Distribution Agreement — Alabama

DISTRIBUTION AGREEMENT (ALABAMA)

THIS DISTRIBUTION AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

SUPPLIER:

DISTRIBUTOR:

TABLE OF CONTENTS

1. Recitals and Definitions
2. Appointment and Territory
3. Products and Pricing
4. Orders, Acceptance, and Delivery
5. Minimum Purchase and Performance Requirements
6. Inventory Management and Returns
7. Marketing, Promotion, and Channel Conduct
8. Antitrust Compliance
9. Branding and Intellectual Property
10. Warranties and Pass-Through
11. Product Liability Under Alabama Law
12. Anti-Diversion and Gray Market Provisions
13. Compliance Obligations
14. Confidentiality
15. Insurance
16. Limitation of Liability
17. Term and Termination
18. Effects of Termination and Wind-Down
19. Alabama Dealer Protection Considerations
20. Governing Law and Dispute Resolution
21. Alabama-Specific Provisions
22. General Provisions
23. Signature Block
24. Schedules

1. RECITALS AND DEFINITIONS

1.1 Recitals

WHEREAS, Supplier manufactures or sources certain products described in Schedule 1 (the "Products"); and

WHEREAS, Supplier desires to appoint Distributor to purchase Products and resell them within the Alabama Territory; and

WHEREAS, Distributor desires to accept such appointment under the terms herein;

NOW, THEREFORE, the Parties agree as follows:

1.2 Definitions

(a) "AEMLD" means the Alabama Extended Manufacturer's Liability Doctrine, a product-liability theory recognized in Ala. Code § 6-5-521(a).

(b) "Authorized Channels" means the channels in Schedule 5.

(c) "Minimum Purchase Commitment" means the amounts in Schedule 3.

(d) "Net Price" means the price in Schedule 2 less applicable discounts.

(e) "Products" means the goods in Schedule 1, as amended.

(f) "Territory" means the geographic area in Schedule 5, which shall include the State of Alabama or portions thereof as specified.

2. APPOINTMENT AND TERRITORY

2.1 Appointment

☐ Exclusive distributor within the Alabama Territory
☐ Non-Exclusive distributor within the Alabama Territory
☐ Sole distributor (Supplier may sell directly but no other distributors)

2.2 Territory

The Territory encompasses: [________________________________] (e.g., State of Alabama; Northern Alabama; Birmingham metropolitan area)

2.3 Authorized Channels

☐ Retail ☐ E-commerce ☐ Wholesale / Subdistribution ☐ Government ☐ Industrial ☐ Other: [________________________________]

2.4 Reservation of Rights

Supplier reserves the right to sell directly outside the Territory, appoint other distributors outside the Territory, and service national accounts per Schedule 5.

2.5 Independent Contractor

Distributor is an independent contractor purchasing for its own account. Distributor has no authority to bind Supplier.

3. PRODUCTS AND PRICING

3.1 Products

Per Schedule 1. Supplier may add or discontinue Products upon [____] days' notice.

3.2 Pricing

(a) Wholesale prices per Schedule 2.

(b) Price adjustments upon [____] days' notice, applying to new orders only.

3.3 Discounts and Robinson-Patman Compliance

Volume discounts and rebates per Schedule 2. All pricing shall comply with the Robinson-Patman Act (15 U.S.C. § 13) and be functionally available to all similarly situated distributors.

3.4 Payment Terms

(a) Net [____] days from invoice.

(b) Late payments accrue interest at [____]% per annum, subject to the rate permitted for this transaction under Alabama law. Ala. Code § 8-8-1 states general loan and forbearance rates; it does not itself label every unpaid distribution invoice a non-contractual obligation.

3.5 Taxes

Distributor is responsible for Alabama sales and use taxes. Alabama imposes sales tax at the state level and municipalities may impose additional local taxes. Distributor shall maintain appropriate Alabama sales tax registration.

