This Agreement is made between Epsilon Electronics, Inc., a California Corporation, 1550 S. Maple Ave., Montebello, CA, 90640 (hereinafter, “EPSILON ELECTRONICS, INC.”) and dealer as stated below
EPSILON ELECTRONICS, INC. and DEALER agree as follows:
1) Appointment of DEALER
EPSILON ELECTRONICS, INC. appoints DEALER and DEALER agrees to serve as a non-exclusive retail DEALER for EPSILON ELECTRONICS, INC. brand products upon the terms and conditions set forth in this Agreement at the location(s) indicated herein and/or at additional locations set forth in section 24, below, and continued on Schedule A to this Agreement (“DEALER Locations”).
DEALER agrees to maintain, at all times during the term of this Agreement, a retail store for the sale of EPSILON ELECTRONICS, INC. brand products at each DEALER location, and DEALER agrees to promote and sell EPSILON ELECTRONICS, INC. brand products within the market area immediately surrounding each such location to the best of the DEALER’s ability.
No other DEALER Location(s) may be added without the prior written consent of EPSILON ELECTRONICS, INC.. To request such consent, DEALER shall submit a statement to EPSILON ELECTRONICS, INC. setting forth the following information with regard to each proposed DEALER Location: store name and address, managerial responsibility to be exercised by DEALER, names of all persons holding ownership interests, and the type and percentage of ownership interests held by each such person.
2) DEALER Restrictions
EPSILON ELECTRONICS, INC. and DEALER recognize that it is in their mutual best interest that EPSILON ELECTRONICS, INC. brand products be sold through a restricted DEALER network whereby all DEALERS selling EPSILON ELECTRONICS, INC. products have the ability to provide those services to the public that EPSILON ELECTRONICS, INC. requires, and that if the EPSILON ELECTRONICS, INC. products are offered only through restricted outlets, DEALER will be able to offer the maximum consumer value and services with respect to EPSILON ELECTRONICS, INC. brand products, thereby enabling DEALER to compete more effectively against DEALERS selling competitive products. Accordingly, DEALER agrees that it will not offer EPSILON ELECTRONICS, INC. brand products for sale at any location other than those set forth herein and/or on Schedule A to this Agreement unless approved in advance by EPSILON ELECTRONICS, INC. in writing. DEALER also agrees that it will not sell and/or transship EPSILON ELECTRONICS, INC. brand products to others for resale without having obtained EPSILON ELECTRONICS, INC.’s prior written consent.
3) Export Sales
DEALER shall not sell or otherwise transfer EPSILON ELECTRONICS, INC. brand products to any person, firm or entity located outside of the United States for resale without the prior written consent of EPSILON ELECTRONICS, INC..
4) Website, Mail Order and Telephone Order Sales
DEALER acknowledges that it is to the advantage of the consumer, the DEALER and EPSILON ELECTRONICS, INC. that EPSILON ELECTRONICS, INC. brand products are presented in an environment where they are displayed, demonstrated, and explained by knowledgeable sales personnel. Accordingly DEALER agrees it is preferred to sell EPSILON ELECTRONICS, INC. brand products only to consumers who visit DEALER’s retail outlets. DEALER agrees that if website, mail order, telephone order or Internet sales of EPSILON ELECTRONICS, INC. brand products are to be a part of the sales generated by the DEALER that the level of support to the customer shall be similar to that offered at its retail locations and that full disclosure of all such websites, internet sales sites, mail order operations and telephone sales operations shall be made in section 24 of this agreement or by Schedule A attached to this agreement.
5) Terms of Sale
EPSILON ELECTRONICS, INC. agrees to sell and DEALER agrees to purchase and pay for such quantities of EPSILON ELECTRONICS, INC. brand products as DEALER may reasonably request, in quantities and amounts not less than the minimum quarterly purchase requirements as defined in article 6 herein for as long as the Agreement is in effect at prices then currently in effect. All sales are subject to the other terms and conditions of sale established by EPSILON ELECTRONICS, INC. and in effect at the time of shipment. The DEALER shall pay for all products in accordance with the invoice terms.
