Exhibit 10.16
GRAPHIC [logo.jpg]
Surge Components, Inc.
Distributor Agreement

Agreement entered into, by and between,  Surge Components, Inc., a New
York  corporation having its principal place of business at 95 E. Jefryn Blvd.,
Deer Park, NY  11729 , and   TTI, Inc., a corporation having its principal place
of business at  2441 North East Parkway, Fort Worth, TX, 76106.

    WHEREAS, Supplier is engaged in the supply of high quality electronic
products including capacitors and discrete components, to both original
equipment manufacturers who incorporate Supplier’s products into their finished
goods and to distributors of Supplier’s product lines;
 
    WHEREAS, Supplier desires to appoint Distributor as Supplier’s non-exclusive
distributor for such Products in the Territory hereinafter described; and
 
    WHEREAS, Distributor desires to be appointed Supplier’s non-exclusive
Distributor upon the terms and conditions contained hereinafter.
 
    NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, the parties hereto agree as follows:

1. 
Appointment of Distributor.   SUPPLIER appoints DISTRIBUTOR on a nonexclusive
basis to serve during the term of this Agreement as an authorized distributor of
the Products within the Territory, and DISTRIBUTOR accepts such appointment. In
its capacity as a Distributor of the Products, Distributor shall purchase
Products from Supplier for its own account and for resale to third parties and
shall not represent itself as a distributor of the Products outside of the
Territory, without the prior written consent of Supplier.

 
           Distributor further acknowledges and agrees that Distributor is not
required to, nor has Distributor  paid any money, or tendered any valuable
consideration not described herein, for the right to act and serve as a
distributor for Supplier.

Distributor hereby represents and acknowledges that Distributor has adequate
financial resources to adequately serve as Supplier’s distributor in the
Territory, and hereby further agrees and acknowledges that Supplier has relied
upon such representation in its appointment of Distributor hereunder.
Distributor hereby further acknowledges that Supplier’s reputation and the good
will of its customers in the Territory is dependent upon the quality of services
performed hereunder by Distributor, and that Supplier will suffer irreparable
harm in the event Distributor fails to satisfactorily perform its obligations
and duties as a distributor hereunder. SUPPLIER shall be free to distribute the
products within the Territory either directly or through other distributors or
dealers.

1.1  
Definition of “Products.”   The term “Products” shall mean all products offered
for sale by SUPPLIER generally, as set forth and described in SUPPLIER’s then
current Published Price List (Price List) as attached hereto as Exhibit A.
(Products may be added to the Price List or deleted therefrom by SUPPLIER upon
sixty (60) days prior written notice to DISTRIBUTOR). Additional Products may be
added to this Agreement, including Products specified in SUPPLIER’s Price List
but not approved for distributor stocking, by mutual agreement between the
parties.

1.2  
 Definition of “Territory.”  The term “Territory” shall mean the geographic
area(s) known as “the Americans”

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2.  
Responsibilities of DISTRIBUTOR. DISTRIBUTOR shall use its best efforts
commensurate with its overall business, and shall devote such management,
manpower, and time as may be reasonably necessary to conduct a mutually agreed
to program to sell and to promote the sale, lease or other distribution of the
Products within the Territory. DISTRIBUTOR shall not be prevented in any way
from selling within the Territory similar products or merchandise of other
suppliers or manufacturers, provided that Distributor first obtains the prior
written approval of Supplier. Without limiting the generality of the foregoing:

2.1  
Inventory.  DISTRIBUTOR shall use its best efforts commensurate with its overall
business to maintain a representative inventory of Products in reasonably
sufficient quantities to provide reasonably adequate and timely delivery to
DISTRIBUTOR’s  customers.

2.2  
Sales, Marketing and Promotion. DISTRIBUTOR shall maintain a competent sales
force to market the Products and shall, consistent with its own business
judgment, advertise or otherwise promote the sale, lease or other distribution
of the Products (including the establishment of promotional campaigns,
advertising in trade journals and the like) within the Territory.

2.3  
Training Programs. DISTRIBUTOR and its employees shall participate, when and to
the extent appropriate, in such training programs as may be offered by SUPPLIER,
to the extent that such participation does not materially detract from the
conduct of DISTRIBUTORS business.

