service, the Distributor shall warrant its workmanship relating to product service for at least [90] days after completion.

12.2. Standards. The Distributor shall perform all product service in accordance with the requirements of the Company Training Program.

13. Sub-distributors. The Distributor shall not appoint or use any third parties to market, sell, or distribute the Products unless each sub-distributor, and the Distributor's written agreement authorizing the sub-distributor to market, sell, or distribute Products, has been expressly approved by the Company in writing.

14. Prohibited Activities

14.1. No Deceptive or Other Practices. The Distributor shall not

(a) engage in deceptive, misleading, or unethical practices that are or might be detrimental to the Company, the Products, or the public,

(b) make any false, misleading, or deceptive statements relating to the Company, the Distributor, or the Products, or

(c) make any statements to any existing or potential customers or to the trade relating to any of the Products that are inconsistent with the materials that the Company provides to the Distributor for marketing purposes

14.2. No Sales outside Territory. The Distributor shall not solicit the sale of any Products from customers in another territory. The Distributor may, however, accept and fill unsolicited orders for Products from customers located outside the Territory.

14.3. No Sales of Competing Products. The Distributor shall not promote or sell, directly or indirectly, any Competing Product. The Distributor shall disclose to the Company any new products in the field of [BUSINESS SEGMENT] that the Distributor intends to promote or sell, as well as their manufacturer before promoting or selling them. The Company shall advise the Distributor whether those products are Competing Products.

14.4. Prohibition against Certain Sales. The Company may prohibit the Distributor from providing Products to any Person that it reasonably believes is using the Products in violation of the terms of this agreement or any Law. 

14.5. Definition of "Competing Product." In this agreement, "Competing Product" means any product or treatment manufactured or offered for sale by another Person that competes with any of the Products.

15. Trademarks

15.1. Grant of Trademark License. In order to enable the Distributor to properly distribute the Products, the Company grants to the Distributor, and the Distributor accepts, a limited, non-exclusive, non-transferable, and revocable license to use the trademarks described in Schedule B (the "Licensed Trademarks") in the Territory in association with the Products.

15.2. Terms of Trademark License

(a) Use of Licensed Trademarks. The Distributor shall use and display the Licensed Trademarks only

(i) in association with the[ manufacture,] distribution, and sale of the Products,

(ii) in the manner and form that they are registered under the US Trademark Act of 1946, and

(iii) in accordance with the terms of this agreement.

(b) Advertising. The Distributor may, in the Territory,

(i) indicate to the public that it is an authorized distributor of the Products, and

(ii) use the Licensed Trademarks to advertise the Products.

(c) [Company's Approval of Proposed Uses. The Distributor shall submit to the Distributor, for its approval, all representations of the Licensed Trademarks that it intends to use.]

(d) Notice on Licensed Trademarks. The Distributor shall place the following notice (or any other notice that the Company may request[ in writing] on one or more occasions) in a legible manner on each licensed product that forms part of the Products and on any any packaging, advertising, promotional, or other [similar] materials that contain or depict the Licensed Trademarks and that the Distributor proposes to use in connection with the Products (including any content posted on any Internet site):

"Mark(s) of [COMPANY NAME]; used under license by [DISTRIBUTOR NAME]."

(e) Reservation of Rights. Any rights not expressly granted to the Distributor in this agreement are reserved to the Company. The Distributor does not acquire any rights other than the right to use the Licensed Trademarks in accordance with the terms of this agreement.

15.3. Use of Licensed Trademarks

(a) Trademark Use Policy. The Distributor shall abide strictly by the guidelines set out in the Company's Trademark Use Policy[, a copy of which is attached as Schedule C], currently in effect and as amended on one or more occasions (the "Trademark Use Policy"). The Company shall give reasonable Notice to the Distributor of any changes to the Trademark Use Policy.

(b) Documenting Use of Licensed Trademarks. The Distributor shall assist the Company, if requested, by providing documentation of its use of the Licensed Trademarks in connection with any trademark application.

(c) No Removal of Trademarks. The Distributor shall not alter or remove any of the Licensed Trademarks that have been applied to the Products.

