THIS DISTRIBUTION AGREEMENT
(“Agreement”) is made as of , 200__ (the “Effective Date”) by and between The
University of Texas (“Supplier”), whose address is , and (“Distributor”),
whose address is ______________________________________________.
A. Supplier has created
certain products known as “ ………….“ which are proprietary to Supplier.
B. Distributor desires that
Supplier appoint Distributor as Supplier’s exclusive distributor in the USA
with respect to the distribution and sale of the products to [specify any
particular marketing niche, if any].
C. Supplier and Distributor
also desire that [Supplier/Distributor] produce copies of the Products for
distribution and sale by Distributor as more particularly set forth herein.
in consideration of their mutual promises set forth below and other valuable
consideration, the parties agree as follows:
SCOPE OF AGREEMENT
1.1 Definitions. As used in
this Agreement, the following terms shall have the following meanings:
“Contract Year” means any given twelve month period
ending on an anniversary of the Effective Date.
“Product(s)” means Supplier’s product(s) known as “
“ manufactured in accordance with the Specification, and any improved versions
of the product(s) introduced by Supplier from time to time.
“Specifications” means the specifications for the
Products set forth of Exhibit A, as supplemented or amended by Supplier from
time to time.
“[Marketing Niche]” means [definition of any
particular marketing niche].
Exclusivity. Supplier hereby appoints Distributor as Supplier’s exclusive
distributor in the USA (and no other territory) with respect to the
distribution and sale of the Products through Distributor’s normal
distribution channels to [Marketing Niche] only. This Agreement does not grant
to Distributor any rights with respect to the distribution and sale of the
Products in any market other than [Marketing Niche] in the USA. The exclusive
right granted Distributor to distribute and sell Products to [Marketing Niche]
is expressly made subject to Section 2.1.a below. Distributor acknowledges and
agrees that Supplier has retained for itself and/or granted to others the
rights to distribute and sell the Products in markets other than [Marketing
Niche] in the USA. Accordingly, Distributor agrees (i) to not
distribute or sell Products except to [Marketing Niche] in the USA through
Distributor’s normal distribution channels and (ii) to require that each
Distributor contractor, agent, representative, and/or sub- distributor selling
or handling Products (“Sub-distributors”) will comply with the limitations and
restrictions imposed by this Section 1.2; and (iii) to take all reasonable
steps to enforce such limitations and restrictions on the Sub-distributors.
Distributor’s failure to comply with any of the provisions of this Section 1.2
shall be a material breach of this Agreement.
1.3 Independent Contractors.
Neither party shall, for any purpose, be deemed to be an agent of the other
party and the relationship between the parties shall only be that of
1.4 No Other Terms and
Conditions. The parties acknowledge and agree that any terms and conditions of
any purchase order, sales acknowledgement or other document submitted to the
other by either party which conflict with the terms and conditions of this
Agreement shall be of no force or effect, and the terms and conditions hereof
control and supersede such conflicting documents and any course of conduct or
usage of the trade inconsistent with any of the terms and conditions hereof.
PURCHASE AND SALE OF PRODUCT.
2.1 Purchase and Sale.
Subject to the terms and conditions set forth herein, Supplier agrees to sell
and Distributor agrees to purchase Products in accordance with Distributor’s
purchase orders and this Agreement. In this regard:
a. Distributor agrees to
purchase and take delivery of not less than the following minimum quantity of
Products in each Contract Year:
1st Contract Year
2nd Contract Year
3rd - 5th Contract Years
The foregoing minimum
purchase requirement will be satisfied for any given Contract Year if
Distributor’s aggregate purchases of Product “units” equals or exceeds the
minimum number for that Contract Year. If Distributor fails to meet or exceed
the foregoing minimum purchase requirement in any given Contract Year, then,
as Supplier’s sole remedy, Supplier may elect, by written notice to
Distributor (i) to terminate this Agreement or (ii) to make non-exclusive for
all purposes the sales and distribution rights granted Distributor by Section
b. Unless otherwise agreed,
the minimum order quantity is ( ) units for any given Product.
c. All Products will be sold
under Supplier’s trademarks and tradenames only, using Supplier’s trade dress,
and Supplier will retain all proprietary rights in and to the same.