2.4  
Reports. DISTRIBUTOR shall send to SUPPLIER, within thirty (30) days after the
end of each calendar month, a written or electronic Point of Sale Report (“POS
Reports”) indicating the quantities of all Products sold by Product type,
including model number, and customer name, address and zip code and such other
information pertaining solely to DISTRIBUTOR’s resale’s under this Agreement as
SUPPLIER may reasonably request.

 
SUPPLIER recognizes and respects the Distributor’s proprietary rights and
interest in the information contained in Distributor’s POS Reports. SUPPLIER
agrees these reports and information contained therein (in whatever form
submitted) are and remain the property of the Distributor. SUPPLIER agrees to
return or destroy the reports within sixty (60) days after submittal (and on
Distributor’s written request to certify in writing that they have all
been destroyed), and further agrees to use its best efforts to keep confidential
and not to disclose to any Third Party the information contained in the
POS  Reports, and to restrict its availability and use to only SUPPLIER’s
employees with a genuine need to know. Supplier agrees these reports and to
restrict its availability and  use to only SUPPLIER’s employees with a genuine
need to know. It is not intended that this provision should restrict. SUPPLIER’s
use of the POS information for market analysis or other information processing
purposes or commission payments, so long as the confidentiality of the
information is assured.
 
SUPPLIER agrees that in the event of termination of this Agreement by either
party, with or without cause, that upon written notice of said termination all
POS Reports and information will be returned to DISTRIBUTOR or destroyed and
upon DISTRIBUTOR’s written request, SUPPLIER shall furnish DISTRIBUTOR with
written certification that said POS Reports and information have been returned
to DISTRIBUTOR  or destroyed. The information in a Point-of-Sale Report shall
not be used by any of the SUPPLIER’s personnel, agents or by any of the
SUPPLIER’s other authorized DISTRIBUTOR’s to the detriment, or damage, of the
DISTRIBUTOR or the DISTRIBUTOR’s sales of any products to any of its customers.
 
2.5 
Audit and Inspection.  Not more than twice annually, upon reasonable prior
written notice,DISTRIBUTOR shall permit SUPPLIER, at SUPPLIER’s sole cost and
expense, to (i) audit those records of DISTRIBUTOR which pertain solely and
exclusively to purchases of Products under this Agreement for the previous
twelve (12) months or from and after the last such audit, whichever period is
shorter and which are located at DISTRIBUTOR’s  principal place and branch
locations of business, and (ii) perform an inventory of all Products purchased
hereunder by DISTRIBUTOR at each location; provided, however, that such audit
and inventory are carried out at reasonable times and in a manner that will not
disrupt or otherwise adversely impact the conduct of DISTRIUBTOR’s business.

 
2.6
Distributor Policies.  Distributor further agrees to promptly implement and
maintain all of Supplier’s sales and distribution policies, as such policies may
exist from time to time. In addition, Distributor hereby agrees to comply with
and to strictly adhere to and follow any and all rules, regulations, policies,
and procedures established by Supplier from time to time with respect to the
marketing, sale and servicing of customers and potential customers for the
Products and to satisfy any and all quality standards established from time to
time with respect thereto by Supplier.

3.  
Responsibilities of SUPPLIER.  SUPPLIER, at its cost and expense, shall
cooperate with and assist DISTRIBUTOR in performing its duties under this
Agreement and shall utilize its best efforts commensurate with its overall
business to promote the sale and distribution of the Products. Without limiting
the generality of the foregoing:

3.1  
Training.  SUPPLIER shall provide DISTRIBUTOR’s sales organization with all
necessary and appropriate Product sales training, support and assistance.

3.2  
Literature. SUPPLIER shall furnish DISTRIBUTOR with a reasonable supply of
current price and product information including price lists, sales literature,
books, specifications sheets, catalogues, promotional plans and information and
the like as SUPPLIER may prepare for nationwide distribution and shall also
provide DISTRIBUTOR with such training, technical and sales support and
assistance (including sales forecasting and planning assistance) as may be
necessary to assist DISTRIBUTOR in effectively carrying out its activities under
this Agreement.

3.3  
Quality Control. SUPPLIER shall establish and maintain quality control
procedures for product manufacturing, handling and testing, including but not
limited to, electrostatic discharge sensitivity procedures and other customary
programs as are necessary to ensure that the Products, as manufactured and sold
to DISTRIBUTOR, are the highest quality and reliability.

