VALUE ADDED RESELLER AGREEMENT
This
Value Added Reseller Agreement ("Agreement") is made and effective
this ___________ (Date), by and between ______________________________
("VAR") and
("Developer").
Developer
has developed certain software, which it markets directly to end-users and also
markets through intermediaries such as VARs.
VAR
is in the business of creating and adding value to existing software and
technology products and remarketing the value-added products to end-users.
VAR
desires to take a license in certain of Developer's products as identified on
Exhibit A ("Products") attached, and to add value to same and
remarket the value-added products, all pursuant to this Agreement.
Therefore
the parties agree as follow:
1. Nonexclusive Appointment.
VAR is hereby
appointed a nonexclusive value-added reseller of the Products for sale in the
Territory as it appears in Exhibit B (“Territory”), pursuant to this
Agreement. VAR accepts such appointment
and agrees to serve as a value-added reseller of the Products to end users as
provided herein. This Agreement is not
exclusive to VAR, and Developer reserves the unrestricted right to sell,
license, market and distribute or to grant to others the right to sell,
license, market and distribute the Products and value added versions thereof
anywhere in the world.
2.
Price, Terms, and Discounts.
Prices,
discounts, and other terms for the Products are set forth in Exhibit A. and are
subject to change at any time, to take effect no sooner than the end of the
Initial Term of this Agreement and following at least 30 Days prior written
notice by Developer to VAR.
3.
Product Changes Including Upgrades.
VAR acknowledges that customers
generally desire and expect Product changes in VAR’s marketplace. Therefore, VAR encourages Developer to
modify, alter, amend or delete from the Products at any time at its
discretion. Any formal upgrades require
at least 30 Days written notice from Developer to VAR. VAR agrees never to remove from the Products
any copyright notice included in them.
4. Ordering,
Delivery, and Shipment.
A. Purchases of Product pursuant to this
Agreement shall be made by VAR using VAR's regular purchase order form;
provided, however, additional, modified or conflicting terms and conditions on
VAR's purchase order form shall not modify or amend this Agreement unless
expressly agreed to in writing by Developer.
B. All orders must specify the Product
or Products to be purchased; the appropriate purchase price; the requested ship
date; and, if applicable, state the appropriate tax exemption
certificate number, or include a blanket tax exemption certificate form for
Developer’s files when examined by tax authorities.
C. Shipment of the Products purchased by VAR shall be
made prepaid to the VAR. Developer shall have the right to make partial
shipments, and each shipment shall be deemed a separate order and payment
therefore shall become due in accordance with the terms of shipment. VAR shall take the license to the Products
upon receipt and all risks of loss and expenses in connection with the Products
shall thereafter be the responsibility of VAR; provided, however that Developer
retains all applicable rights to the intellectual property contained in the
Products as set forth in this Agreement.
D. Products ordered will be deemed accepted by VAR upon
shipment by Developer. VAR shall have
thirty (30) days after receipt of the Products at VAR's facilities ("Test
Period"), but prior to reshipment of the Products to VAR's customers, to
inspect and test the Products. If VAR
discovers any defect in a Product and reports such defect in or within the Test
Period, Developer will, at its option, either repair, replace or accept return
of the Product or credit VAR for the applicable purchase price.
E. All purchase
orders and amendments received by Developer after this date shall be part of
this Agreement and are subject to acceptance by Developer. Payment shall be made by VAR within 30 days
after the date of Developer's invoice.
VARs shall be responsible to pay, or reimburse Developer, as
appropriate, for any sales, use, excise or similar tax levied on the
transactions hereunder, or any personal property tax attributable to the
license granted VAR.
5.
Changes and Cancellations.
VAR may cancel an order prior to
shipment upon payment of a cancellation fee equal to 25% of the original order,
and provided that Developer receives notice of the cancellation not more than 5
Days following the original order.
Cancellation of any order after the last day for cancellation, or in the
event that Developer has already shipped the Product, shall require VAR to pay
in full. The parties agree that these charges are a reasonable method for
determining Developer's expenses and damages arising out of cancellation or
refusal to accept shipment.
6. License.
A.
Developer grants and VAR accepts a limited, nonexclusive license to the
Products as provided in this Agreement.
