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Exhibit 10.2
DISTRIBUTORSHIP AGREEMENT
This Agreement is made this 12th day of August, 1996, by and between
Grafix Time Corporation doing business and known as Carrera Golf, a corporation
incorporated and existing by virtue of the laws of New York and having its
principal place of business at 0000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, hereafter "Carrera Golf", and Citizen Trading Co., Ltd., a
corporation incorporated and existing by virtue of the laws of Japan and having
its principal place of business at 00-0, Xxxxxxx-Xxxx 0-xxxxx, Xxxxx-xx, Xxxxx
000, Xxxxx, hereafter "Distributor".
Article I - Definitions
For purposes of this Agreement the following definitions shall apply:
"Product(s)" shall mean Golf clubs, Golf balls, Golf bags, Golf gloves, Golf
shoes, Golf headwear, Golf apparels and Golf-related accessories which are
manufactured, directly or by contract, by Carrera Golf from time to time.
"Point(s) of Sale" shall mean all places where the Products are sold within the
Territory.
"Trademark" shall mean all registered trademarks and other trademarks, trade
names, logos and symbols used by Carrera Golf in connection with the sale and
distribution of the Products (as hereinbefore defined) and as amended from time
to time by Carrera Golf.
"Territory" shall mean Japan.
CHAPTER 1: DISTRIBUTION
Article II - Appointment as Sole and Exclusive Distributor
Carrera Golf hereby designates and appoints the Distributor as its sole
and exclusive distributor of the Products within the Territory for distribution
through the Points of Sale subject to the terms and conditions of this
Agreement and the Distributor accepts such appointment and agrees to act as
sole and exclusive distributor.
Article III - Distributor's Obligation Referring to Marketing
1. Marketing Policy
The Distributor shall offer, sell and distribute the Products in
accordance with the marketing policy as from time to time established by mutual
agreement by the parties hereto for the Territory.
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The Distributor shall spend at least 10% of its annual purchases of the
Products (price ex Factory) in the advertising and promotion of the Products
according to the preceding subparagraph of this Article. Evidence of its
advertising and publicity costs shall be sent by the Distributor to Carrera Golf
within 45 days after the end of each calendar year. If during any given semester
the Distributor did not use the full amount of said 10%, according to the plans,
the remaining balance thereof is due to Carrera Golf which shall use its within
the following calendar year for additional publicity in the Territory. The
following costs are not considered as advertising or publicity expenses within
the meaning of this subparagraph without prior formal approval of Carrera Golf:
costs in connection with the after sales service, salaries and expenses for the
infrastructure of Distributor's publicity department, training of the staff in
the marketing department and expenses for publicity material available at
Carrera Golf, but bought elsewhere.
All press releases prepared by the Distributor shall be sent to Carrera
Golf for approval.
Article IV - Distributor's Obligation of Sale
1. Sales Organization
The Distributor agrees to establish and maintain a marketing organization
sufficient to develop the market and make sales of the Products at the Points of
Sale throughout the whole Territory.
2. Inventory
The Distributor agrees to maintain at all times during the term of this
Agreement an adequate level of inventory as to the quantity and the variety of
designs of the Products in order to meet the market demands of the Territory.
The Distributor agrees that its inventory shall at all times correspond to
at least the sales of thirty (30) days, but not more than ninety (90) days,
being understood that such amount of sales shall be calculated on the sales over
the period of the last six (6) months.
The Distributor agrees that Carrera Golf shall have the right to inspect
the Distributor's inventory by its duly authorized representatives during normal
business hours. Should the inventory not correspond to the market demands in the
Territory (by quantity and/or models), then the Distributor and Carrera Golf
shall agree together on the measures to be taken, being understood that all
special measures need to the formal approval of Carrera Golf.
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Article V Distributor's Obligation of Information
The Distributor shall supply Carrera Golf with all necessary information
regarding:
a) its orders in hand at the end of each month, split up into
different models;
b) its monthly turnover in volume;
c) its monthly stock situation (quantities) split up by models;
d) forecast by month for each collection;
e) analyses of existing Points-of-Sales and all the changes thereof;
f) changes of major customers;
g) report on Products replaced under warranty;
h) report on Products returned from the Points of Sale for other than
warranty reasons.