3.4  
Compliance with Laws. SUPPLIER warrants that the Products, as manufactured and
sold to DISTRIBUTOR, are in full compliance with applicable laws, standards,
codes and regulations, are duly marked and labeled and are suitable for resale
or other distribution by DISTRIBUTOR.

 
 
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4.  
Orders; Delivery; Rescheduling; Cancellation

4.1  
Orders. DISTRIBUTOR may place written, telefaxed, telexed or electronically
transmitted purchase orders or oral purchase orders confirmed in writing within
ten (10) business days. Such purchase orders shall describe the Products
ordered, the quantities requested, delivery dates requested, prices and shipping
instructions, where appropriate. SUPPLIER shall acknowledge acceptance of each
order in writing, by telefax, telex, or electronic transmission at the earliest
practicable date, but in any event within ten (10) business days following
receipt thereof. In such acceptance, SUPPLIER shall confirm DISTRIBUTOR’s
requested delivery date as the shipment date or specify an alternative shipment
date (“Acknowledged Shipment Date”). If the Acknowledged Shipment Date is more
than thirty (30) days later than DISTRIBUTOR’s  requested delivery date,
DISTRIBUTOR, at its election, may cancel the order without the payment of a
penalty or charge; provided, however, that DISTRIBUTOR shall receive credit for
any such order to establish quantities purchased, quantity discounts and the
like, where applicable, as if such order had been fulfilled.  Order minimum
DISTRIBUTOR places with SUPPLIER is $50.00 USD, Line minimum is $25.00 USD.

4.2  
Method of Shipping. All shipments from SUPPLIER’s F.O.B. point shall be made in
accordance with DISTRIBUTOR’s then current shipping instructions. DISTRIBUTOR’s
shipping instructions are subject to change upon written notice from
DISTRIBUTOR. If SUPPLIER elects to ship otherwise than in keeping with the
shipping instructions, it shall do so at its own cost and bear all risk of loss
until the shipment is received by DISTRIBUTOR. In the absence of specific
instructions from DISTRIBUTOR, the shipping and packaging method shall be at the
discretion of SUPPLIER, provided that SUPPLIER shall, consistent with sound
business practice, select a method of shipping and packaging which is suitable
for the Product. In the event of any misdelivery by the carrier, SUPPLIER shall
assist DISTRIBUTOR in tracing the shipment and obtaining delivery of the
Products.

4.3  
Acceptance.  DISTRIBUTOR shall be deemed to have accepted Products upon delivery
to and inspection by Distributor, unless DISTRIBUTOR notifies SUPPLIER within
thirty (30) days after delivery that the Products are rejected because they are
defective or do not conform to the SUPPLIER’s applicable warranty, the terms of
this Agreement or DISTRIBUTOR’s order.

4.4  
Early Shipments.  DISTRIBUTOR shall have the right to accept or reject any and
all Products delivered prior to their Acknowledged Shipment Date. If SUPPLIER is
notified of DISTRIBUTOR’s  intention to reject and return any such delivery, it
shall issue (or shall be deemed to have issued) a Return Material Authorization
within five (5) business days. The return shall be made freight collect. If
DISTRIBUTOR elects to accept any such delivery, DISTRIBUTOR shall not become
obligated to pay any invoices submitted therefor until thirty (30) after the
Acknowledged Shipment Date.

5.  
Prices. The prices for Products purchased under this Agreement shall be as set
forth in SUPPLIER’s Price List in effect as of the date of this Agreement, a
copy of which is attached to this Agreement as Exhibit A. The prices shown in
Exhibit A are subject to change upon at least thirty (30) days prior written
notice from SUPPLIER to DISTRIBUTOR.

5.1  
Price Increases.  Prior to the effective date of a price increase, DISTRIBUTOR
may order Products for delivery at the prior (i.e., lower) price. All Products
shipped under orders placed by DISTRIBUTOR prior to the effective date of any
price increase shall be shipped and invoiced at the price in effect at the time
of order placement.
 