2.2 Purchase Orders and
Forecasts. Upon execution of this Agreement, Distributor shall provide
Supplier with an initial six (6) months firm purchase order for the purchase
of Products and a forecast of its Product requirements for the seventh (7th)
through twelfth (12th) months thereafter divided on a monthly basis, which
initial purchase order and forecast are attached hereto as Exhibits B and C,
respectively. Commencing with the fourth (4th) month of the first Contract
Year and continuing thereafter, Scott will provide Supplier, on or before the
last day of each calendar month during the term of this Agreement, an
additional firm purchase for Products for the third full calendar month
thereafter and a revised or supplemental forecast of Product requirements for
the fourth (4th) through ninth (9th) months thereafter (unless the term hereof
is shorter), it being the intent that (except for the initial six months
guaranteed purchase order) in general Distributor will provide three (3)
months purchase orders and six (6) months forecasts on a rolling monthly basis
during the term of this Agreement. Distributor’s purchase orders for a given
month, in order to be conforming, must specify only delivery dates during that
month. Distributor’s forecasts are non-binding, but shall be Distributor’s
reasonable best estimate of its future Product requirements.
2.3 Acceptance of Purchase
Orders. Within ten (10) days of receipt of a purchase order from Distributor,
Supplier may request in writing a modification of the Product designations,
quantities, delivery dates, and special shipment instructions specified
thereon. Supplier’s failure to request a modification or to reject a purchase
order within the ten (10) day period shall be deemed an acceptance thereof.
Upon actual or deemed acceptance of a purchase order by Supplier, a binding
contract for the sale and purchase of Product shall exist between Supplier and
Distributor in accordance with this Agreement and Distributor’s purchase
order. If Supplier requests modification of any of the aforementioned terms of
Distributor’s purchase order, then Distributor shall have ten (10) days
following receipt of the request to accept or reject Supplier’s modifications.
If Distributor does not respond or object to Supplier’s request within ten
(10) days of receipt, the modifications specified thereon shall be deemed
accepted by Distributor. Upon Distributor’s actual or deemed acceptance of
purchase order modifications by Supplier, a binding contract for the sale and
purchase of Products shall exist between Supplier and Distributor in
accordance with this Agreement and Distributor’s purchase order as so
modified. The foregoing modification procedure shall apply only with the
regard to Product designations, quantities, delivery dates, and special
shipment instructions. With respect to all other terms, Supplier and
Distributor agree that the terms and conditions of this Agreement shall apply
to the sale of Product hereunder and cannot be modified or amended except as
provided in Section 12.8.
2.4 Non-Conforming Orders.
Supplier will use reasonable commercial efforts to fill non-conforming
purchase orders for Products in accordance with Distributor’s requests.
2.5 Shipment. Supplier will
ship Product to Distributor to the delivery destination(s) specified in
Distributor’s purchase orders, but in no event may Supplier be required to
ship to more than ( ) different locations within the United States. Supplier
shall arrange prepaid insured common carrier transportation of the Products in
accordance with Distributor’s instructions, at Distributor’s expense. Supplier
may not undership or overship by more than ten percent (10%) without
Distributor’s prior written consent.
2.6 Delivery, Title and Risk
of Loss. For purposes of this Agreement, delivery to Distributor will occur
when the Products are placed in the possession of the common carrier by
Supplier. Title and risk of loss or damage with respect to the Products shall
pass to Distributor upon delivery by Supplier.
2.7 Packaging for Shipment.
Unless otherwise agreed in advance, all Products shall be packed by Supplier
as Supplier reasonably deems appropriate to minimize risk of loss or damage in
PRICES AND PAYMENT.
3.1 Price. The prices for the
Products (including volume discounts) for the first twelve (12) months of this
Agreement (the first “contract year”) are as set forth on Exhibit D. Prices do
not include applicable sales or use taxes and shipping costs (freight and
insurance), which shall be separately stated on Supplier’s invoices and born
3.2 Price Changes. The prices
set forth on Exhibit D shall be revised annually, on or before the start of
each Contract Year, to reflect any increase or decrease in manufacturing costs
for the Products reasonably projected by Supplier for the next Contract Year (in
each case, determined in accordance with generally accepted accounting
principles, consistently applied), with the first pricing review occurring ten
(10) months after the Effective Date of this Agreement. Price changes are not
effective unless mutually agreed to in writing (agreement not to be
unreasonably withheld if consistent with this Section 3.2), with the change
being effective with respect to invoices for shipment during the next ensuing
3.3 Taxes. Distributor shall
be responsible for all VAT, sales, use and other similar taxes applicable to
Product supplied under this Agreement, unless Distributor provides written
proof of exemption.
