Sample Korean Distributorship Agreement
DISTRIBUTORSHIP AGREEMENT
This Agreement, made and entered into this June 1, 20__. by and between Korex Trading Co., Ltd. a corporation duly organized and existing under the laws of the Republic of Korea and having its principal office at 1, 1-ka, Sodex-dong, Chung-ku, Seoul, Korea (hereinafter referred to as "Manufacturer") and Amerix Trading Co., Inc., a corporation duly organized and existing under the laws of the state of New York, U.S.A. having its principal office at 510, Fifth Avenue West, New York, N.Y. 10018, U.S. A. (hereinafter referred to as "Distributor").
WITNESSETH:
WHEREAS, Manufacturer wishes to appoint Distributor the exclusive distributor for the Products(as hereinafter defined) in the territory of the United States of America, WHEREAS, Distributor wishes to accept such appointment as exclusive distributor.
IN CONSIDERATION OF the mutual covenants contained herein, the parties hereto agree as follows:
Article 1. Definitions
In this Agreement except where the context otherwise requires, the following terms and expressions shall have the meanings respectively defined as follows:
1.1 "Products" means those products which are mentioned in theattached Annex.
1.2 "Territory" means the United States of America.
Article 2. Appointment and Acceptance
2.1 During the term and subject to the conditions hereinafter set forth, Manufacturer hereby appoints Distributor as an exclusive distributor fot the Products in the Territory, and Distributor accepts such appointment. During the term of this Agreement, Manufacturer shall not, either directly or indirectly, sell the Products in the Territory without the prior consent of Distributor.
2.2 Distributor shall not purchase, import, export, sell, distribute, advertise or otherwise deal in Products competitive with or similar to the Products in the Territory.
Article 3. Orders and Shipment
3.1 In placing orders with Manufacturer, Distributor shallclearly describe the products and quantity required, andshall include precise instructions for packaging, invoicingand shipping, the orders shall not be binding unless anduntil they are accepted by Manufacturer in its discretion.Manufacturer agrees to supply Distributor with Products toenable fulfillment of the minimum purchases as set forth inArticle 5 hereof. Manufacturer agrees to extent its bestefforts to accept all orders as submitted by Distributor inexcess of said minimum purchases.
3.2 Manufacturer shall be responsible for packaging the Productsin such manner to ensure except for perils of the sea safeand undamaged delivery.
Article 4. Price and Payment
4.1 The price of the Products shall be determined in accordancewith the price lists attached hereto and made a part hereof,which price list may be changed from time to time by theManufacturer within 30 days prior notice.
4.2 Within 30 days after receipt of Manufacturer's confirmationof order, Distributor shall open an irrevocable Letter ofCredit in favor of Manufacturer, issued by a first class,international bank, satisfactory to Manufacturer.
4.3 Currency of Payment shall be in United States Dollars.
Article 5. Minimum Purchase
5.1 Distributor guarantees minimum purchases of the Products
from Manufacturer in the following amount, on a FOB
Pusan basis:
(1) First year US$100,000
(2) Second year US$200,000
(3) Third year US$500,000
For the purpose of this Article, the Products shall be considered purchased when shipped by Manufacturer.
5.2 When Distributor has fulfilled the minimum purchaseguarantee as stipulated in Article 5.1, this Agreement shall automatically be renewed for a period of three years. The minimum purchase amount for any three year period shall said period and said purchase volume shall be subject to the same conditions as aforesaid. As long as this volume is reached the Agreement shall be automatically extended by successive three years period subject to Article 13, provided, however, that each successive period shall require a 10% increase of the minimum purchase volume.
5.3 If Distributor fails to purchase the minimum amount as stipulated in Article 5.1 and 5.2, Manufacturer may terminate this Agreement by a written notice as here in after provided forin Article 14.2(2) within one month after the expiration of the three year period of this Agreement, but Distributor shall have no other liability in connection therewith.
Article 6. Technical Assistance
6.1 Manufacturer engages themselves to supply Distributor with necessary Technical Assistance by means of informative and illustrated material and to send all advertising material suitable for promotion and advertising of the Products.