5.2  
Price Decreases. In the event Surge/Lelon decreases the price of any product,
the Distributor shall be entitled to a credit equal to the difference between
the price paid for the Product by the Distributor (less any prior credits
granted by Surge/ Lelon on such Products) and the new decreased price for the
Product multiplied by the quantity of such Product in the Distributor’s
inventory on the effective date of the decrease. Similar price adjustment, if
appropriate, will also be made on all Products in transit to the Distributor on
the effective date of the price decrease. Similar price adjustment, if
appropriate, will also be made on all Products in transit to the Distributor
shall submit to Surge/Lelon, within 45 calendar days following the date of
distributor’s receipt of written notice of such price decrease, a report of the
Products subject to the price decrease and in the Distributor’s inventory as of
the effective date of the price decrease. All Products, except those designated
as NC/NR in the Surge/Lelon price book or those which have been deemed obsolete
by Surge/ Lelon, shipped after the effective date of any price decrease will be
shipped and invoiced at the price in effect at the time of shipment. Credits
will be applied to future Distributor purchases of Products or to the
Distributor’s accounts receivable with Surge/Lelon.
 

5.3  
SUPPLIER’s Representation. SUPPLER represents and warrants that the practices
and policies, including any prices or discounts extended to DISTRIBUTOR in
connection with the Products, comply with all applicable laws and are not, and
will not be, less favorable than those extended to other purchasers of similar
quantities of Products from SUPPLIER for resale or other distribution.
 

5.4  
 F.O.B. All prices are F.O. B. SUPPLIER’s domestic shipping facility at Deer
Park, New York.

      
5.5 
Sales Taxes, Export and Other Charges. DISTRIBUTOR shall be responsible for any
and all applicable sales or use taxes pertaining to its purchase of the
Products, and, if Products are to be delivered by Supplier to points outside the
domestic United States, the cost of export packing, export duties, licenses, and
fees, if included as a separate item on the invoices sent by SUPPLIER to
DISTRIBUTOR.

 
5.6 
Risk of Loss. DISTRIBUTOR shall assume all risk of loss and pay all costs of
insurance forthe Products upon SUPPLIER’s delivery thereof to a common carrier.

6.  
Terms of Payment. SUPPLLIER shall invoice DISTRIBUTOR upon shipment of each
order. Such invoices shall be due and payable by DISTRIBUTOR within thirty (30)
days following DISTRIBUTOR’s acceptance of the Products or DISTRIBUTOR’s receipt
of the invoice, whichever is later. DISTRIBUTOR shall be entitled to a prompt
payment discount of     ONE  percent  (    1 %  ) if payment is made within ten
(10) days of the due date of any such receipt.  Distributor shall remit payment
to supplier by electronic fund transfer.

 
 
 
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7.  
Return of Product.

7.1  
Bi-annual Rotation. Within three (3) months following each half year period of
this Agreement determined as of the commencement date of this Agreement, six (6)
month DISTRIBUTOR may return to SUPPLIER, for credit, a quantity of Products the
value of which shall not exceed    FIVE    percent   (5 %) of the net sales
dollars invoiced by SUPPLIER to DISTRIBUTOR for all products purchased by
DISTRIBUTOR during the preceding Contract 6 months.  Credit issued for such
returned Products shall equal the price paid by DISTRIBUTOR, excluding prompt
payment discount, less any prior credits. DISTRIBUTOR may make such returns from
one or more stocking locations. The foregoing return privilege shall be subject
to the following:
 

7.1.1  
The Products must be returned in their original unopened packaging where
feasible, or if not feasible, must be free of damage and be in merchantable
condition. SUPPLIER agrees to furnish packaging materials when requested by
DISTRIBUTOR:, All date coded products must be returned within one (1) year of
date code.

Prior to returning any Products, DISTRIBUTOR must obtain a Return Authorization
from SUPPLIER, which shall be given to DISTRIBUTOR within thirty (30) days of
request by Distributor; and

7.1.2  
 All Products returned under this Subsection 7.1 shall be shipped
F.O.B.  SUPPLIERS domestic facility at 95 E. Jefryn Blvd, Deer Park, NY 11729,
freight and shipping charges prepaid by DISTRIBUTOR.

7.1.3
DISTRIBUTOR must place offsetting order equal to / or greater than stockrotation
RMA at the same time RMA is given.  Stock rotation RMA will not be giving with
out offsetting order.

