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 1 st
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
1
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.
2
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
3
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,
4
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
f
