EXHIBIT 10.3
TRADEMARK USER AGREEMENT
BY AND BETWEEN
MAYTAG CORPORATION
AND
MAYTAG INTERNATIONAL, INC.
AND
NEWTECH CORPORATION
AND
NEWTECH (HONG KONG) LTD.
October 1993
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS .............................................. 1
ARTICLE TWO
USE OF LICENSED TRADEMARKS ............................... 2
ARTICLE THREE
SPECIAL COVENANTS REGARDING QUALITY CONTROL .............. 4
ARTICLE FOUR
PAYMENTS ................................................. 5
ARTICLE FIVE
RECORDS, AUDITING AND REPORTS ............................ 6
ARTICLE SIX
LICENSEE'S REPRESENTATIONS ............................... 7
ARTICLE SEVEN
REGISTRATION OF LICENSED TRADEMARKS ...................... 8
ARTICLE EIGHT
DURATION AND TERMINATION ................................. 9
ARTICLE NINE
INDEMNIFICATION AND RELEASE ............................. 12
ARTICLE TEN
RELATIONSHIPS BETWEEN THE PARTIES ....................... 12
ARTICLE ELEVEN
ARBITRATION ............................................. 12
ARTICLE TWELVE
MISCELLANEOUS ........................................... 13
SIGNATURE PAGE ................................................ 17
EXHIBIT A - Products .......................................... 18
EXHIBIT B - Licensed Trademarks ............................... 19
EXHIBIT C - Territory ......................................... 20
EXHIBIT D - Territory Extension ............................... 21
EXHIBIT E - Royalty ........................................... 22
EXHIBIT F - Trademark Service Fee ............................. 23
EXHIBIT G - Adjustments to Minimum Royalty ................. 24&25
TRADEMARK USER AGREEMENT
THIS AGREEMENT (this "Agreement"), made and entered into as of this first
day of October 1993, by and between Maytag Corporation and its wholly-owned
subsidiary Maytag International, Inc., companies organized and existing under
the laws of the State of Delaware, U.S.A., respectively having their main
offices and places of business at 000 Xxxx Xxxxxx Xxxxxx X. Xxxxxx, XX 00000
and at 0000 X. Xxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000, X.X.X. (collectively the
"Licensor"), and Newtech Corporation and Newtech (Hong Kong), Ltd. companies
respectively organized and existing under the laws of the State of Florida,
U.S.A. and Hong Kong, respectively having their main offices and places of
business at 0000 X. X. 000xx Xxxxxx, Xxxxx Xxxxx Xxxxx, XX 00000 and 000 Xxxxxx
Xxxx, Xxxxxxx, Xxxx Xxxx (collectively the "Licensee").
WITNESSETH:
WHEREAS, Licensor is the owner of certain trademarks and the goodwill
associated therewith, and Licensor is willing to permit Licensee to use such
trademarks in connection with the manufacturer, use and sale of certain
specified Products in accordance with the terms and conditions hereinafter set
forth:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereafter set forth, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement, the following terms have the following meanings:
A. "Contract Quarter" shall mean each consecutive calendar quarter
beginning on the date of commencement of the first Full Contract Year.
B. "Contract Year" shall mean either the Initial Contract Year or a Full
Contract Year. "Initial Contract Year" shall mean the period of time from the
effective date to the first December 31 following such date. A "Full Contract
Year" shall mean each successive twelve month period following the Initial
Contract Year, such Full Contract Year to commence on January 1 and to continue
through the following December 31.
C. "Effective Date" means the date on which this Agreement is executed by
all parties to the Agreement.
D. "Products" shall mean the products listed in Exhibit A to this
Agreement, and by this reference made a part hereof, bearing the Licensed
Trademarks. The products listed in Exhibit A to this Agreement may be changed
from time to time and products may be added or deleted, all by mutual agreement
in writing between the parties hereto. Any products subsequently added to
Exhibit A to this Agreement shall also be "Products".
E. "Licensed Trademarks" shall mean the trade names, trademarks and service
marks specified in Exhibit B to this Agreement, and by this reference made a
part hereof, whether or not such trade names, trademarks and service marks are
registered or whether or not registrations have been applied for in any
particular jurisdiction within the Territory. The items listed in Exhibit B to
this Agreement may be changed from time to time and items may be added or
deleted, all by mutual agreement in writing between the parties hereto.
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F. "Net Selling Price" shall mean the gross invoice price of any Products
bearing one of the Licensed Trademarks sold, used or otherwise disposed of by
License in bona fide, commercial transactions with third parties, less freight,
import duties, and taxes assessed against such sales, and less advertising and
promotional allowances equal to [*****] of the gross invoice price. In the case
of any Products not sold in a bona fide commercial transaction with a third
party, the "Net Selling Price" shall be based upon Licensee's average net
invoice price for the particular Products during the Royalty Period. To the
extent deductions for freight, import duties, and taxes are not itemized on the
invoice, Licensee shall provide documentation to support the deductions. Upon
Licensor's request, Licensee shall also provide summaries of its expenditures
for advertising and promotional allowances. In the event Licensee's expenditures
for advertising and promotional allowances are less than [*****] of the gross
invoice price for the period covered by Licensor's request, Licensor's sole
remedy shall be a recalculation of the Royalty for the applicable period based
upon a recalculated Net Selling Price using the actual advertising and
promotional allowances expended by Licensee (rather than the [*****] flat
deduction provided above).
G. "Royalty" shall have the meaning set forth in paragraph A of Article
Four.
H. "Royalty Period" shall have the meaning set forth in paragraph A of
Article Four.
I. "Territory" shall mean the countries specified in Exhibit C to this
Agreement. ("Territory" shall also include any other geographic territory as may
be included pursuant to Article 2 of this Agreement or as may be agreed to in
writing by Licensor from time to time in Licensor's sole discretion.)
ARTICLE TWO
USE OF LICENSED TRADEMARKS
X. XXXXX. Licensor hereby grants to Licensee upon the terms and conditions
specified in this Agreement an exclusive, nontransferable right and license to
use the Licensed Trademarks during the term of this Agreement on or in
connection with Products sold by Licensee within the Territory. Whereas Licensee
will be contracting for the manufacture of Products, the scope of this license
is eextended to those facilities contracted by Licensee to produce the Products.