7.1.4
Scrap AllowanceDistributor can choose to Scrap allowance instead of rotation.
Distributor will receive a quarterly credit against payments owed to supplier
for a scrap allowance equal to five percent (5%) of Supplier’s gross sales to
Distributor for the previous six (6) month period, minus all credits instead of
rotation depending on items. This scrap allowance will be applied, in
Distributor’s discretion, to the following: (1) the scrapping of Products to
obtain optimal mix as determined by Distributor, (2) accumulation of unused
scrap allowance to apply to future Product mix issues, and (3) application of
unused scrap allowance to Distributor’s Profit & Loss statement. Supplier has
opportunity to approve scrap decide what items can be send back to supplier
instead of scrap. DISTRIBUTOR must place offsetting order equal to / or greater
that Scrap RMA at the same time RMA is given. Scrap RMA will not be giving with
out offsetting order.

 
7.2  
 New Products. For purposes hereof, the term “New Products” shall mean any and
all Products (i) ordered by DISTRIBUTOR under its initial stocking order (i.e.,
ordered within ninety (90) days of the date of this Agreement of (ii) added to
the Products listed in Exhibit A and ordered within ninety (90) days of the date
of such addition. Within six (6) months following the date of this Agreement or
following the date of any New Product is added hereunder, whichever is later,
DISTRIBUTOR may elect to return to SUPPLIER, for credit, any and all of such New
Products in its inventory. Such return is subject to all of the terms and
conditions of Subsection 7.1 above, except of Subsection 7.1.2 thereof. Returns
of new Products under this Subsection 7.2 shall not be counted as “stock
rotation” for purposes of computing the amount of Products returnable by
DISTRIBUTOR under Subsection 7.1.

8.  
Product Changes.

8.1  
Discontinuance and Obsolescence. SUPPLIER reserves the right to discontinue the
manufacture of sale of, or otherwise render or treat as obsolete, any or all of
the Products covered by this Agreement upon at least forty five (45) days prior
written notice to DISTRIBUTOR. DISTRIBUTOR may, in its discretion, within thirty
(30) days following receipt of such notice, notify SUPPLIER in writing of its
intention to return any or all Products so discontinued or rendered obsolete
which remain in its inventory and shall receive a credit for such Products equal
to the net price paid by DISTRIBUTOR for the same, provided that said Products
are returned within thirty (30) days of the date of DISTRIBUTOR’s receipt of
SUPPLIER’s Return Material Authorization, which RMA shall be promptly issued by
SUPPLIER.  SUPPLIER shall pay all freight and shipping charges in connection
with any such returns. Returns of Products under this Subsection 8.1 shall not
be counted as “stock rotation” for purposes of computing the amount of Products
returnable by DISTRIBUTION under Subsection 7.1.

8.2  
Modification of Products. SUPPLIER shall give DISTRIBUTOR at least thirty (30)
days prior written notice of all engineering modifications that will affect
products in DISTRIBUTOR’s inventory if such changes affect form, fit, or
function, or if the modifications will preclude or materially limit the
salability of DISTRIBUTOR’s affected inventory of Products once the engineering
modifications are implemented.  SUPPLIER shall work with DISTRIBUTOR to move the
affected inventory through resale or repurchase for ninety (90) days following
such notification.  If, after the above efforts, affected Product still remains
in DISTRIBUTOR’s inventory, SUPPLIER agrees to replace it with upgraded Products
within one hundred twenty (120) days of the official public announcement of such
modification or SUPPLIER’s first shipment of the modified Product, whichever
occurs first. SUPPLIER shall pay all freight and shipping charges in connection
with any such returns or replacements. Returns of Products under this Subsection
8.2 shall not be counted as “stock rotation” for purposes of computing the
amount of Products returnable by DISTRIBUTOR under Subsection 7.1.

8.3  
Introduction of New Products.  SUPPLIER shall give DISTRIBUTOR at least thirty
(30) days prior written notice of the introduction of any New Products that
preclude or materially limit DISTRIBUTOR from selling any Products in its
inventory, and shall work with DISTRIBUTOR to move the affected inventory
through resale or repurchase for 90 days, following such notification. If, after
the above efforts, affected Products still remains in DISTRIBUTOR’s inventory,
SUPPLIER agrees to replace them with the New Products within one hundred twenty
(120) days of the official public announcement of such New Products or
SUPPLIER’s first shipment of New Products, whichever occurs first. Returns of
Products under this Subsection 8.3 shall not be counted as “stock rotation” for
purposes of computing the amount of Products returnable by DISTRIBUTOR under
Subsection 7.1.