(d) No Use in Business Name. The Distributor shall not use any of the Licensed Trademarks as part of its business name or as part of prominent signage displaying its business name.

(e) No Registrations based on Licensed Trademarks. The Distributor shall not create or register any new service or trademarks or tradenames based in whole or in part on any of the Licensed Trademarks.

(f) No Rebranding. The Distributor shall not rebrand or private label any of the Licensed Trademarks.

(g) No Holding Out. The Distributor shall not hold itself out as having any ownership interest in any of the Licensed Trademarks.

15.4. Definition of "Trademark Use Policy." In this agreement, "Trademark Use Policy" means the Company's Trademark Use Policy[, a copy of which is attached as Schedule C], currently in effect and as amended on one or more occasions.

16. Terms of Purchase and Payment

16.1. Purchase Orders. The Distributor shall order Products by completing and providing to the Company its standard purchase order form, including the then-current purchase prices.

16.2. Purchase Prices for Products. The Company shall make easily available to the Distributor its purchase prices for Products. The Company may change the Purchase Price upon [45] days' Notice.

16.3. Acceptance and Cancellation. The Company shall give Notice to the Distributor of its acceptance of the Distributor's purchase order. The Distributor may cancel any purchase orders by giving Notice to the Company before the Company's scheduled shipment of the Products or within [10] business days of acceptance of the purchase order, whichever is later.

16.4. Taxes. The purchase prices do not include applicable taxes. The Distributor is responsible for all taxes associated with the order at the (time of the sale or thereafter). The Distributor will be responsible for reimbursement of any taxes that the Company remits within [30] days of shipment.

16.5. Payment. The Company shall prepay all orders before shipment via wire transfer or letter of credit.

16.6. Shipping

(a) Delivery Ex Works. Transportation and delivery of Product will be made Ex Works at the Company's facility.

(b) Shipping Charges. In addition to the purchase price, the Distributor shall pay all costs associated with insurance, freight, import or export charges, and similar expenses.

(c) Freight CarrierThe Company shall select the freight forwarder or carrier for shipment, unless the Distributor designates the carrier on its purchase order. Upon delivery of the Products to the carrier, the title will transfer to the Distributor, and the Distributor will be deemed to have accepted them without right of return. The Company will have no further delivery-related obligations.

17. Term

17.1. Initial Term. The initial term of this agreement will begin on [TERM START DATE] and end on [TERM END DATE] (the "Initial Term"), unless terminated earlier.

17.2. Renewal Terms. Following the Initial Term, this agreement will automatically renew for successive [RENEWAL TERM PERIODS] terms (each, a "Renewal Term"), unless terminated earlier.

18. Distributor's Representations

18.1. No Conflicts. The Distributor is under no restriction or obligation that may affect the performance of its obligations under this agreement.

18.2. Permits and Other Authorizations. The Distributor holds all permits and other authorizations necessary to own, lease, and operate its properties and to conduct its business as it is now carried on.

18.3. No Sale of Competing Products. The Distributor does not promote or sell, directly or indirectly, any Competing Products.

19. Company's Representations

19.1. Ownership of Licensed Trademarks. The Company is the sole owner of the Licensed Trademarks.

19.2. Right to License. The Company has the[ exclusive] right to use and grant rights to use the Licensed Trademarks in the Territory.

19.3. [No Assignment. It has not assigned the Licensed Trademarks to any other Person in the Territory.]

19.4. No Infringement of Third Parties' Rights. Use of the Licensed Trademarks in the Territory does not infringe upon the intellectual property, contractual, or other proprietary or personal rights of any Person.

19.5. Registrations of Licensed Trademarks. The Company shall, at its own expense, keep current all registrations necessary to maintain its rights in and to the Licensed Trademarks.

19.6. No Conflicts. The Company is under no restriction or obligation that may affect the performance of its obligations under this agreement.

20.  Distributor's Acknowledgements

20.1. Proprietary Rights. The Company owns all right, title, and interest in the Products and in all of the Company's patents, trademarks, trade names, inventions, copyrights, know-how, trade secrets and other intellectual property relating to the design, manufacture, operation or service of the Products.

20.2. Benefit of Use of Licensed Trademarks. Any use by the Distributor of the Licensed Trademarks accrues to the benefit of the Company.