All information according to paragraphs (a)-(c) and (f)-(h) shall be sent
to Carrera Golf by facsimile by the tenth (10th) working day after the end of
each month at the latest.
In the phase of introduction of new models (during the first eight weeks
since the market launch), the information regarding the stock levels and the
sales through figures (see paragraphs (b) and (c) above) of the different
models shall be sent to Carrera Golf every month. The forecast according to
paragraph (d) has to be submitted to Carrera Golf within three (3) weeks after
presentation of any new collection to it by Carrera Golf.
Furthermore, the Distributor shall supply to Carrera Golf by facsimile by
the twentieth (20th) day after the end of each calendar quarter, information
regarding the general economic situation in the Territory and in particular
regarding the activities of the major competitors.
Article VI Distributor's Obligation Referring to Warranty Policy
1. Warranty
The products are sold to the end user subject to an international warranty
substantially in the form of Schedule A attached hereto, as amended from time
to time at the sole discretion of Carrera Golf covering a period of twelve (12)
months after their sale to the end user.
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The Distributor agrees to carry out all warranty obligations on the
Products free to charge to the end user and irrespective of the place (in or
out of the Territory) in which they were sold, provided, however, that all
charges and costs in connection with this warranty service shall be borne and
reimbursed by Carrera Golf.
The Distributor shall inform Carrera Golf about all relevant legal aspects
concerning the sale and distribution of the Products and relevant consumer
protection within the Territory.
Should any claim, demand or suit be made or filed against the Distributor
and/or its customers as a result of any defect, whether patent or latent, in
the Products, under the theory of breach of warranty, express or implied, or
under the theory of products liability, Carrera Golf shall indemnify and hold
the Distributor and/or its customers harmless for any claims, losses, damages,
suits, demands or proceedings.
Replacement products may be selected by Distributor within sixty (60) days
starting at the end of the calendar quarter from a special replacement list
published from time to time by Carrera Golf. It is understood that Carrera Golf
shall keep and maintain the same style or model of a defective Product at least
for the period covered by the Warranty. On request from Carrera Golf, the
Distributor shall return, at the expense of Carrera Golf, to Carrera Golf any
defective Product which was replaced. Carrera Golf may inspect the defective
Products in the Distributor's premises at any time during normal business hours
(quality audit).
The Distributor is obliged to analyze and keep records of all returns, and
in particular of the warranty returns, in order to secure and prove the quality
level of the Carrera Golf products.
2. After Sales Service
The Distributor agrees to establish and maintain an after sales and
replacement service in the Territory in accordance with after service rules to
be agreed upon by the parties hereto. Such service shall be competently
managed, efficient, prompt and reasonable in cost with regard to Products not
covered by the warranty. The Distributor also agrees to maintain, at its own
expense, an adequate stock of original spare parts.
Article VII - Distributor's Obligation to Refrain from Distribution or
Production of Competitive Products
The Distributor shall not without the prior written consent of Carrera
Golf (i) during the duration of this Agreement and one year after its
termination manufacture, distribute or sell in any manner whatsoever products
which are directly in competition with the Products, and (ii) during the
duration of the Agreement and after its termination use any design for any
Product whether subject or not of this Agreement.
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Article VIII - Distributor's Obligation of Procuring Import and Other Licenses
The Distributor agrees to obtain and maintain current and in effect during
the duration of this Agreement all import and other licenses required by
applicable law/or any political authority division or regulatory body to enable
the Distributor to carry on the business of importer and distributor of the
Products in the Territory.
Article IX - Carrera Golf's Obligation to Respect Sole Distributor
Carrera Golf agrees and undertakes to procure for the duration of this
Agreement that:
i) Carrera Golf will not appoint any other distributor for the
Products in the Territory; and
ii) it will not sell the Products in the Territory to any other
party in the Territory.
Article X - Carrera Golf's Obligation to make Deliveries
1. Terms of Delivery
Carrera Golf agrees that any order for Products by the Distributor,
(provided the ordered models are still manufactured or are for sale) will be
shipped and delivered ex factory within the period agreed to by the parties
hereto after receipt of the Distributor's order, and to inform the Distributor
in the event that the delivery terms must be extended.