8.4  
Return Material Authorization. A Return Material Authorization shall be issued
by SUPPLIER within thirty (30) days of any request for the same by DISTRIBUTOR
when required in connection with any return request under this Agreement.

 
 
 
 
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9.  
Warranty; Compliance With Laws.

9.1  
Standard Warranty.  The Products shall be covered by SUPPLIER’s standard
warranty terms and provisions, copies of which are annexed to this Agreement as
Exhibit B; provided, however, that the warranty coverage shall be no less than
the following: (i) the warranty period set forth therein shall run for at least
one (1) year following DISTRIBUTOR’s shipment of any Product to it’s customer;
(ii) SUPPLIER shall extend such warranty directly to DISTRIBUTOR’s customer as
if such customer had purchased the Product directly from SUPPLIER; (iii)
SUPPLIER shall warrant the Product against defects in material and workmanship
under normal use and service and shall repair or replace at its cost any
defective Product (or issue a credit or refund, as the case may be, based on the
purchase price paid therefor; and (iv) SUPPLIER shall pay (or refund the amount
of) all freight and shipping charges for any defective Product returned.

10.  
Special Purchases.  SUPPLIER and DISTRIBUTOR may at any time during the term of
this Agreement enter into separate agreements for the special purchase of other
Products, including non-standard Products and Products in greater quantities
than those set forth in SUPPLIER’s then current Published Price List, and such
agreements shall be subject to all terms and conditions hereof unless
inconsistent with the terms of such special agreements or unless otherwise
agreed.

                            

11. 
Term and Termination.

 
11.1
Term. The initial term of this Agreement is for one (1) year commencing on July
1st 2012. This Agreement, thereafter, shall automatically renew and extend
annually for a one (1) year term unless either Party has given the other at
least sixty (60) days prior to the end of the term written notice of its
intention not to renew the Agreement.

11.2
Termination for Convenience.  Either SUPPLIER or DISTRIBUTOR may at any time
terminate this Agreement without cause and for its convenience by giving ninety
(90) days prior written notice to the other. Both SUPPLIER and DISTRIBUTOR
represent that they have considered the making of expenditures in preparing to
perform under this Agreement, as well as the possible losses which might result
in the event of any termination of the Agreement.

11.3 
Immediately upon the expiration or termination of this Agreement for any reason,
Distributorshall immediately and forever cease to solicit orders for Products
and shall  cease to represent or to hold itself out in any manner that
Distributor is associated with Supplier.

 11.4 
Events of Default.  Any of the following shall constitute a default under this
Agreement.

 11.4.1 
Except as otherwise permitted under Subsection 17.04 of this Agreement, the
assignmentby DISTRIBUTOR or SUPPLIER of this Agreement or any of its respective
rights hereunder without the prior written consent of the non-assigning party
(the word “assign” to include, with out limiting the generality thereof, a
merger, sale of any substantial portion of assets or business or any similar
transaction);

 
11.4.2 
DISTRIBUTOR or SUPPLIER’S failure to perform or observe any of its
obligationshereunder for a period of thirty (30) days following written notice
thereof from the other; or if the breach is of such a nature that it could not
reasonably be cured within such thirty (30) day period, DISTRIBUTOR’s or
SUPPLIER’s failure within such thirty (30) days to commence to cure the breach
and, thereafter, proceed with due diligence to cure it; or

      
11.4.3 
The assignment by DISTRIBUTOR or SUPPLIER of its business for the benefit
ofcreditors, or the filing of a petition by DISTRIBUTOR or SUPPLIER under the
Bankruptcy Code or any similar statute, or the filing of such a petition against
either of them which is not discharged or stayed within sixty (60) days, or the
appointment of a receiver or similar officer to take charge of DISTRIBUTOR’s or
SUPPLIER’s property, or any other act indicative of bankruptcy or insolvency, or
the determination by Supplier, in its sole discretion, that Distributor lacks
the financial resources to satisfactorily perform its obligations and/or duties
hereunder.