4. ORDERS, ACCEPTANCE, AND DELIVERY

4.1 Purchase Orders

Via [________________________________]. Orders specify SKU, quantity, delivery date, and destination.

4.2 Acceptance

Orders binding upon written acceptance or shipment.

4.3 Delivery

☐ FCA ☐ FOB Origin ☐ FOB Destination ☐ DDP ☐ Other: [________________________________]

Lead times: [____] days. Title and risk pass per selected Incoterm.

4.4 Inspection

(a) Inspect within [____] business days of receipt.

(b) Notify nonconformity within [____] business days. Failure constitutes acceptance under Ala. Code § 7-2-606.

(c) Supplier repairs, replaces, or credits confirmed nonconforming Products.

4.5 Allocation

If supply constrained, allocation on fair and equitable basis per Ala. Code § 7-2-615 and antitrust requirements.

5. MINIMUM PURCHASE AND PERFORMANCE REQUIREMENTS

5.1 Minimum Purchase

Per Schedule 3.

5.2 Performance Metrics

☐ On-time payment ☐ Sales growth ☐ Forecast accuracy ☐ Returns rate ☐ Territory coverage ☐ Other: [________________________________]

5.3 Failure Consequences

(a) Downgrade exclusivity upon [____] days' notice;
(b) Reduce Territory;
(c) Terminate after [____] consecutive periods of failure and opportunity to cure.

6. INVENTORY MANAGEMENT AND RETURNS

6.1 Inventory Levels

Maintain sufficient inventory; provide reports [____] (monthly/quarterly).

6.2 Stock Rotation

Up to [____]% per quarter for credit; original condition; RMA required; [____]% restocking fee; Distributor pays freight.

6.3 DOA

Full credit or replacement at Supplier's expense within [____] days.

6.4 End-of-Life

[____] days' notice of discontinuation; return within [____] days for [____]% credit.

6.5 Forecasting

Rolling [____]-month forecasts, non-binding, good faith.

7. MARKETING, PROMOTION, AND CHANNEL CONDUCT

7.1 Marketing Obligations

Commercially reasonable promotion efforts, trained personnel, trade show participation, professional online presence.

7.2 Advertising Approval

All materials using Supplier's marks require prior approval.

7.3 MAP Policy

☐ MAP policy applies only after Alabama and federal antitrust review; Distributor otherwise sets resale prices independently
☐ No MAP policy

7.4 MDF

Per Schedule 3. Claims with documentation within [____] days.

7.5 No Unauthorized Bundling

No bundling, rebranding, or alteration without consent.

8. ANTITRUST COMPLIANCE

8.1 Robinson-Patman Act

Supplier's pricing is functionally available to all similarly situated distributors (15 U.S.C. § 13). Distributor shall not knowingly induce discriminatory pricing.

8.2 Sherman and Clayton Acts

Distributor sets its own resale prices. Exclusive dealing is reasonable in scope. No price fixing, market allocation, or group boycotts.

8.3 Alabama Antitrust

The Parties shall comply with Alabama's antitrust provisions, which generally follow federal antitrust principles.

9. BRANDING AND INTELLECTUAL PROPERTY

9.1 License

Non-exclusive, non-transferable, revocable license to use Trademarks for marketing within the Territory during the Term.

9.2 Usage Guidelines

Per Schedule 7. No modification of marks. Goodwill inures to Supplier.

9.3 No Reverse Engineering

No reverse engineering, decompilation, or disassembly.

9.4 Product Identification

No removal of marks, serial numbers, UPC codes, or regulatory labels.

10. WARRANTIES AND PASS-THROUGH

10.1 Supplier Warranty

Products at delivery: (a) conform to specifications; (b) free from material defects; (c) merchantable under Ala. Code § 7-2-314.

10.2 Warranty Period

[____] months from delivery or [____] months from end-customer sale, whichever first.

10.3 Pass-Through

Distributor passes through Supplier's warranty without modification.