21. Product Warranty

21.1. Product Warranty. The Company warrants to the Distributor that, during the Standard Product Warranty Period, the Products will be free from material defects in materials and workmanship and will substantially conform to the Company's written specifications applicable to the particular Products as those specifications exist on the date of shipment (the "Product Warranty").

21.2. Warranty Non-transferable. The Product Warranty is non-transferable.

21.3. No Promises by Distributor. The Distributor shall not make any statements or promises regarding the Products that exceed the scope of the Product Warranty. The Distributor will be solely responsible for any liability arising from any such statements or promises that it does make.

21.4. Conditions of Product Warranty. The Product Warranty does not apply and will be void if the conditions set forth in this agreement are not met or if the Product

(a) has been subjected to any improper operation, neglect, misuse, alteration, abuse, willful damage, negligent operation, or failure to follow the Company's instructions,

(b) has had any unauthorized repair or modification, or

(c) has been repaired without the Company's prior approval.

21.5. Geographical and Time Limitations. The Company will not be obligated under the Warranty in connection with Products located outside the Territory or for any claims made after the expiration of the applicable Product Warranty period.

21.6. Disclaimer. Except for the Product Warranty, the Company makes no warranties or representations relating to the products, any training, and any services provided under this agreement. The Company disclaims all other warranties of any nature, express or implied, including any warranties of merchantability, fitness for a particular purpose, and non-infringement. The warranties contained in this agreement are exclusive and in lieu of all other warranties.

21.7. No Company Obligations to Customers. The Product Warranty is solely for the benefit of the Distributor. Nothing in this agreement obligates the Company to accept returns of Products directly from, or otherwise provide warranty or other services to, any customers.

21.8. Distributor Dealings with Customers. The Distributor shall handle all interactions with customers regarding warranty services and Products.

21.9. Labor Costs. The Distributor shall perform all labor required in connection with customer warranty services under this agreement (excluding labor associated with the repair or replacement of Products at the Company's facilities).

21.10. Shipping Costs. The Distributor shall pay all shipping-related charges to the Company for all Product Warranty repairs. The Company shall pay all shipping-related charges to return repaired Products to the Distributor, except that if the Company determines that any item returned for Product Warranty repair is in fact a Non-Defective Product, the Distributor shall pay the charges.

21.11. Definition of "Standard Product Warranty Period." In this agreement, "Standard Product Warranty Period" for any Product means a period of [three] years following the date that is [60] days after the date the Company ships the Product to the Distributor. 

22. Compliance and Regulatory Matters

22.1. Compliance with Laws. The Distributor shall comply at its expense with all Laws governing the distribution, promotion, marketing, training, and sale of the Products in the Territory. [It shall maintain records as necessary to demonstrate its compliance.]

22.2. Permits and Approvals. The Distributor shall obtain and maintain all permits and other approvals required by any Governmental Authority. To the extent possible, the Distributor shall obtain these approvals in the name of the Company alone. The Distributor shall provide copies of all approvals to the Company promptly when they are obtained.

22.3. Notice of Regulatory Changes. The Distributor shall give the Company Notice of any changes or proposed changes to any applicable regulatory requirements, including any changes that might be required to the Products, and of the Distributor's to comply with them.

22.4. Recalls. The Distributor shall comply promptly with any recalls of the Product issued by the Company or any applicable Governmental Authority.

23. Confidentiality

23.1. Confidentiality Obligations. During the Restricted Period, the Distributor shall hold all Confidential Information in confidence in accordance with the terms of this agreement.

23.2. Use Solely for Purpose. The Distributor shall use the Confidential Information solely for the Purpose.

23.3. Standard of Care. In protecting the Confidential Information, the Distributor will exercise at least the same degree of care as it uses with its own Confidential Information, but in no event less than reasonable care.

23.4. Permitted Disclosure. The Distributor may disclose Confidential Information to its Representatives but only

(a) to the extent necessary to carry out the Purpose,

(b) if The Distributor first informs them of, and directs them to maintain, its confidential nature in accordance with the terms of this agreement[, and

(c) upon the Company's request in connection with any of the Distributor's Representatives[ other than a director, officer, shareholder, partner, or employee], if they each first enter into separate written agreements to that effect[ in a form acceptable to the Company].

