Sales & Marketing

Division 
Factory
Picfare Industries Ltd.
Yusuf Lule Road, Njeru
P.O. Box 1025, Jinja
Uganda

T: +256-43-4123181
E: customercare@picfare.co
m
Picfare House
Plot No. 37, Jinja Road
P.O. Box 9396,
Kampala Uganda

T: +256 312 202 842

E: customercare@picfare.co
m
 THE REPUBLIC OF UGAND
THE CONTRACT ACT No. 7 of 2010

IN THE MATTER OF THE SALE OF GOODS AND SUPPLY OF

SERVICES ACT, 2017

IN THE MATTER OF A DISTRIBUTORSHIP

CONTRACT

This Contract is made this …………..……… day of ……………….

…………., 2019

BETWEEN

PICFARE INDUSTRIES LIMITED, a limited liability company

incorporated in the Republic of Uganda and having its
principal office at Plot No. 37, Picfare House, Jinja Road,
Post Office Box No. 9693, Kampala, Uganda (hereinafter
referred to as “The Company) which expression shall where
the context allows mean and include its successors in title and
assign of the one part;

AND

……………………………………………… of P.O. Box No.

……….. , ……………………………. Kampala-Uganda
(hereinafter referred to as “The Distributor”) which
expression shall where the context allows mean and include its
successors in title and assign, of the other part;

WHEREA
S:
a) The Company is a limited liability company engaged in the
business of manufacturing paper and paper products
(hereinafter referred to as “Picfare Products”) for sale
and distribution in both the local and foreign markets and
wishes to appoint the Distributor to promote, market, sell
and facilitate distribution for sale of the Company’s
Products (herein after referred to as “paper products
 and the distributor has agreed to purchase, promote,
market and sell pulp and paper products for the
company).

b) The Distributor has accepted to be appointed by the

Company to purchase, promote, market, sell and facilitate
the distribution for sale of picfare Products and is willing to
provide the services in accordance with the terms and
conditions specified in the Agreement.

NOW THEREFORE, in consideration of the mutual promises,

covenants and conditions hereinafter set forth, the Parties have
agreed to enter into this Contract on the terms and conditions
set out herein.

DEFINITIONS:
In this agreement, the following terms shall have the
following meanings;
i. “Contract” means the Agreement set out in this
document and any annexure and schedules hereto;
ii. “Effective Date” the date upon which this Contract is
signed by the Party signing last in time;
iii. “picfare products” refers to the items and/or products
produced by The Company.
iv. “Designated markets” refers to the list of traders
listed on the distributors ‘Master Data’ approved by The
Company where The Distributor will promote, market,
and sell; facilitate the distribution of the pulp and paper
products; which markets are described in Schedule A
attached and may be amended from time to time.
v. “Laws” means all laws, statutes, enactments made in
the Republic of Uganda as amended or repealed from
time to time;
vi. “Substantial or Fundamental Breach” means a
breach of the Contract which makes the performance of
the Contract impossible or incapable of performance by
any of the parties. Incapability shall not include
negligence on any side of the parties;
vii. “Master Data” is the schedule of Distributors
 customers retailers, middlemen, institutions and other
target resellers or large non-consumer users of picfare
industries brands and products which Distributor must
originate, maintain by adding new and deleting closed
customers and maintain to the standards Picfare
Industries Limited requires at all times. This schedule
shall be available to Picfare Indsutries Limited at all
times and on demand.
viii. Transaction Data is all that information that is required
to be captured at each and every customer sales
including name, telephone, postal and physical address
of customer, date pulp and paper products customer
bought by SKU name and quantity; wherever a
transaction involving company products occurs and any
such information from Distributor that The Company may
require.
ix. “The Parties” mean the parties to the Contract;

DURATION OF THIS AGREEMENT

1. The Contract shall commence from the Effective Date
and unless earlier terminated in accordance with the
provisions hereof shall continue in force for an initial period
of ……………. year and shall thereafter be renewed
automatically on the anniversary date unless terminated in
writing thirty calendar days prior to that anniversary date or
terminated otherwise as provided here below.