10.4 Warranty Disclaimer

EXCEPT AS SET FORTH IN THIS SECTION 10, SUPPLIER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. THIS DISCLAIMER IS CONSPICUOUS PURSUANT TO ALA. CODE § 7-2-316.

11. PRODUCT LIABILITY UNDER ALABAMA LAW

11.1 AEMLD Framework

The Parties acknowledge Alabama's Extended Manufacturer's Liability Doctrine (AEMLD). Ala. Code § 6-5-521(a) lists AEMLD among the theories that can support a product liability action; it does not create the doctrine. Under applicable product-liability law:

(a) Manufacturers may face claims for personal injury, death, or property damage caused by defective products. A distributor or seller is generally protected from a product liability action unless a statutory exception applies, such as manufacturing or assembling the product, substantial control over a defect-related process, a causally significant alteration, or an unidentified manufacturer after due diligence (§ 6-5-521(b)-(d));

(b) The product must have been defective and unreasonably dangerous when it left the control of the defendant;

(c) AEMLD is a judicially recognized theory; § 6-5-521 defines the statutory scope of a product liability action and preserves common law except where the statute expressly changes it.

11.2 Supplier Indemnification

Supplier indemnifies Distributor for third-party claims arising from: (a) product defects existing at time of delivery; (b) IP infringement; (c) breach of warranties; (d) Supplier's negligence or willful misconduct.

11.3 Distributor Indemnification

Distributor indemnifies Supplier for claims from: (a) unauthorized modification; (b) breach of this Agreement; (c) unauthorized warranty representations; (d) Distributor's negligence or misconduct; (e) failure to comply with applicable laws.

11.4 Product-Claim Timing

Any product-liability claim arising from the Products is subject to the filing period and accrual rules applicable under current Alabama law. This Agreement does not shorten those periods.

11.5 Joint and Several Liability

Alabama does not apportion fault between defendants in product liability actions. Alabama follows the doctrine of joint and several liability, meaning each defendant may be held liable for the full amount of damages. See Ala. Code § 6-11-4.

11.6 Indemnification Procedures

(a) Prompt notice; (b) defense control by indemnifying Party; (c) cooperation; (d) no settlement without consent.

12. ANTI-DIVERSION AND GRAY MARKET PROVISIONS

12.1 Prohibition

No diversion outside Territory; no sales to known re-exporters; no tampering with tracking.

12.2 Records

Maintain chain-of-custody documentation.

12.3 Remedies

Material breach; liquidated damages of [____]% of diverted invoice value or actual damages, whichever is greater.

13. COMPLIANCE OBLIGATIONS

13.1 Export Controls

Compliance with EAR, ITAR, and OFAC regulations.

13.2 Anti-Corruption

FCPA and local anti-corruption compliance. No improper payments.

13.3 Audit Rights

Records maintained for [____] years. Supplier may audit upon [____] days' notice, up to [____] times per year.

14. CONFIDENTIALITY

14.1 Scope

Pricing, customer lists, business plans, technical data, marketing strategies, and designated information.

14.2 Obligations

Hold in confidence; limit access; use only for Agreement purposes.

14.3 Duration

[____] years after termination.

14.4 Exceptions

Public information; independent development; third-party receipt; legal requirement.

14.5 Alabama Trade Secrets

Alabama has adopted the Alabama Trade Secrets Act, Ala. Code § 8-27-1 et seq. Confidential Information qualifying as trade secrets receives protection under this Act, including injunctive relief and damages for misappropriation.

15. INSURANCE

15.1 Required Coverage

15.2 Additional Insured

Supplier named as additional insured on CGL and products liability.

15.3 Certificates

Within [____] days of request or renewal.

16. LIMITATION OF LIABILITY

16.1 Cap

EXCEPT FOR CONFIDENTIALITY BREACHES, INDEMNIFICATION, AND WILLFUL MISCONDUCT, AGGREGATE LIABILITY LIMITED TO AMOUNTS PAID/PAYABLE IN THE PRIOR TWELVE (12) MONTHS.