It is agreed that the Distributor shall accept all deliveries made within
a thirty (30) day period after the agreed period of delivery provided that such
delivery will be made within the same calendar year. Should Carrera Golf not
make delivery within thirty (30) days after the agreed period of delivery, the
Distributor shall have the right to cancel such order. Alternatively, should
Carrera Golf not make delivery within forty-five (45) days after the agreed
period of delivery, the Distributor may, in its sole discretion, either cancel
such order or accept such order with a ten percent (10%) reduction in the price
of such order.
2. Pricing
All Products shipped by Carrera Golf shall be delivered ex factory and
invoiced in U.S. dollars. All costs for shipping, insurance, custom duties and
sales or other applicable taxes and any other fees shall be borne by the
Distributor.
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Prices for all Products shipped shall be those prevailing at the date of
shipment, and Carrera Golf reserves the right to modify its list prices for any
of the Products at any time, but will give the Distributor at least one (1)
month prior notice of any price changes. In case of price changes, the
Distributor shall have the right to request that the price applicable to the
order accepted by Carrera Golf shall not be affected by the said price changes
or to modify its orders, it being understood that the ordered quantities may
not be reduced more than fifty percent (50%). Additional quantities shall be
supplied if available.
3. Payment Condition
All payments required under this Agreement shall be made in U.S. dollars
within twenty (20) days following the end of the month in which the Products
are shipped. Said payments shall be made via wire transfer to a bank designated
by Carrera Golf. If the above payment terms are not met, Carrera Golf may
decide that the Products shall only be shipped against Irrevocable Letters of
Credit made through and confirmed by a bank acceptable to Carrera Golf and
issued seven (7) days prior to the date of shipment of the Products.
4. Standard Warranty and Other Usual Conditions
All orders of the Distributor are subject to the standard Warranty and
other usual conditions of Carrera Golf and such other terms and conditions of
Carrera Golf in effect of the time that each order is made by Distributor.
Article XI - Carrera Golf's Contribution to Direct Marketing Expenditure
Not later than forty-five (45) days after the end of each calendar
quarter, the Distributor shall submit to Carrera Golf a detailed statement of
all direct marketing, advertising and promotion expenses (excluding any in
store fixturing and displays) incurred during the calendar quarter ended
including but not restricted to invoices for such activities, copies of all
printed advertising with description of the media and any collateral materials
which might have been produced. Carrera Golf shall reimburse to the Distributor
such sum equal to one-half of the included expenses as described above, but not
exceeding five percent (5%) of the quarterly purchase of the Products by the
Distributor.
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CHAPTER 2: TRADEMARK
Article XII -- Right to use Trademark
Carrera Golf hereby grants to the Distributor the right during the
duration of this Agreement to use the Trademark in connection with the
distribution and sale of the Products in accordance with the terms of this
Agreement. Carrera Golf shall register the trademark within the Territory. The
parties acknowledge that Distributor has a master license to use the Carrera
brand for all types of goods except optical frames, sunglasses, helmets and
goggles.
Article XIII -- Distributor's Obligation in use and Defense of Trademark
The Distributor acknowledges Carrera Golf's right, title and interest in
and to the Trademark as it relates to the Products.
The Distributor shall not in any manner, directly or indirectly, represent
that it has ownership in the Trademark or the registration thereof and
acknowledges that the use of the Trademark shall not create to the Distributor
any right, title or interest in or to the Trademark subject to the terms and
conditions set forth herein.
The Distributor shall use the following footnote in his publicity and on
his promotion material
Carrera Golf(R)
such footnote being amended from time to time as Carrera Golf may request.
The Distributor must inform Carrera Golf at any time immediately if
products imitating Carrera Golf Products appear on the market or if other
products are sold in a manner causing unlawful damage to Carrera Golf or
endangering its interests.
The Distributor shall inform on as many details as possible, such as
relevant points of sale, promotion materials, products, photos, copies of
bills, manufacturer and distributors.
Carrera Golf will take appropriate steps, but the Distributor is obliged
to assist in any manner requested by Carrera Golf including to act and proceed
in its own name; the cost of such actions will be borne by Carrera Golf.
Carrera Golf has the permanent right to direct all actions and other legal
proceedings, to withdraw or to settle at any time.
