Exhibit 10.19
WEST COAST DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT, made and entered into effective as from the 21st day of
February, 1997, by and among Tajima Industries, Ltd., a company incorporated and
existing under the laws of Japan and having its principal office at 00-00
Xxxxxxxxx 0-xxxxx, Xxxxxxxxx, Xxxxxx 000, Xxxxx ("TAJIMA"); Nomura Trading Co.,
Ltd., a company incorporated and existing under the laws of Japan and having its
main office at 0-0, Xxxxxxx-Xxxxx 0- xxxxx, Xxxxxxx-xx, Xxxxx 000, Xxxxx
("NTC"); Nomura (America) Corp., a company incorporated and existing under the
laws of New York State and having its main office at 60 East 42nd Street, New
York, N.Y. 10165, U.S.A. ("NAC"); and Xxxxxx International Corp., a corporation
incorporated and existing under the laws of New York State and having its
principal office at 000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxx 00000, X.X.X.
("DISTRIBUTOR");
WITNESSETH:
WHEREAS, Tokai Industrial Sewing Machine Co., Ltd. ("TOKAI") is the
manufacturer of the PRODUCTS (as defined in Clause 1 (a) below), which are sold
exclusively for TOKAI by TAJIMA and which are marketed in the United States by
NTC and NAC;
WHEREAS, DISTRIBUTOR has substantial technical expertise and marketing
know-how with respect to the distribution of high quality embroidery machines in
the TERRITORY (as defined in Clause 1 (b) below);
WHEREAS, TAJIMA, NTC and NAC are willing to appoint DISTRIBUTOR as their
sole distributor of the PRODUCTS in the said TERRITORY on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants herein contained, the parties hereby agree as follows:
CLAUSE 1. DEFINITIONS
(a) The term "PRODUCTS" shall mean the models of "TAJIMA" brand embroidery
machines such as TMFX-C Series and TMEX-C Series manufactured by TOKAI, and may
hereafter be amended from time to time by written notice to DISTRIBUTOR.
(b) The term "TERRITORY" shall mean the States of Arizona, California,
Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming and shall
not include any other areas.
CLAUSE 2. APPOINTMENT AND RESPONSIBILITIES
(a) Subject to the terms and conditions contained herein, TAJIMA, NTC and
NAC
hereby jointly agree to appoint DISTRIBUTOR as the exclusive distributor of
the PRODUCTS within the TERRITORY, and DISTRIBUTOR hereby accepts such
appointment.
(b) DISTRIBUTOR shall use its best efforts to promote the maximum sale and
distribution of the PRODUCTS within the TERRITORY, and shall devote such time as
is necessary for effective promotion of the PRODUCTS. In connection therewith
DISTRIBUTOR shall maintain an active and effective commercial organization
designed to maximize sales of the PRODUCTS.
(c) DISTRIBUTOR shall not have the right to sell and/or distribute the
PRODUCTS, either directly or indirectly, to any area than the TERRITORY.
However, DISTRIBUTOR may sell in any area other than the TERRITORY upon the
written consent from NAC, which will be issued after being agreed upon between
NAC and the party having sales right in such area.
(d) During the term of this Agreement, DISTRIBUTOR shall not in the
TERRITORY, directly, indirectly, or in conjunction with any third party, solicit
orders for, distribute, sell, or manufacture, products of any type which are
competitive with the PRODUCTS, or assist, inspire, or promote others in such
activities.
CLAUSE 3. ORDER AND PAYMENT
(a) DISTRIBUTOR shall, with respect to the calendar quarter commencing on
April 1, 1997, and for all calendar quarters thereafter during the term of this
Agreement, submit to TAJIMA through NAC a quarterly report setting forth its
forecast of the quantity of the PRODUCTS which DISTRIBUTOR expects to purchase
for such quarter. The forecast with respect to the calendar quarter commencing
on April 1, 1997 shall be submitted to NAC no later than February 28, 1997, and
each such subsequent forecast shall be submitted to NAC not later than sixty
(60) days prior to the first day of the relevant quarter.
(b) DISTRIBUTOR agrees to make all purchases of the PRODUCTS by submitting
purchase orders for the PRODUCTS to NAC. All such sales by and between NAC and
DISTRIBUTOR shall be upon the terms and conditions contained in the NAC's form
of "Confirmation of Sale", including, but not limited to, price, delivery, risk
of loss, retention of title, and payment (the "INDIVIDUAL CONTRACT").