CREDIT TERMS:
1). The company shall provide goods/stationeries on credit
worth Ugx ……………………[Uganda Shillings
……………………… ] or its equivalent in form of stationery to
the distributor. This shall constitute the maximum credit limit
for distributor during the subsistence of this agreement.
2). It is agreed and understood that the Distributor shall
provide security for payment of the goods so-delivered on
credit in form of either a Bank guarantee or insurance Bond
worth Ugx ………………[]. By virtue of this memorandum of
agreement, the parties further agree and understand that
the said security shall at all time operate as continuing
 securities for the credit facilities that shall be enjoyed from
time to time during the validity of the agreement. For
avoidance of doubt, all securities inform of Insurance Bond
shall only be provided from the following Insurance
Companies:-
a) Jubilee Insurance Company;
b) UAP Insurance Company;
c) Sanlam Insurance Company, and;
d) Phoenix Insurance.
3). Notwitstanding the Provisions of this memorandum of
agreement and the Company’s credit policy, the Company
shall have the right to encash the guarantee/insurance bond
or any of the securities in the event that the distributor fails
to settle the monies outstanding on the credit limit,
PROVIDED that the compnay avails the distributor 30 days
notice of intention to encash the bank guarantee/insurance
bond.
4). It further agreed and understood that upon service of the
notice in (3) above, and after the lapse of the 30 days notice
period, the Company shall be at liberty to encash the bank
guarantee/insruance bond without recourse to court.
5) in the alternative without prejudice to the above, The
Distributor shall deposit with The Company an amount equal
to Ugx. ___________________ ( million
only) as a security for the distributorship role within the
territory as per Schedule attached and raise a capitalization
amount of not less than Ugx. m/- (
million) as trading capital.

APPOINTMENT:
1) The Company hereby appoints The Distributor as the
distributor of the Picfare products within the designated
market (Geographic) until end of …………………….., 20…. and
thereafter among the customers listed on distributor’s
‘Master Data’ and The Distributor hereby accepts such
appointment and agrees to act as such. The Distributor shall
devote its continuing best efforts to the promotion,
marketing, sales and facilitate the distribution for sale of
Picfare products and to perform such other acts, functions
 and services as it is specifically required to do pursuant to
the terms of this Contract. The Company reserves the right
to make direct sales of the products in the territory by itself
or through an affiliate in the case of specific un-remedied
non-performance or breach of any condition of this
agreement.

2) It is hereby agreed and declared that The Distributor

shall be an independent provider in all respects and no
agency relationship exists between the Parties. The
Distributor undertakes that it shall not hold out as being The
Company’s agent in anyway or for any purpose whatsoever.

3) It is hereby agreed and confirmed that prior to signing of

this Contract, The Distributor shall avail to The Company
their Memorandum and Articles of Association and the latest
2 years audited accounts if The Distributor has been in
existence for a period of more than 3 years.

ORDERS

4). The Distributor shall comply with the requirements as set

out below for an order to be valid and binding on the
Company:
a) The order shall be made in writing (by mail, letter or
any other acceptable format) one day prior to the
delivery date;

b) The order shall be addressed to the Executive

Sales person of The Company assigned to the territory.

c) The order shall be sent to the physical address or

email address as set out in clause 44 below, or such other
address as The Company may subsequently notify The
Distributor in writing.
d) The order shall specify the type of Pulp and paper
Products required (preferably by codes used by the
Company)
e) The order shall indicate the quantity of each of
 picfare Products which the Distributor requires;

f) The order shall reflect the price (as per the Price List
attached in the attached Schedule or as amended from
time to time) of the ordered products.

g) The orders to be placed will depend on the monthly

plans as agreed upon between The Company’s
distribution manager and The Distributor.

h) The Distributor orders are required to meet the

monthly target as set and agreed between the two
parties mentioned in Clause 5(g).

5) Only such orders placed by The Distributor and accepted by

The Company shall be binding on the parties hereto;

6) All expenses arising out of the change or cancellation of an

order after acceptance by The Company, including any
reasonable restocking charge shall be paid by The Distributor
to The Company, on demand.

PRICES:
(7) Subject to and in accordance with the terms and
conditions hereof, The Distributor shall purchase picfare
Products at the prices in effect at the time of order.

