Distribution Agreement

This is a distribution agreement regulated under Italian Law and with terms and provisions drafted for the distributor benefit

EXCLUSIVE DISTRIBUTION AGREEMENT

This Distribution Agreement is entered into as of ……………….. (“Effective Date”) by and between ALFA (ALFA), a U.S.A. corporation with its registered offices at …, (U.S.A.), and BETA S.r.l. (BETA), with its registered offices at …, (Italy). ALFA is represented by its legal agent, Mr. … and BETA is represented by its legal agent, Mr. ….

§ 1

Appointment of Distributor

a) ALFA hereby appoints BETA as its exclusive distributor to import and distribute all ALFA’s Products in the Territory defined in paragraph 2.d on the terms of this Agreement.

b) BETA shall have the exclusive right to market, promote, display, sell and distribute the Products by any and all distribution methods.

c) BETA shall have full organizational autonomy, without any subordination or dependence from ALFA. BETA shall be free to choose distribution and sales channels for ALFA’s products.

d) ALFA has the right to grant the distribution right specified in this Agreement, and it has not knowingly granted any license to another entity that would restrict the rights granted hereunder, unless otherwise stated herein.

e) The distribution rights granted hereunder shall include all sales of the Products.

§ 2

Definitions

a) “Control” means the ability to direct the affairs of another whether by virtue of the ownership of shares contract, or otherwise.

b) “Delivery date” means the date on which ALFA shall guarantee that the Products are delivered DDP INCOTERMS ICC 2000 at BETA’s premises.

c) “Products” means current products produced by ALFA, included those listed on Schedule B.

d) “Territory” means Italy.

§ 3

ALFA’s obligations

a) To supply the Products to BETA for resale in the Territory in such quantities as BETA orders in advance.

b) Refer to BETA about all inquiries concerning the Products from existing customers and prospective customers in the Territory.

c) Use its reasonable efforts to provide written confirmation to BETA of BETA’s orders within five (5) working days of receipt of each order.

d) Guarantee that the Products ordered by BETA are delivered at BETA premises on the Delivery Date.

e) Promptly inform BETA of any change of Control in ALFA.

§ 4

BETA’s obligations

a) To promote the distribution of the Products in the Territory.

b) Purchase the Products ordered for its own account for resale in the Territory pursuant to this Agreement.

c) Maintain on its own account an inventory of the Products at levels which are appropriate and adequate for BETA to meet customer delivery requirements for the Products throughout the Territory.

d) Inform ALFA immediately of any changes in Control of BETA.

e) Give notice to ALFA in the event that it becomes aware of any significant dispute which arises or may arise between BETA and a customer in relation to the subject matter of this Agreement.

f) Inform ALFA of the main recommendations or opinions expressed by, or received from customers about the Products.

g) Inform ALFA of any complaints in relation to the Products and to provide all relevant information with respect of such complaints to ALFA so as to enable ALFA to carry out investigations, should ALFA wish to do so.

h) Possess the technical skills and competencies to carry on the activities detailed above.

§ 5

Orders and Delivery

a) ALFA shall deliver the Products DDP INCOTERMS ICC 2000 to BETA’s premises in the Territory by the terms agreed by the parties. ALFA shall bear all delivery costs.

b) Time of delivery shall be of the essence for the purpose of this Agreement, therefore any breach thereof shall entitle BETA to terminate, in writing and without notice, the sale contract to which the breach is referred, as well as the present Agreement, anyhow without prejudice for BETA’s right to be compensated for the damages incurred.

c) ALFA shall specify each Delivery Date to be within 30 days following receipt of BETA’s orders. Delivery Dates shall be notified to BETA in written confirmation of BETA’s orders, sent by telefax and/or courier.

d) Purchase from ALFA shall be made using written orders, by telefax, email, registered mail or courier for what concerns either the order and its confirmation.

e) Orders shall detail the model’s name, number, quantity, the delivery date, for each order.

§ 6

Prices and Payments

a) The prices to be paid by BETA for the Products shall be calculated according to ALFA’s list set up in Schedule B, as amended by joint agreement of the parties from time to time.

b) ALFA shall give BETA 60 days’ prior notice of any increase in the prices for the Products. All price increases are limited by the corresponding percentage increases in ALFA’s actual cost of production, and ALFA shall provide to BETA sufficient information at the time of the aforementioned notice for BETA to confirm ALFA’s increases in production costs.

c) ALFA shall be able to modify the prices once per year. Price increase is to be submitted to BETA in writing. Price increase is to be in accordance with 6.b.

d) BETA shall pay the full amount invoiced to it by ALFA within thirty (30) days of date of receipt of the Products delivered and of the related invoice.

e) Payment shall be made by bank draft to Bank …, swift code …, beneficiary: ALFA.

