EXHIBIT 10.13
AGENCY CONTRACT
Between:
U.T.I.T. S.p.A., seated in Modena, Via X. Xxxxxx, 183, personified by the legal
representative, Dr.ssa Xxxxxxxxx Xxxxxxxx (hereinafter called "the Principal")
And
XXXXXXXX INDUSTRIES, INC., seated in Charlotte, North Carolina, 000 Xxxxxxxx
Xxxx (hereinafter called "the Agent"):
IT IS AGREED AS FOLLOWS:
1. TERRITORY AND PRODUCTS
1.1 The Principal appoints the Agents, who accepts, as his
commercial agent to promote the sale of the products listed in
Annex I, ss.1 (hereinafter called "the Products") in the
territory defined in Annex I, ss.2 (hereinafter called "the
Territory").
1.2 If the Principal decides to sell any additional products in
the Territory, he shall inform the Agent in order to discuss
the possibility of including them within the Products defined
under Article 1.1. Exception to this obligation is made for
products which:
a. Will not be sold in the textile field;
b. Do not match with the product lines already marketed by
the agent.
2. GOOD FAITH AND FAIR DEALING
2.1 In carrying out their obligations under this agreement the
parties will act in accordance with good faith and fair
dealing.
2.2 The provisions of this agreement, as well as any statements
made by the parties in connection with this agency
relationship, shall be interpreted in good faith.
3. AGENT'S FUNCTIONS
3.1 The Agent agrees to use his best endeavors to promote the sale
of the Products in the Territory in accordance with the
Principal's reasonable instructions and shall protect the
Principal's interests with the diligence of a responsible
businessman.
3.2 The Agent shall not solicit orders from outside the Territory
unless permitted to do so by the Principal. Where the Agent
negotiates with customers in the Territory business which
results in contracts of sale with customers established
outside the Territory, Article 13.4. will be applied.
3.3 Unless otherwise specifically agreed, the Agent has no
authority to make contracts on behalf of, or in any way to
bind, the Principal towards third parties. He only solicits
orders from customers for the Principal, who is free to accept
or to reject them.
3.4 When negotiating with customers, the Agent shall offer
Products strictly in accordance with the term and conditions
of the contract of sale which the Principal has communicated
to him.
3.5 The Agent binds himself to give his assistance for the
after-sale service too (included assembling and running test
of the plants), receiving possible observations, requests or
claims, and informing immediately the Principal and shall
participate to the arguments resolution and to reach friendly
agreements and reconciliation.
3.6 The Agent is not entitled to receive payments on the
Principal's behalf without prior written authorization from
the Principal to that effect. When the Agent has been so
authorized, he must transmit them as soon as possible to the
Principal and until then hold them separately on deposit on
the Principal's behalf. The Agent is in no case supposed to
hold the above mentioned payments, even not as compensation of
eventual credits towards the Principal, unless differently
authorized by the Principal himself in written form.
4. UNDERTAKING NOT TO COMPETE
4.1 The Agent shall not represent, manufacture or distribute any
products which are in competition with the Products, for the
entire term of this contract and for six months after its
dissolution.
4.2 The Agent may represent, distribute or manufacture any
products which are not competitive with the Products, provided
he informs the Principal in advance of such activity.
4.3 The Agent shall not represent or distribute, directly or
indirectly, non-competitive products of a manufacturer who is
a competitor of the Principal: such obligation will be in
force for the entire term of this contract and for six months
after its dissolution.
4.4 The Agent declares that he represents (and/or distributes or
manufactures, directly or indirectly) the products listed in
Annex III on the date on which this contract is signed.
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5. SALES ORGANIZATION, ADVERTISING AND FAIRS
5.1 The Agent shall provide an adequate organization for sales and
after-sales service, with all necessary means and personnel,
in order to ensure the fulfillment of his obligations
throughout the Territory under this agreement.