8) The Company shall have the right, in its sole discretion, to

increase its prices unilaterally, it being understood that any
such increases shall only be effective upon a 2 working days’
notice to The Distributor, whereupon after any such revised
price shall be effective immediately without further notice;

9) In addition to the purchase price, The Distributor shall pay

to the Company the amount of all taxes or other government
charges (except taxes on or measured by net income) that The
Company may be required to pay on the sale or delivery of any
products sold and delivered hereunder, except where the law
otherwise provides.

PAYMENT:

10) The Company shall avail the Picfare Products within 3

(three) days upon receipt of The Distributor’s order and
payment in full for the products. All trade will be on payment
prior to delivery basis unless otherwise duly authorized by the
authorized signatories of The Company.

11) In event that The Distributor cannot meet the conditions

laid out in subsection 11 above, a one-time credit period of
four (4) days only may be extended to The Distributor to clear
the liability after that credit line is sought in writing by The
Distributor and authorized by the authorized Picfare Industries’
official (Financial Controller).

12) The Company shall issue a tax invoice to The Distributor in

respect of each order placed in terms of this Contract and in
accordance with The Company’s practice in this regard from
time to time.

13) In case a credit line is extended, all invoices due for

settlement shall be paid without set-off, counterclaim or
deduction for whatever reason by The Distributor (save as
required by law) to The Company in readily available funds,
that is, cash or bank guarantee or cheque (but only if
agreed to by The Company and is deposited and honoured)
or by electronic transfer and funds are available in The
Company’s bank
account and shall be paid
in advance.

14) Non or delayed exercise by The Company and The

Distributor of any of the rights or privileges under this Contract
shall not be construed as a waiver of such right or privilege to
preclude any other or further exercise thereof. In the event
that The Distributor requests for the extension of time within
which to pay and the same is granted by The Company the
same shall be with an added condition that The Distributor will
pay a penalty of 10% of the total amount due.

15) The Distributor hereby agrees to pay all the reasonable

fees, charges and costs that would be incidental to the
recovery or collection of the outstanding amount and/or any
interest due thereof as provided under this Agreement.

THE DISTRIBUTOR’S OBLIGATIONS

The Distributor hereby agrees with the Company that it
undertakes the following during the continuance of this
Contract;

16) Sales Activities:

The Distributor agrees to use its best effort vigorously and
actively to promote the sale of Picfare products within the
designated markets and to achieve specific performance
targets in connection with such efforts. The parties shall agree
the Objectives, Key Performance targets and measurement
methods for each year (1st July to 30th June) that this
Agreement remains in effect in writing no later than May 30th
of the preceding financial year. Such Objectives, KPI’s and
measurement methods shall become an integral part of this
agreement and shall be achieved by the DISTRIBUTOR to the
greatest extent possible for any period for which they may be
stipulated by the two parties. Failure by the Parties to agree on
Objectives, Key Performance targets and measurement
methods as contemplated by this article shall entitle
either one to cancel this agreement on written notice of 30
calendar days to the other in accordance with the relevant
provisions below.

17) After the end of each month, the Distributor shall furnish
to Company MASTER and TRANSACTION data on the format
prescribed by it through the Distribution Manager not later
than 4th working day of the following month. The
completeness, veracity, accuracy and timeliness of receipt of
these reports is a material or fundamental part of the
performance of this contract. The details of these
documents and respective information will be discussed with
The Company’s distribution manager and trade sales
Executive.

18) The Distributor shall obtain, at its own expense, such

approvals, consents, certifications, permits and other
authorizations, including all approvals as are required to effect
the sale and distribution of picfare Products in the market for
as soon as reasonably practicable; provided however that The
Company shall not be obligated to deliver any products unless
and until The Distributor provides The Company with
satisfactory evidence that such approvals have been obtained

20) The Distributor shall notify The Company of events that

could have a material adverse effect on the Distributor’s
business (most notably the pulp and paper Products) and its
ability to perform its obligations hereunder, within 7 (seven)
calendar days of the occurrence of such event or
circumstances.

21) The Distributor must be a registered and incorporated

corporate entity with a valid TIN.

