SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 23, 1996
Commission File Number: 33-7811-NY
GRAFIX TIME CORPORATION
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(Exact name of registrant as specified in its charter)
New York 93-0943925
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(State of Incorporation) (I.R.S. Employer I.D. Number)
2901 Suffolk Ct. East, Suite 130, Fort Worth, TX 76133
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(Address of principal executive offices and Zip Code)
(800) 789-7736
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On December 23, 1996, Grafix Time Corporation (the "Company") executed a
financing agreement with Monte Ahuja (the "Agreement"), a copy of which was
previously filed as an exhibit to a Report on Form 8-K, and whose terms are
incorporated herein by reference. Mr. Ahuja owned all 500,000 authorized, issued
and outstanding shares of the Company's Preferred Series A stock. Mr. Ahuja
signed the Agreement on December 28, 1996.
Pursuant to the terms of the Agreement, Mr. Ahuja or his designee(s) agreed
to provide financing of up to $1,500,000 to the Company, in the form of one or
more loans, guarantees, letters of credit, or other financial instruments, all
pursuant to a definitive financial plan to be agreed between the parties. The
Agreement further calls for Mr. Ahuja or his designee(s) to provide interim
financing to the Company in the amount of $300,000, which Mr. Ahuja provided in
the form of a secured loan on January 2, 1997. Mr. Ahuja provided an additional
$500,000 secured loan to the Company on January 10, 1997. The Company has
pledged its receivables, purchase orders, inventory, and intangible assets as
security for these loans. On or about January 31, 1997, Mr. Ahuja fulfilled his
funding obligations under the terms of the Agreement.
In return for the interim funding and financing commitment from Mr. Ahuja,
the Company agreed to modify the Statement of Series Shares pertaining to the
Preferred Series A stock owned by Mr. Ahuja, to allow conversion of the
Preferred Series A stock into a number of the Company's common stock
representing (after conversion of all outstanding notes, options, and warrants)
seventy-five percent (75%) of the issued, outstanding, and committed common
stock of the Company. Conversion of the Preferred Series A Shares occured when
Mr. Ahuja made all of the agreed funding available to the Company, pursuant to
the terms of the Agreement. On or about February 10, 1997, the Mr. Ahuja
converted all of his Preferred Series A stock into 12,000,000 shares of the
Company's common stock.
The Agreement also provides that Mr. Ahuja and/or his designee(s) will
provide ongoing financial services to the Company, including a thorough review
of the Company's financial status and systems. The Company has agreed to retain
Mr. Ahuja and/or his designee(s) to manage the financial affairs of the Company.
The Company's Board of Directors approved the terms of the Agreement on December
23, 1996.
On December 24, 1996, Messrs. Walter Sims, Russell Walker, and Timothy
O'Brien resigned as officers and directors of the Company. Mr. Arnold Guttenberg
resigned as a director of the Company on December 22, 1996. Ms. Kim Pavlin
resigned as Secretary of the Company on December 30, 1996. Mr. Ted Honda
remained as the sole officer and director of the Company until January 23, 1997,
when he appointed the Messrs. Vir Sondhi, Ron Karani, Martin A. Traber, and
Steve Duke as directors of the Company, to fill the vacancies created by the
resignations of Messrs. Sims, Walker, O'Brien, and Guttenberg. On January 24,
1997, the Company's Board of Directors named Mr. Sondhi Chairman of the Board,
and appointed Mr. Karani Chief Executive Officer, President, and Treasurer of
the Company. The Board of Directors also named Martin A. Traber Secretary, and
Ted Honda Executive Vice President, of the Company.
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On January 29, 1997, the Company executed a licensing agreement (the
"Licensing Agreement"), a copy of which is filed herewith as an Exhibit and
whose terms are incorporated herein by reference, with Carrera Optyl Marketing
GmbH, an Austrian corporation ("Carrera") that acquired the "Carrera" trademarks
from Carrera Optic AG, a German company which was declared bankrupt on or about
June 1, 1996 in Germany. The term of the Licensing Agreement is through December
31, 2001, with automatic renewal for a further period of five years, through
December 31, 2006.
Under the terms of the License Agreement, Carrera has granted the Company
the exclusive right to manufacture and sell golf products (apparel, shoes,
clubs, balls, head covers, bags and bag travel covers, gloves, hats and cap
visors, umbrellas, and towels) worldwide, with exceptions as set forth in
schedules to the Licensing Agreement, incorporating Carrera's trademarks.
Pursuant to the terms of the License Agreement, the Company is obligated
to, among other things, pay licensing fees according to a schedule contained in
the Licensing Agreement. In addition, the Company is obligated to provide
accounting reports to Carrera at the close of each licensed year of the License
Agreement. The Company has agreed to pay certain yearly minimum non-returnable
license fees under the License Agreement.
Item 7. Exhibits.
2.1 Licensing Agreement between the Company and Carrera, dated January 29,
1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GRAFIX TIME CORPORATION
March 12, 1997 By: /S/ RON R. KARANI
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Ron R. Karani, CEO, President and Treasurer
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EXHIBIT INDEX
CURRENT REPORT ON FORM 8-K DATED JANUARY 29, 1997
GRAFIX TIME CORPORATION
Exhibit No. Document Description Page No.