In particular, the Agent will have to supply, at its costs, a
CAD engineer design person already familiar with drawing and
designing U.T.I.T. systems.
5.2 The Agent will be responsible for promotion and sales, as well
as advertising of U.T.I.T's equipment in the Territory. It is
understood that the contents of any advertising must be
approved by the Principal beforehand. The parties shall agree
on their participation in fairs or exhibitions within the
Territory. The cost of the Agent's participation in such fairs
and exhibitions shall be apportioned between the parties as
specifically agreed each time.
5.3 The Agent will make available, on his own cost, part of his
show room in Charlotte for displaying U.T.I.T. systems. The
cost of U.T.I.T. equipment displayed in the show room shall be
apportioned between the parties as specifically agreed.
6. PRINCIPAL TO BE KEPT INFORMED
6.1 The Agent shall exercise due diligence to keep the Principal
informed about his activities, market conditions and the state
of competition within the Territory. He shall answer
reasonable request for information made by the Principal.
6.2 The Agent shall exercise due diligence to keep the Principal
informed about: (i) the laws and regulations which are to
apply in the Territory to which the Products must conform
(e.g. import regulations, labeling, technical specifications,
safety requirements, etc.), and (ii) the laws and regulations
concerning his activity, as far they are relevant for the
Principal.
7. ADMINISTRATIVE AND COMMERCIAL SECRETS
The Agent binds himself not to reveal to third parties administrative
and commercial secrets or other confidential information he has learned
in his activity for the Principal, neither after the dissolution of the
present agreement, nor for the exploitation of such secrets or
confidential information for purposes different from the ones of the
present agreement.
8. FINANCIAL RESPONSIBILITY
8.1 The Agent shall satisfy himself, with due diligence, of the
solvency of customers whose orders he transmits to the
Principal. He shall not transmit orders from customers of
which he knows or ought to know that they are in a critical
financial
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position, without informing the Principal in advance of such
fact.
8.2 The Agent shall also use every possible influence to obtain
payments punctually from customers.
8.3 The Agent shall assist the Principal for credit collection.
9. PRINCIPAL'S TRADEMARKS AND SYMBOLS
9.1 The Agent shall use the Principal's trademarks, trade names or
any other symbols, but for the only purpose of identifying and
advertising the Products, within the scope of this contract
and in the Principal's sole interest. However, the use of
trademarks, names and symbols of the Principal on the
letterhead sheet of the Agent, on advertising material and on
all materials delivered by the Agent to third parties, must be
authorized in advance by the Principal in written form.
9.2 The Agent hereby agrees neither to register, nor to have
registered, any trademarks, trade names or symbols of the
Principal (or which are confusingly similar with the
Principal's ones), in the Territory or elsewhere.
9.3 The right to use the Principal's trademarks, trade names or
symbols, as provided for under the first paragraph of this
article, shall cease immediately for the Agent, on the
expiration or termination of the present contract, whatever
the reason. After the expiration or termination of the present
contract, the Agent bind himself to avoid any reference to
third parties of the past relationship with the Principal, so
as to avoid any confusion with customers.
9.4 The Agent shall notify the Principal of any infringement of
the Principal's trademarks, trade names or symbols that comes
to his notice.
10. PATENT RIGHTS AND INFRINGEMENTS
The Principal will obtain and maintain any patents, trademarks or other
similar protection of the Products, and it will, at its own expense,
protect such rights.
11. EXCLUSIVITY
11.1 The Principal shall not, during the life of this contract,
grant any other person or company with the Territory the right
to represent or sell the Products.
11.2 The Principal reserves itself the right to supply the Products
through the spinning machinery manufacturers, in which case
the Agent will only be entitled half the commission. These
cases will be dealt with the following procedure: Upon receipt
of an inquiry from a machine maker, for a supply in the
U.S.A., the Principal will immediately contact the Agent to
check if the same inquiry has already been
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submitted to it by the end user. In case a quotation has not
yet been submitted, the Principal reserves to itself the right
to decide whether to submit the quotation through the Agent or
directly through the machinery maker (turn key project
requested by the end user). The final decision will be taken
by the Principal and the Agent will accept it.
