Exhibit 10.13
DISTRIBUTORSHIP AGREEMENT BETWEEN CINTEL CO., LTD. AND SNET SYSTEMS CO.
ARTICLE 1. PURPOSE
This Agreement is made and entered into this 1st day of October 30, 2001 by and
between CinTel Co. Ltd., having its principal office at MSA Building, #000-00,
Xxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxx (hereinafter referred to as "Principal")
and SNET Systems Co., having its principal office at 10th floor Sungwon Building
000 Xxxxxxx-xxxx Xxxxxxx-xx Xxxxx, Xxxxx (hereinafter referred to as
"Distributor").
WHEREAS, Principal desires to appoint Distributor and Distributor desires to be
appointed, as Principal's non-exclusive Distributor for the sale of the Products
(as defined hereinafter) in the Territory (as defined hereinafter).
ARTICLE 2. APPLICATION AND RANGE
1. This Agreement is applied to the additional agreement entered into
through order sheet requested by Distributor, such as invoice. Both
parties must observe the additional supply agreement.
2. The related regulations including Commercial Law or Civil Law shall be
applied to the items unspecified in this agreement.
ARTICLE 3. TERM
1. This Agreement shall become effective from October 26, 2001 to October
25, 2002 and shall continue in full force and effect for a period of
one (1) year.
2. This Agreement shall be automatically extended for a successive one
(1) year thereafter, unless and until either party shall give to the
other party at least thirteen (15) days prior written notice of its
intention not to extend this Agreement. And the termination of the
term shall not effect any right or debt already generated.
ARTICLE 4. DEFINITION
1. "Products" shall mean the products which are manufactured by CinTel
Co., Ltd., (hereinafter referred to as "Manufacturer"), the whole
hardware including iCache software provided for the end-user and
agency. (Refer to Appendix 1)
2. "Services" shall mean the whole services provided for customers
(in)directly by Distributor with Principal's products..
3. "Customers" shall mean individual, corporation, government
organization having business with Distributor as the outcome of its
sales activities.
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4. "Agency" shall mean sales agencies undertaking sales of Principal's
products in Distributor's charge.
5. "Sole trade right" shall mean the right of distributor which can open
agency to sell Products.
ARTICLE 5. DETAILS OF AGREEMENT
1. Distributor, as Principal's business partner, seeks profit by
providing customers with products and services and has the management
right of sales agency in place of Principal. However, Distributor must
get advance written consent from Principal before entering into sales
agency agreement.
2. Principal, as Distributor's business partner, shall supply Distributor
the products and support Distributor faithfully.
3. Principal shall supply Distributor with the products.
ARTICLE 6. RIGHT AND DUTY
1. Distributor shall provide Principal's product to its resellers with
higher price than the one suggested in Appendix 1.
2. Distributor ought to open its agency or technical support center
within the range specified on this agreement.
3. Principal and Distributor shall exchange information on competitors'
products and market trends.
ARTICLE 7. PAYMENT
1. Payment in cash due shall be based on within 60 days after generating
invoice (This shall be defined as "Payment Due Date"). Day counting
shall follow the rule of Civil Law of Republic of Korea.
2. Without mutual agreement, both parties can offset payment by clearing
invoices that contain payment responsibility of either party.
3. If Distributor needs to clear its invoice with other payment methods
except cash, both parties shall determine with mutual agreement.
ARTICLE 8. DELIVERY AND DELAY PENALTY
1. Product delivery time shall follow Principal's delivery rules, and it
shall not exceed more than four weeks after receipt of order sheet.
2. If Principal fails to deliver the products within the time rule
defined in Article 8-1, Principal shall be responsible for payment of
3/1000 of product's price as penalty of delay everyday after delivery
due date.
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3. Principal shall not be responsible for delay penalty with following
reasons;
A. Force Majeure such as natural disaster;
B. If supply is delayed or suspended by Distributor;
C. Delivery date is delayed by mutual agreement between
both parties.
X. Xxxxx is caused by structural reasons such as
government's regulation.
ARTICLE 9. PRICE AND SPECIFICATION
1. Mutually agreed price and specification is defined in Appendix 1 at
the date of exchanging this Agreement. Unexpected change in price and
specification shall happen due to market trends with mutual agreement
between both parties.
2. The price cut rate that shall be applied when Principal delivers
products to Distributor shall be 60% of consumer price. Additional cut
rate that is caused by Principal's sales activities shall be decided
by Principal. Cut rate that shall be applied to Distributor can be
changed due to Market trend with mutual agreement between both
parties.
ARTICLE 10. DESTINATION PLACE OF DELIVERY
1. Destination place of delivery shall follow the written address of
Distributor in this Agreement.
2. Delivery expense shall be responsible by both parties. When
Distributor demands installation service from Principal, expenses
related to installation service shall be responsible and paid by cash
by Distributor. Other expense shall be cleared by the mutual agreement
of both parties.