Licensee shall provide to Licensor a list of all production facilities it
intends to use to produce or manufacture the Products, and shall advise Licensor
in writing of any changes in the facilities.
B. EXTENSION OF TERRITORY. In addition to the countries specified in
Exhibit C, Licensor agrees to grant to Licensee a right of first refusal to
extend the Territory to those countries specified in Exhibit D to this
Agreement. Upon Licensor's determination that it is in a position to license the
Licensed Trademarks in a country specified in Exhibit D, Licensor shall notify
Licensee in writing of the country's availability for inclusion in the
Territory. Such country(xxxx) shall be included in the Territory unless Licensee
gives written notice within 45 days of its receipt of Licensor's notice in the
Territory ("Rejection Notice"). Licensee's Rejection Notice shall eliminate
Licensee's right of the first refusal as to such country(xxxx). Unless Licensee
shall have sent a Rejection Notice, the Trademark Service Fee (Exhibit F) and
the minimum Royalty necessary to qualify for the first and second renewal terms
as provided in Article Eight shall be increased as specified in Exhibit G.
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CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
C. RESERVED USE. Licensor reserves unto itself the right to use or license
to third parties to use in the Territory the Licensed Trademarks on all products
not listed in Exhibit A, as well as any other trademark belonging to Licensor,
notwithstanding paragraph A of this Article Two However, prior to the selling or
licensing of products listed in Exhibit A bearing another of Licensor's
trademarks within the Territory, Licensor shall provide written notice to
Licensee of its intent.
D. NO TRANSFER, CONFUSION OR ALTERATION. Licensee shall not subcontract,
sublicense or authorize any third party, other than distributors, wholesalers
and retailers purchasing Products from Licensee for sale in the Territory
pursuant to this Agreement, to use the Licensed Trademarks without the prior
written consent of Licensor and shall not manufacture, use, sell or deal in any
product or service under any trade name, trademarks, service xxxx or other
designation which is likely to cause confusion with the Licensed Trademarks.
Licensee shall use the Licensed Trademarks only in a manner so as not to deceive
the public. All Products not bearing the Licensed Trademarks marketed or sold by
Licensee shall be reasonably distinguishable from the Products bearing the
Licensed Trademarks.
E. MANNER OF USE PRIOR APPROVAL. Licensee shall be entitled to use the
Licensed Trademarks on Licensee's Products, letterhead, invoices and all
advertising and promotional material including introduction books or other
literature relating to the use of the Products but only in such form and in such
general manner as shall have been previously approved by Licensor in writing.
All representations of the Licensed Trademarks to be used by Licensee shall
first be submitted to Licensor for approval of design and color. Licensee shall
comply with any other reasonable labeling and marking requirements that Licensor
may prescribe from time to time on Products manufactured subsequent to
Licensor's modification.
F. ACKNOWLEDGEMENT OF LICENSOR'S OWNERSHIP. Licensee acknowledges and
agrees that Licensor is the exclusive owner in the Territory and elsewhere of
the Licensed Trademarks and of all the goodwill relating thereto, and Licensee
agrees that all rights to the Licensed Trademarks shall remain vested in
Licensor both during the term of this Agreement and thereafter in the Territory
and elsewhere. Except for the rights granted under this Agreement, Licensee
shall not represent that it has any right or title to the Licensed Trademarks,
to any trade name, trademark or service xxxx incorporating the Licensed
Trademarks or any portion thereof or to the registration thereto and shall not
at any time claim that the use of such Licensed Trademarks by it has created any
right, title or interest on its part to the Licensed Trademarks. In each
instance when it uses the Licensed Trademarks, in order to maintain the validity
of the Licensed Trademarks, Licensee shall identify, by appropriate means
consistent with applicable legal requirements, that the Licensed Trademarks
belong to Licensor. Licensee agrees to incorporate the language of this
paragraph, or similar language acknowledging Licensor's ownership of the
Licensed Trademarks, in all contracts for the production and distribution of the
Products.
G. CONTROL OF LITIGATION. Nothing in this Agreement shall be construed as
granting to Licensee any right to take any action either in its own name or in
Licensor's name, unless specifically approved in writing by Licensor prior to
the initiation of any action, against third parties for any passing-off by any
third party of products as the products of Licensor, whether by the use of a
similar trademark or imitation or otherwise, or of any infringement or
unauthorized use of any of the Licensed Trademarks or any of Licensor's
trademark registrations for the Licensed Trademarks. Licensee shall, however,
promptly inform Licensor of instances of
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such passing-off, infringement or use that come to its attention, Licensor,
in its sole discretion, shall determine what action, if any, is to be taken in
each such instance and by whom, but shall proceed in good faith and make
reasonable efforts to protect its trademark rights and restrain infringement or
unauthorized use of the Licensed Trademarks. Except to the extent specified in
Article 7 or otherwise expressly agreed by Licensor, any damages recovered in
any action so taken shall be the property of Licensor. From any damages so
received, Licensor agrees to give credit to Licensee against any amounts owed or
which may become due from Licensee based upon the reasonable determination of
Licensor of the damages caused to Licensee based on the rights granted to
Licensee pursuant to this Agreement.
H. LIMITATION. Except as specifically permitted by this Agreement, the
license granted by Licensor to Licensee under this Article Two shall be
nondivisible, nontransferable and nonassignable, and without the right to grant
sublicenses thereunder, except with the prior written consent of Licensor.
ARTICLE THREE
SPECIAL COVENANTS REGARDING QUALITY CONTROL
A. STANDARDS OF QUALITY. Licensee agrees that the nature and quality of all
goods sold by Licensee in connection with the Licensed Trademarks shall conform
to reasonable commercial standards set by and under the control of Licensor with
respect to each country in the Territory. Licensee agrees that it will use the
Licensed Trademarks in connection with Licensee's business. Licensee agrees that
the Product will be positioned generally under normal market conditions above
comparable products bearing Licensee's NEWTECH trademark. In addition Licensee
shall position the Products in each country within the Territory to be generally
consistent under normal market conditions with Licensor's established
positioning of its white goods distribution for the Licensed Trademarks within
such country. Licensee shall provide Licensor its product development and
quality control programs applicable to all goods sold pursuant to this
Agreement.