16.2 Consequential Damages

EXCEPT FOR ANTI-DIVERSION, COMPLIANCE, AND CONFIDENTIALITY BREACHES, NO INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES.

17. TERM AND TERMINATION

17.1 Initial Term

[____] years from the Effective Date.

17.2 Renewal

☐ Auto-renew for [____]-year terms unless [____] days' notice of non-renewal
☐ Mutual agreement only

17.3 Termination for Cause

(a) Material breach uncured within [____] days;
(b) Insolvency or bankruptcy;
(c) Antitrust, anti-diversion, or compliance violations.

17.4 Termination for Convenience

☐ Either Party upon [____] days' notice
☐ Supplier only upon [____] days' notice
☐ Not permitted

18. EFFECTS OF TERMINATION AND WIND-DOWN

18.1 Sell-Off Period

[____] days to sell remaining inventory in ordinary course.

18.2 Inventory Repurchase

☐ Supplier repurchases new, resalable inventory at [____]% of purchase price
☐ No repurchase obligation

18.3 Trademark Cessation

Cease use of Trademarks upon Sell-Off Period expiration.

18.4 Return of Confidential Information

Return or destroy within [____] days; certify destruction.

18.5 Outstanding Payments

All amounts immediately payable. Accrued rebates preserved.

18.6 Survival

Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, and 20 survive.

19. ALABAMA DEALER PROTECTION CONSIDERATIONS

19.1 Motor Vehicle Dealers

If the Products are motor vehicles, this Agreement is subject to the Alabama Motor Vehicle Franchise Act, Ala. Code § 8-20-1 et seq., which:

(a) Prohibits unfair and deceptive trade practices by manufacturers/distributors (§ 8-20-4);

(b) Restricts termination without good cause and required notice periods;

(c) Requires manufacturer to repurchase inventory upon termination.

19.2 Equipment Dealers

If the Products are tractors, lawn and garden, or light industrial equipment, Ala. Code § 8-21A-1 et seq. applies:

(a) Termination, cancellation, or nonrenewal requires good cause and written notice of at least ninety (90) days specifying grounds (§ 8-21A-4);

(b) Supplier must repurchase inventory, including parts, accessories, and equipment, upon termination (§ 8-21A-6);

(c) Dealer is entitled to compensation at net cost plus any applicable surcharges (§ 8-21A-6);

(d) The dealer has a continuing security interest in returned items until paid (§ 8-21A-6(a)(3)).

19.3 Heavy Equipment Dealers

If the Products are heavy equipment, Ala. Code § 8-21B-1 et seq. applies with similar termination and repurchase protections.

19.4 Sales Representatives

The Alabama Sales Representative Commission Contracts Act applies only when the relationship meets Ala. Code § 8-24-1's definitions: a covered principal uses a commission-paid representative to solicit wholesale orders for products bought by customers for resale. A distributor that purchases products for its own account for resale is excluded from the sales-representative definition. If a separate representative relationship qualifies, § 8-24-2(c) requires commissions due at termination within 30 days and later-due commissions within 30 days after they become due; § 8-24-3 supplies a civil damages remedy for a principal's nonpayment.

19.5 General Distribution Relationships

For products not covered by industry-specific statutes, Alabama follows general contract law principles. Termination is governed by the terms of the agreement, subject to the implied duty of good faith and fair dealing under Ala. Code § 7-1-304.

20. GOVERNING LAW AND DISPUTE RESOLUTION

20.1 Governing Law

This Agreement is governed by the laws of the State of Alabama, without regard to conflict-of-laws principles. Alabama's UCC Article 2 (Ala. Code § 7-2-101 et seq.) applies to all transactions in goods.

20.2 Venue

Exclusive jurisdiction in the state and federal courts located in [________________________________] County, Alabama.

