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Exhibit 10.1 DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into this 22nd day of
January, 2009 by and between Samsung Electronics Argentina S.A., a
corporation organized and existing under the laws of the Argentine
Republic, domiciled at Bouchard 547 – 3 Piso, (1106) Buenos
Aires, Argentina (hereinafter referred to as "SEASA") and
Infosonics Corporation, a corporation organized and existing under
the laws of the E.E.U.U. , domiciled at 4350 Executive Drive Suite
#100, San Diego, CA 92121 and Infosonics S.A. , a corporation
organized and existing under the laws of the Uruguay Republic ,
domiciled at Ponce Ave, 1302, Montevideo, Republica Oriental del
Uruguay (hereinafter referred to as "DISTRIBUTORS").
WITNESSETH:
WHEREAS, SEASA is engaged, by itself or through affiliated
companies, in the manufacture and sale of cellular handsets and
accessories, which intends to market in the TERRITORY hereinafter
set forth,
WHEREAS, DISTRIBUTORS are engaged in the business of importation
and distribution of products in the TERRITORY and desires to deal
in and sell the products and its accessories in the TERRITORY;
and
WHEREAS, SEASA is desirous of granting to the DISTRIBUTORS the
non-exclusive right to distribute the products in the TERRITORY and
the DISTRIBUTORS are willing to accept it. Now, THEREFORE, in
consideration of the mutual covenants hereunder set forth, the
parties hereto agree as follows:
Article 1. Definitions.
When used in this Agreement, each of the following terms shall have
the meaning attributed to it below.
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(a)
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“Affiliate” shall mean any entity that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with SEASA.
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(b)
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"Agreement" means this Agreement, any written amendment and any
exhibits or schedule thereto and all references to "herein";
"hereunder" or "hereof" shall refer to this entire Agreement.
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(c)
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"Notice" shall mean a notice given in accordance with the terms
of Article 18 of this Agreement.
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(d)
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"PRODUCTS", shall mean cellular handsets and accessories, as
decided by SEASA from time to time.
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(e)
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“SEASA” shall have the meaning set forth on the
introductory paragraph. However,
if DISTRIBUTORS purchases
the PRODUCTS to an Affiliate of SEASA, all references in Articles 2
to 23 to SEASA will be deemed as if they were referred to such
Affiliate.
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(f)
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"SEASA's Trademarks" shall mean those trademarks, trade names,
slogans, labels, logo and other trade identifying symbols whether
registered or not in the TERRITORY which are developed and used by
SEASA in connection with any of the PRODUCTS to be sold by the
DISTRIBUTORS pursuant to this Agreement.
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(g)
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"TERRITORY" shall mean the Argentine Republic and Uruguay.
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Article 2. Distributorship.
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2-1
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SEASA hereby grant to DISTRIBUTORS a non-exclusive right to
distribute the PRODUCTS in the TERRITORY during the term of this
Agreement and subject to the provisions and conditions hereinafter
set forth.
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2-2
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DISTRIBUTOR shall buy and sell in its own name and for its own
account and shall act as independent trader with regard to both
SEASA and the customers of DISTRIBUTORS. Nothing in this Agreement
shall authorize DISTRIBUTORS to engage in transactions in the name
of SEASA or in any manner, which may create any obligations or
liabilities on the part of SEASA.
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2-3
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This Agreement shall not operate or be construed to create any
exclusive relationship between the parties. SEASA shall have at any
time the right to sell to any other person within the TERRITORY
upon such terms and conditions as are acceptable to SEASA in its
sole discretion. DISTRIBUTORS shall have no right or interest,
including third party beneficiary or “most-favored
nation” interest or rights, in any transaction or agreement
between SEASA and any person within the TERRITORY.
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Article 3. Orders.
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3-1
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SEASA shall sell the PRODUCTS to DISTRIBUTORS for resale in the
TERRITORY in accordance with the terms and conditions of each sales
contract to be separately agreed and fixed between the parties
provided that, unless agreed otherwise, this Agreement shall be
applicable.
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3-2
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No sales contract shall be binding unless and until accepted by
SEASA.
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3-3
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SEASA shall use its best efforts to accept any reasonable order
regarding the PRODUCTS placed by the DISTRIBUTORS provided that
SEASA shall be entitled to reject DISTRIBUTOR's order or any part
thereof when:
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a)
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The PRODUCTS are not available or sufficient enough to fill the
order placed by the DISTRIBUTOR, or all the orders placed by the
DISTRIBUTORS and other customers; or
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b)
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SEASA have discontinued the manufacture or sale of the PRODUCTS
ordered at the time the order is received; or
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c)
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The DISTRIBUTORS have committed a material breach under this
Agreement.
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3-4
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SEASA shall use its best efforts to meet the delivery dates set
forth on the accepted orders. In the event of a shortage of the
PRODUCTS, SEASA shall apportion its available supply among its
customers, as it deems convenient. DISTRIBUTORS may cancel by
delivering a written notice to SEASA, any order if the delivery
date has not been met for more than sixty (60) days, without
charge.
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3-5
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Except as set forth on 3-4 above, neither DISTRIBUTORS nor SEASA
shall rescind or amend any order, which has been accepted by SEASA
without written consent of SEASA.
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3-6
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DITRIBUTOR will place orders for the PRODUCTS by way of written
or electronic purchase orders. No order from DISTRIBUTORS are
binding on SEASA until SEASA issues an acknowledgment and
acceptance to the DISTRIBUTORS for such order. SEASA shall have ten
(10) business days to accept such order. If SEASA does
not accept in writing within such term, then such order will be
deemed as rejected by SEASA.