6) Minimum Purchase Requirements
DEALER agrees to purchase a minimum in EPSILON ELECTRONICS, INC. brand products during each calendar quarter in which this agreement is in effect. Minimum purchase requirements will be reviewed and adjusted quarterly.
7) Obligation to Promote Product Sales
The DEALER shall use its best efforts to stimulate interest in and to sell EPSILON ELECTRONICS, INC. brand products to retail consumers. In particular, and without limiting the generality of the foregoing, DEALER shall: (a) acquire and maintain adequate facilities, display and demonstration areas to personally explain and demonstrate the features of EPSILON ELECTRONICS, INC. brand products to each individual retail consumer; (b) maintain a representative inventory of models and styles of EPSILON ELECTRONICS, INC. brand products in quantities sufficient to meet reasonably anticipated sales during a period of not less than one month; (c) to personally instruct each individual retail consumer in the proper installation, operation, maintenance, and care of EPSILON ELECTRONICS, INC. brand products; (d) prominently display all advertising and promotional materials provided by EPSILON ELECTRONICS, INC. and cooperate fully with EPSILON ELECTRONICS, INC. in connection with all promotional programs and sales training programs offered by EPSILON ELECTRONICS, INC.; and (e) at no time engage in any illegal, deceptive, unfair, or unethical trade practices, such as “bait and switch” advertising, or any other practices which may adversely affect the image and reputation of EPSILON ELECTRONICS, INC. or its products, and shall make no false, misleading, or disparaging representations regarding EPSILON ELECTRONICS, INC. or any EPSILON ELECTRONICS, INC. brand products.
Unless otherwise authorized by EPSILON ELECTRONICS, INC. in advance, DEALER shall use EPSILON ELECTRONICS, INC.’s name, trademarks, trade names, and copyrighted materials only for the purposes of advertising and promoting sales of EPSILON ELECTRONICS, INC. brand products, and shall not use any such name or materials in any advertising or other communication which is damaging to EPSILON ELECTRONICS, INC., or in any unlawful manner, or in any way which tends directly or indirectly to lessen the value and goodwill of the EPSILON ELECTRONICS, INC. brand or products or in connection with the sale of another product or group of products not manufactured by EPSILON ELECTRONICS, INC., whether or not components made by EPSILON ELECTRONICS, INC. are in such group, without specifically stating which components are EPSILON ELECTRONICS, INC. products. Nothing herein shall transfer to DEALER any interest or ownership in any such name, trademark, trade name, or copyright, or in any patent application, patent right, or license in or to any of said products. Provided further, DEALER’s rights to use such materials and names shall terminate upon the termination of this Agreement.
DEALER shall not advertise or engage in promotional activities concerning EPSILON ELECTRONICS, INC. brand products unless DEALER has in stock a sufficient supply of the advertised product or products to meet anticipated demand. Failure to comply with this requirement shall be grounds for termination of this Agreement by EPSILON ELECTRONICS, INC..
9) MAP (Minimum Advertised Price)
EPSILON ELECTRONICS, INC. in no way intends to dictate the actual selling price of EPSILON ELECTRONICS, INC. brand products. EPSILON ELECTRONICS, INC. does, however, desire to establish a high perceived value for EPSILON ELECTRONICS, INC. brand products. Accordingly, DEALER and EPSILON ELECTRONICS, INC. agree that DEALER shall not advertise for sale any products listed as covered by a MAP agreement for less than the MAP (minimum advertised price). MAP shall be defined as the Minimum Advertised Price then in effect as described in the then current MAP Agreement. From time to time EPSILON ELECTRONICS, INC. may offer additional discounts on products. Any adjustment to MAP, related or unrelated to such discount, will be specified in writing by EPSILON ELECTRONICS, INC. and will be supplied to the DEALER in advance. In all other cases the most recent MAP specification will apply.
