DISTRIBUTION AGREEMENT
THIS DISTRIBUTOR AGREEMENT is entered into by and between Samsung
Electronics Co., Ltd., a corporation formed under the laws of Korea, with a
place of business at San #24 Nongseo-Ri, Kiheung-Eup, Yongin-City, Kyungki-
Do, Korea 449-900 ("Samsung") and Tensleep Design Inc., a corporation
formed under the laws of the state of Colorado, U.S.A., with a place of
business at 00000 Xxxxx Xxxxx Xx Xxxxxx, XX 00000 ("Distributor")
BACKGROUND
Samsung is engaged in the design and manufacture of stand-alone fax modem
products (the "Products"). Distributor has requested the right to
distribute Samsung's Products on a non-exclusive basis. To induce Samsung
to enter into this Agreement, Distributor represents and warrants to
Samsung that Distributor is: (1) qualified to distribute Products in the
territory of United State of America and Japan ("Territory"); (2) has
sufficient knowledge of Samsung's Products to do so; and (3) is not
competing in any manner or from against Samsung
In consideration of the mutual promises of the parties, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, Samsung and Distributor
hereby agree as follows:
1. Appointment
Subject to the terms herein, Samsung hereby appoints to the
Distributor the nonexclusive right to sell the Samsung stand-alone fax
modem products identified in Exhibit A hereto (the "Products") in the
United States of America and Japan (the "Territory") during the term of
this Agreement. Distributor agrees that it will not sell the Products
outside the Territory, nor knowingly sell the Products to customers who
intend to install the Products outside the Territory, without the prior
written consent of an authorized representative of Samsung. Samsung shall
provide Distributor with necessary technical information regarding the
Products.
2. Acceptance of Appointment
Distributor hereby accepts its appointment as Samsung's distributor
with the nonexclusive right to sell the Products in the Territory. Except
as expressly set forth in this Section 2, Distributor acknowledges that
Samsung shall have the right to appoint other distributors in the Territory
and that Samsung and/or its affiliates may distribute the Products in the
Territory.
Notwithstanding the above, Samsung agrees not to appoint
Distributor's agents or subagents as distributors. Samsung agrees, prior
to its appointment of any party as a distributor or its distribution of its
Products in the Territory, to give Distributor 30 days written notice of
its intention ("Notice of Appointment") and Samsung agrees that
Distributor shall have the exclusive right to sell to customers listed on a
customer list provided to Samsung within 10 days after the receipt of
Samsung's Notice of Appointment, only to the extent actual and substantial
order placement of the Products from such customer has been made as of the
receipt date of Samsung's Notice of Appointment.
3. Duties of Distributor
Distributor shall undertake, at its sole expense, the following
duties in a professional manner to the satisfaction of Samsung:
3.1 Use its best efforts to promote the sales of Products in the
Territory. Such efforts shall include, but not be limited to, promptly
servicing all customer accounts and cooperation with and participation in
Samsung's advertising and sales promotional programs. All promotional and
advertising materials for the Products, unless supplied by Samsung, must be
approved in writing by Samsung.
3.2 Maintain adequate office and warehouse facilities.
3.2 Provide its customers with technical support related to the
Products.
3.3 Maintain a trained and aggressive sales force and technical
personnel.
3.4 Maintain an inventory of Products as may be reasonably
necessary to meet market demand for the Territory.
3.5 Provide monthly reports to Samsung regarding inventory, sales
and sales forecast of Products and any other information reasonably
requested by Samsung.
3.6 Elect one person designated by Samsung to serve on
Distributor's Board of Directors. The person designated will be subject to
the approval of the Distributor, which will not be unreasonably withheld.
4. Agreement of Purchase and Sale
Samsung agrees to sell to Distributor and Distributor agrees to
purchase from Samsung the Products subject to Samsung's terms and
conditions of sale ("Terms and Conditions"), attached hereto as Exhibit A
and incorporated herein by reference set forth herein.
5. Purchase Orders
No contract for sale of Products shall result except by Samsung's
written acceptance of each order submitted by Distributor. Accepted
purchase orders will be exclusively subject to the Terms and Conditions
attached hereto as Exhibit B. Any preprinted information on Distributor's
Purchase Orders shall be of no force or effect.
6. Prices
Products will be invoiced to Distributor at the applicable prices
listed on the price list or other applicable written price quotations to be
issued to Distributor by Samsung twice per year (the end of June and
December), current at the date of Samsung's acceptance of Distributor's
order. The initial price offered to the Distributor effective as of the
date of this Agreement is attached hereto as Exhibit B. The payment term
shall be C.O.D(Cash on Delivery) which requires full payment of the prices
invoiced to Distributor prior to shipment of the Products under
Distributor's order. Such payment will be made by wire transfer to a bank
account in Korea as designated by Samsung in the applicable invoice.
7. Product Discontinuance and Changes
Samsung reserves the right to discontinue the sale of any and all
types of Products and to change the product type, specifications, designs,
formula, contents or packaging thereof, with sixty (60) days' advance
written notice to Distributor. In such event, Samsung agrees to fulfill
all orders or contracts for the discontinued products outstanding or taken
prior to the product termination date included in this Section 7.