22) The Distributor shall maintain adequate warehousing

(Minimum ………………… sq ft) with adequate loading and
offloading capacity, street facing show space accessible by
vehicular traffic, a minimum of one serviceable and licensed
vehicle of no less than three tons capacity and capability to
lend up to ‘thirty days of sales outstanding’ as debt for which
Picfare shall not be liable in any way whatsoever. Distributor
shall bear all risks for credit they may grant their customers in
connection with the sale of Pulp and paper products.

23) The Distributor will be required to trade in the entire Nice

Products range and ensure marketing of such products in the
designated markets and develop vertical growth by enlisting
other wholesalers to promote secondary billing.
24) The Distributor MUST adhere to the Recommended
Wholesale Price (RWP) recommended by The Company in the
designated market and will adhere to the rules and principles
outlined against dumping. The distributor shall have
standard terms and Picfare Industries Limited conditions
including non-discriminatory pricing for pulp and paper
products to the end that there is little or immaterial variance in
prices for the same product from place to place in the market.
In addition distributor covenants to abide by any Picfare’s
commercial selling principles’ and all amendments as may be
made from time to time.

25) The Distributor on request by its customers will promote

value addition to the picfare Products through branding the
products; however, all costs relating to this development will
be met by the beneficiary through an understanding with The
Distributor.

26) The Distributor shall prepare monthly claims arising out of

returns arising from factory damages or from handling by The
Company delivery system as agreed with The Company and
should be presented to the company every month by 3rd day of
subsequent month with the entire supporting document as
dully attached upon which The Company shall issue a credit
note to The Distributor on the claims.

27) It is in the best interest of both parties that the

Distributor’s business be profitable and viable. Accordingly,
distributor agrees to allow the duly authorized representatives
of the Company access to its books of accounts upon
reasonable request. All information obtained by reason of such
access shall be held by the Company in the strictest of
confidence and shall be used only to improve the operations of
the distributor.

THE COMPANY’S OBLIGATIONS:

The Company hereby agrees with the Distributor that it
undertakes the following during the continuance of this
Agreement;
28) The Company undertakes to use all reasonable
endeavors to supply the Distributor with such reasonable
and adequate supplies of picfare Products as shall be ordered
by the Distributor.

29) The Company will deploy a Trade Sales Executive to

operate within the designated market who will report to The
Company and update The Distributor with market information
pertaining to picfare Products, most notably on the stocking
gaps and price variations in the designated market. Picfare’s
employees are not responsible for achievement of any or all
Distributor targets in any way whatsoever.

30) The Company will on signing of this Contract or within its

continuance undertakes to do a one-off marketing campaign
that will introduce The Distributor as the distributor of its
picfare Products within the agreed market. The Company will
on signing of this Contract make every effort to promote sales
through Distributor in the designated market and unless
distributor fails or refuses to serve a customer refrain from
selling directly to Distributor’s designated market.

31) The Company will meet 100% costs of branding one store
for The Distributor and 50% of the branding costs of the truck
(The Company has to be advised of the costs of branding
before its undertaken) that will be earmarked by The
Distributor for the purposes of transporting and distributing
Picfare Products. However, these costs are a one-off and any
subsequent costs will be at The Distributor’s account.

32) The Company will undertake the branding of the Picfare

Products as and when demanded by the Distributor, however,
all costs relating to this value addition to the product will be at
The Distributor’s cost and will be carried out preferably at The
Company’s premises. Such costs will be advised to the
Distributor on an official Company Proforma Invoice and
communicated accordingly. The Distributor will exercise his
option of either absorbing or passing on this branding cost to
their customers.

33) The Company undertakes to sensitize and provide

information regarding to the functionality and attributes of the
Picfare Products as and when any development arise to The
Distributor and or his agents / representatives. This
sensitization will include but not limited to the handling and
storage of the Picfare Products.

34) The Company shall invoice for Picfare Products at ex-

factory price inclusive of VAT; however, The Company shall
contribute to the transport of Picfare products to The
Distributor’s warehouse an amount of either ……………% of the
carrying value or 50% of the haulage costs, whichever is lower.
All risk relating to such merchandise invoiced and delivered to
the Distributor shall pass to the Distributor immediately upon
such delivery at the NICE factory.