The license granted herein shall permit VAR to combine or include the
Products with VAR's other software or hardware for the purpose of adding to or
increasing the value, functionality or utility of such software or hardware for
VAR's end user customers. VAR shall not
be permitted to use the Products for its internal business. VAR may not copy any of the Products or
distribute or transfer the Products except as provided herein.
B. Developer hereby grants VAR a limited,
nonexclusive license to grant sublicenses of the Product to VAR's end user
customers in the normal course of business.
Any sublicense of the product by VAR shall be pursuant to a written
license agreement, approved in advance by Developer as to form and substance
that shall include at least the following:
(i) VAR's sub licensee shall have no right to
copy, modify, reproduce, publish or convey any part of any Product.
(ii) VAR's sub licensee shall acquire no
ownership in the Product.
(iii) VAR's sub licensee shall look solely to
VAR in the event of any defect, damage or inoperability of the product or part
thereof.
C. If VAR's sub licensee fails to perform
any material obligation with respect to Product pursuant to its written
sublicense agreement with VAR, then VAR shall be required to cooperate with
Developer to protect and enforce Developer's rights and title with respect to
the Products. VAR may use this Agreement
to show to sub licensee that they are required by Agreement to enforce these
terms and conditions.
7. Confidentiality.
In the performance of this
Agreement, each party may have access to confidential, proprietary or trade
secret information owned or provided by the other party relating to software
computer programs, object code, source code, marketing plans, business plans,
financial information, specifications, flow charts and other data ("Confidential
Information"). All Confidential
Information supplied by one party to another pursuant to this Agreement shall
remain the exclusive property of the disclosing party. The receiving party shall use such
Confidential Information only for the purposes of this Agreement and shall not
copy, disclose, convey or transfer any of the Confidential Information or any
part thereof to any third party, except that VAR may sublicense the Products as
set forth in this Agreement. Neither
party shall have any obligation with respect to Confidential Information which:
(i) is or becomes generally known to the public by any means other than a
breach of the obligations of a receiving party; (ii) was previously known to
the a receiving party or rightly received by a receiving party from a third
party; or (iii) is independently developed by or a the receiving party.
8.
VAR Sales Organization and Activities.
In
connection with the performance of its obligations in this Agreement in a
professional
and
businesslike manner, VAR agrees to:
A. Hire, train and employ at its place or
places of business competent, professional and ethical sales, technical and
support personnel to sell and support the products.
B. Stay current with respect to information concerning
the Products and, where appropriate, attend Developer's training with respect
to the Products.
C. Maintain adequate human resource and other facilities
to assure prompt handling of all customer inquiries, orders, shipments and
after sale support for the Products.
D. Maintain, for demonstration purposes
adequate equipment and other resources to properly demonstrate the Products.
E. Provide prompt, reliable and competent
technical and other assistance to VAR's end user customers with respect to the
Products.
F. Conduct its business in a professional manner
that will reflect favorably on Developer and the Products, and not engage in deceptive,
fraudulent, misleading, illegal or unethical business practices, whether with
respect to the Products or otherwise.
G. Permit Developer the right of reasonable entry
to visit and inspect VAR's place of business for the purpose of verifying, to
the satisfaction of Developer, that VAR is performing its obligations under
this Agreement.
9. Developer Sales Assistance
Responsibilities.
Developer will provide commercial
and technical assistance to VAR as may be necessary and appropriate to assist
VAR in effectively carrying out its obligations under this Agreement and in the
promotion and sale of the Products to VAR's end user customers. Developer will subject to availability
provide VAR and its agents sales promotion materials, technical manuals, sales
aides and other materials helpful in the promotion or sales of the Products.
10. Limited Warranties.
A. Developer warrants that it is the owner of
or otherwise has the right to license the
Products and
otherwise perform its obligations set forth herein.
B. Developer
warrants that the media upon which the Products are included shall be free from
defects in materials and workmanship for a period of following the date of
shipment. In the event any breach of
warranty set forth in this Section 10. B., VAR's sole remedy and Developer's
sole liability shall be for Developer to replace the defective media.
C. Developer warrants that for a
period of 90 Days following shipment of the Products, each Product will perform
the functions substantially according to Developer's regular specifications
document with respect to such Product.
