EXHIBIT 10.3
[LONATI LETTERHEAD]
Brescia, January 2nd, 1997
DISTRIBUTOR AGREEMENT
This Agreement is made on this 2nd day of January 1997, by and between LONATI
S.p.A.. - Xxx X. Xxxx, 00 - 00000 XXXXXXX (Xxxxx) ("LONATI") and XXXXXXXX
INDUSTRIES, INC. - 000 Xxxx 0xx Xxxxxx - XXXXXXXXX, Xxxxx Xxxxxxxx 00000, XXX
("SPEIZMAN").
The parties agree as follows:
1. AGENCY.
LONATI hereby appoints SPEIZMAN as it exclusive agent in XXXXXX ("xxx
Xxxxxxxxx") for the sale of its present range of circular knitting machines,
ladies and men (the "Products").
2. TERM.
The term of this Agreement will last from today through December 31st, 1999 and
will continue from year to year thereafter. It may be cancelled by either party
at any year end on ninety (90) days written notice to the other party.
A. This Agreement may be terminated by either party, without advance notice,
upon the breach of this Agreement by the other party, or upon the
bankruptcy of the other party.
3. RESPONSIBILITIES OF SPEIZMAN.
X. XXXXXXXX will promote, at its own expense, the sale of Lonati's products in
the Territory, to assist LONATI in maintaining its competitive position in
the Territory, both among existing customers and potential customers.
X. XXXXXXXX will provide an efficient sales organization employed by it to
promote the sale of LONATI products.
X. XXXXXXXX will provide a proper technical service.
X. XXXXXXXX will provide to maintain an efficient commercial organization in
Mexico City and will have a salesman visiting all the customers at least 4
times per year.
X. XXXXXXXX will establish at its own expenses a stock of spare parts in such
quantity to satisfy the reasonably expected needs of its customers.
X. XXXXXXXX will not act either directly or by means of a third party on
behalf of any other firm in competition with LONATI for the new Products
during the terms of this Agreement.
X. XXXXXXXX will pay all the costs for participation in trade shows in the
Territory and will pay for all the costs for advertising on the Products
in the Territory.
4. RESPONSIBILITIES OF LONATI.
X. XXXXXX will furnish SPEIZMAN with reasonable quantities of sales
literature and will provide price quotations with delivery schedules.
X. XXXXXX hereby grants to SPEIZMAN the non-transferable license to use
LONATI's trademarks and trade names only and exclusively in the promotion
and marketing of the Products in the Territory. However, LONATI's
trademarks and trade names and the goods will thereof remain the property
of LONATI, and SPEIZMAN will have no right to such trade names and
trademarks except as provided herein. Upon termination or cancellation of
this Agreement, SPEIZMAN will cease any use of LONATI's trademarks and
trade names.
5. PURCHASE ORDERS.
SPEIZMAN will promptly transmit to LONATI all purchase orders received by
SPEIZMAN for the Products. LONATI will accept or reject each order placed by
SPEIZMAN within ten (10) days after receipt thereof, and will give prompt notice
of such acceptance or rejection to SPEIZMAN.
6. COMPENSATION.
X. XXXXXXXX will act as a distributor and LONATI will provide a net price-list
FOB Brescia. Payment will be made by SPEIZMAN with an irrevocable Letter of
Credit to be opened 30 days before previous shipment date and payable at 90
days from Xxxx of Lading.
B. All spare parts manufactured by LONATI for sale in the territory will only
be sold to SPEIZMAN and not directly to any customers, except for customers
upon mutual agreement of the parties. In case of direct sales of
spare-parts, LONATI will pay a ten percent (10%) commission to SPEIZMAN on
the net value of each invoice for such sale.
C. In case of reduction of prices to customers, or of sales made directly by
LONATI to customers, the commission rate will be discussed in advance
between the parties, case
by case. LONATI will provide SPEIZMAN with copies of its records showing
the calculations of commissions due to SPEIZMAN.
7. TRIAL MACHINES.
LONATI will deliver trial machines to potential customers who show a strong
interest in buying them, under the following conditions:
X. XXXXXX will pay freight charges from LONATI's plant to the customer's
plant.
X. XXXXXXXX will pay freight charges from customer's plant to LONATI's plant,
for those machines which are not accepted.
C. All installation and service expenses for trial machines are at SPEIZMAN's
charges.
X. XXXXXXXX will also pay the cost of transporting machines rejected by one
customer to the plant of another customer within MEXICO.
E. However, all machines must be returned within one hundred twenty (120) days
from the delivery, unless other written terms have been agreed upon. The
parties will review this policy and amend it if necessary in the light of
future experiences.
8. INSTALLATION.
All expenses for installation of machines sold by LONATI under the conditions
"delivered and installed" will be at LONATI's expenses. If SPEIZMAN buys
machines ex-works by LONATI, then SPEIZMAN is responsible for all delivery and
installation as well as transportation charges.
A. Should SPEIZMAN purchase machines ex-works LONATI, and need assistance of
LONATI's technicians for the installations, then all travel and living
expenses plus daily pocket money will be at SPEIZMAN's charge.
9. PATENT RIGHTS AND INFRINGEMENTS.
It will be the responsibility of LONATI to obtain and maintain any patents,
trademarks or other similar protection of the machines and spare-parts, and
LONATI will - at its own expenses- protect such rights, and will hold SPEIZMAN
harmless from any infringement claim.
10. RIGHTS AFTER TERMINATION.
Upon termination of this Agreement, for whatsoever cause:
X. XXXXXXXX will be entitled to all commissions due it with respect to orders
accepted by LONATI before termination, such commissions to be paid as
provided in this Agreement.
X. XXXXXXXX will have no rights to any commissions for orders not accepted by
LONATI before termination.
X. XXXXXXXX will immediately cease using the name "LONATI" and will promptly
return all trial machines, sales literature and other items owned by LONATI
to LONATI's designee in MEXICO.
11. APPLICABLE LAW.
This contract is subject to Italian law.
12. ASSIGNABILITY.
This Agreement is personal to both SPEIZMAN and LONATI and may not be assigned
by either party without the prior written consent of the other party.
13. ENTIRE DOCUMENT.
This Agreement is intended by the parties as a final expression of their
agreement and supersedes all prior agreements concerning the subject matter
hereof.
14. AMENDMENT.
Any amendment to this Agreement must be in writing and signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written, pursuant to authority duly given.
/s/ Xxxxxx X. Xxxxxxxx, President /s/
XXXXXXXX INDUSTRIES, INC. LONATI S.p.A.