3.4 Payment. Supplier shall
issue invoices for Product on or after the date of shipment. Payment shall be
due within thirty (30) days from the date of invoice. A late charge at the
rate of one and one-half percent (….%) per month or the highest rate allowed
by law, whichever is lower, shall be applied to the total invoice price for
payments not received within sixty (60) days after the date of invoice.
SPECIFICATIONS, QUALITY CONTROL AND ACCEPTANCE.
4.1 Specifications. Subject
to Section 4.3, [Supplier/Distributor] shall produce copies of the Product in
all material respects in accordance with the Specifications and all applicable
federal, state and local laws and regulations.
4.2 Specification Changes.
Supplier reserves the right to change the Specifications by written notice to
Distributor. If Distributor objects to any Specification change proposed by
Supplier, then the parties will consult in good faith to resolve their
differences and Supplier will not implement the change without Distributor’s
consent (not to be unreasonably withheld).
4.3 Quality Assurance.
Supplier shall be responsible for ensuring that the Products meet Supplier’s
internal quality assurance tests and procedures prior to shipment hereunder.
Upon request, Supplier will provide Distributor with written certification by
a responsible supervisory employee of Supplier that the requirements of this
Section 4.3 have been met.
4.4 Acceptance. Products
shipped hereunder shall be subject to acceptance by Distributor within fifteen
(15) days of receipt. Distributor shall promptly inform Supplier of any
Product rejected as non-conforming and at Supplier’s request shall return non-conforming
Products to Supplier, at Supplier’s risk of loss and expense. Products as to
which no rejection has occurred within fifteen (15) days shall be deemed
Distributor is granted a non-exclusive
license during the term of this Agreement to use and further sublicense the
right to use the Products purchased hereunder in accordance with this
Agreement. Distributor agrees that all Products delivered under this Agreement
are only for such use, and that despite any use of the terms “purchase” and
“sale” in connection with Products, such Products shall not be sold nor shall
title thereto be transferred to Distributor and Distributor has no interest in
the Products obtained by it other than the license rights specifically set
forth in this section. Supplier shall retain all ownership right, title and
interest in the Products furnished to Distributor pursuant to this Agreement.
Except as separately agreed to by Supplier, Distributor may not modify in any
way, or copy or otherwise reproduce in any form, any computer program (including
manuals and other supplied documentation) supplied with any Product or
purchased hereunder. Distributor will comply with the policies and
requirements of Supplier in effect from time to time with respect to (i) the
licensing by Supplier of its proprietary, protected or confidential material
and information and (iii) any Products which are subject to one or more
license agreements between Supplier and third parties.
Distributor shall maintain
and place on any copy of a Product which it reproduces, whether for internal
use or for distribution, all such notices as are authorized and/or required
hereunder. Distributor shall use the following notice, or such other
reasonable notice as Supplier shall from time to time require, on each copy of
the Product. Such notice shall be loaded in the computer memory for use,
display, or reproduction and shall be embedded in program source code and
object code, in the video screen display, on the physical medium embodying the
Product copy, and on any documentation and sublicensee reference manuals:
This software and
documentation constitute an unpublished work and contain valuable trade
secrets and proprietary information belonging to University. None of the
foregoing material may be copied, duplicated or disclosed without the express
written permission of University. UNIVERSITY EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES CONCERNING THIS SOFTWARE AND DOCUMENTATION, INCLUDING ANY
WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR ANY PARTICULAR PURPOSE, AND
WARRANTIES OF PERFORMANCE, AND ANY WARRANTY THAT MIGHT OTHERWISE ARISE FROM
COURSE OF DEALING OR USAGE OF TRADE. NO WARRANTY IS EITHER EXPRESS OR IMPLIED
WITH RESPECT TO THE USE OF THE SOFTWARE OR DOCUMENTATION. Under no
circumstances shall University be liable for incidental, special, indirect,
direct or consequential damages or loss of profits, interruption of business,
or related expenses which may arise from use of software or documentation,
including but not limited to those resulting from defects in software and/or
documentation, or loss or inaccuracy of data of any kind.
PRODUCT WARRANTY, DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY.
7.1 Product Warranty.
Supplier warrants to Distributor that the Products purchased hereunder shall
be free from defects in materials and workmanship and shall conform in all
material respect to the Specifications for a period of ninety (90) days from
the date of delivery thereof, provided the Product in question has been stored
and used in accordance with ordinary industry practices and conditions.
SUPPLIER DOES NOT WARRANT THAT THE OPERATION OF THE PRODUCTS WILL BE
UNINTERRUPTED OR ERROR FREE.
7.2 Remedies. In the event
that a Product does not comply with the product warranty set out in Section
7.1 and such non-conforming Product is returned to Supplier within the
warranty period by Distributor freight prepaid, Supplier will replace such
non-conforming Product at no additional charge to Distributor; the replaced
Product will be returned to Distributor, freight prepaid.
7.3 Disclaimer of Warranties.
The foregoing express warranties are limited to Supplier and are not
transferable and are in lieu of any other warranty by Supplier with respect to
Products furnished hereunder. SUPPLIER GRANTS NO OTHER WARRANTY, EITHER
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.4 Limitation of Liability.
DISTRIBUTOR SHALL IN NO EVENT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THE SALE OR USE OF ITS
PRODUCTS, WHETHER OR NOT SUPPLIER HAS ADVANCE NOTICE OF THE POSSIBILITY OF
SUCH DAMAGES. IF SUPPLIER BREACHES ANY PROVISION OF THIS AGREEMENT, SUPPLIER’S
SOLE AND EXCLUSIVE MAXIMUM LIABILITY, WHETHER BASED IN CONTRACT, TORT, OR
OTHERWISE, SHALL NOT IN ANY EVENT EXCEED THE CONTRACT PRICE FOR THE PARTICULAR
PRODUCTS. The foregoing limitation of liability will not apply to the payment
of costs and damage awards referred to in Section 8, Indemnification.
7.5 Distributor assumes full
responsibility for its selection of the Products specified herein and any
other equipment, programs or services used with the Products, their use, and
results obtained therefrom.
Supplier shall indemnify,
hold harmless and defend Distributor against any action brought against
Distributor to the extent that such action is based on a claim that any
unmodified Product, when used in accordance with this Agreement, infringes a
United States copyright and Supplier shall pay all costs, settlements and
damages finally awarded; provided, that Distributor promptly notifies Supplier
in writing of any claim, gives Supplier sole control of the defense and
settlement thereof and provides all reasonable assistance in connection
therewith. If any Product is finally adjudged to so infringe, or in Supplier’s
opinion is likely to become the subject of such a claim, Supplier shall, at
its option, either: (i) procure for Distributor the right to continue using
and distributing the Product (ii) modify or replace the Product to make it
noninfringing, or (iii) refund the price paid upon return of the Product.
Supplier shall have no liability regarding any claim arising out of: (w) use
of other than a current, unaltered release of the Product unless the
infringing portion is also in the then current, unaltered release, (x) use of
the Product in combination with non-Supplier products, data or equipment if
the infringement was caused by such use or combination, (y) any modification
or derivation of the products not specifically authorized in writing by
Supplier or (z) use of third party products. THE FOREGOING STATES THE ENTIRE
LIABILITY OF SUPPLIER AND THE EXCLUSIVE REMEDY FOR DISTRIBUTOR RELATING TO
INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY COPYRIGHT OR OTHER PROPRIETARY
RIGHT BY THE PRODUCTS.
9.1 Protection of Proprietary
Information. Supplier and Distributor agree to keep in confidence and not
disclose to others all knowledge, information and data furnished to either by
the other party and claimed by the other party to be proprietary, provided
such information is given in writing or, if oral, is reduced to writing within
thirty (30) days and such writing is marked to indicate the claims of
ownership and/or secrecy. Supplier and Distributor agree that neither shall
use, nor reproduce for use in any way, any proprietary information of the
other except in furtherance of the relationship set forth herein. Supplier and
Distributor agree to protect the proprietary information of the other with the
same standard of care and procedures used by each to protect its own
proprietary information of similar importance but at all times using at least
a reasonable degree of care.