11.3 Exception to what is stated at Paragraph 11.2 is made for the
sales made through the manufacturer Marzoli S.p.A., which will
generate no commissions for the Agent during the first eight
months following the date of coming into force of this
contract.
11.4 The Principal is, however, entitled to deal directly, without
the Agent's intervention, (provided he informs the Agent) with
customers situated in the Territory; in respect of any sales
arising therefrom, the Agent shall be entitled to the
commission provided for in this contract.
11.5 Regarding all Principal's products not included in Annex I
ss.1, the Principal shall be free to promote their sales,
directly or through other agents, commissioners, distributors,
concessionaires, or in any other way, and the Agent shall not
be entitled to any commission thereon.
12. AGENT TO BE KEPT INFORMED
12.1 The Principal shall provide the Agent with all necessary
written information relating to the Products (such as price
lists, brochures, videotapes etc.) as well as with the
information needed by the Agent for carrying out his
obligations under the contract.
12.2 The Principal shall keep the Agent informed of any relevant
communication with customers in the Territory.
13. AGENT'S COMMISSION
13.1 The Agent is entitled to a commission of ten percent (10%), on
all sales of the Products to customers established in the
Territory during the validity of this contract.
13.2 Sales of machinery other than those included in U.T.I.T.
product range (even if they are part of a U.T.I.T. system such
as: wrapping machines, weighing, labeling machines and so on)
only generate a commission of five percent (5%).
13.3 In case of direct sales through textile machine manufacturers,
the Agent shall be entitled to half the commission, that is,
five percent (5%).
13.4 If the Agent, when dealing with customers established in the
Territory, solicits orders resulting in contracts of sale with
customers established outside the Territory, and if the
Principal accepts such orders, the Agent shall be entitled to
receive a commission of five
5
percent (5%). Similarly, the Agent's commission shall be
reduced to five percent (5%) when another agent solicits with
customers established outside the Territory resulting in
contracts of sale with customers established within the
Territory.
13.5 Both parties agree that in special cases and/or for special
customers and for contract prices less than the minimum
requested by the Principal, the commission amount shall be
discussed and agreed case by case. In case of discount given
beyond the minimum price requested by the Principal, the
commission due to the Agent shall be proportionally reduced.
(i.e.: Minimum price = $500.000
Effective sale price = $400.000
Commission = $(40.000 - 20% = $32.000)
13.6 Unless otherwise agreed in writing, the commission covers any
expenses incurred by the Agent in fulfilling his obligations
under this contract (such as telephone, telefax, office,
travel expenses, etc.)
14. METHOD OF CALCULATING COMMISSION AND PAYMENT
14.1 Commission shall be calculated on the net amount of the
invoices, i.e., on the effective sales FOB price (any discount
being deducted, clear of any additional charges such as
packing, erection, duty, transportation, insurance and clear
of all tariffs on taxes of any kind).
14.2 The Agent shall acquire the right to commission after full
payment by the customer of the invoiced price. In case the
Principal is insured against the risk of non-payment by his
customers, the parties may agree that a commission be paid on
the sums obtained by the Principal from the insurer.
14.3 If the Principal grants the customers particular price
reductions because of accepted quality defaults of the
Products, the commission due to the Agent shall be calculated
and settled only on the amount effectively paid by the
customer, therefore with the exclusion of the discount and
reduction.
14.4 Any possible overprice is on Principal's favor, excepted
different written specific agreements for each single
business.
14.5 The Principal will provide the Agent with a statement of the
commissions due in respect of each period of two months and
will set out all the business in respect of which such
commission is payable. The commission will be paid not later
than the last day of the month following the relevant period
of two months.