Distributor shall also have the right to purchase the Mask set and designs
at a reasonable price and seek fabrication from another foundry.
8. Product Implementation and Derivatives
Distributor may implement Supplier's technology related to the
Products into other derivative products, subject to terms and condition of
a separate written agreement to be executed between the parties ("License
Agreement"), including but not limited to Supplier's technical support for
such implementation, royalty payment for the Distributor's use of
Supplier's technology, royalty-free grant-back license for Supplier's use
of derivative technology developed by Distributor, and foundry service
arrangement for such derivative products.
9. Confidential Information
Neither party ("Recipient") shall use or disclose to a third party
any confidential information of the other party ("Provider") acquired by
the Recipient as a result of activities under or in the performance of this
Agreement except as authorized in writing by the Provider. This
confidential obligation shall survive for five (5) years after the
termination or expiration of this Agreement. Upon expiration or
termination of this Agreement pursuant to Section 10, below, Recipient
shall immediately return to the Provider all of the Provider's confidential
information including but not limited to technical Information set forth in
Section 1, together with any and all copies thereof.
10. Covenant of Non-competition
Distributor shall not purchase, sell, distribute or otherwise deal
such products, which are competitive with or similar to the Products in the
Territory, without prior written consent of Samsung.
11. Trademarks and Trade Names
Distributor shall use its own trademarks, trade name, logo, marking
and identification code("Trademark") on the Products supplied under this
Agreement and other printed materials associated with resale of the
Products . Samsung will supply the Products on an OEM basis with
Distributor's Trademark. Distributor shall not use Samsung's Trademark
without Samsung's prior written consent. Distributor shall not have any
right or interest in or claim to any Samsung trademark or trade name in any
manner whatsoever.
12. Term and Termination
12.1 The initial term of this agreement shall be one (1) year from
the date of receipt of the Technical Source & Document (as set forth in
Exhibit A) to be provided by Samsung pursuant to this Agreement.
Thereafter this Agreement may be automatically renewed for four(4)
additional terms of one year each, unless Samsung or Distributor provides
the other with 90 days' written notice of non-renewal, for any reason or
for no reason, prior to the end of the initial or any renewal term.
12.2 This Agreement may be terminated at any time by either party if
the other party defaults in the performance of any provision of this
agreement and such default continues for a period of 30 days after notice
thereof, and if the other party is adjudicated a bankrupt, becomes
insolvent, makes an assignment for the benefit of creditors, has a receiver
appointed, files a petition in bankruptcy or initiates reorganization
proceedings.
12.3 Samsung agrees to fulfill all orders or contracts of Products
outstanding or taken prior to the effective date of the expiration or
termination of the Agreement provided in this Section 12, unless such
termination is caused due to Distributor's default or insolvency set forth
under Section 12.2.
13. Notice
Any notice, request, consent, offer or demand required or permitted under
this Agreement must be in writing and must be sufficiently given if
delivered in person or sent by registered airmail or fax confirmed by
registered by registered airmail, addressed as follows:
Samsung Distributor
Address: Samsung Electronics Tensleep Design, Inc.
San #24 Nongseo-Ri, kiheung-Eup 00000 Xxxxx Xxxxx Xx Xxxxxx,
Xxxxxxx-Xx, Xxxxx XX 00000 U.S.A.
Fax : 00-000-000-0000 0-000-000-0000
Telephone : 00-0-000-0000 0-000-000-0000
Attention : Xx. Xxxxx Xxx Roh Xx. Xxxxxx X. Xxxxxx
Notice must be deemed to have given on the date of mailing except the
notice of change of address which must be deemed given when received.
14. Indemnification
14.1 Distributor shall indemnify Samsung and hold Samsung harmless
from and against any loss, claim, damages, fees (including attorney's
fees), or award arising from any lawsuit, proceeding or other action
arising out of (i) the operation of Distributor's business or (ii) related
to any claim by a third party based, in whole or in part, on Distributor's
distribution, use or install of the Products. The activities of any of
Distributor's employees or agents will be considered activities of the
Distributor for purposes of this section. Samsung will have the right, but
not the obligation, to assume the defense of any such lawsuit, proceeding
or action. Samsung and Distributor will each give the other prompt notice
of any such claim, lawsuit, proceeding or action.
14.2 Except for any design, specification or technical data provided
by the Distributor, any changes in the Products made by the Distributor, or
any combination with other products or incorporation into system products
not undertaken by Samsung for which the Distributor shall indemnify and
hold harmless Samsung in accordance with this Section 14.2, Samsung shall
indemnify, release and hold Distributor harmless from any claims, demands,
liabilities, actions, suits or proceedings asserted or claimed by any third
party from sales of the Products, whether against Samsung or Distributor,
and arising out of the violation of any copyrights and/or patents, and
Samsung agrees to undertake the cost of defending same, including
reasonable attorney's fees, where such claim, demands, liabilities,
actions, suits or proceedings are the result of defencts in the Products or
violations of copyrights and/or patents of others. Samsong shall be given
timely notice of any such claim demand, liability, action, suit or
proceeding, and Samsung shall have the option to undertake and conduct the
defense thereof.