ARTICLE 11. DELIVERY AND NOTICE OF FAULTY PRODUCT
1. Distributor shall notice result of quality test to Principal within 10
days after containing product, and such test shall be considered
completed if Distributor does not notice testing result within 10
days.
2. If Distributor finds faulty parts in products within testing period,
Distributor shall report such report to Principal. Principal shall be
responsible for fixing or replacing such parts with immediate manner.
ARTICLE 12. OWNERSHIP TRANSFERRING
Ownership transferring right of product shall belong to Distributor right after
Principal deliver product to Distributor with gaining Product Receiving
Confirmation.
ARTICLE 13. ORDER CANCELLATION
1. The cancellation of order according to official order form shall not
be granted.
2. However, order cancellation shall be considered by both parties before
Principal sends its product to Distributor.
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ARTICLE 14. EDUCATION AND SALE'S SUPPORT
1. Distributor shall be fully responsible for Resellership management
including product education for its customers or resellers. Principal
shall be responsible for education of installation and technical
support for Distributor.
2. Principal shall provide printed presentation materials including
product introduction and logo, and Distributor shall not utilize
Principal's presentation materials for purpose of other activities
except business that is defined in this Agreement.
ARTICLE 15. SALES PROMOTION
Distributor shall, at its own expenses, use its best efforts to promote the sale
of the Products and Principal shall support those efforts. Distributor shall
execute independent sales promotion by utilizing Principal's logo or product,
but it shall not harm Principal's public image or invade its rights.
ARTICLE 16. SALES PROMOTION ADVISORY
Distributor shall, at its own expenses, use its best efforts to promote the sale
of the Products. Distributor shall ask presentation materials to Principal.
ARTICLE 17. WARRANTY AND MAINTENANCE
1. Principal shall be responsible for repairing or exchanging of faulty
part of product due to Principal's own fault.
2. Principal shall guarantee warranty for one year with free of charge.
This warrantee term shall begin right after Distributor complete
product delivery confirmation from customer.
3. Principal shall ask expense for maintenance if such maintenance
request is not covered by warranty policy.
4. Upgrading of product shall not be covered by warranty with free of
charge. Required expense of upgrading process shall be discussed by
both parties with mutual agreement.
5. Principal shall provide warranty deed which guarantees the defect of
products during the termination.
ARTICLE 18. CUSTOMER MANAGEMENT
1. Distributor shall take full responsibility for customer management
after gaining its customer by own sales activities.
2. Distributor shall provide kindly service for product maintenance
request from customers and shall notice to maintenance request order
to Principal if maintenance request is dealing with faulty part of
product that contain effective warranty policy.
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ARTICLE 19. TERMINATION RIGHT WITH IMMEDIATE EFFECTIVENESS
1. In each case of the following events, either party ("Terminating
Party") may terminate this Agreement, with immediate effect, by giving
the written notice of termination to the other party ("Defaulting
Party"):
A. if the Defaulting Party becomes bankrupt or insolvent, or have
its business placed in the hand of a receiver, assignee or
trustee, whether by voluntary act or otherwise;
B. if both parties agree on termination of this Agreement;
C. if the Defaulting Party assigns this Agreement or any rights
hereunder to a third party without the non-defaulting party's
prior written consent;
D. if the Defaulting Party ceases to function as a going concern or
to conduct its operations in the normal course of business;
E. if the Distributor should be acquired by, or should itself
acquire, in whole or in part, a manufacturer of products which in
the reasonable judgment of Principal competes to a material
extent with the Products;
F. if the Defaulting Party causes damages on Terminating Party's
company image or Terminating Party's customer relationship
ARTICLE 20. PRINCIPAL'S ARBITRARY TERMINATION RIGHT
In case of termination due to Article 19-1-B, the Principal or Distributor may
terminate this Agreement by exchanging prior written notice.
ARTICLE 21. MAKING PROTEST
1. In case a party gets termination notice of this agreement, the party
can make a protest within fifteen (15) days after the receipt of the
notice.
2. In case each Party does not make any protest against the claim, this
agreement is considered to be terminated.
ARTICLE 22. CLEARANCE AFTER TERMINATION
After termination according to Article 19, each party carries out clearance as
follows;
1. All products and sales rights granted by Principal is suspended and
Distributor shall bear all responsibilities originated after the
effective date of termination.
2. All materials for promotion and sales granted to Distributor are to be
returned to Principal
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ARTICLE 23. ARBITRATION
All disputes, controversies or differences which may arise between the parties,
out of, or in relation to, or in connection with this Agreement, or for the
breach thereof, shall be finally settled by arbitration in Seoul, Korea in
accordance with the Commercial Arbitration Rules of the Korean Commercial
Arbitration Board and under the laws of Korea.
ARTICLE 24. DAMAGE REPARATION
Each party is claimable damage reparation of nonfulfilment or delay of this
agreement caused by partner's fault.
1. Each party shall not bear the responsibility of damage reparation when
it caused by force majeure, such as natural disaster, war, or other
acute situation.
2. In case a party delays activity described on this agreement for force
majeure, the party must notice the reason, delay time to another
party.