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14.6 Any taxes imposed on the Agent's commission in the Territory
are for the Agent's account.
15. UNCONCLUDED BUSINESS
15.1 No commission shall be due in respect of offers or orders
transmitted by the Agent and not accepted by the Principal.
15.2 If a contract made by the Principal as a result of orders
transmitted by the Agent is not thereafter put into effect for
the whole or in part, the Agent shall not be entitled to
commission on the not executed part, unless non-performance of
the contract is due to a great non-fulfillment by the
Principal.
16. TERM OF THE CONTRACT
16.1 This contract enters in force on the date of signature and
shall remain in force for two years.
16.2 This contract shall be automatically renewed for successive
periods of one year, unless terminated by either party by
notice given in writing by the registered mail with return
receipt, not less than four months before the date of
expiration. If the contract has lasted for more than five
years, the period of notice will be of 6 months.
17. UNFINISHED BUSINESS
17.1 Orders transmitted by the Agent or received by the Principal
from customers established in the Territory before the
expiration or termination of this contract and which result in
the conclusion of a contract of sale not more than 6 months
after such expiration, shall entitle the Agent to commission.
17.2 No commission is due to the Agent for contracts of sale made
on the basis of orders received after the expiration of
termination of this contract, save if such transaction is
mainly attributable to the Agent's efforts during the period
covered by the agency contract and if the contract was entered
into within a reasonable period after the expiration or
termination of this contract. The Agent must however inform
the Principal in writing, before the expiration or termination
of this contract, of the pending negotiations which may give
rise to commission under this paragraph.
18. EARLIER TERMINATION
18.1 Each party may terminate this contract with immediate effect,
by notice given in registered mail with return receipt, in
case of a substantial breach of the obligations arising out of
the contract by the other party, or in case of exceptional
circumstances justifying the earlier termination.
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18.2 Any breach by a party of his obligations under the contract
resulting in such detriment to the other party as not to
permit him to continue the business relationship based on
mutual trust, shall be considered as a substantial breach for
the purpose of Article 18.1 above.
Circumstances in which it would be unreasonable to require the
terminating party to continue to be bound by this contract,
shall be considered as exceptional circumstances for the
purpose of Article 18.1 above.
18.3 The parties hereby agree that the violation of the provisions
under Articles 4.1 - 4.3 - 7 - 9.1 - 9.2 and 9.4 of the
present contract is to be considered as a substantial breach
of the contract. Moreover, any violation of the contractual
obligations may be considered as a substantial breach, if such
violation is repeated notwithstanding a request by the other
party to fulfill the contract obligations.
18.4 Furthermore, the parties agree that the following situations
shall be considered as exceptional circumstances which justify
the earlier termination by the other party:
Bankruptcy, moratorium, receivership, liquidation or any kind
of composition between the debtor and the creditors.
Civil and penal condemnation of the Agent which could damage
his well-known name;
Any other circumstances which are likely to affect
substantially one's party's ability to carry out his
obligations under contract.
18.5 The contract may also be terminated by the Principal with
immediate effect in case of change of control, ownership
and/or management of the agent-company.
18.6 If a party terminates the contract according to this article,
the Agent renounces from now on to claim indemnity for damages
by the Principal at any title.
19. INDEMNITY IN CASE OF TERMINATION
The Agent shall not be entitled to any indemnity for goodwill or
similar compensation in case of termination of the contract under
Articles 16 and 18.
20. DISPOSITION IN CASE OF CONTRACT'S TERMINATION
Upon expiration of this agreement, the Agent shall have to stop
immediately his activities on behalf of the Principal, avoiding from
assuming behaviors which might lead customers to mistaken or however to
damage the Principal. The Agent shall also return to the Principal all
advertising material and other documents and samples which have been
supplied to him by
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the Principal and are in the Agent's possession.