9.2 Limitations. Section 9.1
shall not be applicable and shall impose no obligation on a party with respect
to any portion of proprietary information which:
Was at the time received or which thereafter
becomes, through no act or failure on the part of such party, generally known
or available to the public;
Is known to such party at the time of receiving
such information as evidenced by documentation then rightfully in the
possession of either party;
Is furnished to others by the other party without
restriction of disclosure;
Is thereafter rightfully furnished to such party by
a third party without restriction by that third party on disclosure; or
Has been disclosed pursuant to the requirements of
law or court order without restrictions or other protection against public
disclosure; provided, however, that the other party shall have been given a
reasonable opportunity to resist disclosure and/or to obtain a suitable
Survival. The covenants of confidentiality set forth herein shall survive and
continue and be maintained from the Effective Date hereof until three (3)
years after termination of this Agreement.
TERM AND TERMINATION.
10.1 Term. The initial term
of this Agreement shall commence upon the Effective Date and shall continue
for a period of five (5) Contract Years (the “Initial Term”). Thereafter, this
Agreement shall be renewed for successive one (1) year terms unless terminated
by either party by ninety (90) days written notice given on or before the
commencement of any renewal term.
10.2 Termination. This
Agreement may be terminated as follows:
At any time upon mutual written agreement of the
By Supplier upon fifteen (15) days written notice
to Distributor for failure by Distributor to make payment for Products when
due, unless such failure is cured within the fifteen (15) day period; or
By either party if (i) the other party is in
material breach of its obligations hereunder and such breach continues uncured
for a period of thirty (30) days after written notice to the defaulting party,
or (ii) the other party makes a general assignment for the benefit of its
creditors, appoints or has appointed a receiver, trustee in bankruptcy or
similar officer to take charge of all or part of its property, files or has a
petition filed against it in any bankruptcy (unless such petition is dismissed
within sixty (60) days of its filing), and/or is adjudged insolvent or
11. EXPORT REQUIREMENTS.
The Products and any
documentation and all related technical information or materials are subject
to export controls and are licensable under the U.S. Government export
regulations. Distributor will comply strictly with all legal requirements
established under these controls and will not export, reexport, divert,
transfer or disclose, directly or indirectly, the Products, documentation and
any related technical information or materials without the prior approval of
the U.S. Department of Commerce.
12.1 Successors and Assigns.
The rights and obligations of either party shall not be transferable without
the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. All obligations of the parties herein shall
be binding upon their respective successors or assigns.
12.2 Choice of Laws. This
Agreement shall be governed by, and its terms shall be construed in accordance
with, the laws of the State of Texas.
12.3 Waiver. No waiver or
breach of any term or condition of this Agreement shall operate as a waiver of
any other breach of such term or condition, or of any other term or condition,
nor shall any failure to enforce any provisions hereunder operate as a waiver
of such provision or any other provision hereunder.
12.4 Severability. In case
any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, except
in those instances where removal or elimination of such invalid, illegal, or
unenforceable provision or provisions would result in a failure of
consideration under this Agreement, such invalidity, illegality or
unenforceability shall not effect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein.
12.5 Notices. All notices
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, one day after delivery to a nationally recognized
overnight delivery service, charges prepaid, three days after being sent by
registered or certified mail, postage prepaid, to the parties at their
respective addresses set forth above and:
If to Distributor, with a
copy as follows:
If to Supplier, with a copy
or to such other address as
any party shall have specified by notice to the other in accordance with this
Section. Purchase orders, forecasts and other routine business forms (and any
notices not sent in accordance with the foregoing) shall be effective only
12.6 Headings. Headings used
in this Agreement are for the purpose of reference only and are not to be
considered in construction or interpretation of this Agreement.
12.7 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall be deemed one and the same
12.8 Entire Agreement;
Amendment. This Agreement, including the Exhibits, contains the entire
Agreement between the parties relating to the subject matter hereof. All prior
agreements and all prior negotiations, representations and communications
relating to the same subject are superseded by this Agreement. This Agreement
may not be modified other than by a written document signed by an authorized
representative of each party.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
duly authorized representatives the day and year first set forth above:
The University of Texas