B. MAINTENANCE OF QUALITY. Licensee shall cooperate with Licensor to
facilitate Licensor's control of the quality of the Products as required by
Paragraph A of this Article and shall permit Licensor's representatives to enter
Licensee's places of business from time to time at Licensor's request to: (i)
ascertain whether the terms and conditions of this Agreement are being complied
with, (ii) inspect the facilities and procedures used by Licensee in the
manufacture and packaging of the Products and (iii) test for compliance with
standards of quality.
C. GOODWILL. Licensee agrees to conduct its business according to regularly
accepted commercial standards and use its best efforts to create, maintain and
promote Licensor's goodwill in connection with the Products and the Licensed
Trademarks. Licensee shall use its best efforts to promote the sale and
distribution of the Products in the Territory and, upon written request, shall
furnish Licensor with a report and forecast of market conditions and
developments.
D. PRODUCTS SAFETY. Licensee shall inform Licensor as soon as possible of
any material allegation or actual fault, material failure or defect in any of
the Products which might foreseeably give rise to concerns for health or safety
as a consequence of the use of the Products. Licensee shall (at its sole
expense) take all such reasonable action as deemed necessary in the interests of
consumer safety (including total product recall) to meet the requirements of
local safety standards.
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For the purpose of ensuring that the Products conform to the standards of safety
and quality of the Products sold under the Trademarks as required by paragraph A
of this Article 3, Licensee shall, when reasonably requested by Licensor from
time to time, supply performance and failure data and samples of the Products to
Licensor, at Licensee's expense, for the purposes of inspection and testing.
ARTICLE FOUR
PAYMENTS
In consideration of the rights and licenses granted by Licensor to Licensee
hereunder, Licensee shall pay to Licensor the following amounts in the manner
specified below:
A. ROYALTY. Licensee shall pay to Licensor a royalty fee (the "Royalty")
for all Products sold, used or otherwise disposed of by Licensee. The Royalty
shall be calculated by multiplying (i) the Net Selling Price of all Products
bearing the Licensed Trademark sold, used or otherwise disposed of by Licensee
by (ii) the applicable Royalty Percentage set forth in Exhibit E during the
preceding calendar year.
Such Royalty shall be calculated and paid with respect to the Initial Contract
Year and each Contract Quarter Year thereafter (each such period being
hereinafter referred to as a "Royalty Period") based upon statements of
Licensee. Licensee shall provide to Licensor all supporting documents and
calculations that Licensor may require to support the calculation of the
Royalty, including a written report stating the number and the types of the
Products sold, used or disposed by Licensee under this Agreement during the
immediately preceding Royalty Period. The Royalty, and the documentation and
statements supporting such Royalty, shall be delivered to Licensor no later than
60 days after the expiration of the applicable Royalty Period to which they
relate.
B. TRADEMARK SERVICE FEE. Licensee shall pay to Licensor within 15 days of
the Effective Date of this Agreement an initial trademark service fee in the
amount of [*****] of which shall be applied to the Royalty owed by Licensee with
respect to the Initial Contract Year and the first Full Contract Year. Licensee
shall also pay to Licensor within 60 days of the end of each Full Contract Year
the difference, if any, in the amount of Royalty payable pursuant to Paragraph A
of this Article Four and the amount for such Full Contract Year specified in
Exhibit F of this Agreement.
C. CURRENCY; CONVERSION. All payments due under this Article Four shall be
made in United States currency. Payments due under paragraph A of this Article
Four shall be converted into U.S. dollars at the rate of exchange for sales of
U.S dollars prevailing in New York, New York, USA on the last business day of
the Royalty Period with respect to which such payment relates.
D. METHOD OF PAYMENT. All payments required to be made to Licensor
hereunder shall be paid to Licensor by Licensee by bank wire transfer (or other
means acceptable to Licensor) to Maytag International's Account No. 242-l50-1 at
Xxxxxx Trust & Savings Bank, Xxxxxxx, XX 00000 XXX, Electronic Wire Transfer
Code HAT RUS 44, ABA # 000000000.
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CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
E. TAXES, DUTIES AND WITHHOLDINGS. Any customs, duties, taxes (except as
provided in the following grammatical paragraph) or any similar charges that
may be incurred in the Territory with respect to this Agreement and the
manufacture, sale or use of Products shall be paid by Licensee.
Notwithstanding the foregoing, if the government of any jurisdiction in the
Territory imposes any income or similar taxes for such payment on Licensor and
requires that such taxes shall be withheld by Licensee, Licensee shall be and is
hereby authorized to do so. Licensee shall promptly transmit to Licensor tax
receipts issued by the appropriate tax authorities in respect of such taxes so
withheld and remitted as well as the applicable provisions of law, in English,
so as to enable Licensor to support a claim for credit against income tax
payable by Licensor. In the event Licensee is required to make such a
withholding from any payment to Licensor for tax purposes but Licensee fails to
provide a receipt to Licensor as prescribed in this paragraph E of Article Four,
then such payment to Licensor shall be increased to an amount equal to the
payment due to Licensor determined without regard to this paragraph.
F. INTEREST ON OVERDUE AMOUNTS. Any amount payable hereunder that is not
paid by Licensee when due shall bear interest until paid at three percent over
the per annum rate of interest announced or set from time to time by Citibank,
NA as its Base Rate as in effect in New York, New York, USA. Licensor shall also
be entitled to treat any such failure as a default hereunder.
ARTICLE FIVE
RECORDS, AUDITING AND REPORTS
A. LICENSEE TO MAINTAIN RECORDS. Licensee shall keep at its usual place of
business materially complete and correct sales records in accordance with
generally accepted accounting principles containing information in reasonable
detail from which amounts due to Licensor under this Agreement can be readily
calculated, including deductions to the Net Selling Price of Products.
B. ROYALTY REPORT. Licensee shall deliver to Licensor within 60 days after
the end of each Royalty Period during the tenn of this Agreement, a royalty
report, showing the nature, quantity, Net Selling Price, Royalties due (which
shall be paid at the time of delivery of such report) and other items necessary
to determine the Royalty with respect to Products bearing of the Licensed
Trademark used, sold or otherwise disposed of by Licensee during the applicable
Royalty Period.