Provided, however, in the event of a conflict between the terms of any such
Confirmation of Sale and this Agreement, the terms and conditions of this
Agreement shall control.
(c) DISTRIBUTOR agrees to buy the PRODUCTS based on the current price list
provided by NAC. The said price list may be modified from time to time by
written
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notice to DISTRIBUTOR, and, any such modification shall apply to all orders
submitted on or after the date of written notice to DISTRIBUTOR of such
modification.
CLAUSE 4. TERM
The initial term of this Agreement shall be for a period of five (5) years,
from the date first set forth above through February 20, 2002. Thereafter, the
term of this Agreement shall be renewable for successive five (5) years period,
provided that a written agreement to such effect shall be executed by the
parties hereto with respect to each such renewal not later than two (2) months
prior to the expiration of the theneffective term.
CLAUSE 5. MINIMUM SALES QUANTITY
(a) During the term of this agreement, DISTRIBUTOR shall sell on a yearly
basis in the TERRITORY not less than the minimum sales quantities of the
PRODUCTS specified below:
One Hundred (100) units of TMFX-C Series and One Hundred and Twenty (120)
units of TMEX-C Series for the first year ending February 20, 1998.
The minimum sales quantities of the second year onwards shall be determined
by the parties concerned not later than the end of each calendar year.
Individual sale shall be established if DISTRIBUTOR makes delivery the
PRODUCTS to its end user.
(b) Distributor shall submit to TAJIMA via NAC a monthly report in writing
as to the sales quantities not later than the 10th day of the following calendar
month. In the event that DISTRIBUTOR receives a request from NAC, DISTRIBUTOR
shall submit to NAC evidence of sale including the date of sale, the name of
customer, the model name and quantity of the PRODUCTS and the machine number of
the PRODUCTS.
(c) In the event that this Agreement shall be renewed beyond the initial
five (5) year term, the minimum quantity DISTRIBUTOR shall be required to sell
for each such additional year shall be as defined in the written agreement
setting forth such renewal.
CLAUSE 6. REPORTS
To facilitate proper planning and production by TAJIMA and TOKAI, in
addition to the quarterly reports required pursuant to paragraph (a) of Clause 3
above, DISTRIBUTOR shall submit a written report to TAJIMA via NAC describing
the
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latest market conditions and trends in the TERRITORY, and such other market
and customer information as TAJIMA may request, at least once every calendar
quarter during the term of this Agreement.
CLAUSE 7. PROMOTION
(a) DISTRIBUTOR shall carry out advertising and promotional activities for
the PRODUCTS within the TERRITORY to an extent and in a manner that is customary
in the trade (or as NTC and NAC shall otherwise reasonably specify) in order to
promote sales of the PRODUCTS effectively. All costs and expenses associated
with such advertising and promotional activities, including, without limitation,
costs and expenses relating to consultants, mailings, preparation of samples,
and customer solicitations and contacts, shall be borne by DISTRIBUTOR.
(b) TAJIMA shall, without charge and at the request of DISTRIBUTOR, furnish
DISTRIBUTOR with such reasonable quantities of samples and advertising materials
as TAJIMA may determine to be necessary or desirable to support DISTRIBUTOR's
advertising and promotional activities.
(c) (1) TAJIMA grants to the DISTRIBUTOR the exclusive right to use the
TOKAI or TAJIMA trademark (collectively the "TRADEMARK") in the TERRITORY in
connection with the promoting, marketing, advertising, and selling of the
PRODUCTS, and the DISTRIBUTOR agrees to market the PRODUCTS under the TRADEMARK.
(2) The TRADEMARK is and shall remain the exclusive property of TOKAI and
TAJIMA respectively, and nothing contained herein shall give to the DISTRIBUTOR
any interest in the TRADEMARK, except the right to use them in connection with
the promoting, marketing, advertising, and selling of the PRODUCTS. Upon
expiration of this Agreement or its earlier termination, for whatever cause, the
DISTRIBUTOR shall abandon at once any use of the TRADEMARK or any xxxx or name
confusingly similar thereto.
