Exhibit 10.25
AMENDMENT TO AGREEMENT FOR STRATEGIC ALLIANCE
AND LICENSE AGREEMENT
This Amendment is entered into on March 14, 2003 by and between
MIDAS INTERNATIONAL CORPORATION, 0000 Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx
00000 hereby represented by Xxxx X. Xxxxxxx, President and Chief Executive
Officer (hereinafter "MIDAS")
and
MAGNETI MARELLI SERVICES S.p.A. X.xx Xxxxxxxx 000/X 00000 Xxxxxx (Xxxxx) hereby
represented by Carlo Bondone, Director and Special Attorney (hereinafter
"Marelli")
WHEREAS:
A. The parties have signed (or are the successors to the original party
of) the Agreement for Strategic Alliance dated October 1, 1998
("Agreement") and a License Agreement dated October 30, 1998 ("License
Agreement").
B. Prior to the date hereof, the entry fees and royalties required to be
paid by Marelli to MIDAS under the Agreement and the License Agreement
have been subsequently renegotiated according to Attachment A hereto.
C. The parties have thereafter and recently agreed on the additional
modifications to the Agreement and the License Agreement set forth
herein.
NOW THEREFORE IT IS AGREED AS FOLLOWS
1. Capitalized terms not otherwise defined herein shall have the meanings
contained in the Agreement and License Agreement, as applicable.
2. The royalties required to be paid by Marelli to MIDAS under the
License Agreement from and after January 1, 2003, are hereby modified
by agreement of the parties, and they will be as set forth below:
(a) Fixed Amounts
-------------
2003 = US $ 8,40 MM
2004 = US $ 8,82 MM
2005 = US $ 9,26 MM
2006 = US $ 9,72 MM
2007 = US $ 8,90 MM
(b) Royalties on Turnover
2008 and beyond = 1,00% of Gross Revenue, until such time as the
Marelli business using the MIDAS System achieves annual Gross Revenue
of US $650 MM, at which time, starting from the following fiscal year,
the royalties on turnover shall be 1,25% of Gross Revenue
3. With respect to the countries and continents set forth in Attachment B
(the "New Countries") the entry fees otherwise required to be paid by
Marelli to MIDAS under Section II, 5.3, of the Agreement are hereby
modified by agreement of the parties, and, effective as of the date of
this Amendment, they will be eliminated (including those still due
under Attachment A hereto). Instead of entry fees, Marelli shall pay to
MIDAS, for each new MIDAS shop opened in a New Country after the date
of this Amendment (whether a newly-built MIDAS shop, an existing
competitor's shop converted to a MIDAS shop, or otherwise) a new shop
opening fee ("Shop Opening Fee") equal to:
(a) US $5,000 for each of the first fifty (50) new MIDAS shops opened
in each New Country; and
(b) US $10,000 for each additional new MIDAS shop in excess of fifty
(50) opened in each New Country.
With respect to Russia, Great Britain, Ireland and South Africa, the
Shop Opening Fee shall be equal to US $10,000 for each new MIDAS shop
opened in such country or on such continent.
No Shop Opening Fees are required to be paid by Marelli for Argentina,
Turkey, Germany, Morocco and those countries set forth in Annex A to
the Agreement.
4. By completing the payments due to MIDAS under the Agreement and the
License Agreement up to and including the date of this Amendment, and
subject to Marelli's payment to MIDAS of the Shop Opening Fees provided
under Section 3 above, Marelli will acquire exclusive rights to exploit
the MIDAS System in the New Countries without any further obligation to
pay New Country entry fees to MIDAS under Section II, 5.3, of the
Agreement. Marelli is free to exploit the MIDAS System in the New
Countries effective from the date hereof in the manner provided under
the Agreement and the License Agreement.