Each such royalty report shall be signed by a responsible officer of
Licensee. If no Royalty is due and payable for the Royalty Period covered, the
report shall so state. The initial royalty report shall cover the Initial
Contract Year and shall be due on March 31, 1994.
C. ANNUAL FINANCIAL STATEMENT. Within 90 days after the end of each fiscal
year of License, Licensee shall furnish Licensor with annual balance sheets and
profit and loss statements of Licensee prepared in accordance with U.S.
generally accepted accounting principles and reported on by Licensee's
independent auditors.
D. AUDIT AND INSPECTION. Licensor shall have the right, at its option, to
inspect, review and audit (or have its representatives inspect, review and
audit), at reasonable business hours of Licensee, all books, records, documents
and other data
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of Licensee for the purpose of computing the Royalty due under paragraph A of
Article Four. Licensee shall give Licensor or any such representative reasonable
access to Licensee's premises and books, records, documents and other data.
ARTICLE SIX
LICENSEE'S REPRESENTATIONS
As an inducement to Licensor to enter into this Agreement, Licensee represents
and warrants to Licensor and agrees as follow:
A. ORGANIZATION AND AUTHORITY. Licensee i are corporations duly organized
and existing under the laws of Florida and Hong Kong respectively, and has full
power and authority to conduct its business as proposed to be conducted and to
enter into and perform this Agreement. Licensee, to the extent legally required,
is fully qualified and duly registered and has obtained all permits, licenses
and registrations necessary, under the laws of each jurisdiction in the
Territory or elsewhere, to perform its duties and obligations under this
Agreement and it will remain so qualified and registered and will maintain such
permits, licenses and registrations during the term of this Agreement.
B. AUTHORIZATION OF AGREEMENT. The executor, delivery and performance of
this Agreement has been duly and validly authorized and approved by the Boards
of Directors of Licensee and no further authorization or consent of the Licensee
or any of the stockholders of Licensee is required.
C. NO CONFLICT. Neither the execution and delivery of this Agreement nor
its performance will conflict with or result in a breach of the terms,
conditions or provisions of the charter or by-laws of Licensee, or any contract,
agreement, mortgage or other instrument or obligation of any nature to which
Licensee is a party or is bound; and neither the execution and delivery of this
Agreement nor its performance will contravene or violate any statute or any
judicial or governmental regulation, order, injunction, judgement or decree and
Licensee has received no notice which is inconsistent with the foregoing.
D. GOVERNMENT APPROVALS. In the performance of its duties and obligations
under this Agreement Licensee, to the extent legally required, shall comply with
all applicable laws and regulations and obtain all appropriate government
approvals pertaining to the sale, distribution, manufacturing and advertising of
the Products.
E. COMPLIANCE WITH LAWS. Licensee is in compliance, and during the term of
this Agreement Licensee and its employees and agents will comply, with all laws,
rules and regulations applicable to Licensee or the conduct of its business,
pertaining to the performance of its duties and obligations under this
Agreement.
F. U.S. FOREIGN CORRUPT PRACTICES ACT. Licensee and Licensor acknowledge
that the parties are corporations organized under the laws of the United States
of America and that an essential term and condition of entering into this
Agreement is that neither Licensee nor Licensor will take any action which might
cause the other party to be in violation of United States law. Accordingly, the
Licensee and Licensor represent, warrant and agree that they shall comply with
the U.S. Foreign Corrupt Practices Act, as amended from time to time, including,
to the extent then required by applicable law, the following provisions:
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(i) neither it nor any of its employees or agents have made or will
make use of the mails or any means or instrumentality of
interstate or foreign commerce corruptly in furtherance of an
offer, payment, promise to pay, or authorization of the payment
of any money, or offer, gift; promise to give, or authorization
of the giving of anything of value to any foreign official for
purposes of influencing any act or decision of such foreign
official in his official capacity, including a decision to fail
to perform his official functions or inducing such foreign
official to use his influence with a foreign government or
instrumentality thereof, to affect or influence any act or
decision of such government, or instrumentality in order to
assist any person in obtaining or retaining business for or with,
or directing business to any person; and
(ii) neither it nor any of its employees or agents have made or will
make use of the mails or any means or instrumentality of
interstate or foreign commerce corruptly in furtherance of an
offer, payment, promise to pay, or authorization of the payment
of any money, or offer, gift, promise to give, or authorization
of the giving of anything of value to any foreign political party
or official thereof or any candidate for foreign political office
for purposes of influencing any act or decision of such party,
official, or candidate in its or his official capacity, including
a decision to fail to perform its or his official functions or
inducing such party, official, or candidate to use its or his
influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or
instrumentality in order to assist any person in obtaining or
retaining business for or with, or directing business to any
person, provided that nothing contained in this paragraph shall
be construed to prohibit acts allowed by the U.S. Foreign Corrupt
Practices Act.
G. LITIGATION. There are no judgments, liens, actions, or proceedings
pending or threatened against Licensee, or any of its officers or directors, and
neither Licensee nor its officers or directors have been convicted of any crime.
ARTICLE SEVEN
REGISTRATION OF LICENSED TRADEMARKS
A. To the extent the Licensed Trademarks are not presently registered for
the Products in countries within the Territory, Licensor agrees to proceed in
good faith and make reasonable efforts to obtain such registrations and to
maintain in force its current registrations at its sole cost. Licensee shall
render to Licensor reasonable assistance in obtaining and maintaining such
registrations.
B. Nothing contained in this Article Seven or this Agreement shall be
construed as:
(i) a warranty or representation by Licensor that any manufacture,
sale or use of the Products hereunder will be free from
infringement of trademarks owned by anyone other than Licensor,
(ii) a warranty or representation by Licensor as to the validity or
scope of any Licensed Trademark;
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(iii) a release for any infringement prior to the date hereof.