6.2 Manufactures shall train a reasonable number of technical personnel either in Korea or on site in the Territory by consent of both parties if it becomes necessary due to introduction of any new Products or generally in order to achieve better installation and maintenance standards. Costs for round trips, meals, lodging, and other expenses of the dispatched personnel of Distributor or Manufacturer for training shall be borne by Distributor.
6.3 The above Technical Assistance shall be implemented in theEnglish Language.
7.1 Distributor shall keep a sufficient level of spare parts in order to provide and efficient After Sales Services, Manufacturer shall also advise Distributor of the required spare parts and any stocking will be discussed and mutually agreed before orders are placed.
7.2 Manufacturer shall supply to Distributor spare parts for the Products so long as Distributor continues to purchase the Products pursuant to the terms and condition of this Agreement and for two years after the last shipment of the Products to Distributor. The Price for the Spare Parts shall be consented by both parties. And at Manufacturer's option Distributor may purchase standard spare parts from Manufacturer's suppliers directly for two years after the last shipment.
Article 8. Inspection and Warranty
8.1 Promptly after the receipt of the Products, Distributor shall inspect or shall cause its qualified agent to insure that the quality standards, as agreed to by the parties in writing,have been met. If any of the Products or any part of aProduct is found not to be in compliance with the qualitystandards, Manufactrer shall supply Distributor free of charge replacement for the Products or the part of a Product not meeting the quality standards, and/or shall indemnify the Distributor against any loss and damage suffered by the Distributor.
8.2 Manufacturer warrants that the Products at the time of shipment shall be free from defects in material and workmanship. This warranty does not extend to any of the said Products which have been: (1) subject to misuse, neglect, accident or abuse, (2) improperly repaired, or altered or modified in any way, and (3) used in violation of instructions furnished by Manufacturer.
8.3 Claims by Distributor in regard to any defect in the Products must be in writing and be dispatched by Distributor with full particulars within one (l) year after receipt of the products.
Article 9. Distributor's Responsibility
9.1 Distributor shall maintain adequate stocks of the Products throughout the Territory to meet its customer's demand intime. Distributor shall maintain adequate stocks of replacement parts, facilities and qualified mechanics throughout theTerritoy and shall provide reasonable after sale services to its customers.
9.2 Distributor shall undertake for its own account, advertisement, and sales promotions of the Products and devote its best efforts toward obtaining the largest sales volume of the products in the Territory.
9.3 Whenever Manufacturer shall render to Distributor any complaints as to Products from any dealer or customer in theTerritory, Distributor shall immediately make investigationand take a proper action.
Article 10. Report
Distributor shall make quarterly reports to Manufacturer on the sales of the Products, the inventory of the Products and parts thereof, general market conditions and other as Manufacturer requires.
Article 11. Trademarks
11.1 Distributor recognizes that any of trademarks, trade names, designs, copyrights and other proprietary rights, used onor embodies in the Products ("Proprietary Rights") shall remain the exclusive property of Manufacturer. Distributorshall not have or acquire any right, title or interest in proprietary Rights: provided, however, that Distributor may with the consent of Manufacturer indicate that it is an authorized distributor of the Products, Upon termination ofthis Agreement for any cause, Distributor shall cease holding itself out as a distributor of the Products and cease using in any way Manufacturer's name or its ProprietaryRights or any material similar thereto.
11.2 Distributor shall not alter, deface, remove, cover or mutilate in any manner the trademark, serial or model numbers, brand or Manufacturer's name attached or affixed to any of the Products, without the consent of Manufacturer.
Article 12. Status of Distributor
12.1 This Agreement does not in any way create the relationship of principal and agent between Manufacturer andDistributor: and under no circumstances shall Distributor be considered to be the agent of Manufacturer. Distributor shall not act or attempt to act, or represent itself, directly or by implication, as an agent of Manufacturer or in any manner assume or create, or attempt to assume or create, any obligation, liability, representation, warranty or guarantee on behalf of, or in the name of Manufacturer.
12.2 Distributor shall at all times comply with all applicable laws, regulations and orders of any government of the Territory or political subdivisions thereof relating to or in any way affecting this Agreement and Distributor's performance here under, including the obtaining of any required licenses, permits or approvals.