During the duration of the Agreement and after termination of this
Agreement, the Distributor shall not register, use and/or allow registration
and/or use of the Carrera Golf Trademark and designs and copyrights for any
goods or services.
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In case any third party makes a claim against the Distributor and/or its
customers or users of the Products in connection with any of the Trademarks,
Carrera Golf shall settle the disputes at its expense and indemnify and hold
harmless the Distributor, its customers and the users from losses and damages to
be incurred due to the claims.
CHAPTER 3: DURATION, MISCELLANEOUS AND JURISDICTION
Article XIV - Effective Date and Duration of the Agreement
This Agreement shall remain in full force and effect for a period of time
ending on December 31, 2001 and thereafter shall be renewed for additional terms
of one (1) year unless (i) either party gives a notice to the other in writing
not less than six (6) months in advance not to renew this Agreement and (ii)
this Agreement is not earlier terminated for good cause as hereinafter defined.
Each party shall have the right at any time by giving notice to the other
party to terminate this Agreement forthwith in the event that:
(a) the other party commits a breach of its obligations under this
Agreement, and such breach continues for a period of thirty (30) days
after notice of such a breach has been given; or
(b) the other party stops its operation and activities or a substantial
part of it or enters into liquidation; or
(c) the other party enters into an arrangement with creditors, or makes an
assignment for the benefit of creditors, or becomes subject to a
bankruptcy, receivership or trusteeship proceeding, or suffers or
permits any execution of judgment to be levied on any of its assets,
or becomes insolvent or otherwise ceases to a going concern; or
(d) the other party shall assign, transfer, pledge, hypothecate, mortgage,
lease or similarly dispose of, not in the ordinary course of business,
all or substantially all of its assets.
In addition, Carrera Golf shall have the right at any time by giving
written notice to the Distributor to terminate this Agreement forthwith in the
event that:
(a) the Distributor merges with another company other than its controlling
shareholders; or
(b) the majority ownership of the actual shareholders of the Distributor
should pass to one or more new owners, except where Carrera Golf has
given its prior consent.
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Upon any termination of this Agreement, Carrera Golf shall have an option
to repurchase the stock of Products or a part of it according to the following
terms and conditions:
(a) Carrera Golf shall have the right to purchase the Products at the net
price invoiced by Carrera Golf minus the following write-downs:
0% - when delivered during the last six months however the handling-
fees will be charged to the Distributor
25% - when delivered during 6 to 12 months before termination
40% - 12-18 months before termination
60% - 18-24 months before termination
70% - 25 months and earlier
(b) The Distributor shall advise Carrera Golf within fifteen (15) days
after any expiration or termination of the Agreement of the amount,
composition and prices of its remaining inventory of Products and
Carrera Golf shall have thirty (30) days thereafter to exercise the
option granted herein by giving the Distributor written notice of
such exercise.
(c) If Carrera Golf does not exercise its purchase option as aforesaid,
the Distributor shall be free to sell its inventory of Products during
a period of six (6) months after Carrera's Golf obligation has lapsed.
Article XV - Miscellaneous Provisions
1. Relationship Between the Parties
It is understood and agreed that in giving effect to this Agreement the
Distributor shall not be or be deemed an agent or employee of Carrera Golf for
any purpose and that its relation to Carrera Golf shall be that of independent
contractor. Nothing in this Agreement shall constitute a partnership or joint
venture between the parties. The Distributor shall not have the right to enter
into contracts nor to incur expenses, warranties or liabilities on behalf of
Carrera Golf (except the international standard warranty of Carrera Golf).
2. Assignment
This Agreement shall bind the parties hereto and may not be assigned by
either party without the prior written consent of the other party.
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3. Notices
All notices required or permitted under this Agreement shall be given in
writing and shall be deemed effective when given by personal delivery or mail,
postage prepaid, registered or certified air mail, addressed to the parties at
their respective addresses as set forth below, or to such other address as each
party may specify by written notice from time to time:
Carrera Golf The Distributor:
0000 X. Xxxxxx Xxxxxx Citizen Trading Co., Ltd.
Suite 500 13-8, Higashi-Ueno 2-chome
Xxxxxx, XX 00000 Taito-ku, Tokyo 000
Xxxxx
4. Force Majeure
In the event that lawful performance of this Agreement or any part thereof
by either party hereby shall be rendered impossible by or as a consequence of
any law or any act of any government or political subdivision thereof having
jurisdiction over such party, such party shall not be considered in default by
reason of any failure to perform its obligation until a reasonable time after
such law or act has ceased.