(3) The DISTRIBUTOR agrees to take all reasonable steps to protect the
TRADEMARK and to ensure TOKAI's and TAJIMA's continuing exclusive ownership and
right to use the TRADEMARK in the TERRITORY. In the event that the DISTRIBUTOR
becomes aware that any person (the "INFRINGER") is engaging in any activity
which infringes the TRADEMARK, the DISTRIBUTOR shall promptly notify TOKAI or
TAJIMA, as the case may be, of the details of such sales or activities and the
identity of the INFRINGER. Thereafter, if either TOKAI or TAJIMA should, in its
sole discretion, decide to institute an infringement action against the
INFRINGER in any court, the DISTRIBUTOR shall cooperate with TOKAI or
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TAJIMA, as the case may be, in the prosecution of such litigation.
CLAUSE 8. WARRANTY
(a) TAJIMA warrants the PRODUCTS against defective material and workmanship
for a period of one (1) year from the date such PRODUCTS are shipped (the
shipping date shall be determined by the B/L date) from Japan. The obligations
of TAJIMA under this warranty shall be limited to providing for the repair or
replacement, in accordance with the warranty adjustment policies of TAJIMA, of
any PRODUCTS and/or parts found defective and of which TAJIMA is advised by
DISTRIBUTOR or a customer within one hundred eighty (180) days from the date of
delivery of the defective PRODUCTS and/or parts to the customer; provided
always, however, that the date of receipt by TAJIMA of such notice falls
strictly within one (1) year of the warranty term as provided in the foregoing
of this paragraph (a). The repair or replacement of defective PRODUCTS and/or
parts shall be at TAJIMA's expense, except that the DISTRIBUTOR or customer
shall have the obligation to return such defective PRODUCTS or parts to NAC.
(b) The warranty set forth in this Clause 8 is contingent upon proper use
in the application for which the PRODUCTS are intended and shall be void as to:
the PRODUCTS which have been modified or altered; the PRODUCTS which have been
subjected to negligence, misuse, accident, or unusual physical stress; or the
PRODUCTS used in contravention of the procedures, instructions, recommendations,
and warnings specified in the TAJIMA's operation manual or otherwise by TAJIMA.
(c) THIS WARRANTY IS EXPRESSLY MADE IN LIEU OF ANY AND ALL OTHER WARRANTIES
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, WHICH WARRANTIES TOKAI, TAJIMA, NAC AND NTC HEREBY
EXPRESSLY DISCLAIM. TOKAI'S, TAJIMA'S, NAC'S AND NTC'S SOLE OBLIGATION SHALL BE
THE EXPRESS WARRANTY GIVEN IN CLAUSE 8, PARAGRAPH (A) ABOVE, AND TOKAI, TAJIMA,
NAC AND NTC SHALL IN NO EVENT BE LIABLE FOR ANY OTHER INCIDENTAL, INDIRECT,
SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES OR LOSS (INCLUDING WITHOUT LIMITATION
LOST PROFITS), WHETHER ARISING IN CONTRACT OR TORT, WHETHER FORESEEABLE OR
UNFORESEEABLE, ARISING OUT OF THE DESIGN, MANUFACTURE, SALE, USE, OR REPAIR OF
THE PRODUCTS.
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CLAUSE 9. RESOLUTION OF CUSTOMER DISPUTES
As among TAJIMA, TOKAI, NAC, NTC and DISTRIBUTOR, DISTRIBUTOR shall be
solely and exclusively responsible for any and all claims and liabilities with
respect to third parties arising from the purchase or use of the PRODUCTS
consequent to any sale of the PRODUCTS within the TERRITORY, except as provided
in Clause 8 (b) hereof.
CLAUSE 10. TERMINATION OR NON-RENEWAL
(a) In the event that any default shall be committed by any of the parties
hereto in the performance of its obligations hereunder or under the INDIVIDUAL
CONTRACT, the party or parties suffering from such default shall notify the
offending party of such default in writing and shall demand correction. If such
default is not corrected within thirty (30) days from the date of notification
thereof, the suffering party or parties shall have the right to terminate this
Agreement by a written notification to that effect of the offending party.
(b) Should any material change occur in ______ current Class B
shareholders, directors, or officers of DISTRIBUTOR, or should there occur any
direct or indirect change in control of DISTRIBUTOR, the other parties hereto
shall have the right at their discretion to determine such change to constitute
a material breach hereof, and notwithstanding the generality provided in the
foregoing paragraph (a) may forthwith terminate this Agreement by a notice to
DISTRIBUTOR in writing.
(c) DISTRIBUTOR shall notify TAJIMA via NAC of any actual or expected
material change in the current Class B shareholders, directors, or officers of
itself or of any subsidiary which acts as a distributor hereunder prior to 90
days of the date of any such change.
(d) Notwithstanding paragraph (a) above, this Agreement shall terminate
automatically without written notification upon the bankruptcy, receivership,
insolvency, liquidation, dissolution or corporate reorganization of any of the
parties hereto, or upon any assignment by any of the parties hereto for the
benefit of creditors.
(e) Notwithstanding anything in this Agreement to the contrary, TAJIMA may
terminate this Agreement or terminate the exclusivity granted hereunder by
providing written notice to DISTRIBUTOR within thirty (30) days after the end of
any year in which DISTRIBUTOR fails to purchase the minimum quantities of the
PRODUCTS specified in Clause 5 hereof.
(f) In the event that TAJIMA issues notice to terminate this Agreement,
TAJIMA shall repurchase the PRODUCTS which have been shipped (the shipping date
shall be determined by the B/L date) from Japan within 120 days prior to the
date of said
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notice, at the price at which the PRODUCTS were sold to DISTRIBUTOR.
TAJIMA's obligation to repurchase the PRODUCTS hereunder shall only apply to
unused, salable PRODUCTS that have not been altered or damaged in any way.
Additionally, in such event, any or all purchase orders outstanding from
DISTRIBUTOR may be cancelled or completed at TAJIMA's option.
(g) In the event that DISTRIBUTOR issues notice to terminate this
Agreement, all purchase orders for the PRODUCTS outstanding at that time shall
be completed, and DISTRIBUTOR shall remain responsible for the performance of
all obligations associated therewith.
(h) Upon the expiration or earlier termination of this Agreement for any
cause whatsoever, DISTRIBUTOR agrees to return to TAJIMA all advertising and
promotional materials, price lists, technical documents, documents outlining
terms and conditions of sale, and any other information embodied in tangible
form in the possession of DISTRIBUTOR.
(i) DISTRIBUTOR hereby expressly waives any rights it may have to recover
any damages from TAJIMA, NAC or NTC, and any other rights which it may have
against TAJIMA, NAC or NTC as a result of the termination of this Agreement.
CLAUSE 11. ASSIGNMENTS
DISTRIBUTOR shall not assign this Agreement or any of its rights and
obligations hereunder either directly or indirectly to any other person or
entity without the prior written consent of all of the other parties hereto.
CLAUSE 12. CONFIDENTIALITY
(a) Each of the parties hereto shall treat and maintain as confidential all
materials and information provided by the other parties pursuant to this
Agreement, and each party shall use its best efforts to cause all shareholders,
directors, officers, employees, and agents of such party to keep such materials
and information confidential.
(b) The materials and information to be kept confidential pursuant to
provisions of the foregoing paragraph shall include, without limitation, any and
all data concerning assembly, operations, technical drawings, instruction
manuals, computer software and other information relating to the PRODUCTS. Such
information shall remain the exclusive property of TAJIMA, shall not be used,
copied or reproduced by DISTRIBUTOR without the consent of TAJIMA, and shall be
protected at least to the same extent that DISTRIBUTOR protects its own strictly
confidential information.
(c) The obligations set forth in this Clause 11 shall survive any
termination of this Agreement.
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CLAUSE 13. NO WAIVER
The failure of any party hereto to enforce at any time or for any period of
time any of its rights or entitlements under any provision of this Agreement
shall not be construed as a waiver of such provision or of the rights of such
party subsequently to demand enforcement of such provision.
CLAUSE 14. FORCE MAJEURE
No party hereto shall be liable in any manner for failure or delay in the
fulfillment of all or any part of this Agreement where such failure or delay
results directly or indirectly from act of God, war warlike hostilities,
sanctions, mobilizations, blockade, embargo, detention, revolution, riot,
looting, strike, lockout, labor dispute, plague or other epidemics, fire, flood,
act of government, inability to obtain materials or supplies, or any other
causes or circumstances beyond the reasonable control of such party.