5. Marelli's exclusive right to exploit the MIDAS System in each of the
New Countries, as contained in Section 4 above, is subject to Marelli
submitting to MIDAS, on or before April 30, 2003, a Shop Development
Plan reasonably acceptable to MIDAS, which sets forth the number of new
MIDAS shops to be opened in each of the New Countries and the timeline
for such openings, and meeting such development requirements in
accordance with the schedule set forth thereon. Marelli shall have a
one (1) year cure period for any failure to meet the Shop Development
Plan.
6. The support contemplated in Section II, 2.1, of the Agreement is
intended to be only upon Marelli's written request to MIDAS.
2
7. The support contemplated in Section II, 2.2, of the Agreement will no
longer be required to be made available to Marelli, which will arrange
for any training on its own care and expenses.
8. The reports mentioned under Section II, 2.6, of the Agreement will be
exchanged by the parties on a semi-annual basis.
9. The meetings under Section II, 2.5 and 2.7, of the Agreement are
intended to be held on a semi-annual basis.
10. By executing this Amendment, MIDAS is formally notifying Marelli that
it does not intend to exercise its right of first option and first
refusal under Section II, 5.5, of the Agreement to acquire Marelli's
assets and rights relevant to the MIDAS system in the countries of
Poland and Austria. However, any purchaser of those assets and rights
must satisfy the requirements set forth in Section II, 5.5, of the
Agreement, unless otherwise agreed to in writing by MIDAS, such
agreement not to be unreasonably withheld or delayed by MIDAS.
11. All other terms and conditions of the Agreement and of the License
Agreement not expressly modified by this Amendment shall remain
unchanged and continue in full force and effect.
Executed in Chicago, Illinois, U.S.A, on March 14, 2003.
MIDAS INTERNATIONAL CORPORATION MAGNETI MARELLI SERVICES S.p.A.
/s/ Xxxx X. Xxxxxxx /s/ Carlo Bondone
------------------------------- -------------------------------
Xxxx X. Xxxxxxx Carlo Bondone
President and Chief Director and Special Attorney
Executive Officer
3
MIDAS
AMENDMENTS TO THE LICENSE AGREEMENT
dated October 30, 1998
ROYALTIES REVISION
1. FIXED AMOUNTS
Below are the gross amounts due by Licensee to Licensor for each calendar
year in monthly instalments.
2000 = $ 6,50 MM 2004 = $ 8,82 MM
2001 = $ 7,35 MM 2005 = $ 9,26 MM
2002 = $ 7,80 MM 2006 = $ 9,72 MM
2003 = $ 8,40 MM 2007 = $10,20 MM
--------------------------------------------------------------------------------
2. ROYALTIES ON TURNOVER
2008 = 2,00% 2009 = 1,25% 1999 Countries
2,00% Turkey-Argentina-Germany
2010 = 1,25% 1999 Countries + Turkey 2011 = all Countries 1,25%
and Argentina
2,00% Germany
--------------------------------------------------------------------------------
3. NEW COUNTRIES
January 2000 = Argentina + Turkey entry fee = 765,425 $ +523,865 12 instalments from January 2000
January 2001 = Germany entry fee = 6,567,235$ 60 instalments from January 2001
4. MOROCCO + CHILE
entry fee to be agreed upon
Royalties 1,25%
Attachment B
------------
1. Africa
2. Albania
3. Belarus
4. Bosnia and Herzegovina
5. Bulgaria
6. Xxxxxxx
0. Xxxxx Xxxxxxxx
8. Denmark
9. Dominican Republic
10. Estonia
11. Finland
12. F.Y.R.O. Macedonia
13. Great Britain
14. Greece
15. Hungary
16. Iceland
17. Ireland
18. Latvia
19. Lithuania
20. Madagascar
21. Mauritius Island
22. Xxxxxxx
00. Xxxxxxxxxxx
24. Norway
25. Romania
26. Russia
27. Xxxxxxxx
00. Xxxxxxxx
29. Sweden
30. Tobago
31. Trinidad
32. Ukraine
33. Yugoslavia
34. Middle East (excluding Saudi Arabia)
4
