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Note it will be 'non-exclusive' if the Distributor has the right to distribute and may appoint another distributor in the Territory; 'exclusive' if the Distributor will not be appointing any other distributor but retains the right to co-distribute in the Territory; 'sole' means the Distributor retains no right to distribute in its own right and no right to appoint another licensee in the Territory.

Note that this template provides that in any event a separate licence is required and the form of that licence is attached as a Schedule.

Is distribution to a purchaser contingent upon that person entering into a separate licence agreement?

Yes No

*During the Term, is the Distributor permitted to distribute or sell software that is competitive with or similar in functionality to the Software?

Yes No

*Will the Distributor or Supplier pay the cost of the initial despatch of the Software and Materials?

Distributor Supplier

*Does risk and liability for loss or damage to the initial despatch of the Software pass to the Distributor on despatch or on delivery?

despatched delivered

*In what manner will the Supplier convey its acceptance of an order placed by the Distributor?

in writing
oral
oral with written confirmation to follow

*If the Distributor fails to meet agreed minimum order requirements and the Distributor is appointed on an exclusive basis, does the Supplier reserve the right to change the arrangement to a non-exclusive basis?

Yes No

*Does the Supplier reserve the right to cancel a previously accepted order in particular circumstances?

Yes No

In what circumstances will the Supplier be entitled to exercise that right?

eg. Loss of technical manager; notification of 3rd party IP claim

Note that if this is the case, the template provides that the Supplier will refund or provide a pro rata rebate in relation to any pre-paid amount.

*Does the Supplier reserve the right to supply the Distributor with an amount less than what was ordered?

Yes No

*Does the Supplier reserve the right to not accept orders or supply the Distributor if the Distributor is in breach of the Agreement, eg. when behind in its payments?

Yes No

*Does the Distributor have the right to cancel a placed or accepted order in limited circumstances?

Yes No

eg. notification by a customer of faulty software, independent advice relating to issue of solvency, within [_____] days of anticipated delivery, if the Supplier cannot deliver within the stipulated delivery time frame.

*Within how many days after delivery of the software must the Distributor notify the Supplier of any defects?

e.g. thirty (30) days

Note: a royalty is a per-unit fee or lump sum payment payable when a licence to use the software is granted to a customer; a base fee is usually calculated on quantities bought from the Supplier

If a base fee is payable what is that base rate amount? Include the time frame within which it must be paid.

eg. R30 within 7 days of receipt of Tax Invoice, or R50 at end of each month/quarter.

This is likely to be based on a percentage of gross receipts or net receipts and will take into account whether any distributor deductions are allowed. Note this is either vat inclusive or exclusive. 'Rand' is defined as South African Rand.

*Does the Supplier reserve the right to charge interest on overdue Royalty or Base Fee payments?

Yes No

Note this template provides that payments by the Distributor are to be made by electronic transfer to the Supplier's nominated account.

*Within what time frame will the Distributor pay after receiving a Tax Invoice?

e.g. seven (7) days

*If the Distributor creates marketing material/s, will the Distributor or the Supplier own the intellectual property in that material?

Distributor Supplier

*Is it a condition that prior to entering into this agreement, the distributor must provide a financial or performance guarantee?

financial
performance
no guarantee required

Note this template provides that the Distributor must use any IP notice as directed by the Supplier.

*If the Distributor is providing the packaging and/or marketing materials, are these to be submitted to the Supplier for approval prior to release?

Yes No

*At the end of the Term, will the Distributor hold the goodwill in the Software on trust for the Supplier and any new distributor to be appointed?

Yes No

*How many days do the parties have to remedy a breach of the agreement after which time the other party will be entitled to terminate?

e.g. twenty-one (21) days or two (2) months

Note this period will depend on the length of the agreement; eg. if the term is for a short period then the termination notice may also be short but if the term is 1 or more years, then the termination notice period may be a couple of months.

*In a termination for convenience clause, how many days/weeks/months notice is required to be given?

e.g. twenty-one (21) days or two (2) months

*Is the Distributor required to give an undertaking not to market, distribute or sell competitive software for a period after the end of the agreement?

Yes No

Note that this period must be reasonable in time and area for it to be enforceable and is only for the purpose of protecting the goodwill of the supplier.

*Is each party giving a non-solicitation undertaking regarding the other party's employees and/or contractors for a period after the end of the agreement?

Yes No

Note that this period may or may not be the same time frame as for the non-compete period; in any event it must be reasonable to be enforceable.

This is for the purpose of completing a governing law clause. If the contract services will be conducted in more than one Province, we recommend the Province where the Supplier conducts its business be inserted.

Additional Clause
*Add additional clause here:
Remove

*The distributor's customers need to enter into a separate licence of the software. Will this licence be between the Supplier and the customer or between the Distributor and the customer?

Supplier Distributor

These should be clearly identified and are likely to include these types of items: software manual/s, reference sheets, training manuals, training CD Roms.

*What associated materials are being supplied?

If no materials are being supplied insert 'None'

This is for the definition of Commencement Date. If the agreement starts on the date the agreement is signed, insert 'the date of this Agreement'; note it is important to ensure this is inserted to avoid uncertainty. You may leave it blank when completing the template however it must be inserted prior to or on execution.

This is for the purpose of defining 'Term', at the end of which there will be an option to extend subject to certain conditions set out in the agreement.

Note it is likely that the Supplier will wish to end this agreement to coincide with a financial reporting cycle, in which case that date should be inserted eg. 30 June 20__, 31 December 20__.

This is preferable to inserting '6 months from the date of this Agreement' which may prove difficult to fit with fiscal reports.

*When does the initial period for this agreement expire?

e.g. 3 years from start date, or 30 June 20__

Ensure this is clearly set out, ie. do not insert "N/A" or leave blank as this may subsequently become an issue of contention.

*What is the geographic area for which the distribution rights are being granted?

e.g South Africa or Cape Town or 15k radius from .......

*Within what time frame does the Supplier undertake to deliver after receipt of an order?

e.g. seven (7) days

This template provides an option that the agreement can be extended beyond the nominated end date with option for either a single extension of similar duration to the initial term, or for ongoing extensions each having a similar timeframe to the initial term.

In either case, the template provides that in the event of an extension being granted by the Supplier, all provisions of this agreement will apply.

Is this agreement limited to a single extension of the Term or are ongoing extensions permitted/required?

Single Ongoing

Within how many days of an agreement to extend the term must the Renewal Fee be paid?

eg. 6 days

How much notice will the Distributor provide if it wishes to extend the term?

Notice
eg. 7 days or 10 weeks

*What is the Distributor's address for delivery?

include Province, facsimile number and email if appropriate.

This address may be different to the delivery address and will be used for extension and termination notices, and general correspondence.

*What is the Distributor's address for service of notices?

include Province, facsimile number and email if appropriate.

*What is the Supplier's address for orders?

include Province, facsimile number and email if appropriate.

This address may be different to the address for orders and will be used for extension and termination notices, and general correspondence.

*What is the Supplier's address for service of notices?

include Province, facsimile number and email if appropriate.

Customise Document

Software Distribution Agreement (Supplier)