§ 7

Advertising and Promotion

a) BETA shall be responsible for the advertising, marketing, and promotion for the Products in the Territory.

b) ALFA shall, at no costs to BETA, list BETA as its exclusive distributor in the Territory on ALFA’s website.

§ 8

Title and Risks

a) The risks to any consignment of the Products shall not pass until the Products are delivered from ALFA’s carrier to BETA. ALFA shall receive a document from the carrier to verify this delivery. Document to be transmitted to BETA.

b) Carrier and method of transport to be determined by ALFA. Risk and loss to be responsibility of the carrier appointed by ALFA until the Products reach BETA, according with the delivery term agreed under art. 5.a.

c) ALFA shall properly package Products to prevent damage during the transport, according with the delivery term agreed in art. 5.a.

§ 9

Warranty

a) ALFA bears sole responsibility for defective Products and shall replace them at no charge to BETA. Replacement Products shall be shipped at ALFA’s sole expenses. Without prejudice for the substitution of defective Products, BETA shall have all the rights set forth, in alternative or in addition, by the Wien Convention, applicable to this Agreement.

b) BETA shall contact ALFA, in writing, regarding any Product’s defect within a reasonable term of the discovery of the defect.

§ 10

Term and Termination

a) This Agreement shall remain in effect for a period of five (5) years, and shall thereafter be automatically renewable for an additional five (5) years unless either party gives notice to the other of its desire to terminate the Agreement in writing at least sixty (60) days before expiration of the original or renewal term, subject to the terms of this Agreement.

§ 11

Termination

a) Termination of this Agreement, however caused, shall be without prejudice to any rights or liabilities occurred at the date of termination.

b) Either party may give notice in writing to the other terminating this Agreement with immediate effect if the other party commits any material breach of any of the terms of this Agreement and (if such a breach is remediable and if the non breaching party is willing to grant this further term) fails to remedy that breach within thirty (30) days of that party’s being notified of the breach if such further term is granted. Parties expressly agree that the present Agreement may be terminated without notice, without prejudice for the right to the compensation of damages, in the case set forth by art. 5.b and in case of any breach, by ALFA, of BETA’s exclusivity rights.

§ 12

Force Majeure

a) The obligations of each party under this Agreement shall be suspended during the period and to the extent that that party is prevented from complying with them by any cause beyond its control such are acts of God, wars, riots, civil commotions, compliance with any law or governmental orders, rules, regulations or directions, fires, floods, storms.

b) In the event of either party being so hindered, the party concerned shall give notice of suspension as soon as possible to the other party stating the date and extent of the suspension and its cause and the omission to give such notice shall forfeit the rights of that party to claim suspension. Any party whose obligations have been suspended as aforesaid shall resume the performance of those obligations as soon as reasonably possible after the removal of the cause and shall so notify the other party. In the event that the cause continues for more than two months either party may terminate this Agreement on 30 day’s written notice, and neither party shall be liable to the other for compensation in respect of a failure to perform its obligations under this Agreement insofar as such failure arises as a direct result of any of the causes contemplated in section 12.a.

§ 13

Entire Agreement

a) This Agreement constitutes the entire understanding between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, negotiations and discussions between the parties relating to it.

§ 14

Modifications

a) Except as expressly provided in this Agreement, no modification or variation of this Agreement shall be effective unless in writing and signed by a duly authorized representative of each of the parties to it.

§ 15

Assignment

a) Neither party shall without the prior written consent of the other party assign or transfer its rights or obligations under this Agreement.

§ 16

Relationship

a) Nothing in this Agreement shall create, or be deemed to create, a partnership or the relationship of the principal and agent or employer and employee between the parties.

§ 17

Freedom to contract

a) The parties declare that they each have the right, power, and authority and have taken all actions necessary to execute and deliver, and to exercise their rights and perform their obligations under this Agreement.

§ 18

Communication

a) Communication between ALFA and BETA is to be sent in written form between either Mr. … or Mr. … and Mr. ….

§ 19

Applicable Law and Arbitration

a) The present Agreement and the sale contracts subsequently entered into between the same parties are governed by the laws of Italy and, for the relevant aspects, by the U.N. Convention on the International Sale of Goods (Wien 1980) and any dispute arising out of it or with it in any way connected or arising out or in connections with the sale contracts subsequently entered into between the same parties shall be exclusively and definitively settled by one arbitrator appointed in accordance with the rules of the Arbitration Chamber ….

As Witness the hands of the duly authorized representatives of the parties

Hereto the day and year first above written

ALFA

Date: …

By: …

Its: …

BETA S.r.l.

Date: …

By: …

Its: …

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