21. ARBITRATION - APPLICATION LAW
21.1 Any dispute arising out of or in connection with the present
contract shall be finally settled in accordance with the Rules
of Conciliation and Arbitration of the International Chamber
of Commerce by one or more arbitrators designated in
accordance to said Rules.
21.2 This contract is governed by Italian Low.
22. PREVIOUS AGREEMENTS - MODIFICATIONS -- NULLITY
22.1 This contract replaces any other preceding agreement between
the parties on the subject.
22.2 No addition or modification to this contract shall be valid
unless made in writing.
22.3 The nullity of a particular clause of this contract shall not
involve the nullity of the whole agreement.
23. PROHIBITION OF ASSIGNMENT
The present contract cannot be assigned without prior written agreement
between the two parties.
24. AUTOMATIC INCLUSION UNDER THIS PRESENT CONTRACT
The annexes and the ADDENDUM attached to this contract and listed
hereunder form an integral part of the agreement:
Annex I: the Products, the Territory.
Annex II: considerations discussed with the Agent in the meeting held
in Modena on December 1, 1999 and accepted by him as guidelines of his
activity in the name of U.T.I.T.
Annex III: list of the products distributed or sold by the Agent at
date of signature of this contract.
ADDENDUM: additional Agent's obligations.
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25. AUTHENTIC TEXT
The English text of this contract is the only authentic text.
Made in Modena, Italy on the 22nd day of March, 2000.
The Principal The Agent
U.T.I.T. S.p.A. XXXXXXXX INDUSTRIES, INC.
Xxxxxxxxx Xxxxxxxx Xxx Xxxxxxxx
/s/ Xxxxxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx, President
---------------------- -----------------------------------
In accordance with Article 1341 of the Italian Civil Code, the following
Articles of this contract are hereby specifically approved by the Agent:
4 (UNDERTAKING NOT TO COMPETE)
9 (PRINCIPAL'S TRADEMARKS AND SYMBOLS)
11 (EXCLUSIVITY)
18 (EARLIER TERMINATION)
19 INDEMNITY IN CASE OF TERMINATION)
21 (ARBITRATION - APPLICABLE LAW)
The Agent
XXXXXXXX INDUSTRIES, INC.
Xxx Speiman
/s/ Xxxxxx X. Xxxxxxxx, President
------------------------------------
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ANNEX I: Products and Territory
(Article 1.1)
ss. 1 Products:
TEXTILE FIELD
o COTTON XXXXX transportation systems
o CAN transportation systems: - link between Draw Frames and Roving Frames
- link between Draw Frames and O.E. Frames
o COTTON AND WOOL ROVING BOBBIN transportation systems: - link between Roving
Frames and Ring Frames
o CONE transportation, palletizing, conditioning and packing systems: - cone
originating from Cone Winding and O.E. Frames
o FABRIC ROLLS palletizing systems
o SPARE PARTS for the above mentioned systems
The Principal is free to promote the sales of all the products he produces,
which are not listed above, directly or through other agents, commissioner,
distributors, or in any other way, and the Agent shall not be entitled to any
commission.
ss. 2 Territory:
The Territory assigned to the Agent is:
o U.S.A.
Canada
Modena, 22nd March 2000
The Principal The Agent
U.T.I.T. S.p.A. XXXXXXXX INDUSTRIES, INC.
Xxxxxxxxx Xxxxxxxx Xxx Xxxxxxxx
/s/ Xxxxxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx, President
------------------------ -----------------------------------
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ANNEX II: considerations discussed with the Agent in the meeting held in Modena
on December 1st, 1999 and accepted by him as guidelines of his activity in the
name of U.T.I.T.
Real implication in promoting, selling and servicing automation
o Sales
Each and every quotation has to be tailored, customer is to be visited
several times, prior to focus on his real needs and every visit brings
about a new quotation, a process which is long and time consuming.
o Erection and start up
The start up of every installation is a very critical moment, only at this
stage in fact, the automation put in place makes it evident shortcomings in
the existing mill organization and the possibility to overcome them with
the addition of new automation. This gives normally start to discussions in
which the customers tend to pretend the supply of this additional
automation free of charge, as a necessary completion of the contracted
installation.
