EX-10.1 DISTRIBUTION AGREEMENTDistribution Agreement |
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Exhibit 10.1
DISTRIBUTION AGREEMENT
by and between
INFOSONICS CORPORATION, a Maryland corporation
and
SAMSUNG ELECTRONICS ARGENTINA S.A.
Effective as of January 1, 2007
DISTRIBUTION
AGREEMENT
THIS AGREEMENT is made and entered into
this 1st day of January, 2007 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 5880 Pacific Center Blvd, San Diego, CA 92121
(hereinafter referred to as “DISTRIBUTOR”).
WITNESSETH:
WHEREAS, SEASA is engaged, by itself or through affiliated companies, in the manufacture and sale of hand phones and its accessories, which intends to market in the TERRITORY hereinafter set forth,
WHEREAS, DISTRIBUTOR is engaged in the business of importation and distribution of same products and its accessories trough carries or through such carrier´s authorized agent 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 DISTRIBUTOR the non-exclusive right to distribute the products in the TERRITORY and the DISTRIBUTOR is 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.
(a)
“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.
(b)
“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.
(c)
“Notice” shall mean a notice
given in accordance with the terms of Article 17 of this
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Agreement.
(d)
“PRODUCTS”, shall mean Held
phones and its accessories as decided by SEASA from time to time.
(e)
“SEASA” shall have the
meaning set forth on the introductory paragraph. However, if DISTRIBUTOR
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.
(f)
“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 DISTRIBUTOR pursuant to this Agreement.
(g)
“TERRITORY” shall mean the
ARGENTINE REPUBLIC, URUGUAY REPUBLIC and PARAGUAY REPUBLIC, the product shall
be delivery at the customers in the port, in FOB bases.
Article 2. Distributorship.
2-1
SEASA hereby grant to DISTRIBUTOR 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.
2-2
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 DISTRIBUTOR. Nothing in this Agreement shall
authorize DISTRIBUTOR 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.
2-3
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. DISTRIBUTOR 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.
3-1
SEASA shall sell the PRODUCTS to
DISTRIBUTOR 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.
3-2
No sales contract shall be binding unless
and until accepted by SEASA.
3-3
SEASA shall use its best efforts to
accept any reasonable order regarding the PRODUCTS placed by the DISTRIBUTOR
provided that it shall not be required to accept a DISTRIBUTOR’s order or
any part thereof when:
a)
The PRODUCTS are not available or
sufficient enough to fill the order placed by the DISTRIBUTOR, or all the
orders placed by the DISTRIBUTOR and other customers; or
b)
SEASA have discontinued the manufacture
or sale of the PRODUCTS ordered at the time the order is received; or
c)
The DISTRIBUTOR has committed a material
breach under this Agreement.
3-4
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. DISTRIBUTOR 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.
3-5
Except as set forth on 3-4 above, neither
DISTRIBUTOR nor SEASA shall rescind or amend any order, which has been accepted
by SEASA without written consent of SEASA.
3-6
DISTRIBUTOR will place orders for the
PRODUCTS by way of written or electronic purchase orders. No order from
DISTRIBUTOR is binding on SEASA until SEASA issues an acknowledgment and
acceptance to the DISTRIBUTOR 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.
3-7
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). DISTRIBUTOR may increase the
quantity of such orders for the fixed or forecasted months subject to written
acceptance by SEASA.
3-8
All orders will be shipped to DISTRIBUTOR
FOB from the respective Samsung Electronics
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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 DISTRIBUTOR, shall be borne by DISTRIBUTOR. In addition, DISTRIBUTOR 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 DISTRIBUTOR upon delivery.
Article 4. Independence of parties
4-1
It is expressly agreed that the
relationship hereby established between SEASA and the DISTRIBUTOR is that of a
supplier and a purchaser. The DISTRIBUTOR is 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 DISTRIBUTOR. This Agreement does
not establish a joint venture, agency or partnership between the parties, nor
does it create an employer/employee relationship.
4-2
SEASA shall not be responsible for the
acts or defaults of the DISTRIBUTOR or its employees or representatives or its
appointed sub-distributors or retailers and the DISTRIBUTOR hereby agrees to
indemnify and to hold SEASA harmless from any and all claims of any nature
whatsoever arising therefrom.
Article 5. Prices and payment
5-1
SEASA will sell the PRODUCTS to
DISTRIBUTOR at the reasonable prices SEASA normally sells to its other
non-exclusive distributors from time to time. To that end, SEASA shall provide
DISTRIBUTOR with pricing schedules within 10 business days upon request by
DISTRIBUTOR.
5-2
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 DISTRIBUTOR, unless otherwise
specified therein.
5-3
The DISTRIBUTOR and SEASA will cooperate
in all good faith to establish selling prices for the PRODUCTS at appropriate
levels enough to keep the competitiveness of the PRODUCTS.
5-4
The DISTRIBUTOR shall cause an
irrevocable and confirmed letter of credit without recourse,
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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. DISTRIBUTOR will pay all banking and similar charges incurred in connection with any of these payments.
5-5
If the DISTRIBUTOR fails 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.
5-6
SEASA and DISTRIBUTOR may agree on other
forms of payment, other than the one provided in 5-4 and 5-5 above.
5-7
All amounts payable by DISTRIBUTOR 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 DISTRIBUTOR, then the amounts payable by
DISTRIBUTOR shall be readjusted so that SEASA does not suffer a loss as a
result of such change in the law.
Article 6. Risk and Property
6-1
Risk in the PRODUCTS supplied by SEASA to
DISTRIBUTOR will pass upon delivery FOB. Property in such goods supplied by
SEASA shall pass to the DISTRIBUTOR on payment in full to SEASA of the contract
price therefor.
Article 7. Inspection and Claim
7-1
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 defects or
shortage of the PRODUCTS been found upon inspection due to its material failure
to meet the standards of quality, DISTRIBUTOR shall give a written notice to
SEASA within 10 days upon inspection. If (i) such written notice of claim for
defects or shortages is accompanied by a proof of damage certified by an
authorized surveyor, (ii) such defects or shortages are acknowledged by SEASA
as attributable to the fault of SEASA and (iii) such defects or shortages are
not compensated by
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