11.5 
Remedies Upon Default. In the event of any default set forth in Subsection 13.4
above, the non-defaulting party may, at its option:

11.5.1 
Proceed by any lawful means to enforce performance of this Agreement and to
recover damages for a breach thereof (and the breaching party agrees to bear the
other’s costs and expenses, including reasonable attorney’s fees incurred in any
judicial action to enforce such performance or recover such damages if the
aggrieved party is determined to be entitled to such relief in such action;

 
11.5.2 
Terminate this Agreement for cause by written notice and proceed by any lawful
meansto recover damages for breach thereof; or

11.5.3 
Avail itself of any other lawful remedy available under law or equity.

11.5.4 
The rights and remedies under Subsection 13.5.1, 13.5.2, and 13.5.3 above
are intended to be cumulative and not exclusive, so that the non-defaulting
party can elect to pursue any one or more of the same.

11.6 
Return of Inventory

 
11.6.1 
In the event SUPPLIER terminates this Agreement without cause or elects not to
renewthe same, or DISTRIBUTOR terminates this Agreement for cause, SUPPLIER
shall repurchase from DISTRIBUTOR any and all unsold Products designated by
DISTRIBUTOR from its  inventory at the price paid therefor by DISTRIBUTOR, less
any prior credits granted by  SUPPLIER on such Products. SUPPLIER shall pay all
freight and shipping charges in connection with such repurchases.

11.6.2
In the event DISTRIBUTOR terminates this Agreement without cause or elects not
torenew the same, SUPPLIER shall repurchase from DISTRIBUTOR from its inventory
at the same price as set forth in Subsection 12.6.1 above. A twenty percent
(20%) handling charge may be deducted by SUPPLIER  from the purchase price to be
paid by DISTRIBUTOR for all Products returned in salable condition in opened or
non-original packaging. DISTRIBUTOR shall pay all freight and shipping charges
in connection with such repurchases.

 
11.6.3
Notwithstanding the foregoing, SUPPLIER shall be required to accept only those
Productswhich are in their original unopened packaging or, where not in such
packaging, are undamaged and in salable or merchantable condition after testing
and inspection by SUPPLIER.

 
 
 
 
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11.7  
Outstanding Order.  In the event of any termination, SUPPLIER shall, if
requested to do so by  DISTRIBUTOR, honor any open DISTRIBUTOR purchase order
then outstanding.

11.8 
Release.  No termination of this Agreement shall affect any obligation of either
party to pay amounts due to the other hereunder and all such payments shall be
made when due.

12.
Trademarks; Trade Names.  This Agreement shall not create, and SUPPLIER shall
have no right in, or to the use of, any trademark, trade name, logo, service
mark or other mark, identification or name of DISTRIBUTOR. DISTRIBUTOR
recognizes SUPPLIER’s ownership of, and right to use, certain trademarks, trade
names, logos and other marks, and names and acknowledges that, except as
hereinafter set forth, DISTRIBUTOR has no right in, or to use, any thereof.
Notwithstanding the foregoing, DISTRIBUTOR   is hereby granted a non-exclusive
right to use SUPPLIER’s trademarks, trade names, logos and other marks and names
for the purposes of identifying itself to the public as an authorized
distributor of the Products and for advertising and otherwise promoting the
resale, lease or servicing of any products purchased under this Agreement.

13. 
Confidential Information. SUPPLIER, SUPPLIER’s authorized representatives and
DISTRIBUTOR shall each receive and maintain in confidence any and all
proprietary information, trade secrets or other know-how belonging to the other
(including, but not limited to,  knowledge of manufacturing or technical
processes, financial and systems data, customer information and resale reports),
(“Confidential Information”), which is expressly designated and conspicuously
marked confidential (except and to the extent that disclosure of any
Confidential Information is (i) required by any law or governmental regulation
or the decree of a  court having competent jurisdiction or (ii) enters into or
exists in the public domain without the act of the party obligated to maintain
such confidentiality hereunder). Without limiting the foregoing, all books,
documents, records and other material and information made known to SUPPLIER or
SUPPLIER’s authorized representatives by DISTRIBUTOR pursuant to Subsection 2.4
of this Agreement are hereby designated as confidential. This Section 16 shall
survive termination or expiration of this Agreement for a period of two (2)
years.