In the event of any breach the warranty set forth in this section 10.C.,
VAR's sole remedy, and Developer's sole liability, will be that Developer must
promptly repair the Products so as to conform to the warranty or, at
Developer's election, refund the purchase price.
11. Developer Disclaimer.
THE WARRANTIES OF DEVELOPER SET
FORTH IN SECTION IO ABOVE ARE EXCLUSIVE AND EXPRESSLY IN PLACE OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. IN NO
EVENT SHALL DEVELOPER BE LIABLE TO VAR FOR INCIDENTAL, CONSEQUENTIAL OR SPECIAL
DAMAGES INCLUDING, WITHOUT LIMITATION, LOSS OF DATA OR PROFITS, WITH A CLAIM BY
REASON OF BREACH OF WARRANTY OR BASED ON CONTRACT, STRICT LIABILITY OR
OTHERWISE, REGARDLESS OF WHETHER DEVELOPER HAS BEEN ADVISED OF THE RISK OF SUCH
DAMAGES IN ADVANCE.
12. Indemnification.
A. VAR agrees to
indemnify and hold harmless Developer from and against loss, suit, damage or
claim including reasonable attorney's fees and costs, arising out of or
connecting with the sale, sublicense or use of any of the Products that have
been modified by VAR or anyone else.
B. Developer
shall, at its own expense, defend any suit that may be instituted against VAR
or any end user customer of VAR for any alleged infringement of any US patent,
trademark or copyright related to the Product as provided by Developer
hereunder, provided that:
1. Such alleged infringement consists only of
the use of the Product in the manner for which the Product was designed by
itself, and does not relate to any modification or alteration or combination
with other works.
2. VAR gives Developer immediate notice in
writing of any such suit and permits Developer, with counsel of its choice, to
defend such suits. Immediate is defined
as less than 5 Days after the suit was filed upon VAR or its representatives.
3. VAR provides Developer all of the necessary
information, assistance and authority, to enable Developer to defend such suit,
and similarly uses its best efforts to get all VAR's end user customers to
similarly provide all needed information, assistance and authority, all at
VAR's expense.
4. Developer's indemnity shall not apply with
respect to any claim arising out of or based upon any modification or
alteration of the Products created by or for Developer or an End-User customer.
13.
Relationship of the Parties.
It
is expressly understood and agreed that the relationship between the parties is
solely that of "seller" and "buyer". VAR is not, and shall not be, a
partner, agent, representative or joint venturer of Developer. VAR has no authority to assume or create any
obligation for or on behalf of Developer, express or implied, with respect to
the Products or otherwise.
14. Developer's Marks.
A. Developer
hereby grants to VAR a limited, nonexclusive right to use Developer's regular trade
names, trademarks, titles and logos (the "Licensed Marks") in the
advertising, promotion and sale of the Products. VAR shall not make or permit alteration or
removal of tags, labels, or identifying marks placed by Developer on or within
the Software program of any product. VAR
will not use Developer's trade names or abbreviations (with the exception of a
logo or mark or graphic design provided by Developer which indicates VAR is an
authorized reseller of Developer) in VAR's corporate title, or name or in any
way that might result in confusion as to separate and distinct identities of
Developer and VAR. Upon the expiration
or earlier termination of this Agreement, the license granted to VAR in the
Licensed Marks shall immediately terminate and VAR shall immediately cease and
desist all use of the Licensed Marks.
B. VAR
recognizes and acknowledges Developer's ownership and title to the Licensed
Marks and the goodwill related thereto and agrees that any goodwill which
accrues because of VAR's use of such marks shall become the property of
Developer. VAR further agrees not to
contest or take any action in opposition to any trademark, serviceman, trade
name or logo of Developer or to use, employ or attempt to register any mark or
trade name, which is similar to any mark or name of Developer.
C. VAR shall
apply the Licensed Marks only to products which have been manufactured in
accordance with the standards of quality in materials, design, workmanship,
use, advertising and promotion set forth in Developer's trademark use
specifications and product control specifications ("Control
Specifications"), copies of which will be furnished to VAR in confidence
pursuant to Section 7 of this Agreement.