In the event that DEALER violates MAP (beyond one warning) as defined herein, the DEALER shall forfeit to EPSILON ELECTRONICS, INC. all discounts for six (6) months purchases subsequent to the violation date as determined by EPSILON ELECTRONICS, INC..
The phrase “shall not advertise for sale” as it relates to MAP shall be construed to mean the DEALER will not advertise in any media, TV, radio, newsprint, Internet web site, direct mail, billboard, DEALER’s demonstration board or other in-store media, EPSILON ELECTRONICS, INC. brand products for sale at any price below the current MAP.
This agreement shall begin on the date written above and shall continue until December 31, 2018 unless earlier terminated. After December 31, 2018, the agreement shall automatically renew month-to-month unless superseded by a new agreement. Either party may terminate this Agreement as follows: where the termination is without cause, upon thirty (30) days’ written notice; where the termination is for cause (breach of this agreement in whole or part), upon written notice such thirty-(30) days advance written notice may, but need not, be given.
Upon termination, all open invoices are and will be immediately due and payable. As of the effective date of termination, unfilled DEALER orders shall be deemed canceled and for thirty (30) days from that date EPSILON ELECTRONICS, INC. shall have the sole option to purchase from DEALER, and DEALER agrees to sell to EPSILON ELECTRONICS, INC., all or any part of EPSILON ELECTRONICS, INC. brand products then in the DEALER’s stock at the prices paid for EPSILON ELECTRONICS, INC. brand products by the DEALER, less any discounts, credits and unearned allowances. If EPSILON ELECTRONICS, INC. elects to exercise its option to purchase all or any part of the remaining inventory, DEALER agrees to ship the inventory to EPSILON ELECTRONICS, INC. at the address set forth above or such place as EPSILON ELECTRONICS, INC. may designate, at EPSILON ELECTRONICS, INC.’s expense, Upon termination, DEALER shall cease representing itself as an EPSILON ELECTRONICS, INC. DEALER and shall ship, at EPSILON ELECTRONICS, INC.’s expense, all advertising and sales materials bearing EPSILON ELECTRONICS, INC. ’s name and any other advertising and promotional material owned by EPSILON ELECTRONICS, INC. to EPSILON ELECTRONICS, INC..
Neither EPSILON ELECTRONICS, INC. nor DEALER shall be liable to the other for damages of any kind, including incidental or consequential damages, on account of termination of this Agreement.
DEALER shall make no warranties or guarantees with respect to EPSILON ELECTRONICS, INC. brand products or the use of EPSILON ELECTRONICS, INC. brand products except as may be authorized by EPSILON ELECTRONICS, INC. in writing. Sales shall be made under EPSILON ELECTRONICS, INC. ’s warranty in effect at the time of sale and shall be extended to DEALER’s retail purchasers. Warranty cards or similar material provided by EPSILON ELECTRONICS, INC. shall be furnished to each retail purchaser by DEALER. At all times, DEALER shall comply with the requirements of the Federal Consumer Products Warranty Act and take all actions that EPSILON ELECTRONICS, IN C. may from time to time reasonably request for purposes of compliance with the Act.
12) Product Changes
EPSILON ELECTRONICS, INC. may at any time add, change, or cease making products available without notice to DEALER, and DEALER shall have no claim for damages against EPSILON ELECTRONICS, INC. for failure to furnish products of the model, design, or type previously sold.
13) Product Liability
DEALER shall not modify any EPSILON ELECTRONICS, INC. brand products for use other than that permitted in the relevant owner’s manual and installation guide. EPSILON ELECTRONICS, INC. shall not be responsible for any damages or liability, and DEALERS shall indemnify, defend and hold EPSILON ELECTRONICS, INC. harmless against any product liability claims, whether civil, administrative or criminal, arising from any modification made by DEALER
14) No Agency
Nothing contained in this Agreement shall be construed to identify, nominate or authorize DEALER an agent, representative, or employee of EPSILON ELECTRONICS, INC. for any purpose other than those expressly set forth herein. DEALER is not granted, and shall not represent in any way, that it possesses any right or authority to assume any obligation or make any agreement or commitment, express or implied, on behalf of or in the name of EPSILON ELECTRONICS, INC. except as specifically set forth herein.