C. In the event Licensor's rights to the Licensed Trademarks in any of the
countries of the Territory specified in Exhibit C are defective or invalidated
so as to prohibit Licensee's sale of Products in such country not caused by
actions of Licensee inconsistent with the terms of this Agreement, Licensee's
sole recourse shall be:
(i) a reduction as specified in Exhibit G to this Agreement, in the
applicable Trademark Service Fee (Exhibit F, and a reduction in
the minimum Royalty necessary to qualify for the first and second
five year renewal term as provided in Article Eight; and
(ii) in the event the prohibition on Licensee's sales results in
Licensee's possession of inventory of Products within such
country which it cannot sell, Licensor shall pay one-half of
Licensee's actual costs of relocating such inventory to another
country where the inventory can be sold, plus one-half of the
Licensee's actual losses, if any, (but not anticipated profits)
on the sale of the relocated Products. If the prohibition on
Licensee's sales results in an impoundment of Licensee's
inventory for a period greater than 90 days, Licensor shall pay
to Licensee one-half of Licensee's net cost of the impounded
inventory. Upon release of the inventory from impoundment,
Licensee shall reimburse Licensor for one-half of the value of
the inventory at the time of the release. If the inventory cannot
be sold within the country of impoundment, Licensee's
reimbursement to Licensor shall be reduced by one-half of
Licensee's actual costs of relocating such inventory to another
country where the inventory can be sold. For purposes of this
paragraph Licensor's obligations to pay any of Licensee's costs
specifically exclude any claim for lost profits or sales.
D. In the event Licensor's rights to the Licensed Trademarks are defective
or invalidated, or have not become available as contemplated in paragraph B of
Article 2, or through governmental action which prohibits sales or imposes a
tariff in excess of [*****] of the value of the Products so as to prohibit
Licensee's sale of Products in three out of the four countries of Argentina,
Brazil, Mexico and Venezuela, provided the prohibition is not caused by actions
of Licensee inconsistent with the terms of this Agreement, Licensee shall have
the right to terminate the Agreement without penalty for a period of six months
from the date Licensee became aware of the qualifying invalidation by providing
written notice to Licensor. Licensee's failure to exercise its rights to
terminate the Agreement within this period shall waive Licensee's termination
rights for the qualifying invalidation, but shall not terminate any rights for
future qualifying invalidations.
ARTICLE EIGHT
DURATION AND TERMINATION
A. BASIC TERM; RENEWALS. The basic term of this Agreement shall be for ten
(10) Full Contract Years from the Effective Date, unless sooner terminated as
provided in this Agreement. This Agreement shall be subject to renewal for:
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CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
(i) an additional term of five (5) Fu11 Contract Years provided the
average Royalty paid by Licensee for the eighth (8th) and ninth
(9th) Full Contract Year exceeds [*****] or as amended by the
operation of Articles Two and Seven and Exhibit G, and Licensee
provides written notice to Licensor of its intent to renew the
Agreement on or before June 30, 2003; and
(ii) a second additional term of five (5) Full Contract Years pro-
vided the average Royalty paid by Licensee for the thirteenth
(13th) and fourteenth (14th) Full Contract Year exceeds
[*****] or as amended by the operation of Articles Two and
Seven and Exhibit G, and Licensee provides written notice to
Licensor of its intent to renew the Agreement on or before June
30, 2008.
At the end of the basic term or the renewal term, this Agreement shall
expire automatically without notice.
B. In the event the first or second additional five-year term is not
granted due to Licensee's failure to meet the minimum Royalty Payment, Licensor
grants to Licensee a right of first refusal for a period of one year from the
end of the term of this Agreement, for any licensing agreement for Products
bearing the Licensed Trademarks within the Territory as in effect at the end of
the term of this Agreement. Licensor shall provide written notice of its intent
to enter into such an agreement, including the terms of such agreement. Licensee
shall have a period of ten days from the date of its receipt of Licensor's
notice, to accept the terms by providing written notice to Licensor of its
acceptance. Failure by Licensee to provide its notice of acceptance within the
ten day period shall extinguish Licensee's right of refusal for the licensing
agreement so noticed.
C. PREMATURE TERMINATION. In addition to the other provisions of this
Agreement and any other available remedies, either party may terminate this
Agreement (either in its entirely or with respect to specified Products) in the
event of a default by the other party upon written notice of termination to the
other party (given after the expiration of any applicable grace period specified
below), which termination shall become effective upon receipt of such notice of
termination.
For purposes of this Agreement, a "default by Licensee" shall mean:
(i) a challenge by Licensee to Licensor's ownership of the Licensed
Trademarks;
(ii) the impairment by Licensee of the Licensed Trademarks, and
failure by Licensee to cure such default within thirty days after
written notice by Licensor specifying the required action;
(iii) Licensee's becoming insolvent or bankrupt under the laws of the
United States, becoming legally obligated to cease its business
or to wind up its affairs and to go into liquidation, or
Licensee's commencing voluntary liquidation proceedings;
10
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
(iv) a change in control of Licensee within the first 36 months of
this Agreement which results in either Xxxx Xxxxxx'x loss of the
title of President or day-to-day control of Licensee.
(v) the failure by Licensee to pay when due all sums payable to
Licensor under Article Four and failure by Licensee to cure such
default within 15 days after written notice of such default from
the Licensor to the Licensee;
(vi) a default by Licensee under any other provision of this Agreement
or under any other agreement between Licensee and Licensor or any
of its affiliated companies and failure by Licensee to cure such
default within 45 days after written notice of such default from
the Licensor to the Licensee;
For purposes of this Agreement a "default by Licensor" shall mean:
(i) a default by Licensor under any provision of this Agreement other
than Article Seven and failure by Licensor to cure such default
within 45 days after written notice of such default from the
Licensee to the Licensor.
Licensee's sole recourse for any loss of Licensor's rights to the Licensed
Trademarks in the Territory is established in paragraph C of Article Seven.
D. FAILURE TO USE LICENSED TRADEMARKS. In the event Licensee fails to use
the Licensed Trademarks in any particular country of the Territory for a period
of two (2) years anytime during the term of this Agreement, unless such non-use
is caused by governmental restrictions or reasonable legal concerns relating to
the validity of the Licensed Trademark in such country Licensor may remove such
country or countries from the Territory by providing written notice to Licensee
of its decision and by reducing the applicable Trademark Service Fee as
specified in Exhibit G.
