SOLE AGENT AGREEMENT
Exhibit 10.17
SCI Surge Components, Inc.
Surge Components, Inc. and Xxxxx Electronics agree to work together, with Xxxxx as the manufacturer supplier, and Surge as Lelon's sole agent in North America, responsible for the sales and marketing. This agreement will govern the relationship and the cooperation between the two companies in this strategic partnership
THIS AGREEMENT is made and entered into as of January 1, 2007, by and between Surge Components, Inc., a New York corporation (also referred to as "SCI") and:
Xxxxx Electronics Corp. (also referred to as "Supplier")
In their mutual best interest, and in consideration of the mutual covenants hereinafter set forth, SCI and the Xxxxx agree as follows:
1. Duration of Agreement:--This Agreement shall remain in force unless terminated in accordance with paragraph thirteen.
2. Territory:--Xxxxx hereby appoints and designates SCI as their sole and exclusive sales agent in the territory described in schedule A.
3. Products:--SCI is authorized to offer for sale all the products and services of the Supplier, on terms and conditions, and in accordance with the general sales policies established from time-to-time by the Supplier and the Supplier will furnish complete and up-to date information on the product line to SCI but retains the exclusive right to define such products and services.
4. Competitive Products:--SCI and Xxxxx agree that, Xxxxx will not sell to any person, firm, corporation or entity which are competitive with the products and services being sold by Surge. For the products and services that Xxxxx is able to offer, Xxxxx is the only supplier for SCI. In case that SCI needs to have more than one supplier for the products and services that Xxxxx can offer, SCI needs to provide the reasons to Xxxxx and get Lelon's agreement before placing any order to the new supplier.
5. Independent Entity:--lt is agreed that Surge will conduct all of its business in its own name as an independent contractor, and will provide competent sales staff who will apply their best efforts to provide sales coverage for Xxxxx. In connection with the performance of this Agreement, the entire management and direction of the Surge's operations, including the sales organization, shall at all times be under the exclusive control and management of Surge.
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6. Operating Procedure and Communications:-- Surge agrees that it will, at all times, use its best efforts to promote the business and welfare of Xxxxx.
a. Surge's duties in connection with the promotion of business for Xxxxx shall include but are not restricted to: active solicitation of orders, application engineering, assistance on proposal preparation, field service, liaison engineering, assistance with contract negotiations, contract administration, prompt follow-up of and reporting on sales leads, conscientious and active promotion of Xxxxx products, and complete disclosure to Xxxxx of information pertinent to Xxxxx within the territory.
b. Lelon agrees to furnish Surge with copies of all correspondence and sales leads and other information pertaining to sales and prospective sales within the Surge's assigned territory promptly upon their origination.
7. Confidentiality:--Both parties to this agreement acknowledge that it is in a confidential relationship in respect to proprietary items, trade secrets, processes, inventions, operational procedures including manufacturing and marketing secrets, customer names, selling prices, or any and all other information obtained by this association. Both parties, and their servants, employees and associates, shall not disclose during the term of this Agreement, nor at any time thereafter, any prices, trade secrets, processes, inventions, proprietary information, operational procedures, or other information which may have been revealed to each other, its servants, employees and associates, during the term of this Agreement.
8. Sales Promotion:--lt is contemplated that Xxxxx may from time-to-time engage in sales promotion and advertising on behalf of its product line in conjunction with sales activities of Surge. In connection with such efforts, Xxxxx will supply reasonable quantities of promotional, advertising material without cost to the Surge.
9. Training:--Xxxxx recognizes the importance of adequate training on its products, their applications and how they are sold. Accordingly, Xxxxx will from time-to-time prepare training materials and provide training programs for Surge. Surge agrees to make every reasonable effort to assure active participation of all appropriate personnel in its organization in the use of such materials and attendance at Xxxxx training events.
10. Prices:--SCI reserves the exclusive right to establish all prices, discounts specifications, terms and conditions governing the sale of Lelon's products and services. SCI further reserves the right to change any and all such prices and other terms of sales at any time.
11. Acceptance of Orders:- It is understood that Xxxxx hereby grants to Surge the authority to solicit and obtain orders for transmittal to Xxxxx. Surge has express authorization to accept orders on behalf of Xxxxx and to enter into written or oral contracts or agreements of any nature on behalf of Xxxxx, subject to final acceptance by Xxxxx.
12. Effective Date:--This Agreement shall become effective when executed by the Surge and a duly authorized officer of Xxxxx as of the date first above written
13. Termination:--This Agreement shall terminate automatically upon the occurrence of any breach of the Agreement by SCI or by the Xxxxx. Otherwise, termination may occur by the will of either party, with written notice, which notice must be confirmed received by the receiving party. This notice will provide a winddown of affairs over a 6 month period, unless mutually agreed by both parties to end sooner. Upon termination, Xxxxx agrees to honor and carry out the completion of all open and existing orders which they have accepted as of the termination date.
