XXXXXXXX YARN MACHINES AGREEMENT
TO BE THE EXCLUSIVE DISTRIBUTOR FOR
MARZOLI IN THE UNITED STATES AND CANADA
1. Xxxxxxxx Yarn Machines will become the exclusive distributor for all
Marzoli and Xxxx products in the United States and Canada. Xxxxxxxx
would not purchase shares of Marzoli International. Xxxxxxxx is buying
certain assets and assuming certain commitments as outlined below.
2. Sales of machines, sales of spare parts, technical assistance (both
mechanical and electronic) for customers in the territory, advertising,
local exhibitions not including international exhibitions, financing of
customers, responsibility for collections of accounts.
3. Xxxxxxxx will pay for the transportation of machines to the show and
return to Italy. Marzoli should pay the expenses for the erection
people who come from Italy to set up for the show.
4. For the time being, Xxxxxxxx will purchase the parts and machines CIF
Charleston, South Carolina, or CIF Canadian port, payable against a
60-day irrevocable letter of credit from shipment. In the future, in
order to be more price competitive, Xxxxxxxx may want to buy these
machines crated sea shipment FOB Xxxx and Xxxxxxx'x plant. However, for
the first few deals, I think it would safer for both of us to continue
with the CIF Charleston, South Carolina or Canadian port. Included in
the CIF price, Marzoli and Xxxx agree to pay for the cost of the
assembly and start-up technicians.
5. Xxxxxxxx will be responsible for training mill personnel, either with
its own technicians or by paying for such technicians to come from
Marzoli or Xxxx. Xxxxxxxx will send technicians to Marzoli and Xxxx for
training. Marzoli and Xxxx agree to give the people that we send for
training someone who can speak English to help instruct them. The
Customer and/or Xxxxxxxx will pay for transportation, salary, food and
lodging for these technicians. Marzoli and Xxxx will pay for the
lunches. Marzoli and Xxxx commit to have people available at the time
that these technicians come to devote their full attention to training
them.
6. Xxxxxxxx will be responsible for maintaining an acceptable of spare
parts, both mechanical and electric, as well as electronic, in the U.S.
and Canadian offices. Xxxxxxxx may, from time to time, buy parts
domestically if the prices are much cheaper in the U.S. than they are
from Italy, particularly if this expedite shipment of the parts and
they are comparable to the parts supplied from Italy.
7. Xxxxxxxx will promote the sale of equipment through direct sales with
sales representatives and trade magazines in their territory. If a
customer in the territory purchases a Marzoli or Xxxx machine from
Xxxxxxxx and ships them to Mexico,
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Xxxxxxxx will make the sale. If a U.S. or Canadian customer goes to
Mexico and buys a Marzoli or Xxxx machine, then Xxxxxxxx will not
receive credit for the sale.
8. Marzoli and Xxxxxxxx agree to the following disposition of the assets
currently at Marzoli USA:
A. All personnel. Effective August 1, 1998, Xxxxxxxx Yarn Machines will
be responsible for the salaries, commissions and all expenses of all
personnel currently employed by Marzoli USA. Xxxxxxxx will have the
exclusive right to hire and dismiss all personnel in the USA and
Canadian operations.
B. All current office equipment owned by Marzoli International will be
reviewed by both Marzoli Italy and Xxxxxxxx and Xxxxxxxx will pay a
fair price based on current market condition for that equipment which
Xxxxxxxx will need to continue the operation of Marzoli USA.
C. Spare parts inventory. Xxxxxxxx agrees at the time of signing of
this contract, to pay Marzoli $150,000 for the spare parts that are
currently in Spartanburg. As soon as the sale of parts at their cost
value of $150,000 is exceeded through sales cost, Xxxxxxxx will pay for
the other parts that are currently in inventory as they are sold on a
monthly basis through 12/31/99. In December 1999, Xxxxxxxx and Marzoli
will determine if the parts that have not been sold will either be sent
back to Marzoli or thrown away. Those parts that are still active as
determined by Xxxxxxxx and Xxxxxxx will be purchase at their agreed
upon price by Xxxxxxxx and Marzoli.
9. Showroom installation. Xxxxxxxx would not be able to effectively sell
machines without this showroom installation. As soon as Marzoli and
Xxxx present their latest technology, Xxxxxxxx would agree to the
following:
X. Xxxxxxx will fax Xxxxxxxx the price that Marzoli must net for the
current showroom equipment. Xxxxxxxx is responsible for adding any
profit that they might make to these prices.
B. As Marzoli and Xxxx introduce new pieces of equipment to their
product range, they will fax Xxxxxxxx their new prices of each piece of
equipment. Marzoli and Xxxx will inform Xxxxxxxx to begin selling part
of the old line and what price they want to net for each piece of
equipment in the old line. After Xxxxxxxx sells the equipment and
collects the money, Xxxxxxxx will forward the money to Marzoli and
Xxxx.
This will be done on piece at a time rather than all at one
time. This process will continue on a revolving basis. Xxxxxxxx will
commit to pay for the cost of the new
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equipment for the USA showroom with equal monthly payments at LIBOR
plus 1% interest on the unpaid balance over a 36-month period.
10. Marzoli agrees to pay the IRS the $120,000 due the IRS before removing
the funds from the current Marzoli U.S. company.
11. Xxxxxxxx Yarn Machines will be responsible for the leasing of the
building as well as all of the apartments. At Speizman's expense and
risk, Xxxxxxxx will try to sublet the current building and move the
facility to Charlotte if it is possible without disrupting the current
personnel.
12. PRICING. Marzoli agrees to sell Xxxxxxxx Industries Marzoli and Xxxx
equipment, CIF Charleston, South Carolina, with the installation and
erection group from Italy, included in the price. Marzoli and Xxxxxxxx
will agree upon prices based in market conditions to sell the Xxxx and
Marzoli equipment in the USA and Canada.
As mentioned above in Item, it would be best for the first few sales to
continue with the practice of selling the equipment of Xxxxxxxx
purchasing the equipment CIF Charleston or Canadian port. After we both
understand our pricing and cost better, I believe it would be more
efficient for Xxxxxxxx to buy the machines crated for sea shipment FOB
the Marzoli or Xxxx factories. We could then add in a rate which you
would give us for the erection team for each deal.
13. The contract both Marzoli and Xxxx will be valid from July 15, 1998 and
will expire on December 31, 2000.
F.LLI MARZOLI C. S.P.A. /s/ Xxxxxx X. Xxxxxxxx, President
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