15) Personal Liability
In the absence of written consent of EPSILON ELECTRONICS, INC. otherwise, the undersigned agree to be personally liable hereunder, regardless of the type of entity under which DEALER’s business is conducted or any change in such legal structure, or any title which is noted under DEALER’s signature. In order to induce EPSILON ELECTRONICS, INC. to extend credit to DEALER, the undersigned each personally guarantees any and all obligations of DEALER to EPSILON ELECTRONICS, INC. and waives notice of acceptance and/or any requirement that EPSILON ELECTRONICS, INC. first proceed against DEALER or any security given before proceeding against Guarantor.
16) Non-Assignment, Non-Delegation
DEALER shall have no right to assign, transfer or sell its rights or delegate its obligations under this Agreement without the prior written consent of EPSILON ELECTRONICS, INC.. For purposes of this Agreement, assignment, transfer or sale shall include, without limitation, any assignment, sale or transfer, whether or not by operation of law, of any interest in DEALER which results in any change in the present ownership interest(s) in DEALER.
Invoices not paid within invoice terms are subject to finance charges of 1.5% per month. Buyer agrees to pay all of Seller’s costs and expenses, including but not limited to reasonable attorney’s fees and collection agency fees and all expenses necessary to enforce Seller’ rights to collection. The formation of this agreement took place in Montebello, California. Seller’s performance is and shall be in Montebello, California; and all payments due hereunder shall be made in Montebello, California at the address of the Seller. Buyer and Seller agree that the State of California shall have jurisdiction to adjudicate any controversy concerning the terms and conditions of this transaction and the performance of either party hereunder; and venue shall be Los Angeles County.
DEALER agrees to indemnify, defend and hold EPSILON ELECTRONICS, INC. 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 attorney’s fees expended by EPSILON ELECTRONICS, INC. in defending such claims.
Notice by either party shall be in writing and shall be deemed sufficient if deposited in the United States mail, in a sealed envelope, registered or certified, with postage prepaid addressed to the other party at the address set forth herein or at such other address as the parties shall have previously designated by notice given in accordance with this paragraph. Notice shall be effective upon mailing and as of the date mailed. Notice may also be given by email and followed-up by mail to ensure delivery of said notice.
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.
21) Governing Law
This Agreement shall be governed and construed in accordance with the laws of the State of California. In the event that any of the provisions of this Agreement shall be held by a court of competent jurisdiction to be unenforceable, the remaining provisions of the Agreement shall remain in full force and effect.
The parties agree that any disputes or questions arising hereunder, including the construction or application of this Agreement, shall be settled by arbitration before any generally recognized arbitrator or arbitration service in Los Angeles County, California. If the parties cannot agree upon an arbitrator within ten (10) working days after demand by either of the parties, either or both parties may request the Arbitration Office of the Los Angeles County Superior Court to name a panel of five (5) arbitrators. The parties shall strike one arbitrator in alternating turns, and the remaining arbitrator shall arbitrate the matter. The arbitration award shall be final and binding upon the parties both as to law and to fact, and shall not be appealable to any court in any jurisdiction. The expenses of the arbitrator shall be paid equally by the parties. Attorneys’ fees and costs shall be awarded to the prevailing party. 23) Entire Agreement
This Agreement constitutes the entire agreement and understanding between the parties and supersedes all prior discussions, negotiations, and agreements between the parties, whether written or oral, with respect to the subject matter hereof. This Agreement may not be altered, amended or modified except in a written agreement executed by both parties.
DEALER is authorized to sell EPSILON ELECTRONICS, INC. brand products from the following retail sales outlets: