1. Appointment of Dealer. Manufacturer appoints Dealer and Dealer agrees to serve as a non-exclusive Dealer upon the terms and conditions set forth in this Agreement at the location set forth above (and where applicable, the additional locations set forth in Schedule A to this Agreement) (“approved location”). Dealer represents and warrants that it owns the controlling interest in all approved locations. Dealer is authorized to sell at the approved locations the approved products. (hereinafter called “Products”)
2. Dealer Location/Unauthorized Distribution. Dealer agrees not to offer the Products for sale at other than approved locations. Dealer shall not imply in any advertising or promotional materials that Products are available by mail, telephone or via the Internet. Dealer shall not participate in any transaction involving resale or other redistribution of Products by or through any other person or facility. Without limiting the foregoing, Dealer shall not participate in any transaction involving (i) the direct or indirect sale or delivery of the Products beyond the assigned territorial limits within the United States, or (ii) the offering or sale of Products by online auction or other Internet-based transactions. Should Dealer be found to have participated in any transaction prohibited under the Agreement, Dealer shall indemnify and hold Current Audio, harmless from any and all claims, costs, expenses and losses directly or indirectly incurred or arising out of such transaction or out of the sale, purchase, or use of such Products, including without limitation any investigative and legal expenses and out-of-pocket costs incurred in order to identify and interdict transactions in violation of this Agreement and in which Dealer is found to have been directly or indirectly involved.
3. Advertising. Dealer agrees to engage in advertising and promotional activities only in the geographical areas in which it sells.
4. Trademarks and Names. During the term of this Agreement, Dealer is granted the limited right on a non-exclusive basis to use, in accordance with Manufacturer’s policies in effect from time to time, the trademarks and trade names used by Manufacturer in connection with the Products. Such permission is limited to uses by Dealer necessary for the performance of Dealer’s obligations under this Agreement. Dealer recognizes that such marks and names have a valuable reputation and goodwill and constitute assets of substantial value. Dealer agrees to make proper use of such marks and names and not to take any action inconsistent with Manufacturer’s rights. Nothing contained in this Agreement shall give Dealer any interest in such trademarks or trade names except as heretofore provided, and Dealer’s right to use such marks and names shall cease upon termination or expiration of this Agreement. Dealer further agrees not to affix or use any such mark or trade name to or in connection with Products other than the Products specified herein, and not to register any mark or name used by Manufacturer.
5. Term and Termination.
(i) The term of this Agreement shall be from January 1, 20___ through December 31, 20___ unless earlier terminated pursuant to Paragraph 5.ii or 5.iii. Unless earlier terminated in accordance with this Section 5, this Agreement will remain in effect for one (1) year after the Effective Date (the "Term"). The Term will automatically renew for a series of successive one (1) year periods unless terminated by either party by notice to the other no later than thirty (30) days prior to any such renewal date.
(ii) Manufacturer may terminate this Agreement immediately upon notice for cause. "For cause" means: (a) Dealer has failed to abide by any of the terms of this Agreement, Manufacturer has given Dealer written notice of such failure and a period of ten (10) days in which to bring Dealer back in compliance with the terms of this Agreement and Dealer has not cured such failure; (b) there is a change in the control of Dealer’s business; or (c) Dealer is insolvent, files or has filed against it a petition for bankruptcy or makes an assignment for the benefit of its creditors.
(iii) Either party hereto may at any time terminate this Agreement without cause after giving the other party thirty (30) days written notice of such termination in accordance with Paragraph 9.i. Upon termination or expiration of this Agreement for any reason (a) the rights to payments and the obligations of either party that have come due before termination will continue in full force and effect; and (b) Dealer will immediately return to Manufacturer all materials supplied to Dealer by Manufacturer or relating to Dealer’s performance of services under this Agreement. The parties further agree that neither party shall be liable to the other for any loss or damage caused by the unlawful termination of this Agreement for any reason. In the event of a termination of this Agreement under Paragraph 5.ii, all pending orders from Dealer for the Products shall be cancelled. Further, Manufacturer shall have the option for 30 days after the effective date of any termination to repurchase all or any part of the unused saleable Products remaining in Dealer’s inventory. The repurchase price shall be equal to the actual purchase price paid by Dealer less any discounts and unearned allowances paid to Dealer with respect to such inventory. Upon such repurchase, Dealer shall ship the Products to Manufacturer at Manufacturer’s expense.
(iv) Dealer shall refrain from any conduct which would make it appear that it is an authorized Manufacturer’s Dealer; shall promptly remove from its letterheads, advertising literature, and signboards at approved locations, and shall promptly take action to have removed from all telephone and business directories of any kind, all references to the Products and to its action as a Dealer with respect to the Products or on behalf of Manufacturer; and shall not thereafter use any corporate name, trade name or trademark tending to give the impression that any relationship still exists between Manufacturer and Dealer. Dealer agrees to ship to Manufacturer, at Manufacturer’s expense, all advertising and sales materials bearing Manufacturer and/or the Products name and any other advertising and promotional materials provided by Manufacturer.