E. EARLY TERMINATION BY LICENSEE. On or after March 1, 1996, Licensee shall
have the right to terminate is Agreement without cause by providing written
notice to Licensor of its decision to terminate this Agreement and by paying to
Licensor a termination fee equal to the Trademark Service Fee specified in
Exhibit F which would have been payable in the Contract Year following the
effective date of the termination. In the event the effective date of the
termination is other than the end of a Contract Year the termination fee shall
be calculated by proportioning the two applicable Trademark Service Fees on the
basis of one full calendar year.
Example: In the event Licensee terminates this Agreement
effective November 30, 1998, the termination fee would be
[*****].
F. EFFECT OF TERMINATION. Upon termination of this Agreement either by
expiration or otherwise, Licensee shall immediately:
(i) cease all use of the Licensed Trademarks; except Licensee
shall have a period of [*****] to sell or otherwise dispose
of its inventory of Products consistent with the terms of
this Agreement which period
11
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
may be extended for up to an additional [*****] provided
that Licensee can reasonably demonstrate to Licensor valid
business reasons for the extension, and that Licensee is not
in default of any other term of this Agreement; and
(ii) prepare a final accounting and pay all money accrued or due
and payable by Licensee to Licensor hereunder within [*****]
of such termination, or the period established in paragraph
F (i) of this Article 8
Expiration or termination of this Agreement for any reason shall not in any
case operate to relieve either party from its responsibility to fulfill any
obligations under this Agreement which shall have accrued to such party prior to
the time of expiration or termination.
At all times after the termination of this Agreement, whether by expiration
or otherwise, Licensee shall:
(i) not use any trade name, trademark, service xxxx, word,
design, slogan or legend associated with Licensor or which
so nearly resembles any of the Licensed Trademarks as to be
likely to deceive or cause confusion; and
(ii) not hold forth to third parties in any manner whatsoever
that Licensee has any connection with Licensor.
ARTICLE NINE
INDEMNIFICATION AND RELEASE
Licensee shall be solely responsible for, and shall indemnify and hold
Licensor harmless against and from, any liabilities, claims, damages, or
expenses (including attorneys fees) arising out of Licensee's use of the
Licensed Trademarks, or Licensee's manufacture, distribution, service, testing,
use or sale of the Products, except to the extent such liabilities arise from a
defect or invalidation of Licensor's rights to the Licensed Trademarks not
caused by actions of Licensee inconsistent with the terms of this agreement, and
Licensee hereby further releases Licensor from any such liabilities, claims,
damages or expenses (including attorneys' fees).
Licensee further agrees to maintain adequate insurance, including product
liability insurance in an amount not less than [*****] dollars, in force with
respect to all Products and shall name Licensor as an additional dollars insured
on all such policies.
ARTICLE TEN
RELATIONSHIP BETWEEN THE PARTIES
The relationship of Licensor and Licensee to one another under this
Agreement shall at all times be that of independent contractors. Nothing
contained in this Agreement shall be construed (i) to constitute either party as
the agent or representative of the other party or give either party any
authority to bind or commit the other party in any capacity whatsoever or (ii)
to create any partnership or fiduciary relationship between Licensor and
Licensee.
12
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
ARTICLE ELEVEN
ARBITRATION
In the event that any disagreement or dispute arising out of this Agreement
or its interpretation, validity or enforcement is not reached within thirty (30)
calendar days after notice of the dispute is received, then both parties hereby
consent and agree that the dispute shall be finally and conclusively settled in
a binding arbitration held in Chicago, Illinois under the then existing UNCITRAL
Rules of Arbitration.
The arbitration shall be conducted in the English language by a single
arbitrator chosen in accordance with the UNCITRAL Rules who is skilled in
business matters of this nature with significant experience in Latin America.
The costs of the arbitration shall be determined by the arbitrator, but in no
event shall either party be required to post security for costs. The arbitrator
shall allow each party to conduct 1imited discovery regarding the documents
which will be submitted at the hearing and oral depositions under oath or
affirmation by all important witnesses. The arbitration shall be conducted and
the decision rendered as soon as practical after the filing of an arbitration
demand. The decision of the arbitrator shall be final and shall be fully
enforceable in any jurisdiction where the non-prevailing party has assets.
Notwithstanding the foregoing agreement to arbitrate disputes, either party
shall have the right to request that a court of competent jurisdiction issue a
temporary restraining order or a temporary injunction or similar equitable
relief in order to protect a party from any immediate or irreparable harm or
damage which may occur pending the final decision of the arbitrator.
The parties agree that this Article on arbitration constitutes a fair,
reasonable and equitable manner of resolving disputes and does not unfairly
disadvantage or prejudice either party.
ARTICLE TWELVE
MISCELLANEOUS
A. AMENDMENTS. This Agreement may not be amended except by an instrument in
writing executed by a duly authorized representative of Licensor and Licensee.
B. SUCCESSORS AND ASSIGNS. This Agreement shall be binding and insure to
the benefit of the parties and their respective successors and assigns, but
neither this Agreement nor any rights hereunder may be assigned, transferred or
sublicensed by Licensee, directly or indirectly, voluntarily or by operation of
law, without the prior written consent of Licensor which consent shall not be
unreasonably withheld. A proposed assignment, transfer or sublicense to a direct
competitor of Licensor shall be considered a reasonable basis for Licensor's
refusal to consent. In the event Licensor is merged or consolidated into or
otherwise disposes of all or substantially all of its assets to another
corporation or other person, Licensor will use its best efforts to have such
other corporation or person assume and perform Licensor's obligations under this
Agreement.
C. SURVIVAL. The rights and obligations of the parties hereto under the
following provisions of this Agreement shall survive the termination, whether by
expiration or otherwise, of this Agreement Paragraph F of Article Two, Article
13
Four, paragraphs A, B and C of Article Five, paragraph F of Article Eight,
Article Nine, Article Eleven and Article Twelve.
D. NOTICES. Any notices that the parties are required or permitted to
receive pursuant hereto shall be sent by registered or certified air mail,
return receipt requested, or by messenger, or by telegraph, facsimile or telex
communication, subsequently to be consumed in writing, to the other party at the
following addresses:
If to Licensor:
MAYTAG INTERNATIONAL INC.
0000 X. Xxxx Xxxx Xxx
Xxxxxxx, XX 00000
X.X.X.