CONFIDENTIALITY
35) The Distributor shall not at any time, either during or
after the term of this Contract, disclose or use directly or
indirectly, any Proprietary Information of which the distributor
gains knowledge during or by reason of this Contract and the
Distributor shall retain all such information in trust in a
fiduciary capacity for the sole use and benefit of the Company.

36) As used in the above Section, "Proprietary

Information" means information developed by or for The
Company which is not otherwise generally known in any
industry in which The Company is or may become engaged
and includes, but is not limited to, information developed by or
for The Company, whether now or hereafter obtained,
concerning plans, marketing and sales methods, materials,
processes, procedures, devices utilized by The Company,
prices, quotes, Company, manufacturers, customers with
whom The Company deals (or organizations or other entities or
persons associated with such customers), trade secrets and
other confidential information of any type, together with all
written, graphic and other materials relating to all or any part
of the same.

INTELLECTUAL PROPERTY RIGHTS

37) The Distributor shall, take all reasonable measures to

assist The Company to protect and maintain its intellectual
property rights and shall display at the Outlets, and on all
stationary, branding materials and literature used by the
distributor, the text as specified by The Company from time to
time disclosing to the public that The Distributor is authorized
by The Company to provide the Services under this Contract.
The Distributor shall also display at the Outlets such notices
with respect to trade or service marks or copyright as The
Company may specify from time to time.

38) Distributor agrees not manufacture, sell, promote, or

distribute any other products which compete with or are
similar to Picfare products during the term of this agreement;
not, during the term of this agreement or at any
time after its termination or expiration, directly or
indirectly, to copy or attempt to copy Picfare products or
be involved either directly or indirectly in manufacturing,
selling, promoting or distributing goods that are intended to
be or could be perceived to be copies of or confusingly
similar to Picfare products.

39) The Distributor acknowledges that all rights, title and

interest in and to the trademark, business name or any
patents, emblems, designs or other industrial or commercial
rights of The Company (“the intellectual property”) vests in the
Company and that The Distributor has no claim of any nature in
and to the intellectual property. The Distributor shall not at
any time during or after termination or cancellation of this
Contract dispute the validity or enforceability of such rights, or
cause to be done any act or thing contesting or in any way
impairing or tending to impair any part of that right, title and
interest of any of the intellectual property rights which may be
the subject of this Contract and shall not counsel or assist any
other person to do so.

40) Upon termination of this Contract for whatever reason,

The Distributor shall immediately cease any further use of the
intellectual property, trade slogans, or any confusing or
deceptive simulation thereof, and will cease doing anything
that would indicate in any way any relationship existing
between The Company and The Distributor.

INDEMNITY
41) Without prejudice to any indemnity contained herein, and
to the extent permitted by law, the Distributor shall indemnify
and hold the Company and its respective affiliates, officers,
directors, employees, agents and owners, individually and
collectively harmless from any and all claims, liabilities, losses,
damage or expenses (including reasonable attorneys, fees and
costs) arising directly or indirectly from, as a result of, or in
connection with, The Distributor's operation of The
Distributor's business. Under no circumstances shall The
Company be liable for any act, omission, contract, debt or
other obligation of any kind of the Distributor or any salesman,
employee, agent or other person acting for or on behalf of The
Distributor. The terms of this indemnity shall survive the
termination of this Contract.

42) The Company shall indemnify The Distributor for any

losses incurred as a result of a manufacturing defect in the
Picfare Products and should adhere to the provisions as laid
out in subsection 26 of this Contract.

43) Nothing contained in this Contract shall be deemed to

relieve either party of any duty that may be imposed by any
applicable laws.

TERMINATION:
44) Either Party may terminate this Contract for any or no
reasons by giving the other Party Thirty (30) calendar days
written notice to that effect.
45) Upon receipt of notice of termination of this Contract by
either Party, the Parties shall effect any pending transactions,
instructions for which were received before the date of receipt
of such notice, and shall immediately thereafter cease to
undertake any further instructions unless otherwise agreed by
the Parties;

46) The Company may terminate this Contract immediately

at any time, in the following circumstances:
a) Failure to honour terms of payment.
b) Inability to stock and grow the volumes and trade to
the contracted levels.
c) Failure to comply with business conduct of The
Company i.e. targets and The Company requirements.
d) In the event that the Distributor is declared or
acknowledges that it is insolvent or otherwise unable to
pay its debts as they become due or upon the filing of
any proceeding (whether voluntary or involuntary) for
bankruptcy, insolvency or relief from creditors; or an
applicable regulatory or law enforcement authority
initiates a regulatory or enforcement action or
investigation against it which, in the reasonable judgment
of The Company will materially impair the operation of
the services and the transactions contemplated herein,
the expected economic value of this Agreement, or the
business reputation of The Company.
e) In the event that The Distributor commits a
material breach of this Contract and (in the case of a
remediable breach) fails to remedy the breach within
Fifteen days of receipt of the terminating Party’s written
notice to do so.
f) The Distributor may terminate the Contract
immediately at any time in the

event that the Company commits a material breach of

this Contract and (in the case of a remedial breach) fails
to remedy the breach within 15 (fifteen) days of receipt of
the terminating Party’s written notice to do so.
NOTICES
47) Any notices and communication to be given under this
Contract shall be in writing and shall be addressed or delivered
to the address provided herein above and shall either be
delivered by hand or sent by registered post to the address for
each party.

FORCE MAJEURE

48) Neither Party hereto shall be liable to perform any

obligation hereunder in the event and to the extent that
performance of such obligation is prevented or hindered by a
condition of force majeure.

49) A condition of force majeure shall arise from any

circumstances beyond the reasonable control of the affected
party, which prevents or impedes the execution of the
agreement, including but not limited to war or hostilities;
riot or civil disturbance; earthquake, flood, fire or other
natural physical disaster; power failure denial of the use of
road or other means of public transport; national or regional
strike or other national or regional industrial action by workers
or employees; or confiscation, destruction or requisition by
order of any government or public authority.
50) Relief from liability for non-performance by reason of the
provisions of this clause shall commence on the date upon
which the party seeking relief gives notice of the impediment
relied upon and shall terminate upon the date upon which such
impediment ceases to exist; provided that if such impediment
continues for a period of more than 90 (ninety) days either
party shall be entitled to terminate the relevant part of the
Contract. GOVERNING LAW;

51) This Contract shall be governed by and construed in

accordance with the laws of Uganda.

DISPUTE RESOLUTION
52) Any dispute or disagreement arising from or in connection
with this Contract shall first be referred to the Executive
Directors or persons of similar status of the parties who shall
attempt to resolve such dispute finally within 30 (Thirty)
business days of the said dispute having been referred to them
by either Party.

53) This clause and any discussion which takes place

hereunder shall not prejudice any right or remedy which any
Party may ultimately have should the matter fail to be resolved
by such discussions.

54) Should the individuals referred to in Clause 50 above fail to

resolve the disputefully and finally, such Dispute shall be
referred to and finally resolved by the Courts in Uganda with
competent jurisdiction.

55) Nothing in this Contract shall prevent or delay a party

seeking urgent injunctive or interlocutory relief in a court
having jurisdiction.

SEVERABILITY
56) If any provision of this Contract is invalid or
unenforceable for any reason whatsoever, such invalidity or
unenforceability shall not affect the validity or enforceability of
any or all of the remaining provisions of this Contract, which
shall continue in force and effect and be constructed as if this
Contract had been executed without the invalid or
unenforceable provisions.

VARIATION
57) This Contract may not be modified, altered or amended
except by written instrument duly executed by the Parties.

WAIVER
58) A waiver by any party of any breach of any of the
obligations or duties of either party under this Contract shall
not be construed as a waiver of any succeeding breach of the
same or any other obligation or duty. The rights and remedies
provided herein are not exclusive of any rights or remedies
provided by law.

IN WITNESS where of this Contract has been executed as a

deed by the parties hereto and is intended to be and is hereby
delivered on the date first written above.

THE COMPANY
The Common Seal of
PICFARE INDUSTRIES LIMITED
Was affixed in the presence of

………………………………………..
DIRECTOR

In the presence of Name :

Signature :
Title :
Address :

THE DISTRIBUTOR

The Common Seal of

Was affixed in the presence of

…………………………………..
In the presence of Name :
Signature :
Title :
Address :

Drawn By:
Picfare Industries Limited;
Plot 37, Jinja Road,
P.O. Box 9306,
Kampala, Uganda.