6. Terms of Sale. Manufacturer agrees to sell and Dealer agrees to purchase and pay for such quantities of the Products as Dealer may reasonably request at the prices and subject to the other terms and conditions of sale established by Manufacturer and in effect at the time of shipment as it is indicated on the invoice. The Dealer shall pay for the Products in accordance with the invoice terms. Manufacturer may accept or reject orders in its sole discretion and by so refusing shall not incur any obligations to the Dealer. Dealer is not authorized to accept, approve, execute on behalf of Manufacturer or amend any application or contract for the sale or license of any Products and will take no action or make any representation to the contrary to any person. No order for the Products will be binding on Manufacturer unless accepted by Manufacturer at its principal office.
7. Pricing, terms and specifications. Dealer agrees not to advertise or promote for sales in any way Products(s) at a price below a minimum price (MAP-pricing) fixed by Manufacturer. Any “advertisement” of any “Current Audio covered product” at a price below MAP will result in Current Audio ceasing to do business with the dealer for the product, category, or the group in question, or ceasing to do business with respect to all Current Audio products. This shall be at the sole discretion of Current Audio. “Advertisement means any communication to a prospective customer that identifies one or more Current Audio products, which can be viewed or heard by the prospective customer without the customer entering the Dealers retail place of doing business. This includes all forms of print and electronic media, direct mail and audio and video communications. MAP pricing does not in any way restrict the actual price that the dealer may sell the product for, nor does it restrict price quotes sent in reply to written solicitations to bid. Manufacturer reserves the right at any and all times to make changes to pricing, programs or promotions. Manufacturer reserves the right at any and all times to make changes in the design of the Products and in the Products characteristics and in the Products and to substitute or withdraw any of the Products at any stage. Dealer further agrees to identify to customer any product that is not sold as NEW. This includes B stock, C stock, Demonstrator, Sample Close Outs and Used equipment and MAP then does not apply.
8. Warranties. Dealer shall make no warranties or guarantees with respect to the Products or the use of the Products except as authorized by Manufacturer in writing. Sales shall be made under Manufacturer’s warranty in effect from time to time. Dealer agrees to comply with all applicable federal and state laws and to take all actions that Manufacturer may from time to time reasonably request for purposes of compliance with those laws.
(i) Notice. Any notice or other communication required or permitted under applicable laws or any term of this Agreement shall be deemed sufficient if deposited in the United States mail, postage prepaid, addressed to the other party at the address set forth on page 1 of this Agreement, or at such other address as either party may hereafter communicate to the other in like manner, and shall be effective upon deposit.
(ii) Disclaimers. The parties are independent contractors. Nothing in this Agreement shall be construed to create or to authorize the creation of any employment relationship, to confer authority upon the Dealer to enter into any commitment or agreement binding on Manufacturer, or to create a partnership or any form of association which would impose liability upon one party for any act or omission of the other.
(iii) Indemnification. Dealer agrees to indemnify and hold Manufacturer harmless from and against any and all claims, damages and liabilities whatsoever, asserted by any person or entity resulting directly or indirectly from any breach by Dealer of this Agreement and such indemnification shall include the payment of all costs and reasonable attorneys’ fees expended by Manufacturer in defending such claims.
(iv) Non-Assignment. Dealer shall have no rights to assign, transfer or sell its rights under this Agreement without the prior written consent of Manufacturer.
(v) Waivers. No waiver of any requirement or of any default in respect of the terms of this Agreement shall be deemed a waiver of any other requirement or default.
(vi) Entire Agreement. This Agreement supersedes all prior discussions, negotiations and agreements between the parties with respect to the subject matter hereof and reflects their entire agreement. It may be amended only by a written document signed by both parties.
(vii) Ability. If any of the provisions of this Agreement are unenforceable or invalid for any reason whatsoever, such unenforceability or invalidity shall not affect the enforceability or the validity of the remainder of this Agreement and such unenforceable or invalid provision shall be severable from the remainder of this Agreement.
(viii) Governing Law. This Agreement shall be deemed to have been entered into in California, and all questions concerning the validity, interpretation or performance of any of its terms, or of any rights or obligations of the parties hereto, shall be governed by and resolved in accordance with the laws of the State of California. The parties agree that venue for any action commenced to determine validity, interpretation, or performance of any of the terms of this Agreement, or of any rights or obligations of the parties hereto, shall be San Diego County, California, and shall be governed by the laws of the State of California. In the event of any action or proceeding, including arbitration, to enforce this Agreement, or any of its provisions, or to declare the rights of the parties with respect to this Agreement the prevailing party shall be entitled to reasonable attorneys’ fees and court costs.
(ix) Arbitration. Any controversy, claim or dispute arising out of or relating to this Agreement or the breach thereof, including any claim or controversy as to the ability to arbitrate of any claim or controversy and any claim for rescission, shall be settled by final and binding arbitration in California in accordance with the commercial arbitration rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction.