1
FIRST AMENDMENT TO AMENDED AND RESTATED
TRADEMARK LICENSE AGREEMENT
Agreement made and entered into this 31st day of July, 1995 by
and between Amway Corporation ("Amway"), a corporation organized and existing
under the laws of the State of Michigan, U.S.A. and having its principal office
and place of business at 0000 Xxxxxx Xxxx Xxxx, Xxx, Xxxxxxxx 00000, X.X.X. and
Amway Japan Limited ("AJL"), a joint stock company organized and existing under
the laws of Japan and having its principal office and place of business at Xxxx
Xxxxx, 0-0, Xxxxxxxxxxx 0-xxxxx, Xxxxxx-Xx, Xxxxx 000, Xxxxx.
W I T N E S S E T H:
WHEREAS, Amway and AJL entered into an Amended and Restated
Trademark License Agreement dated December 16, 1993 ("Amended Agreement"),
which terminated and superseded the existing Trademark License Agreement dated
June 16, 1983, as amended (the "Prior Agreement"). All capitalized terms
herein shall have the definitions set forth in the Amended Agreement.
WHEREAS, pursuant to the Prior Agreement and the Amended
Agreement, Amway licensed certain trademarks, tradenames, servicemarks and
logos for use by AJL and also licensed certain product formulas to enable AJL
to manufacture or contract for the manufacture of certain products in Japan in
consideration of the payment of certain license fees by AJL, all as more fully
described in the Amended Agreement.
2
2
WHEREAS, the parties previously determined that it was to
their respective economic advantage to modify the provisions for payment of the
license fees by AJL as described in the Prior Agreement and now desire to
modify the payment provisions as described in Paragraphs 2(a) and 2(e) of the
Amended Agreement for a certain time period; and
WHEREAS, the parties now desire to document their agreement as
to the payment of royalties by AJL exclusively for the three (3) upcoming AJL
fiscal years 1996, 1997, 1998 (September 1, 1995 through August 31, 1998) in
accordance with the terms and conditions set forth below:
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, the parties agree as follows:
1. Exclusively for AJL's three (3) fiscal years ending August
31, 1996, 1997 and 1998 (the "Amended Years") the parties agree that, to the
extent described herein and subject to Paragraph 2 hereof, Paragraphs 2(a) and
2(e) of the Amended Agreement shall not be enforced. Instead, in lieu of
certain license fees payable by AJL with respect to sales of certain products
(as hereinafter described) for the Amended Years, AJL agrees to execute six
negotiable promissory notes (herein so called) payable to Amway at six month
intervals beginning February 28, 1996, in the form of attached Exhibit A, each
in the amount of Three Hundred Eleven Million Eighty Seven Thousand One Hundred
Eighty-Five Yen (Y.311,087,185) and Amway agrees to accept the Promissory Note
in satisfaction of such license fees. The
3
3
aggregate amount payable pursuant to the Promissory Notes (Y.1,866,523,108) is
the amount (discounted by 12%) calculated to be payable by AJL pursuant to
Paragraph 2(a) of the Amended Agreement based on a percentage of AJL's
cumulative estimated sales for certain products during the Amended Years
("Adjusted Royalty Base") as described in Attachment I attached hereto and
incorporated herein by reference for all purposes.
2. The parties agree to accept both the listing of individual
products and projected royalty bases set forth in Attachment I as the permanent
basis for assessment of the trademark license fees payable by AJL to Amway for
the Amended Years for said products, but only to the extent the actual
aggregate royalty bases for sales of such products during the Amended Years do
not exceed the Adjusted Royalty Base of Y.39,099,952,231. This Amendment shall
not apply or have any force or effect with respect to products that are not
included in Attachment I; rather AJL shall pay the royalty required pursuant to
Paragraph 2(a) of the Amended Agreement for any such products.
3. Notwithstanding any other provision in this Agreement, on
or before Xxxxxxx 00, 0000, XXX agrees to pay Amway an amount equal to the
royalty payable by it pursuant to Paragraph 2(a) of the Amended Agreement on
its actual cumulative Net Sales in excess of the Adjusted Royalty Base.
4. The Promissory Notes shall be signed by an authorized
representative of AJL and delivered by hand by AJL to
4
4
Amway at its principal office and place of business at Ada, Michigan on or
before the close of business on July 31, 1995.
5. The parties agree that this Amendment shall only apply to
the Amended Years; subject to further agreement of the parties, for all periods
thereafter Paragraphs 2(a) and 2(e) of the Amended Agreement shall be followed
and complied with in all respects.
6. In all other respects, the Amended Agreement shall remain
unchanged and in full force and effect.
7. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives as of the date first set
forth above.
AMWAY CORPORATION
By: /s/ Xxxxxxxx X. Call
-----------------------------------
Xxxxxxxx X. Call
Senior Vice President - Finance
and Chief Financial Officer
AMWAY JAPAN LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
President and Representative
Director
5
ATTACHMENTS
-----------
EXHIBIT A - Form of Negotiable Promissory Note from AJL to Amway
for Y.311,087,185
ATTACHMENT I - Projected Royalty Bases for Fiscal Years 1996 through
1998
6
EXHIBIT A
---------
NEGOTIABLE PROMISSORY NOTE
--------------------------
Y.311,087,185 July 31, 1995
For value received, Amway Japan Limited, a joint stock company
organized and existing under the laws of Japan, promises to pay to the order of
Amway Corporation, a Michigan corporation, the principal sum of Three Hundred
Eleven Million Eighty Seven Thousand One Hundred Eighty Five Yen
(Y.311,087,185) on February 28, 1996 without interest thereon.
All rights of Amway Corporation under this Promissory Note may
be assigned. The liability of Amway Japan Limited to any assignee shall be
immediate and absolute, and Amway Japan Limited agrees not to set up any claim
against the assignee as a defense, counterclaim or set-off to any action
brought by any assignee for the unpaid balance owed under this Promissory Note.
In the event of default hereunder, Amway Japan Limited agrees
to pay all costs of collection and enforcement including reasonable attorneys'
fees.
AMWAY JAPAN LIMITED
By:
----------------------------------
Xxxxxxx X. Xxxxxxx
President and Representative
Director
7
ATTACHMENT I (Page 1 of 4)
------------
Royalty Amount (Yen)
-------------------------------------------------------
FYE 96-98
Stock Projected 4% 8% MAX
Number Description Royalty Base Name Formula Total
------ ----------- ------------ ---- ------- -----
ARTISTRY II
-----------
A5619J Two-way Foundation 295,875,000 11,835,000 11,835,000 23,670,000
A7588J Face Powder 38,250,000 1,530,000 1,530,000 3,060,000
A4507J Pressed Powder Refill 14,625,000 585,000 585,000
A7589J Pressed Powder Compact 20,250,000 810,000 810,000 1,620,000
A7607J Mascara 11,865,000 474,600 474,600
A7610J Eyebrow Pencil 10,125,000 405,000 405,000
A7604J Eyeliner Pencil 6,075,000 243,000 243,000
A7590J Eyecolor 14,250,000 570,000 570,000
A5091J Lipcolor 67,800,000 2,712,000 2,712,000 5,424,000
A7628J Cheek Color 11,625,000 465,000 465,000 930,000
A7652J Two-way Case 14,531,250 581,250 581,250
A7653J Eyecolor Case 2,208,750 88,350 88,350
A7654J Cheek Color Case 1,511,250 60,450 60,450
A7655J Make-up Case 4,368,750 174,750 174,750
A7574J Base Controller 38,985,000 1,559,400 1,559,400 3,118,800
A5689J Moisture Foundation 162,000,000 6,480,000 6,480,000 12,960,000
E1210J Massage Cream 6,504,750,000 260,190,000 260,190,000 520,380,000
E8708J Facial Pack 2,960,325,000 118,413,000 118,413,000 236,826,000
A4099J Lip Brush 8,801,750 356,070 356,070
A4100J Cosmetic Brush Set 7,986,000 319,440 319,440
A4102J Eyelash Curler 3,996,000 159,840 159,840
A4103J Pencil Sharpener 1,720,500 68,820 68,820
A4104J Face Powder Brush 5,957,250 238,290 238,290
AD6231J Spatula pk25 157,500 6,300 6,300
AD6232J Blusher Brushes pk5 480,000 19,200 19,200
AD6233J Eyecolor Sponge Appl pk5 1,140,000 45,600 45,600
AD6234J Eyecolor Brush Appl pk5 360,000 14,400 14,400
AD6235J Pressed Powder Puff 1,272,000 50,880 50,880
AD6236J Loose Powder Puff 1,350,000 54,000 54,000
AD6237J Foundation Sponges 6,075,000 243,000 243,000
AD6238J Make-up Mirror pk4 1,835,000 77,400 77,400
AD6242J Spare Tip pk5 180,000 7,200 7,200
Disp. Lip Brush pk25 150,000 6,000 6,000
Disp. Mascara Brush pk25 22,500 900 900
Nailcolor Demonstrator 2,160,000 86,400 86,400
Lipcolor Starter Pack 5,460,000 218,400 218,400
ARTISTRY III
------------
A5752J Two-way Foundation 2,949,822,500 117,996,900 117,996,900 235,993,800
A5753J Two-way Foundation
A5754J Two-way Foundation
A5755J Two-way Foundation
A5756J Two-way Foundation
A5757J Two-way Foundation
A5758J Concealer 333,061,875 13,322,475 13,322,475
A5759J Concealer
A5760J Face Powder 1,283,572,500 51,342,900 51,342,900 102,685,800
A5761J Pressed Powder Refill 456,435,000 18,257,400 18,257,400
8
ATTACHMENT I (Page 2 of 4)
------------
Royalty Amount (Yen)
-------------------------------------------------------
FYE 96-98
Stock Projected 4% 8% MAX
Number Description Royalty Base Name Formula Total
------ ----------- ------------ ---- ------- -----
A5762J Pressed Powder Compact 719,066,250 28,762,650 28,762,650 57,525,300
A5763J Mascara 820,125,000 32,805,000 32,805,000
A5764J Mascara
A5765J Mascara
A5766J Eyebrow Pencil 589,657,500 23,586,300 23,586,300 47,172,600
A5767J Eyebrow Pencil
A5768J Eyeliner Pencil 406,792,500 16,271,700 16,271,700
A5769J Eyeliner Pencil
A5770J Eyeliner Pencil
A5771J Eyecolor 1,684,485,000 67,379,400 67,379,400
A5772J Eyecolor
A5773J Eyecolor
A5774J Eyecolor
A5775J Eyecolor
A5776J Eyecolor
A5777J Eyecolor
A5778J Eyecolor
A5779J Eyecolor
A5780J Eyecolor
A5781J Eyecolor
A5782J Eyecolor
A5783J Eyecolor
A5784J Eyecolor
A5785J Eyecolor
A5786J Eyecolor
A5787J Eyecolor
A5788J Eyecolor
A5789J Eyecolor
A5790J Eyecolor
A5791J Lipcolor 5,079,307,500 203,172,300 203,172,300
A5792J Lipcolor
A5793J Lipcolor
A5794J Lipcolor
A5795J Lipcolor
A5796J Lipcolor
A5797J Lipcolor
A5798J Lipcolor
A5799J Lipcolor
A5800J Lipcolor
A5801J Lipcolor
A5802J Lipcolor
A5803J Lipcolor
A5804J Lipcolor
A5805J Lipcolor
A5806J Lipcolor
A5807J Lipcolor
A5808J Lipcolor
A5809J Lipcolor
9
ATTACHMENT I (Page 3 of 4)
------------
Royalty Amount (Yen)
-------------------------------------------------------
FYE 96-98
Stock Projected 4% 8% MAX
Number Description Royalty Base Name Formula Total
------ ----------- ------------ ---- ------- -----
A5810J Lipcolor
A5811J Cheek Color 891,562,500 35,662,500 35,662,500
A5812J Cheek Color
A5813J Cheek Color
A5814J Cheek Color
A5819J Two-way Case 980,707,500 39,228,300 39,228,300
A5820J Eyecolor Case 150,300,000 6,012,000 6,012,000
A5821J Cheek Color Case 131,950,875 5,278,035 5,278,035
A5822J Make-up Case 452,343,750 18,093,750 18,093,750