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14. Non Compete--If and upon termination, except if Surge breaches the terms of this agreement, Xxxxx agrees to not compete with Surge for a period of 2 years. This means that Xxxxx will not directly or indirectly approach, sell to, or in ayway try to take the customers and the business from these customers, that Surge has been doing with these customers at the time of termination, and for a period of 2 years.
15. lndemnification--Xxxxx will maintain product liability insurance to protect against any claims regarding poor quality. Xxxxx will name Surge as additional insured on this policy. In any and all claims brought by customers as a result of poor quality, or that the parts aren't meeting Lelon's published spec, Xxxxx will hold Surge harmless, and indemnify Surge against all claims, requiring financial compensation for damages incurred, including recall, rework, and or bodily harm, loss of reputation, loss of business.
16. Xxxxx Direct Business in North America-
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a.
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When Xxxxx from time to time has interest to become the supplier for certain specific North American based customers, Xxxxx will communicate this interest to Surge. If Surge is unwilling to do it or Surge is unable to do this work successfully within a reasonable period of time, then Xxxxx will be free to select another agent to help them at the identified customer.
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b.
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Whether a customer will be a Surge customer or a Xxxxx direct customer in North America will be based on which company did the approval work. If Xxxxx got the approvals, then it would be a Xxxxx direct customer unless Xxxxx would like Surge to do service work.
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c.
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Except Xxxxx direct customers, if Xxxxx receives any inquiry from North America directly, Xxxxx will immediately refer it to Surge.
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d.
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When Xxxxx is invited to bid a project and finds the end customer of the project is in North America, Xxxxx will advise Surge of this project if the end customer is not a Xxxxx direct customer. If Surge didn't contact the end customer before, Xxxxx can bid the project directly. If Surge contacted the end customer before, Surge will bid it directly or advise Xxxxx on how to bid it.
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e.
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When a design-in of a model was gotten from a customer by Surge and the mass production is taken place at a customer handled by Xxxxx, Xxxxx will provide a reasonable percent of sales amount of the designed-in items at the Xxxxx-handled customer to Surge as approval commission. The price for calculating the sales amount is based on the selling price to the customer with the delivery term of FOB Taiwan/Hong Kong/Taiwan. The rate of approval commission is subject to change case by case.
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f.
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Surge needs to provide the details of the approval or design-in when claiming approval commission.
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g.
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The approval commission on a design-in of a model will be stopped when the model is phased out at the Xxxxx-handled customer.
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17. Free Samples-Xxxxx will provide reasonable samples with free of charge to Surge for customers' evaluation. Surge needs to track the sample status and report to Xxxxx monthly.
18. Technical Support-Xxxxx will support and provide Surge will technical support as needed to assist Surge in obtaining approval by the customer, of the Xxxxx brand parts.
19. Late Deliveries-If Xxxxx is late on delivery, and the customer requires some parts to be shipped by air, Xxxxx will bear the cost of these air freight charges. Surge will always work with the customer to minimize the amount of product that may need to be shipped by air.
20. Applicable Laws:-- This Agreement shall be governed by and construed in accordance with the laws of the Hong Kong. The parties irrevocably submit to the non-exclusive jurisdiction of the Hong Kong courts in respect of any legal action or proceedings relating to and arising out of the Agreement.
21. Assignability:--Surge and Xxxxx acknowledge that this agreement is not subject to assignment or delegation, either voluntarily or by operation of law, except with the prior written consent and agreement of both parties.
22. Entire Agreement:--This instrument contains the entire agreement between the parties hereto in connection with the appointment of Surge as sole and exclusive sales agent of Xxxxx in the assigned territory. The Agreement cancels and supersedes any and all other previous arrangements between the Xxxxx and SCI. It is understood by both parties hereto that this agreement constitutes a contract between the Xxxxx and SCI, and shall not be transferable.
IN WITNESS WHEREOF, the parties hereto have agreed to the terms and conditions herein, and set their hands as of the day and year first above written.
| SURGE COMPONENTS, INC. | XXXXX ELECTRONICS | ||||
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/s/ Xxx Xxxx
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By: |
/s/ X.X. Xx
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Name: Xxx Xxxx
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Name: X.X. Xx
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Title: President
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Title: President
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Date: Jan. 1, 2007
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SCHEDULE A
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PRODUCTS: ALL
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CLASS OF CUSTOMER: OEM INDUSTRIAL DISTRIBUTOR
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| TERRITORY: | HOUSE ACCOUNTS: | ||
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RATE OF COMMISSION:
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