23.5. Required Disclosure. The Distributor may disclose Confidential Information to a third party if it is required to do so by Law but only if, before that disclosure, the Distributor, to the extent permitted by Law,

(a) gives the Company Notice to allow it a reasonable opportunity to either seek a protective order or other appropriate remedy or waive the Distributor's compliance with this section 23 (Confidentiality),

(b) reasonably cooperates with the Company[, at the Company's expense,] in its reasonable efforts to obtain a protective order or other appropriate remedy,

(c) discloses only that portion of the Confidential Information that[, having consulted with its counsel,] it is legally required to disclose, and

(d) uses reasonable efforts to obtain reliable written assurance from the third party that the Confidential Information will be kept confidential.

23.6. Value and Nature of Confidential Information. The parties acknowledge that the Confidential Information is proprietary and has competitive value. Accordingly, any disclosure to the Company's competitors or to the public would be detrimental to the best interests of the Company, which may incur losses, costs, and damages as a result.

23.7. Burden of Proof. The Distributor will have the burden of proof relating to all exceptions to the definition of Confidential Information.[ The Distributor may rely on its own written records in support of its position.]

23.8. Definition of "Confidential Information." In this agreement, "Confidential Information" means all [material] [non-public] [business-related] information, written or oral[, whether or not it is marked as confidential], disclosed or made available to the Distributor,[ directly or indirectly,] through any means of communication [or observation] by the Company[ or any of its affiliates or representatives] relating to the Company or the Licensed Trademarks, and any derivative of that information, but does not include information that

(a) is or becomes publicly known through no wrongful act of the Distributor,

(b) the Distributor received in good faith on a non-confidential basis from a source other than the Company or its representatives,

(c) was in the Distributor's possession before its disclosure by the Company or its representatives,

(d) the Distributor developed independently without breach of this agreement, or

(e) the Company has explicitly approved, by Notice to the Distributor, for release to a third party.

23.9. Definition of "Restricted Period." In this agreement, "Restricted Period" means the period that ends [RESTRICTED PERIOD] years after the Termination Date. 

24. Non-Competition

24.1. Restrictions. During the Restricted Period, the Distributor shall not, directly or indirectly, engage in any Restricted Activity within the Territory.

24.2. Permitted Investments. The Distributor may, however, participate as a passive investor holding up to [PASSIVE INVESTMENT PERCENT]% of the equity securities of a publicly-traded Person that is engaged in the Restricted Business.

24.3. Definition of "Restricted Activity." In this agreement, "Restricted Activity" means

(a) owning, managing, operating, controlling, or financing,

(b) participating in the ownership, management, operation, control, or financing of, or

(c) being connected as an officer, director, executive, partner, principal, agent, or consultant of any entity engaged in any

Restricted Business.

24.4. Definition of "Restricted Business." In this agreement, "Restricted Business" means any [DESCRIPTION OF RESTRICTED BUSINESS].

25. Non-Solicitation. During the Restricted Period, the Distributor[, on its own behalf or in the service or on behalf of others] shall not induce or attempt to induce any officer, director, or employee to leave the Company.

26. Maintenance of Books and Records

26.1. Recordkeeping. The Distributor shall keep at its principal office complete, accurate, and commercially reasonable records of the operations of [its business], together with all reasonably necessary related documents required to accurately calculate the fees due under this agreement.

26.2. Records Retention. The Distributor shall retain all financial information relating to its sales of the Products for at least [RECORD PERIOD] following a given reporting period.

26.3. Copies of Financial Statements. At the Company's request, the Distributor shall, at its own expense, provide to the Company either a reviewed or an audited profit-and-loss statement and balance sheet for the [Licensed Property] within [60] days of the end of each fiscal year.

27. Insurance

27.1. Coverage. The Distributor shall obtain and maintain

(a) workers' compensation insurance in the amount required by law,

(b) product liability insurance coverage appropriate to the risk involved in marketing and selling the Products, which in no event will be less than $[MINIMUM INSURANCE AMOUNT], and

(c) comprehensive general liability insurance with coverage of at least $[INSURANCE COVERAGE] per occurrence for bodily injury, property damage, or other losses.