CLAUSE 15. ARBITRATION AND APPLICABLE LAW
All disputes which may arise between some or all of the parties hereto
arising out of, in relation to or in connection with this Agreement or the
breach hereof shall be finally settled by arbitration held in Japan pursuant to
the rules of conciliation and arbitration of the Japan Commercial Arbitration
Association. Any award resulting from such arbitration shall be final and
binding upon the parties concerned, and judgement upon the award rendered may be
entered in any court of competent jurisdiction or application may be made to
such court for judicial acceptance of such award and an order of enforcement, as
the case may be. This Agreement shall be governed, construed and enforced in
accordance with the laws of Japan.
CLAUSE 16. ENTIRE AGREEMENT AND GOVERNING LANGUAGE
This Agreement cancels and supersedes all previous agreements, written or
oral, and contains the entire understanding of the parties hereto with respect
to the subject matter hereof and shall not be amended or modified except in
writing and signed by each of the parties hereto. This Agreement is executed in
both the Japanese and English languages, but in the event of any discrepancy
between such texts the Japanese version shall control.
CLAUSE 17. NOTICES
All notices hereunder shall be given (i) by hand, (ii) by registered or
certified mail return receipt requested, (iii) by recognized overnight courier
delivery service or (iv) by telecopy, answerback requested, to the addresses
first above written or to such addresses or telecopy numbers as may be
subsequently designated by the concerned.
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Any such notice shall be effective for all purposes of this Agreement on
the date (A) of receipt if delivered personally, (B) ten (10) days after posting
if transmitted by mail, (C) three (3) days after delivery to a recognized
overnight courier service, or (D) one (1) day after transmission with confirmed
answerback, if transmitted by telecopy.
CLAUSE 18. NO ORAL MODIFICATION
No waiver, modification or change of this Agreement or the terms and
conditions herein contained shall be valid or binding on either party unless
agreed to in writing by competent officers of each of the parties hereto.
CLAUSE 19. HEADINGS
The headings as used herein are for convenience of reference only and shall
not define or limit the provisions hereof.
CLAUSE 20. HOLIDAYS
Should any of the dates set forth herein on which notice is required to be
given or action taken by any party fall on a Saturday, Sunday or holiday either
as recognized by Japan or the United States, then the date on which such notice
is required to be given or action taken shall be the next business day following
such Saturday, Sunday or holiday.
CLAUSE 21. INDEPENDENT CONTRACTOR
The relationship established between TAJIMA, NAC, NTC and DISTRIBUTOR by
this Agreement is solely that of seller and buyer. The DISTRIBUTOR is an
independent contractor and is in no way the legal representative of TOKAI,
TAJIMA, NAC, or NTC. In no event is DISTRIBUTOR authorized to, nor shall it,
assume or incur any obligation of any kind, express or implied, on behalf of
TOKAI, TAJIMA, NAC or NTC. The DISTRIBUTOR shall at all times identify himself
as an independent contractor who has been appointed as a distributor for the
PRODUCTS in the TERRITORY.
CLAUSE 22. SEVERABILITY
If any one or more of the provisions of this Agreement should be found to
be illegal or unenforceable, then all other provisions hereof shall be given
effect separately therefrom and shall not be affected thereby. If any covenant
set forth herein is found to be illegal or unenforceable, it is the intention of
the parties that such covenant shall not thereby be terminated, but shall be
deemed amended to the extent necessary to render it valid and enforceable.
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CLAUSE 23. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which shall evidence the same agreement,
and it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
CLAUSE 24. U.N. CONVENTION
The parties hereto hereby agree that the United Nations Convention of
Contracts for the International Sale of Goods shall not apply to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
TAJIMA INDUSTRIES LTD.
("TAJIMA")
\s\ Xxxxxxx Xxxxxx
------------------------
Name: Xxxxxxx Xxxxxx
Title: President
NOMURA TRADING CO., LTD.
("NTC")
\s\ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxx
Title: General Manager of
Machinery Division
NOMURA (AMERICA) CORP.
("NAC")
\s\ Xxxxxx Xxxxxxx
------------------------
Name: Xxxxxx Xxxxxxx
Title: President
XXXXXX INTERNATIONAL CORP.
("DISTRIBUTOR")
\s\ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: President
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