15. Limitation of Liability
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES ARISING OR IN CONNECTION WITH A PARTY'S
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT.
SAMSUNG'S LIABILITY ON ANY CLAIM OF ANY KIND, WHETHER BASED ON BREACH
OF CONTRACT, WARRANTY, TORT, OR INDEMNIFACTION UNDER THE SECTION 14.2 SHALL
IN NO EVENT EXCEED THE PRICE OF THE PRODUCT FURNISHED HEREUNDER WHICH GIVE
RISE TO THE CLAIM.
16. General
16.1 Relationship of Parties. The relationship of the parties shall
be that of independent contractors, and nothing herein shall be construed
as creating an employment, agency, partnership or joint venture
relationship between the parties hereto. Distributor expressly
acknowledges that it has no power or authority to make any commitments for
Samsung or to obligate Samsung in any manner whatsoever.
16.2 Force Majeure. If the performance of either party is made
impossible by reason of any circumstances beyond Samsung's reasonable
control, including without limitation, fire, explosion, power failure, acts
of God, war, revolution, civil commotion, order or requirement of any
government or legal body, then the affected party shall be excused from
such performance to the extent of such interference.
16.3 No License. Except as expressly set forth herein, nothing in
this Agreement shall be construed as granting to the other party any
rights, interest in, or license to any property, including intellectual
property and information, of the other party.
16.4 Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, such provision shall
be enforced to the fullest extent permitted by applicable law and the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
16.5 Waiver. Failure by either party to enforce or take advantage
of any provision hereof shall not constitute a waiver of the right
subsequently to enforce or take advantage of such provision. Any waiver of
any kind by a party of a breach of this Agreement must be in writing, shall
be effective only to the extent set forth in such writing and shall not
operate or be construed as a waiver of any subsequent breach.
16.6 Governing Law. The construction, validity and performance of
this Agreement will be governed in all respects by the laws of the State of
California in the United States of America. Any and all disputes arising
from or in connection with this Agreement shall be settled by arbitration
to be held in Seul, Republic of Korea in accordance with the arbitration
rules of the International Chamber of Commerce then effective, which shall
be final and binding upon both parties
16.7 Assignment. This Agreement may not be assigned or transferred
by either party except with the other party's written consent; provided,
however, Samsung may assign this Agreement to its affiliated company.
16.8 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties relating to the subject
matter contained herein and supersedes all other prior agreements, oral or
written. This Agreement may not be changed or amended, in any way
whatsoever, except by written agreement signed by duly authorized
representatives of both parties.
16.9 Counterparts. The parties agree that they may execute
counterparts to this Agreement with each being considered the original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SAMSUNG ELECTRONICS CO., LTD. TENSLEEP DESIGN INC.
By: /S/ Xxxxx Xxx Roh By: /S/ Xxxxxx X. Xxxxxx
Print Name: Xxxxx Xxx Roh Print Name: Xxxxxx X. Xxxxxx
Title: Vice President Title: Chairman
& General Manager
Exhibit "A"
1. Samsung Stand-Alone Fax Modem to be covered under this Agreement
a. KS16116-02 100QFP 9600bps FAX Modem with Caller ID
b. KS16117-02 100QFP 14400bps FAX Modem with Caller ID
c. KS16118 144QFP 9600bps FAX Modem Super 1-chip
(Modem +MCU)
d. KS16119 may be available for sale to the Distributor at the 4th
quarter of 1999, subject to the terms and conditions of a
separate agreement for such additional product to be discussed
and agreed between the parties.
2. Technical Source & Document to be provided to the Distributor:
a. Test Program (teradyne :A580 series)
b. Test Vector
c. FAX Modem Development Board
d. FAX Modem Evaluation Board
e. KS16118 Development Tool & Board Circuit
f. KS16118 Control Source Program
g. KS16116/7 Designer's Guide (Frame maker)
h. KS16118 Designer's Guide (Frame Maker)
i. KS16118 User's Guide (Frame Maker)
j. Test Plan (Frame Maker)
k. Field emulation Report (Powerpoint)
l. Ber Report (PowerPoint)
m. Performace Report & Compare Report(Frame Maker
& PowerPoint)
n. Two Hundred Fifty (250) samples of each of the
Products
Exhibit "B"
[Prices of Wafers and Packaged Chips applicable for the 1st
Quarter of 1999]
Products Wafer Price Packaged Chip Price
KS16116-02 $460.00 $3.01
KS16117-02 $460.00 $3.11
KS16118 $460.00 $7.30
KS16118S $580.00 $3.91
* The Products will be provided to the Distributor by Samsung
with minimum order of one hundred (100) wafers or twenty
thousand (20,000) packaged chips per each purchase order.