27.2. Additional Insured. The Distributor shall ensure that its insurance coverage will list the Company as an additional insured.

27.3. Proof of Insurance. At the Company's request, the Distributor shall provide it with

(a) certificates or other acceptable evidence of insurance evidencing its coverage, and

(b) at least [30] days' prior Notice of any change in or cancellation of the insurance coverage.

28. Returns of Defective Products

28.1. Return Authorization Procedure. In the case of a defective Product that the Distributor considers fails to meet the conditions of the Product Warranty, the Distributor must first obtain a return material authorization number from the Company before returning it to the Company and otherwise follow the Company's then-current return authorization procedure in connection.

28.2. Company's Options. The Company shall accept the return of a defective Product and either

(a) repair it or have it repaired, or

(b) provide the Distributor with a replacement.

28.3. Defective Products. The Company's repair or replacement of a defective Product in accordance with this agreement will be the Company's entire liability and the Distributor's exclusive remedy for the breach of the Product Warranty.

28.4. Non-Defective Products. If the Company determines that a Product returned by the Distributor is in fact a Product that the Distributor has returned to the Company that in fact conforms to the applicable warranty (a "Non-Defective Product"), the Company shall give Notice to the Distributor of that fact and return it at the Distributor's expense. The Company may also, in this case, assess the Distributor a charge for its testing and examination.

29. Inspection and Audit

29.1. Inspection. The Distributor shall, upon reasonable Notice from the Company, provide access to its offices during normal business hours for the purpose of conducting an inspection to verify that the Distributor is in compliance with the terms of this agreement. The Distributor shall cooperate with the Company in its inspection.

29.2. Conduct of Inspection. The Company shall conduct any inspection in a manner so as not to unreasonably disrupt the Distributor's business. The Company shall restrict the scope, manner, and duration of any inspection to that reasonably necessary to achieve its purpose.

29.3. Audit. The Company may also, on one or more occasions and at its own expense, conduct an audit of the Distributor's records, upon the same terms as any inspection.

30. Termination

30.1. Termination upon Notice. The Company may terminate this agreement for any reason upon [TERMINATION FOR CONVENIENCE NOTICE] days' Notice to the Distributor.

30.2. Termination upon Change in Control of Distributor. The Company may terminate this agreement, with immediate effect, by giving Notice to the Distributor, in the event of a Change in Control of the Distributor.

30.3. Termination upon Breach

(a) Immediate Termination. The Company may terminate this agreement, with immediate effect, by giving Notice to the Distributor, if the Distributor

(i) fails to pay when due any amount owing under this agreement and that failure continues for [five] days,

(ii) fails to meet the Minimum Purchase Quantity for any quarter,

(iii) challenges, or assists others to challenge, any of the Licensed Trademarks or Company's registrations of the Licensed Trademarks, or

(iv) registers or attempts to register any trademarks or trade names that are confusingly similar to the Licensed Trademarks.

(b) Any Other Breach. If one party

(i) commits any material breach or material default in the performance of any obligation under this agreement (other than the Distributor's obligation to pay money), and

(ii) the breach or default continues for a period of [CURE PERIOD] business days after the other party delivers Notice to it reasonably detailing the breach or default,

then the other party may terminate this agreement, with immediate effect, by giving Notice to the first party.

30.4. Termination upon Insolvency Event. This agreement will terminate immediately upon the occurrence of any of the following:

(a) Insolvency. The Distributor admits in writing that it is insolvent or unable to pay its debts, or fails generally to pay its debts as they become due.

(b) Bankruptcy. The Distributor files a voluntary petition, or one or more of its creditors file a petition, seeking its rehabilitation, liquidation, or reorganization under any law relating to bankruptcy, insolvency, or other relief of debtors and the petition is not removed within [90] days of filing.

(c) Receivership. A receiver or other custodian is appointed to take possession of substantially all of the Distributor's assets.

(d) Dissolution. The Distributor takes any action toward the dissolution or winding up of its affairs or the cessation or suspension of its activities.