A5838J Liquid Nail Color Remover 365,478,750 14,619,150 14,619,150 29,238,300
Lip Brush 193,050,000 7,722,000 7,722,000
Brush Case 99,791,250 3,991,650 3,991,650
Eyelash Curler 111,360,000 4,454,400 4,454,400
Pencil Sharpener 41,339,250 1,653,570 1,653,570
Face Powder Brush 191,700,000 7,668,000 7,668,000
Brush for Cheek Color Case 14,715,000 588,600 588,600
Eyecolor Tip for Eye C. Case 36,881,250 1,475,250 1,475,250
Spatula pk5 4,905,000 196,200 196,200
EyeC. Brush for EyeC. Case 78,468,750 3,138,750 3,138,750
Eyecolor Brush - lg. 70,245,000 2,809,800 2,809,800
Eyecolor Brush - sm. 51,097,500 2,043,900 2,043,900
Pressed Powder Puff pk6 32,091,000 1,283,640 1,283,640
Face Powder Puff pk5 30,243,750 1,209,750 1,209,750
Make-up Sponge-2 way pk5 171,900,000 6,876,000 6,876,000
Make-up Mirror 49,987,500 1,999,500 1,999,500
Eyeshadow Tip 36,506,250 1,460,250 1,460,250
Demo Case 795,937,500 31,837,500 31,837,500
Spare Gum Eyelash Curl pk 7,301,250 292,050 282,050
Cheek Brush 70,762,500 2,830,500 2,830,500
Eyebrow Brush 42,457,500 1,698,300 1,698,300
Eyebrow Brush & Comb 33,022,500 1,320,900 1,320,900
Tweezers 75,262,500 3,010,500 3,010,500
Eyebrow Scissors 91,237,500 3,649,500 3,649,500
Make-up Sponge-moi/liq fdn 58,868,750 2,358,750 2,358,750
E944J Disinfectant Spray 333,396,000 13,335,840 13,335,840 26,671,680
AD563J Replacement Nets 93,970,800 3,758,832 3,758,832
E1681J Soft Buds 822,816,000 32,912,640 32,912,640
AD5113J Drain Back Cap 61,866,000 2,474,640 2,474,640
E1407J Cal/Fiber Peach 1Ltr 344,802,218 13,792,089 13,792,089 27,584,177
E2455J Cal/Fiber Peach 200ml 570,039,750 22,801,590 22,801,590 45,603,180
E2607J Cal/Fiber Gr. Apple 1Ltr 450,818,212 18,032,728 18,032,728 36,065,457
E2608J Cal/Fiber Gr. Apple 200ml 861,749,550 34,469,982 34,469,982 68,939,964
E858J Tea Kettle 1,237,680,000 49,507,200 48,507,200
E1405J Coffee Maker/Grinder 1,031,557,500 41,262,300 41,262,300
E9863J Induction Range 601,065,000 24,042,600 24,042,600
E3110J Induction Range II 10,259,055,000 410,362,200 410,362,200
E2771J 4 Piece Knife Set 1,619,345,063 64,773,803 64,773,803
E1190J Beauty Bar Soap 860,625,000 34,425,000 34,425,000
10
ATTACHMENT I (Page 4 of 4)
Royalty Amount (Yen)
-------------------------------------------------------
FYE 96-98
Stock Projected 4% 8% MAX
Number Description Royalty Base Name Formula Total
------ ----------- ------------ ---- ------- -----
E1191J Beauty Bar Soap Gift Set 499,061,250 19,962,450 19,962,450
E2040J Citrus Fresh Bath Essence 704,860,950 28,194,438 28,194,438
E2041J Xxxxx Moist Bath Essence 1,028,500,950 41,140,038 41,140,038
E2042J Bath Essence Gift Set 839,336,400 33,573,456 33,573,456
--------------------------------------------------------------------------------
Total Projected Royalty Base 52,133,269,642 2,085,330,786 742,734,529 2,828,065,315
==================================================================================
Adjusted Royalty Base 39,099,952,231 1,563,888,089 557,050,887 2,121,048,986
(75% of above)
12% incentive reduction (4,691,994,268) (187,679,771) (66,846,108) (254,525,878)
--------------------------------------------------------------------------------
Total promissory note in yen 34,407,957,964 1,376,318,319 480,204,789 1,866,523,108
==================================================================================
