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The Sub Distribution Agreement is essential for businesses operating in South Africa that employ a multi-tiered distribution model. This document is typically used when a main distributor, who holds primary distribution rights from a manufacturer, wishes to expand their distribution network by appointing sub-distributors for specific territories or market segments. The agreement must comply with South African competition law, particularly regarding territorial restrictions and pricing practices. It outlines the complete framework for the relationship, including product handling requirements, sales territories, performance targets, pricing structures, and compliance obligations. This type of agreement is crucial for maintaining control over the distribution chain while ensuring efficient market coverage and regulatory compliance in the South African market.

1. Parties: Identification of the main distributor and sub-distributor, including registration details and addresses

2. Background: Context of the agreement, including reference to the main distribution agreement and authority to sub-distribute

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including reference to main distribution agreement terms

4. Appointment and Territory: Scope of sub-distributor appointment, territorial limitations, and exclusivity status

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Sub-Distributor's Rights and Obligations: Detailed rights granted and obligations imposed on the sub-distributor

7. Main Distributor's Rights and Obligations: Rights and obligations of the main distributor

8. Product Standards and Compliance: Requirements for product handling, storage, and compliance with standards

9. Ordering and Delivery: Procedures for ordering products and delivery terms

10. Prices and Payment: Pricing structure, payment terms, and invoicing procedures

11. Marketing and Promotion: Requirements and restrictions for marketing activities

12. Intellectual Property: Usage rights and restrictions regarding trademarks and other IP

13. Reporting and Records: Requirements for maintaining records and reporting to main distributor

14. Warranties and Indemnities: Warranties provided and indemnification obligations

15. Termination: Grounds for termination and termination procedures

16. Post-Termination: Obligations and rights after agreement termination

17. Confidentiality: Protection and handling of confidential information

18. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law