D. Developer
shall have the right at any time to conduct during regular business hours an
examination of products manufactured by VAR (including those assembled or
tested) at VAR's facilities to determine compliance of such products with the
applicable Control Specifications. If at
any time such products shall, in the sole opinion of Developer, fail to conform
with the standards of quality in materials, design, workmanship, use,
advertising, and promotion set forth in such Control Specifications, Developer
shall so notify VAR. Upon such
notification, VAR shall promptly cease to use the Licensed Marks on such
products and shall not sell such nonconforming products until the standards of
quality contained in the applicable Control Specifications have been met to the
satisfaction of Developer.
15. Term and Termination.
A. This
Agreement shall commence on the Date of this Agreement and continue for a Term
ending in 2 years. Thereafter, this
Agreement shall continue until a party shall give notice to the other party of
its desire to terminate this Agreement upon at least ninety (90) days prior
written notice.
B. In the
event that VAR has failed to pay any amount when due or is in breach or default
of any other material obligation set forth in this Agreement, then Developer
may notify VAR and if VAR has not paid the entire amount due or cured its other
breach or default within 30 Days following such written notice, then Developer
may elect to terminate this Agreement unilaterally without protest from the
VAR.
C. In the event of any other breach or default
of any material obligation owed by Developer in this Agreement, then the VAR
may provide notice to Developer and if such breach or default is not cured
within 30 Days following such notice, the Agreement may be terminated by the
VAR unilaterally without protest from the Developer.
16.
Notices.
Any notice required by this Agreement or given in connection
with it, shall be in writing and shall be given to the appropriate party by
personal delivery or a recognized over night delivery service such as FedEx.
If
to the Developer: _____________________________________________________.
If
to the VAR: ___________________________________________________.
17. No Waiver.
The
waiver or failure of either party to exercise in any respect any right provided
in this agreement shall not be deemed a waiver of any other right or remedy to
which the party may be entitled.
18. Entirety
of Agreement.
The terms and conditions set forth herein constitute the
entire agreement between the parties and supersede any communications or
previous agreements with respect to the subject matter of this Agreement. There are no written or oral understandings
directly or indirectly related to this Agreement that are not set forth
herein. No change can be made to this
Agreement other than in writing and signed by both parties.
19. Governing Law.
This
Agreement shall be construed and enforced according to the laws of the State of
____________________ and any dispute under this Agreement must be brought in
this venue and no other.
20. Headings in this Agreement
The
headings in this Agreement are for convenience only, confirm no rights or
obligations in either party, and do not alter any terms of this Agreement.
21. Severability.
If
any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
In
Witness whereof, the parties have executed this Agreement as of the date
first written above.
_________________________ _______________________
Developer VAR
___________________
Date
Exhibit
A: VAR Price, Products, and Terms
Schedule
Exhibit
B: VAR Territory and Accounts Specific
Customers
Value-Added Reseller Agreement
Review List
This
review list is provided to help you prepare the VAR Agreement and negotiate the
terms appropriate for your business.
Certain terms and conditions have been imbedded in the text that require
your careful examination. Among them are
prepaid freight due to the almost universal requirement of this by VARs and its
relatively low cost as a percentage of sales in this business for the
Developer. The initial term is specified
as 2 years because that has usually been enough time for both parties to recoup
their investment in the relationship but not too long to encourage sloth on the
job. An exclusive VAR document has not
been prepared because few are used and they tend to be deadly for Developer if
they are done.
1. The Value-Added Reseller Agreement provides
for a software developer to sell its programs to a reseller, who then may
combine the programs with other software or hardware. The combinations are then marketed as
"value-added" products. Many
VARs call themselves by that name but are really just resellers. Therefore the agreement has provided for that
option. Make sure these terms are
appropriate for your situation.
2. Laws vary from state to state and change
over time, especially with regards to distribution agreements such as
these. Having a fixed two-year term,
however, provides a termination point and avoids a flexible date that can be
attacked in Court. One can lose anytime
you go up the people in the black robes, but this fixed term date tends to
limit your liability. If you are unduly
concerned about the possibility for litigation with a potential VAR, either
don’t do business with them or have an “As is” per order agreement, as opposed
to a territory or larger agreement.
3. Print at least two copies so both parties
retain an original. Make an extra copy
for the your sales file and keep a master file of these sales agreements.
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