20.3 Dispute Resolution

(a) Escalation. Senior executive negotiation for [____] days.

(b) Mediation. If unresolved, mediation in [________________________________], Alabama.

(c) Resolution:

☐ Arbitration: Binding arbitration administered by [________________________________] in [________________________________], Alabama. Single arbitrator. Award final and enforceable.

☐ Litigation: Courts per Section 20.2.

20.4 Prevailing Party Fees

Prevailing Party recovers reasonable attorneys' fees and costs.

20.5 Jury Waiver

TO THE FULLEST EXTENT PERMITTED BY ALABAMA LAW, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.

21. ALABAMA-SPECIFIC PROVISIONS

21.1 Alabama Statute of Limitations

Potential six-year routes include an unsealed written promise under Ala. Code § 6-2-34(4) and another simple contract or specialty not specifically enumerated under subsection (9). A contract or writing under seal instead falls under § 6-2-33(1)'s ten-year category. Classify each claim and determine accrual, tolling, and any contractual limitation separately.

21.2 Alabama Deceptive Trade Practices Act

The Alabama Deceptive Trade Practices Act, Ala. Code § 8-19-1 et seq., prohibits deceptive or unconscionable trade practices. Material misrepresentations in connection with this Agreement may give rise to liability under this statute.

21.3 No Tortious Interference

Each Party acknowledges that termination exercised in accordance with this Agreement does not constitute tortious interference with business relations under Alabama law.

21.4 Alabama Workers' Compensation

Distributor shall maintain workers' compensation insurance as required by Ala. Code § 25-5-1 et seq. for employees engaged in distribution activities in Alabama.

21.5 Alabama Business Privilege Tax

Distributor shall maintain compliance with Alabama's business privilege tax requirements under Ala. Code § 40-14A-1 et seq. for entities doing business in Alabama.

21.6 Electronic Signatures

Valid under the Uniform Electronic Transactions Act as adopted in Alabama, Ala. Code § 8-1A-1 et seq.

22. GENERAL PROVISIONS

22.1 Notices

Written notices: (a) personally; (b) confirmed email; (c) one business day after overnight courier; (d) three business days after certified mail, return receipt requested.

22.2 Assignment

No assignment without consent except for mergers, acquisitions, or sale of substantially all assets.

22.3 Force Majeure

No liability for events beyond reasonable control, including tornadoes, severe storms, flooding, and other weather events common to Alabama, government actions, pandemics, or acts of God. If force majeure continues beyond [____] days, non-affected Party may terminate on [____] days' notice. See Ala. Code § 7-2-615.

22.4 Entire Agreement

This Agreement and Schedules constitute the entire agreement.

22.5 Amendments

Written instrument signed by both Parties.

22.6 Severability

Invalid provisions severed; remainder continues.

22.7 Counterparts

Executed in counterparts. Electronic signatures valid.

23. SIGNATURE BLOCK

IN WITNESS WHEREOF, the Parties execute this Agreement as of the Effective Date.

SUPPLIER:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

DISTRIBUTOR:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

24. SCHEDULES

Schedule 1 — Products

Schedule 2 — Pricing and Discounts

Schedule 3 — Minimum Purchase Commitments and MDF

Schedule 4 — Warranty Terms

Schedule 5 — Territory and Channels

Schedule 6 — MAP Policy

Antitrust counsel / jurisdictions / approval date: [________________________________]

Schedule 7 — Trademark Guidelines

☐ Attached ☐ Available at: [________________________________]

SOURCES AND REFERENCES

• Ala. Code § 7-2-101 — Alabama UCC Article 2
• Ala. Code § 8-20-1 — Motor Vehicle Franchise Act
• Ala. Code § 8-21A-1 — Equipment Franchise Act
• Ala. Code § 6-5-521 — product liability actions and distributor limitations
• Ala. Code § 8-24-1 — Sales Representative Commissions
• 15 U.S.C. § 13 — Robinson-Patman Act