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3-7
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When placing orders DISTRIBUTOR shall give SEASA a ninety (90)
days notice in advance, with a fixed purchase order for three
months plus a non-binding forecast for the forthcoming two months
(i.e. seventh and eighth months as of the notice). DISTRIBUTORS may
increase the quantity of such orders for the fixed or forecasted
months subject to written acceptance by SEASA.
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3-8
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All orders will be shipped to DISTRIBUTORS FOB from the
respective Samsung Electronics Co. Ltd. manufacturing or warehouse
facility. All cost of freight, insurance and any other shipping
expenses from FOB point, as well as any special packaging expenses
requested by DISTRIBUTORS, shall be borne by DISTRIBUTORS. In
addition, DISTRIBUTORS will be responsible to (i) obtain all
licenses required to import the PRODUCTS into the TERRITORY and
(ii) clear the PRODUCTS through local customs promptly upon arrival
at the TERRITORY, and (iii) pay all customs duties and other
charges assessed on such PRODUCTS in the TERRITORY. Risk of loss
will pass to DISTRIBUTORS upon delivery to DISTRIBUTORS at FOB
point as specified in this Section.
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Article 4. Independence of parties
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4-1
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It is expressly agreed that the relationship hereby established
between SEASA and the DISTRIBUTORS are that of a supplier and a
purchaser. The DISTRIBUTORS are an independent contractor and does
not have authority to cause SEASA to act in any way, or to
represent that SEASA is in any way responsible for the acts of the
DISTRIBUTORS. This Agreement does not establish a joint venture,
agency or partnership between the parties, nor does it create an
employer/employee relationship.
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4-2
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SEASA shall not be responsible for the acts or defaults of the
DISTRIBUTORS or its employees or representatives or its appointed
sub-distributors or retailers and the DISTRIBUTORS hereby agrees to
indemnify and to hold SEASA harmless from any and all claims of any
nature whatsoever arising there from.
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4-3
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DISTRIBUTORS represents that it complies with all local labor
laws related to the performance of its obligations hereunder and
that it has its own labor force sufficiently trained to comply with
its obligations. DISTRIBUTORS accepts that it alone is liable for
any obligations and liabilities that may arise between DISTRIBUTORS
and its employees or workers as a result of its obligations
hereunder including, without limitation, social security
contributions, individual or collective claims, employee's
withholding taxes and similar issues. DISTRIBUTORS agrees that
there is no contractual relationship between SEASA and
DISTRIBUTOR's employees and workers and will hold harmless SEASA
for any related claim.
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Article 5. Prices and payment
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5-1
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SEASA will sell the PRODUCTS to DISTRIBUTORS at the reasonable
prices SEASA normally sells to its other non-exclusive distributors
from time to time. To that end, SEASA shall provide DISTRIBUTORS
with pricing schedules within 10 business days upon request by
DISTRIBUTORS.
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5-2
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SEASA, at its sole discretion, may change the prices of the
PRODUCTS provided that such change of prices shall become effective
and applicable to each sales contract to be effected between the
parties as from the date SEASA notifies the DISTRIBUTORS and to be
applicable to each sales contract pending of shipping, unless
otherwise specified therein.
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5-3
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The DISTRIBUTORS shall cause an irrevocable and confirmed letter
of credit without recourse, available against SEASA's draft at
sight, to be opened for each sales contract through a leading bank
acceptable to SEASA at least 30 days prior to the date of each
shipment of the PRODUCTS. DISTRIBUTORS will pay all banking and
similar charges incurred in connection with any of these
payments.
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5-4
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If the DISTRIBUTORS fail to provide such letter of credit, SEASA
shall have the option of reselling the PRODUCTS in any country,
holding the PRODUCTS for the DISTRIBUTOR's accounts and risk and/or
canceling the contract and claiming for damages caused by the
DISTRIBUTOR’s default.
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5-5
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Seasa and DISTRIBUTORS may agree on other forms of payment,
other than the one provided in 5-3 and 5-4 above.
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5-6
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All amounts payable by DITRIBUTORS to SEASA under this Agreement
are exclusive of any tax, levy or similar governmental charge that
may be assessed by any jurisdiction, whether based on gross
revenue, the delivery, possession or use of the PRODUCTS, the
execution or performance of this Agreement or otherwise, except for
net income, net worth or franchise taxes assessed on SEASA in or
outside the TERRITORY. If a change in the laws of the TERRITORY
were to occur and such change has an adverse effect on the amounts
payable by DISTRIBUTORS, then the amounts payable by DISTRIBUTORS
shall be readjusted so that SEASA does not suffer a loss as a
result of such change in the law.
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Article 6. Risk and Property
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6-1
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Risk in the PRODUCTS supplied by SEASA to DISTRIBUTORS will pass
upon delivery at FOB point. Titles and any rights in such goods
supplied by SEASA shall pass to the DISTRIBUTORS on payment in full
to SEASA of the contract price therefor.
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Article 7. Inspection and Claim
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7-1
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Within one (1) month upon delivery of the PRODUCTS, the PRODUCTS
may be inspected by a DISTRIBUTOR's qualified agent in the
TERRITORY at the DISTRIBUTOR's cost and according to SEASA's
standard "quality warranty". Should any de
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