EXHIBIT 10.28
DISTRIBUTION AGREEMENT
THE SINGING MACHINE CO. INC.
&
ARBITER GROUP PLC
(UNITED KINGDOM)
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THIS DISTRIBUTION AGREEMENT is made the 1st
day of April 2003.
BETWEEN :-
(1) THE
SINGING MACHINE CO. INC., incorporated in United States of
America,
with
registered office address at 6601 Lyons Road, Building A-7,
Coconut Creek, Florida 33073, United States of America ("the
Supplier"); and
(2) ARBITER
GROUP PLC, with registered office address at Wilberforce Road,
London, United Kingdom ("the Distributor").
NOW IT IS HEREBY AGREED as follows:-
1.
INTERPRETATION
1.1 In this
Agreement, unless the context otherwise requires:-
"FORCE MAJEURE"
means, in relation to either
party, any circumstances beyond the
reasonable control of that party
(including, without limitation, any
strike, lock-out or other form of
industrial action).
"INTELLECTUAL PROPERTY"
means any patent, copyright,
registered design, trade mark or other
industrial or intellectual property
right subsisting in the Territory in
respect of the Products, and
applications for any of the foregoing.
"INVOICE VALUE"
means the sums invoiced by the
Supplier to the Distributor in respect
of any Products, less any applicable
value added tax or other taxes, duties
or levies, excluding the amounts of
transport or insurance.
"PRODUCTS"
means Home Karaoke Systems CD+Graphics
software formats, CD karaoke players
as well as Cassette tape and DVD
karaoke players, under the label of
"The Singing Machine" set out in The
Singing Machine Catalogue under the
cover of
SCHEDULE 1 to this Agreement
and future models from the Supplier
under the same criteria.
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"RESTRICTED INFORMATION"
means any information
which is disclosed to The Distributor
by the Supplier or to the Supplier by
the Distributor pursuant to or in
connection with this Agreement
(whether orally or in writing, and
whether or not such information is
expressly stated to be confidential or
marked as such).
"TERRITORY"
means United Kingdom and Ireland.
"TRADE MARKS"
REGISTERED TRADEMARK OF "THE
SINGING MACHINE" AND "KARAOKE VISION",
whether or not the same have been duly
registered in the Territory.
"US DOLLARS"
means the lawful currency of the
United States of America.
1.2 The
headings in this Agreement are for convenience only and shall
not
affect its interpretation.
2.
APPOINTMENT OF DISTRIBUTOR
2.1 The
Supplier hereby appoints the Distributor as its sole and
exclusive
distributor for the sale of all Singing Machine Products in the
Territory and the Distributor agrees to act in that capacity
subject to
the terms and conditions of this Agreement. SMC also agrees not
to
supply other Karaoke related products to anybody else within
the
territory.
3.
SUPPLY OF THE PRODUCTS
3.1 The
Distributor shall for the Products to be supplied hereunder, be
responsible for:
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3.1.1
ensuring the accuracy of the purchase contracts issued to the
Supplier;
3.1.2
providing the Supplier with any information which is necessary
in order to enable the Supplier to fulfill the order and to
comply with the labeling, marketing and other applicable legal
requirements in the Territory; and
3.1.3
obtaining any necessary import licenses, or other requisite
documents, and paying all applicable customs, duties and taxes
in respect of the importation of the Products into the
Territory and their resale in the Territory.
3.2 The
Distributor agrees to pay for artwork that the Supplier provides
on
behalf of the Distributor for packaging, owner's manuals,
website
and/or promotional materials to be used in relation to the
Products, if
different from the Supplier's standard packaging:-
3.2.1
developed films and/or colour separations or printing proofs
for the aforesaid materials and/or for the aforesaid purposes;
3.2.2 the
Distributor agrees to provide appropriate and accurate
legal markings and descriptions required by the applicable
laws and rules in the Territory in respect to clause 3.2
above.
3.3 For the
avoidance of doubt, all the Intellectual Property rights in
respect of the packaging, manuals, website and materials mentioned
in
clause 3.2 above shall belong to the Distributor. The
Distributor
undertakes not to use it for any other products without the consent
of
the Supplier.
3.4 The
Distributor shall defend and indemnify the Supplier against any
claim, loss, damages, liability and costs or expenses which the
Supplier may incur arising out of any errors or omission in or in
the
infringement of Intellectual Property rights of any third party
arising
out of the packaging, manuals, website and materials mentioned
in
clause 3.2 above including without limitation such loss, liability
and
costs incurred as a result of defending or settling a claim
alleging
such liabilities.
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3.5 The
Supplier shall indemnify the Distributor against any claims,
liability, cost or expense which the Distributor may incur arising
out
of the use of cassette deck mechanism, CD deck mechanism, DVD
player
etc., without appropriate licenses.
4.
PAYMENT FOR THE PRODUCTS
4.1 All of the
Products to be supplied by the Supplier pursuant to this
Agreement shall be sold on F.O.B. (free on board) China and/or
Hong
Kong basis in US Dollars, and as such the Distributor shall, in
addition to the Invoice Value, be liable for arranging and paying
all
costs of transport and insurance.
4.2 Unless
otherwise agreed in writing in an individual purchase contract
entered into between the parties hereto in respect of the
Products,
payment by the Distributor and accepted by the Supplier shall be
made
by Letter of credit and D/A, (documents against payment), interest
for
Distributor's account.
5.
MARKETING OF THE PRODUCTS
5.1 The
Distributor shall use its best endeavours to promote and
maximize
the sale of the Products throughout the Territory through its
own
channels and through third party customers, who is in the
Distributor's
opinion qualified.
5.2 In
connection with the promotion and marketing of the Products,
the
Distributor shall make it clear, in all dealings with customers
and
prospective customers, that it is acting as distributor of the
Prod