(e) Liquidation. A court of competent jurisdiction enters a decree or order directing the winding up or liquidation of the Distributor or of all or substantially all of its assets.

(f) General Assignment. The Distributor makes a general assignment for the benefit of its creditors.

(g) Attachment. Any attachment, execution, or other judicial seizure is levied against all or substantially all of the Distributor's assets.

30.5. Definition of "Change in Control." In this agreement, “Change in Control” means

(a) any sale, transfer, exchange, or other disposition of ownership interests in, or any merger, acquisition, or other reorganization of, the Distributor that results in a change in the Control of the Distributor that is currently exercised by one or more Persons, or

(b) any sale, transfer, or other disposition of all or substantially all of the Distributor’s assets.

30.6. Definition of "Control." In this agreement, "Control" means, for a Person, the ownership interest in an entity that has the practical effect of giving that Person, either alone or with others, the majority voting interest in that entity, and the terms "Controlled" and "Controlling" have comparable meanings. 

31. Effect of Termination

31.1. Return of Property. Upon termination or expiration of this agreement, the Distributor shall return to the Company all Company property, both originals and copies, under its direct or indirect control.

31.2. Fulfillment of Certain Orders. Upon Termination upon Notice in accordance with section 30.1 (Termination upon Notice), the Company shall fulfill those purchase orders that the Company accepted before the Termination Date.

31.3. Records. Within [10] days after the Termination Date, the Distributor shall provide to the Company all of the most current versions of its sales records, training records, and Service Records.

31.4. Remaining Inventory

(a) The Company may (a) purchase or (b) broker the transfer to a distributor of the Company's choosing any inventory of Products that is in the Distributor's possession on the Termination Date (the "Remaining Inventory") at the purchase prices that the Distributor paid for them. For a period of [90] days after the Termination Date, the Distributor may sell any of the Remaining Inventory that the Company chooses not to so purchase or broker.

(b) At the end of that 90-day period, the Distributor shall ship to the Company any Remaining Inventory left unsold at the Company's direction and at its reasonable expense.

31.5. Cease Use of Marks. Upon the Termination Date, the Distributor shall cease its use of the Licensed Trademarks and any other brand identifiers of the Company and shall cease representing to third parties that it is affiliated with the Company.

31.6. Service Responsibility. If requested by the Company in writing, the Distributor shall, for a period designated by the Company of up to [three] months after the Termination Date, continue to provide product warranty and other services, on a non-exclusive basis, to existing customers relating to the Products. The Distributor shall otherwise cease providing service or otherwise interacting with customers in connection with the Products.

31.7. Definition of "Service Records." In this agreement, "Service Records" means the records that the Company maintains with details of all services provided to customers in accordance with this agreement.

32. Third Party Infringement

32.1. Notice to Company. The Distributor shall promptly give Notice to the other when it becomes aware of any actual, suspected, or threatened Infringement of the Proprietary Licensed Trademarks by a third party in the Territory. The Company may, in that case, take any steps it considers appropriate to enforce its rights in the Proprietary Licensed Trademarks. The Distributor[, at its own expense,] shall cooperate with the Company to the fullest possible extent.

32.2. Distributor's Rights. If, within [10] business days of receipt of the Distributor's Notice, the Company either fails to respond to the Distributor's Notice or gives Notice to the Distributor that it elects not to take any steps to enforce its rights, the Distributor may, upon Notice to the Company, take any steps it considers appropriate in the circumstances in the name and on behalf of the Company. The Distributor may then keep any damages or proceeds of settlement it obtains as a result.

32.3. Definition of "Infringement." In this agreement, "Infringement" means any infringement, deemed infringement, passing off, depreciation of goodwill, or other unauthorized use of or interference with any intellectual property rights, and the verb "infringe" has a comparable meaning.

33. Claim of Infringement against Distributor

33.1. Notice to Company. The Distributor shall promptly give Notice to the Company of any action, claim, or demand brought or threatened by a third party against it arising out of its use of the Proprietary Licensed Trademarks in accordance with this agreement. The Company shall, in that case, take all steps it considers appropriate, at its own expense, to defend the Distributor and the Proprietary Licensed Trademarks (including settling any legal actions in the Distributor's name). The Distributor shall, at its own expense, cooperate with the Company to the fullest possible extent.