This phase needs a lot of visits, a lot of competence and patience to
convince customers that what has been supplied is what has been contracted
and paid.
o After sales
After start up, customers have to be constantly supported till when they
know perfectly how to use and troubleshoot the installation.
Modena, 22nd March 2000
The Principal The Agent
U.T.I.T. S.p.A. XXXXXXXX INDUSTRIES, INC.
Xxxxxxxxx Xxxxxxxx Xxx Xxxxxxxx
/s/ Xxxxxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx, President
--------------------------------- ---------------------------------
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The Agent hereby declares that he represents (and/or distributes or
manufactures) the following products, directly or indirectly, at the time of the
conclusion of the present contract:
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Principal Products
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Lonati Group Knitting machines and accessories
(Dinema, Santoni, Lonati, MCM, Marzoli,
Vignoni)
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Xxxxx Complett Seamers
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Fimatex Turning devices
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Margasa Reclaiming machines
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Italtubetti Tubes
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Xxxxx Flats
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Carresi Pillow stuffers
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Xxxxx Yarn bobbin stripper
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Shanghai Erfrinji Spinning machines, etc.
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China Textile Machinery Looms
------------------------------------------ ----------------------------------
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Milnor Laundry machines
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Chicago Dryer Laundry folders & presses
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ADC Dryers
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Energenitics Laundry machines
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The Agent
XXXXXXXX INDUSTRIES, INC.
Xxx Speiman
/s/ Xxxxxx X. Xxxxxxxx, President
-----------------------------------
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AGENCY CONTRACT
ADDENDUM
Between:
U.T.I.T. S.p.A., seated in Modena, Via X. Xxxxxx, 183, personified by the legal
representative, Dr. ssa Xxxxxxxxx Xxxxxxxx (the Preponent)
And
XXXXXXXX INDUSTRIES, INC., seated in Xxxxxxxxx, Xxxxx Xxxxxxxx, 000 Xxxxxxxx
Xxxx (the Agent):
As integration of the Agency Contract stipulated on this day, it is agreed as
follows:
1. The Agent recognizes the long time commercial cooperative relationship
between U.T.I.T. and Marzoli S.p.A. in the U.S. market, which provides for
the selling of certain U.T.I.T. textile transport systems by Marzoli.
Considering that the punctual prosecution of that relationship has a
particular importance for U.T.I.T. , the Agent binds himself to abstain
from any action or behavior which could jeopardize the normal course of
such a relationship. The non-observance of that obligation will constitute
good cause for the early termination of the Agency Contract, according to
article 18.2;
2. The Agent undertakes to furnish at his own cost a deposit of U.T.I.T.
equipment spare parts, and to resell those spare parts to customers who ask
for them at the price U.T.I.T. fixes. U.T.I.T. gives the Agent the sole
spare parts selling right, with the exclusion of those which will be sold
directly by U.T.I.T. to the textile machinery manufacturers, such as
Marzoli, Rieter and so on. The Agent expressly binds himself not to sell
any spare parts for U.T.I.T. equipment which aren't manufactured by
U.T.I.T. and deposited by U.T.I.T. at the Agent to be resold. Violation of
the above obligation will bring about the early termination of the Agency
Contract according to article 18.2;
To integrate and explain those matters provided for in article 5.2 of the Agency
Contract, it is agreed that every kind of U.T.I.T. Product advertising will be
based on U.T.I.T. photos and logo. U.T.I.T. reserves the right to get published
adverts in textile magazine, on its own initiative and at its own cost, and/or
to carry out other advertising initiatives at its own cost, in every case making
it clear that the Agent has exclusive rights of sale in the sales area
specified.
The Principal The Agent
/s/ Xxxxxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx, President
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