Any delays in or failure by any party hereto in the performance of any
obligation hereunder shall be excused if and to the extent caused by
occurrences beyond such party's reasonable control, including Act of God,
strikes or other labor disturbances, war, whether declared or not, sabotage, or
any other cause which cannot be reasonably controlled by such party, until a
reasonable time after such occurrence has ended.
5. Entire Agreement
This Agreement contains the entire understanding between the parties
hereto and no amendment, modification or waiver of any provision hereof shall
be valid unless in writing and signed by both parties hereto.
Any previous agreement between the parties with respect to the subject
matter of this Agreement is hereby terminated.
In the event that any provision of this Agreement should be unlawful due
to any law, regulation or international treaty or other edicts this shall not
affect the other provisions of this Agreement. The parties agree that such
unlawful provision shall be deemed to be replaced by another lawful provision
which shall be as close as possible in purpose and economic content to the
unlawful provision.
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Article XVI -- Effects of Termination
Upon the effective date of termination of this Agreement for any reason
whatsoever except for the case in which the Distributor has the right to sell
its inventory of the Products after the termination, the Distributor will
immediately cease and desist from all use of the Trademark as it relates to the
Products and promptly return to Carrera Golf, or otherwise dispose of in
accordance with Carrera Golf's instructions all advertising and promotion
material, and all technical documents, instruction, catalogues, price lists and
similar material related to the Products.
Upon termination of this Agreement for any reason whatsoever except for the
breach by Carrera Golf of its obligations hereunder, no indemnity shall be due
or paid by Carrera Golf to the Distributor for (i) loss of profits, (ii)
goodwill, (iii) creation of clientele and/or market, (iv) advertising or sales
costs, (v) termination of employees of Distributor or (vi) like expenses.
Article XVII -- Applicable Law and Place of Jurisdiction
This Agreement shall be governed by, and interpreted and construed in
accordance with the laws of the State of New York.
Any and all disputes arising in connection with this Agreement shall be
submitted solely to the courts of the jurisdiction in which the defendant in
such action is located.
CARRERA GOLF:
By: /s/ [illegible]
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CITIZEN TRADING CO., LTD.
By: /s/ [illegible]
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Schedule A
WARRANTY
Carrera Golf warrants that the Carrera golf clubs will be free of defects
in materials and workmanship for one (1) year from the date of original retail
purchase. Any defect, malfunction or failure of these products to conform to
this warranty will be remedied in a manner later described as the responsibility
of Carrera Golf. Carrera Golf reserves the right to inspect returned
merchandise for evidence of misuse. When the product being warranted has been
out of the product line for a period of one (1) year or more, Carrera Golf
reserves the right to replace said product with the equivalent product.
RESPONSIBILITY OF CARRERA GOLF
Carrera Golf's responsibility under this warranty shall be to repair, at
its expense with no charge to the consumer, the products covered hereby which
are actually defective, malfunctioning or otherwise constitute a violation of
warranty. Carrera Golf's obligations of repair or replacement, or refund at its
option, are conditioned upon the consumer's return of the defective product to
Carrera Golf or a Carrera Golf Distributor. Repair by other than Carrera Golf
or a Carrera Golf Distributor voids this warranty.
RESPONSIBILITY OF THE CONSUMER
The consumer's sole responsibility under this warranty shall be, in the
instance of a warranty claim, to notify Carrera Golf or a Carrera Golf
Distributor of the defect, malfunction or other manner in which the terms of
the warranty is violated. The consumer may secure performance of the warranty
under obligations hereunder by, in writing:
1. Specifying the product involved (by model and registration number or
other factor sufficient for Carrera Golf to identify the product), where, when
and from whom the product was purchased.
2. Describing the nature of the defect, malfunction or other violation
of the warranty.
3. Delivering this notification, together with the defective product, to
a Carrera Distributor, or mailing the notification and defective product to:
Carrera Golf
0000 Xxxxxxx Xx. X.
Xxxxx 000
Xxxx Xxxxx, XX 00000