ARTICLE 25. OBLIGATION OF THE DISTRIBUTOR
The Distributor will, in all correspondence and dealing relating directly or
indirectly to the sale or other disposition of the Products, clearly indicate
that it is acting as a principal and not as an agent and/or legal representative
of the Principal. Distributor undertakes any legal problem caused between
Distributor and customer.
ARTICLE 26. PROHIBITION OF TRANSFER
Any rights and obligations on this agreement are unassignable until getting
written consent from each Party.
ARTICLE 27. XXX-XXXXXXXXXX
0. The Distributor shall not disclose to any third party, without the
prior written consent of the Principal.
2. The Distributor shall not use for any purpose other than the
performance of its obligations under this Agreement, any confidential
information concerning the Products or business affairs of the
Principal (including but not limited to, prices, discounts, terms and
conditions of sale, customers, business affairs, Products or Product
specification) which it acquires or develops in the course of its
transaction with the Principal.
ARTICLE 28. TERM & ADDITIONAL ITEMS
1. This Agreement shall become effective upon signing.
2. In case additional or specific items which are not described in this
agreement, they can be added after exchanging written consents
mutually.
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ARTICLE 29. ORAL ENGAGEMENTS
All of conventions and oral engagements before this agreement are abolished.
ARTICLE 30. SAFEKEEPING THE COPIES OF AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this agreement in two (2)
original copies by their duly authorized representatives on the day and at the
place written here below, each party receiving one original copy hereof.
ARTICLE 31. ENTIRE AGREEMENT & AMENDMENTS
1. This Agreement constitutes the entire understanding of Principal and
the Distributor with respect to the subject matter hereof.
2. No amendment, modification or alteration of any terms of this
Agreement shall be binding on either party unless the same shall be
made in writing, dated subsequent to the date hereof and executed by
or on behalf of the parties hereto.
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APPENDIX 1. PRICE LIST AND SPECIFICATIONS
1) Price and Specifications of PacketCruz iCache (Unit: KRW)
-------------------- -------------------------- --------------------------- -----------------------
Model 400 800 1500(future)
-------------------- -------------------------- --------------------------- -----------------------
Specifications Intel Pentium III-800 Intel Pentium III-800 Intel Pentium III-866
256MB 512MB 1GB
IDE ATA-66 60GB IDE ATA-66 120GB IDE SCSI 144GB
10/100Mbps 1ports 10/100Mbps 1ports 10/100Mbps 1ports
-------------------- -------------------------- --------------------------- -----------------------
List Price
-------------------- -------------------------- --------------------------- -----------------------
Reseller Price
-------------------- -------------------------- --------------------------- -----------------------
-------------------- -------------------------- --------------------------- -----------------------
Model 2000 Standard 2000 Plus Giga-bit Interface
-------------------- -------------------------- --------------------------- -----------------------
Specifications Intel Pentium III-1GHz Intel Pentium III-1GHz 1000Base-SX 1 Port
/ Xeon 700 / Xeon 700
1GB 2GB
Ultra3 SCSI 144GB Ultra3 SCSI 290GB
(Hot Swap) (Hot Swap)
1000Mbps 1ports 1000Mbps 1ports
Dual Power Dual Power
-------------------- -------------------------- --------------------------- -----------------------
List Price
-------------------- -------------------------- --------------------------- -----------------------
Reseller Price
-------------------- -------------------------- --------------------------- -----------------------
* Upgrade of the products can be performed under the mutual written consent.
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ADDITIONAL MUTUAL AGREEMENT
CinTel Corp. (hereinafter referred to as "Gab") and SNET System Co. (hereinafter
referred to as "Eul") shall agree on this Additional Mutual Agreement.
1. Eul's responsible sales revenue shall be following figures.
A. Until December 31st, 2001: __________________ (excluding VAT)
B. Until December 31st, 2002: __________________ (excluding VAT)
Total: __________________ (excluding VAT)
2. Gab and Eul shall work together for CDN Project and other domestic CDN
sales that is based on CDN solution.
3. Eul shall maintain active sales work and related support to obtain sales
right from Gab.
4. Gab shall maintain continuous marketing activities to increase brand value
for supporting Eul's proper sales activities.
5. When Eul need to contain additional guarantee of profit due to Eul's
successful sales activities, both parties shall exchange additional
required issues.
6. Eul shall not ask profit share of sales that is executed prior to this
Agreement.
7. Gab and Eul shall be able to change product's specification for proper
sales activities, and both parties can work together for the same reason.
8. Gab shall not execute direct sales activities to its customers and shall
obtain sales only by Eul.
9. Eul shall give choice of priority to Gab's product.
October 30th, 2001
(GAB) ____________________
CinTel Co. Ltd., MSA Xxxxxxxx, #000-00, Xxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxx
(EUL) ____________________
SNET Systems Co., 10th floor Sungwon Xxxxxxxx 000 Xxxxxxx-xxxx Xxxxxxx-xx Xxxxx,
Xxxxx
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