14. 
General

 
14.1 
Entire Agreement.  This Agreement supersedes all prior communications or
understandings between DISTRIBUTOR and SUPPLIER and constitutes the entire
agreement between the parties with respect to the matters covered herein. In the
event of a conflict or inconsistency between the terms of this Agreement and
those of any order, quotation, solicitation or other communication from one
party to the other, the terms of this Agreement shall be controlling.

14.2 
 Amendment.  This Agreement cannot be changed, modified or amended unless
such change, modification, or amendment is in writing and executed by the party
against which the enforcement of such change, modification or amendment is
sought.

 
14.3
Governing Law.  This Agreement is made in, governed by, and shall be construed
solely in accordance with, the internal laws of the State of     New York  .

14.4
Assignment.  Neither party shall have the right to assign this Agreement or any
rights hereunder without the prior written consent of the other except that
either party may make such an assignment to another corporation wholly owned by
or under common control with it.  For purposes hereof, the term “assign” shall
include, without limitation, a merger, sale of assets or business, or other
transfer of control by operation of law or otherwise.

14.5 
Authority.  Both parties represent and warrant to each other that they have the
right and lawful authority to enter into this Agreement for the purposes herein
and that there are no other outstanding agreements or obligations inconsistent
with the terms and provisions hereof.

14.6
Paragraph headings.  Paragraph headings and numbers have been inserted for
convenience of reference only, and if there shall be any conflict between any
such headings and numbers and text of this Agreement, the text shall control.

 
14.7 
Waiver.  Waiver by either party of any term or condition of this Agreement or
any breachshall not constitute a waiver of any other term or condition or breach
of this Agreement

 
14.8
Notices. Notices and other communications by either party under this Agreement
shall be deemed given when delivered by hand or deposited in the United States
mail as certified mail, postage prepaid, addressed to the chief executive
officer of the other party at its then  principal place of business as follows.

 

If to SUPPLIER:          Ira Levy        Surge Components Inc.        95 E.
Jefryn Blvd.        Deer Park, NY  11729               If to DISTRIBUTOR:       
     Frank Sganga           TTI        2441 NE Pkwy        Fort Worth, TX
76106-1816    

 
 
 
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15.09
Invalidity of Provisions. In the event that any term or provision of this
Agreement  shall be deemed by a court of competent jurisdiction to be overly
broad in scope, duration or area of applicability, the court considering the
same shall have the power and hereby is authorized and directed to modify such
term or provision to limit such scope, duration or area, or all of them, so that
such term or provision is no longer overly broad and to enforce the same as so
limited. Subject to the foregoing sentence, in the event any provision of  this
Agreement shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall attach only to such provision and
shall  not affect or render invalid or unenforceable any other provision of this
Agreement.

15.10
Consent Not Unreasonably Withheld.  Whenever any consent, action or
authorization is required or requested of SUPPLIER hereunder, such consent,
action or authorization shall not be unreasonably withheld or delayed.

15.11
Force Majeure. Nonperformance under this Agreement shall be excused,  and
neither party shall be liable for any loss, damage, penalty or expense, to the
extent that such performance is rendered impossible or delayed by fire, flood,
act of God or the public enemy, act of the Government, labor difficulties, riot,
inability to obtain materials or any  other cause where the failure to perform
or delay is beyond the reasonable control of the non-performing party and
without the negligence of such party.

 
15.12 
Relationship of Parties. The relationship between the parties hereto shall
be   that of independent contractors, each being in full control of its own
business. Under no circumstances shall either party have the right or authority,
expressed or implied, to act or make any commitment on behalf of or bind the
other or represent the other as its agent in any way. Nothing contained in this
Agreement shall be construed as creating a joint venture or partnership between
SUPPLIER and DISTRIBUTOR.

 

AGREED TO THIS      ACCEPTED THIS            1st         day
of               July                  , 2012    14          day of
              August  , 2012       /s/ Ira Levy   /s/ Frank Sganga Name
(Signature)       Name (Signature)       Address    Address       95 E. Jefryn
Blvd.   2441 North East Parkway  Deer Park,   NY  11729   NY 11729      
By    Ira Levy   By  Frank Sganga Title   President                          
Title  

 

                                                                            

 
 
 
 
 
 
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