Attention: President
Telecopier 000-000-0000
If to Licensee:
NEWTECH CORPORATION
0000 X. X. 000xx Xxxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
U.S.A.
Attention: President
Telecopier 000-000-0000
or to such other address as shall be designated by notice to the other party.
The date of mailing or, if by messenger, the date of dispatch, shall be the
effective date of such notice. Notices by facsimile or telex communication shall
be effective upon receipt.
E. ENTIRE AGREEMENT. This Agreement represents the complete agreement of
the parties an supersedes any prior agreements between them relative to the
subject matter hereof.
F. LANGUAGE. The language to be used for correspondence between the parties
in any notice or documentation shall be English.
This Agreement has been executed in the English language and the English
language document shall prevail over any translation into any other language.
Each party declares that its representative who signs this Agreement on its
behalf either (i) understands the English language and the contents hereof or
(ii) has had all the provisions hereof, including this paragraph F, translated
for him into a language and by an interpreter of his own choice in such manner
that he understands and agrees to all such provisions.
G. CALENDAR. All dates and periods of time referred to in this Agreement
shall be construed in accordance with the Gregorian calendar.
H. WAIVER. Any waiver of any term or condition of this Agreement must be in
writing and signed by the party giving the same. Any such waiver shall be
effective only in the specific instance and for the purpose given. A failure or
delay
14
in exercising any right or remedy hereunder shall not operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise or any other
right or remedy.
I. APPLICABLE LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Illinois of the United States of
America.
J. SUBMISSION TO JURISDICTION. Licensor and Licensee hereby irrevocably
submit in any suit, action or proceeding arising out of or relates to this
Agreement, or any of the transactions contemplated hereby to the jurisdiction of
the United States District Court for the Northern District of Illinois and the
jurisdiction of any court of the State of Illinois located in the State of
Illinois, United States of America, and waive any and all objections to
jurisdiction that they may have under the laws of the State of Illinois or the
United States of America. Licensee hereby irrevocably appoints CT Corporation
System, 000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000, U.S.A., as its agent
for service of process which may be served in any such suit, action or
proceeding, provided notice is given as specified in this Agreement. Licensee
agrees that a final judgment in any such suit, action or proceedings shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this paragraph J shall affect
the right of Licensor to bring any action or proceeding against Licensee or its
property in the courts of any other jurisdictions. To the extent that Licenscee
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or to its property, Licensee hereby irrevocable waives such immunity
in respect of its obligations under this Agreement.
K. JUDGMENT. If, for the purposes of the Licensor obtaining a judgment in
any court, it is necessary to convert a sum in United States Dollars due
hereunder into another currency (the "Other Currency"), the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Licensor could purchase United States Dollars with the Other Currency on the
business day preceding that on which final judgment is given. The obligation of
Licensee in respect of any such sum due from it hereunder shall, notwithstanding
any judgment in such Other Currency, be discharged only to the extent that on
the business day following receipt by the Licensor of any sum adjudged to be so
due in the Other Currency the Licensor may in accordance with normal banking
procedures purchase United States Dollars with the Other Currency, if the United
States Dollars so purchased are less than the sum originally due to the Licensor
in United States Dollars, Licensee agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Licensor against such loss,
and if the United States Dollars so purchased exceed the sum originally due to
the Licensor in United States Dollars, the Licensor agrees to remit the Licensee
such excess.
L. INTERPRETATION. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meanings or interpretation of this Agreement. Any Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
M. CONFIDENTIALITY. In the performance of this Agreement Licensor and
Licensee will be exchanging confidential information, including but not limited
to:
15
(1) proprietary technical information regarding the Products; (2) customer lists
and sales volumes; (3) sales and marketing plans; (4) sales, costs, and other
financial data; (5) sources of supply for the Products; and (6) status of
intellectual property rights. Licensor and Licensee agree to retain such
exchanged confidential information confidence by exercising reasonable
precautions to Prevent unauthorized disclosure of the confidential information
to any third party, and not to use the confidential information for any purpose
other than in the furtherance of the objectives of this Agreement. In the event
of termination of this Agreement, this confidentiality obligation shall survive
for a period of two years from the effective date of termination.
N. PARTIAL INVALIDITY. Wherever possible, each provision hereof shall be
interpreted in such a manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and thus Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.
O. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original instrument, but all
of which shall be considered one and the same agreement and shall become binding
when one or more counterparts have been signed by each of the parties and
delivered to each of the other parties hereto.
16
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date first mentioned above.
LICENSOR:
MAYTAG CORPORATION
By /s/ [ILLEGIBLE]
---------------------------------
Title: SR V.P. CORPORATE PLANNING
/s/ [ILLEGIBLE]
----------------------------------
(ATTEST)
(CORPORATE SEAL)
LICENSOR:
MAYTAG INTERNATIONAL, INC.
By /s/ [ILLEGIBLE]
---------------------------------
Title: PRESIDENT
/s/ [ILLEGIBLE]
----------------------------------
(ATTEST)
(CORPORATE SEAL)
LICENSEE:
NEWTECH CORPORATION
By /s/ [ILLEGIBLE]
---------------------------------
Title: PRESIDENT
/s/ [ILLEGIBLE]
----------------------------------
(ATTEST)
(CORPORATE SEAL)
LICENSEE:
NEWTECH (HONG KONG) LTD.
By /s/ [ILLEGIBLE]
---------------------------------
Title: PRESIDENT
/s/ [ILLEGIBLE]
----------------------------------
(ATTEST)
(CORPORATE SEAL)
17
EXHIBIT A
TO
TRADEMARK USER AGREEMENT
ARTICLE ONE (D)
PRODUCTS
Televisions - color, black and white, projection
Radios - portable, clock
Video Cassette/Disc Recorders
Camcorders
Tape Recorders/Cassette Recorders
Audio Equipment - amplifiers, receivers, speakers, tuners,
turntables, headphones, compact disc players
Portable/Compact audio equipment
18
EXHIBIT B
TRADEMARK USER AGREEMENT
ARTICLE ONE (E)
LICENSED TRADEMARKS
1. Admiral
19
EXHIBIT C
TO
TRADEMARK USER AGREEMENT
ARTICLE ONE (I)
TERRITORY
Aruba
Bahamas
Belize
Bolivia
Brazil*
Chile
Costa Rica
Dominican Republic
El Xxxxxxxx
Xxxxxx Guiana
Guyana
Honduras
Jamaica
Netherlands Antilles
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
Surinam
Trinidad & Tobago
Uruguay
Venezuela
-------------------
* Licensee has been informed of pending litigation which may impact
Licensor's trademark rights in this country.