33.2. Claims Resulting from Distributor's Breach. If it is established that the third party's action, claim, or demand resulted from a material breach of the Distributor's obligations under this agreement, the Distributor shall reimburse the Company for all costs and expenses (including legal fees) incurred in defending the Distributor and the Proprietary Licensed Trademarks.

34. Indemnification

34.1. Distributor Indemnity. The Distributor shall indemnify the Company[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, costs, and expenses (including legal fees) arising from any third party claim or proceeding brought against the Company that that arises from or relates to any breach by the Distributor of any of its obligations under this agreement.

34.2. Notice of Claim. A party shall give prompt Notice to the other party of any claim or potential claim for indemnification under this section 34 (Termination).

35. Limited Liability

35.1. Limitation of Liability. Neither party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen on entering into this agreement. In no event will the Company be liable to the Distributor for any compensation arising from the expiration or termination of this agreement in accordance with section 30 (Termination).

35.2. No Liability towards Customers. This agreement does not create any liability of the Company towards any customer.

35.3. Maximum Amount of Company Liability. In no event will the Company's aggregate, cumulative liability arising out of or related to this agreement exceed the sum of all amounts that the Distributor has actually paid to it during the six month period immediately preceding the first event giving rise to liability.

35.4. Allocation of Risk. The parties acknowledge that the prices that it sets for the Products reflect the allocation of risk between them and that, accordingly, the Company would not enter into this agreement without the limitations of its liability and the warranty disclaimers contained in this agreement.

36.  Definitions. In addition to the terms defined above, the following definitions apply:

36.1. "Annual Marketing Plan" is defined in section 9.4 (Definition of "Annual Marketing Plan").

36.2. "Change in Control" is defined in section 30.5 (Definition of "Change in Control"). 

36.3. "Confidential Information" is defined in section 23.8 (Definition of "Confidential Information"). 

36.4. "Competing Product" is defined in section 14.5 (Definition of "Competing Product"). 

36.5. "Control" is defined in section 30.6 (Definition of "Control"). 

36.6. "First-Level Support" is defined in paragraph (b) of section 11.1 (Distributor Responsibility). 

36.7. "Governmental Authority" means

(a) the government of the United States or any other nation, or any geographical or political unit or subdivision of either of them (whether federal, provincial, state, municipal, local, or otherwise), and

(b) any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or pertaining to, government.

36.8. "Infringement" is defined in section 32.3 (Definition of "Infringement").

36.9. "Insolvency Event" is defined in section 30.6 (Definition of "Insolvency Event"). 

36.10. "Law" means

(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and

(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority, having the force of law.

36.11. "Licensed Trademarks" is defined in section 15.1 (Grant of Trademark License).

36.12. "Minimum Purchase Quantity" is defined in section 8.3 (Minimum Purchase Quantity). 

36.13. "Monthly Forecast, Sales, and Marketing Report" is defined in section 9.3 (Monthly Forecast, Sales, and Marketing Report).

36.14. "Non-Defective Product" is defined in section 28.4 (Non-Defective Products).

36.15. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this agreement.

36.16. "Person" includes

(a) any corporation, company, limited liability company, partnership, Governmental Authority, joint venture, fund, trust, association, syndicate, organization, or other entity or group of persons, whether incorporated or not, and

(b) any individual.

36.17. "Product Field Action" is defined in section 7.1 (Notice of Product Field Action).

36.18. "Product Warranty" is defined in section 16.1 (Product Warranty).

36.19. "Products" is defined in section 1.2 (Definition of "Products").

36.20. "Remaining Inventory" is defined in section 31.4 (Remaining Inventory).

36.21. "Renewal Term" is defined in section 17.1 (Renewal Terms).

36.22. "Restricted Period" is defined in section 23.9 (Definition of "Restricted Period").

36.23. "Service Records" is defined in section 30.7 (Definition of "Service Records").

36.24. "Standard Product Warranty Period" is defined in section 20.11 (Definition of "Standard Product Warranty Period").

36.25. "Term" means the Initial Term, as extended by one or more Renewal Terms.