12.3 Distributor shall not disclose to any third party, without the prior written consent of Manufacturer, or use for any purpose other than the performance of its obligations under this Agreement, any confidential information concerning the Products or business affairs of Manufacturer (including, but not limited to, prices, discounts, terms and conditions of sale, customers, business affairs products or product specifications) which it receives directly or indirectly from Manufacturer, or which it acquires or develops in the course of its transactions with Manufacturer.
Article 13. Term
13.1 This Agreement shall become effective upon signing and shall continue in full force and effect for a period of three years from the date hereof, unless earlier terminated pursuant to Article 14, and shall thereafter be automatically extended for successive three year periods of time unless, three months prior to the expiration of the term or any extension thereof, a notice of intention to finally terminate is given in writing by one party to the other.
13.2 Upon the extension of this Agreement in accordance with Article 13.1, the minimum purchase amount for each period shall be reviewed and a new minimum purchase amount shall be mutually agreed upon in writing by the parties within two(2) months after commencement of each new period.
Article 14. Termination
14.1 This Agreement may be terminated at the option of Manufacturer, effective upon thirty (30) days prior writtennotice of termination given to Distributor, in the event ofthe happening of the following events;
(1) Should Distributor become bankrupt or insolvent, orhave its business placed in the hands of a receiver,assignee or trustee, whether by voluntary act or otherwise; or
(2) Should Distributor fail to meet the minimum annualpurchase requirements or otherwise fail to meet promptly any of its obligations pursuant to this Agreement; or
(3) Should Distributor be acquired by, or should itself acquire, in whole or in part a manufacturer of the products which in the reasonable judgment of Manufacturer competes to material extent with the Products; or
(4) Should Distributor attempt to assign this Agreement orany rights here under without Manufacturer's priorwritten consent; or
(5) If Distributor ceases to function as a going concern or to conduct its operations in the normal course of business.
14.2 All monies owed to Manufacturer upon termination shallbecome immediately due and payable and no cancellation ortermination of this Agreement shall serve to release Distributor or its successors or assigns from any obligations under this Agreement.
Article 15. Force Majeure
Neither party shall be liable to the other party for nonper-formance or delay in performance of any of its obligations under the Agreement due to war, revolution, riot, strike or other labor dispute, fire, flood, acts of government or any other causes reasonably beyond its control. Upon the occurrence of such a force majeure condition the affected party shall immediately notify the other party of any further developments with evidence proving its occurrence. Immediately after such condition is removed, the affected party shall perform such obligation with all due speed.
Article 16. Governing Law
This Agreement shall be interpreted and governed by the laws of The Republic of Korea.
Article 17. 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. The award rendered by the arbitrator(s) shall be final and binding upon both parties concerned.
Article 18. Miscellaneous Provisions
18.1 Notices
Any notice required or permitted to be given hereunder shall be in writing, and may be given by personal service, registered airmail, or by cable, facsimile or telex if confirmed on the same day in writing by registered airmail.
18.2 Entire Agreement-Amendments
This Agreement constitutes the entire understanding of Manufacturer and Distributor with respect to the subject matter hereof. No amendment, modification or'alteration of any term of this Agreement shall be binding on either party unless the same shall be made in writing and executed by or on behalf of the parties hereto.
18.3 Assignment and Succession
This Agreement shall insure to the benefit of and be binding upon the parties hereto and their respective successors. No assignment of this Agreement shall be valid without the prior written consent of the other party hereto.
18.4 Waiver
All waivers hereunder must be in writing, and the failure of any party at any time to require the other party's performance of any obligations under this Agreement shall not affect the right subsequently to require performance of the obligation. Any waiver of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision or a waiver or modification of the provision.
18.5 Severability
If any one or more of the provisions contained in this Agreement shall be declared invalid, illegal or unenforceable in any respect, under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected and in such case the parties hereto oblige themselves to reach the intended purpose of the invalid provision by a new, valid and legal stipulation.
18.6 Headings.
The section headings herein are included for purposes of convenience only any shall not affect the construction or interpretation of any of the provision of this Agreement.
IN WITHNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective duly authorized officers.
Manufacturer,
Korex Trading Co. , Ltd
Min-su Kim President
Distributor,
Amerix Trading Co., Inc.
Paul A. Fabree President
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