20
EXHIBIT D
TO
TRADEMARK USER AGREEMENT
ARTICLE TWO (B)
TERRITORY EXTENSIONS
Antigua
Argentina
Barbados
Bermuda
British Virgin Islands
Cayman Islands
Columbia
Cuba
Dominica
Ecuador
Falklands
Granada
Guatemala
Haiti
Mexico
21
EXHIBIT E
TO
TRADEMARK USER AGREEMENT
ARTICLE FOUR (A)
ROYALTY
[*****] on all Products.
22
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
EXHIBIT F
TRADEMARK USER AGREEMENT
ARTICLE FOUR (B)
TRADEMARK SERVICE FEE
Contract Year 1, ending December 31, 1994: [*****]
Contract Year 2, ending December 31, 1995: [*****]
Contract Year 3, ending December 31, 1996: [*****]
Contract Year 4, ending December 31, 1997: [*****]
Contract Year 5, ending December 31, 1998: [*****]
Contract Year 6, ending December 31, 1999: [*****]
Contract Year 7, ending December 31, 2000: [*****]
Contract Year 8, ending December 31, 2001 [*****]
Contract Year 9, ending December 31, 2002: [*****]
Contract Year 10, ending December 31, 2003: [*****]
FIRST EXTENSION TRADEMARK SERVICE FEE
Contract Year 11, ending December 31, 2004: [*****]
Contract Year 12, ending December 31, 2005: [*****]
Contract Year 13, ending December 31, 2006: [*****]
Contract Year 14, ending December 31, 2007: [*****]
Contract Year 15, ending December 31, 2008: [*****]
SECOND EXTENSION TRADEMARK SERVICE FEE
Contract Year 16, ending December 31, 2009: [*****]
Contract Year 17, ending December 31, 2010: [*****]
Contract Year 18, ending December 31, 2011: [*****]
Contract Year 19, ending December 31, 2012: [*****]
Contract Year 20, ending December 31, 2013: [*****]
23
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
EXHIBIT G
TO
TRADEMARK USER AGREEMENT
1. EXTENSION OF TERRITORY. ARTICLE TWO (B).
Upon Licensor's acceptance of any of the following countries
as extensions of the Territory, the Trademark Service Fee
(Exhibit F) applicable one year after which acceptance occurs and
for all applicable subsequent years shall be increased by the
percentage specified:
Antigua [*****]
Argentina [*****]
Barbados [*****]
Bermuda [*****]
British V.I. [*****]
Cayman Islands [*****]
Columbia [*****]
Cuba [*****]
Donunica [*****]
Ecuador [*****]
Falklands [*****]
Granada [*****]
Guatemala [*****]
Haiti [*****]
Mexico [*****]
If the date after which acceptance occurs is any day other
than January 1 of a Contract Year, the above percentage shall
be prorated for the remaining part i of such year based on the
number of days left for that year. In the event any of the above
specified countries are included within the Territory for the 9th
and 14th Contract Years, the minimum Royalty necessary to qualify
for the first and second renewal terms, as provided for in
paragraph A of Article 8, shall be increased by the applicable
percentages established above.
II. INVALIDATION OF LICENSOR'S RIGHTS TO LICENSED TRADEMARKS, ARTICLE
SEVEN (C).
In the event of an invalidation of Licensor's rights as
specified in paragraph C of Article Seven in an "affected
country", the Trademark Service Fee (Exhibit F) applicable for
the year in which the invalidation occurs and for all applicable
subsequent years, shall be reduced by a percentage equal to the
total net sales of Products in the affected country in the twelve
months preceding the invalidation divided by the total net sales
of Products in the Territory within the same twelve month period.
If the invalidation occurs during the first three Full Contract
Years and there has been no sales within the affected country
during the twelve month period preceding the invalidation, the
applicable Trademark Service Fee shall be reduced by the
percentage specified.
Aruba [*****]
Bahamas [*****]
Belize [*****]
24
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
Bolivia [*****]
Brazil* [*****]
Chile [*****]
Costa Rica [*****]
Dominican Republic [*****]
El Salvador [*****]
French Guiana [*****]
Guyana [*****]
Honduras [*****]
Jamaica [*****]
Netherlands Antilles[*****]
Nicaragua [*****]
Panama [*****]
Paraguay [*****]
Peru [*****]
Puerto Rico [*****]
Surinam [*****]
Trinidad & Tobago [*****]
Uruguay [*****]
Venezuela [*****]
In the event any of the above specified countries are removed
from the Territory for the 9th and 14th Contract Years, the
minimum Royalty necessary to qualify for the first and
second renewal terms, as provided for in paragraph A of
Article 8, shall be decreased by the applicable percentages
established above.
III. MISCELLANEOUS PROVISIONS.
A. In the event of a Territory extension of any of the
countries specified in Paragraph I of this Exhibit and
Licensor's rights are subsequently invalidated in such
country(ies), the applicable Trademark User Fee shall be
reduced by the percentage established in Paragraph I.
B. In the event of an invalidation of Licensor's rights in
any of the countries specified in Paragraph 11 of this Exhibit
and Licensor's rights are subsequently restored in such
country(ies), the applicable Trademark User Fee shall be
increased by the amount of the reduction calculated at the time
of the invalidation.
C. In the event both a reduction and an increase are applicable
to calculating the Trademark User Fee in any one year, the
following procedure shall be used: (1) add all of the
percentage increases; (2) multiply the total increases by
the applicable Fee from Schedule F; (3) add all of the
percentage reductions; and (4) multiply the total reductions
by the applicable fee from Schedule F (prior to any
adjustments for this computation); (5) the product arrived
at in Step (2) should be added to the applicable fee from
Schedule F and the product from Step (4) should be
subtracted to arrive at the Adjusted Trademark User Fee.
25
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