36.26. "Termination Date" means the effective date of termination or expiration of this agreement.

36.27. "Trademark Use Policy" is defined in paragraph (a) (Trademark Use Policy) of section 15.3 (Use of Licensed Trademarks).

36.28. "Territory" is defined in section 1.3 (Definition of "Territory").

37. General

37.1. Entire Agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.

37.2. Further Assurances. Each party, upon receipt of Notice from the other party, shall sign (or cause to be signed) all further documents, do (or cause to be done) all further acts, and provide all assurances as may reasonably be necessary or desirable to give effect to the terms of this agreement.

37.3. Amendment. This agreement may only be amended by a written document signed by both parties.

37.4. Assignment. The Distributor may not assign this agreement or any of their rights or obligations under this agreement without the Company's prior written consent. The Company may assign its rights and obligations under this agreement

(a) to any subsidiary or affiliate, or

(b) in connection with any sale, transfer, or other disposition of all or substantially all of its business or assets but only if the assignee assumes all of the Company's obligations.

37.5. No Partnership. Nothing contained in this agreement creates a partnership, joint venture,[ employer/employee,] principal-and-agent, or any similar relationship between the parties.

37.6. Third Party Beneficiaries. The Indemnification terms of this agreement confer rights and remedies upon the Company's directors, officers, employees, shareholders, partners, agents or Affiliates. No Person other than the parties themselves and those beneficiaries has any rights or remedies under this agreement.

37.7. Power of Attorney

(a) Grant. In connection with the license granted to it for the Licensed Trademarks, the Company [irrevocably] appoints [ATTORNEY] as its attorney and agent[, with full power of substitution,] to sign all documents necessary to [PURPOSE OF POWER OF ATTORNEY]. [The Company may revoke this power of attorney at any time upon Notice to the Distributor and the attorney.]

(b) Binding Nature. The Company will be bound by any actions made by its attorney in good faith and without negligence under this power of attorney. The Company shall ratify, and hereby waives, all defences that may be available to it to contest any action of its attorney taken in good faith and without negligence under this power of attorney.

37.8. Payment of Costs. Each party is responsible for all costs (including legal fees) and expenses that it incurs in connection with the negotiation and preparation of this agreement.

37.9. Notices

(a) Form of Notice. All notices and other communications between the parties must be in writing.

(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party's address specified in this agreement, or to the address that a party has notified to be that party's address for the purposes of this section.

(c) Receipt of Notice. A Notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth business day following mailing.

37.10. Remedies Cumulative. The rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.

37.11. Survival. Sections 23 (Confidentiality), 24 (Non-Competition), 25 (Non-Solicitation), 31 (Effect of Termination), and 34 (Indemnfication) survive the termination or expiration of this agreement.

37.12. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

37.13. Waiver. A party's failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.

37.14. Equitable Relief. The Distributor acknowledges that its breach or threatened breach of any its obligations under sections 23 (Confidentiality), 24 (Non-Competition), or 26 (Non-Solicitation) would not be susceptible to adequate relief by way of monetary damages only. Accordingly, the Company may, in that case, apply to court for any applicable equitable remedies (including injunctive relief), without the need to post any security.

37.15. Force Majeure. Neither party will be liable for any failure of or delay in the performance of any of its obligations under this agreement if its failure or delay is due to the occurrence of Force Majeure.

37.16. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.

37.17. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.

37.18. Attorney Fees. If either party brings legal action to enforce its rights under this agreement, the prevailing party will be entitled to recover its costs and expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.

37.19. Interpretation

(a) Currency. Unless otherwise specified, all dollar amounts expressed in this agreement refer to American currency.

(b) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa; words importing gender include all genders.

(c) Headings. The headings used in this agreement and its division into sections and other subdivisions do not affect its interpretation.

(d) Internal References. References in this agreement to sections and other subdivisions are to those parts of this agreement.

37.20. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.

37.21. Effective Date. This agreement is effective as of the date shown at the top of the first page, even if any signatures are made after that date.

This agreement has been signed by the parties.












Schedule A

List of Products and Initial Purchase Order

Schedule B

List of Licensed Trademarks

[Schedule C

Trademark Use Policy]