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2.1 Licensing Agreement between the Company and Carrera, 5
dated January 29, 1997
CARRERA(R)
LICENSE AGREEMENT
between:
CARRERA OPTYL MARKETING GmbH
Johan Roithner Strasse 131 A 4050 Traun (Austria)
and
GRAFIX TIME Corporation
4155 E. Jewell Ave., Suite 500
Denver (U.S.A.)
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INDEX
CLAUSE HEADINGS PAGE NO.
PARTIES 1
RECITALS 1
1 DEFINITION AND INTERPRETATION 2
2 GRANT OF LICENCE 5
3 TERM 5
4 DISTRIBUTION 6
5 CARRERA'S OBLIGATIONS 6
6 OBLIGATIONS OF LICENSEE 7
7 LICENCE FEES 10
8 ACCOUNTING 11
9 GUARANTEED MINIMA AND LUMP SUM 13
10 SAMPLES 13
11 MARKETING 13
12 RESERVATION OF RIGHT 14
13 INTELLECTUAL PROPERTY 15
14 CHANGE IN CONTROL 17
15 TERMINATION 18
16 REMEDIES 21
17 INDEMNITY BY LICENSEE 21
18 INSURANCE 21
19 CONFIDENTIALITY 21
20 NON TRANSFERABILITY 22
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21 RELATIONSHIP BETWEEN THE PARTIES 22
22 NOTICES AND APPROVALS 22
23 ENTIRE AGREEMENT 23
24 SEVERABILITY 23
25 FORCE MAJEURE 23
26 NO WAIVER 24
27 NO BROKERAGE FEE 24
28 MISCELLANEOUS 24
29 HEADINGS 24
30 APPLICABLE LAW 24
31 ARBITRATION 25
32 COUNTERPARTS 25
Schedule 1 THE TRADEMARKS 26
Schedule 2 PRODUCTS 31
Schedule 3 TERRITORY 32
Schedule 4 LICENCE FEES 34
Schedule 5.1 NET SALES 35
Schedule 5.2 DISCOUNTS 36
Schedule 5.3 LIST PRICES 37
Schedule 6 GUARANTEED MINIMA 38
ATTESTATION CLAUSE 39
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CARRERA(R)
Optyl
This agreement is made on this 29 day of January 1997, by and between the
following parties:
- - CARRERA OPTYL MARKETING GmbH, a company incorporated under the laws of Austria
having its registered office at Johan Roithner Strasse 131, A 4050 Traun
(Austria) (hereinafter "Carrera".
And
- - GRAFIX TIME Corporation, (formerly known as Sports Equipment Technology
Company) a New York company having its registered office at 4155 E. Jewell Ave.,
Suite 500, Denver, (hereinafter "The Licensee").
Recitals:
a) whereas Carrera owns the trademarks contemplated in this Agreement that
have acquired international renown and prestige in the optical frames,
sunglasses and sport products (goggles, helmets and sport glasses) sector;
b) whereas on October 25, 1995 a Trademark Licensing agreement was stipulated
between Carrera Optic AG, a company existing under German law which was
declared bankrupted on June 1, 1996, by the competent Court of Munich, and
the Licensee for manufacturing the Products under the Trademarks for the
world, unless United States and its territories;
c) whereas on January 1, 1995 a Trademark Licensing agreement was stipulated
between Carrera Eyewear Corp., a New Jersey subsidiary of Carrera Optic AG,
and the Licensee for manufacturing the Products under the Trademarks for
United states and its territories;
d) whereas on September 12, 1996, Carrera Optyl GmbH, that n the meantime had
transferred the Trademarks to Carrera, declared to Grafix Time Corporation
its willingness to terminate the license agreement dated January 1, 1995;
e) whereas the parties intend to terminate by mutual agreement the above
mentioned agreements of October 25, 1995, and January 1, 1995, for all
legal purposes, and to define their business relationship by a new
agreement;
f) whereas the parties agree that all the licence fees referred to the above
mentioned licence agreements matured from the relevant dates of the
transfer of the Trademarks to the date of its termination shall be paid to
Carrera;
g) whereas Carrera is willing to grant the Licensee on the terms and
conditions of this Agreement a license to manufacture specified products
incorporating certain of the trademarks of Carrera and to sell them through
the Licensee's distribution network; and
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h) whereas the Licensee wishes to enter into such a license on the terms and
conditions set out below.
now therefore in accordance with the foregoing recitals, which are an integral
part of this Agreement and which are subject to the detailed terms and
conditions hereinafter set forth, Carrera and the Licensee agree as follows:
I- The Trademark Licensing agreements dated January 1, 1995 and October
25, 1995, terminates with the effect on the Effective Date and with
waiver by the Licensee of any rights it may have in connection with
such termination.
The License undertakes to pay to Carrera the licence fees referred to
the above mentioned agreements matured from the relevant transfer of
the Trademarks up to the date of termination. The dates of transfer are
the following: June 3, 1996, for the license agreement dated October
25, 1995 and August 1, 1996, for the other license agreement dated
January 1, 1995.
The payment will be made within 30 (thirty) days from the Effective
Dave. For this purpose, within 10 (ten) days from the Effective Date
the Licensee shall notify to Carrera the total amount of the above
mentioned license fees.
1. DEFINITION AND INTERPRETATION
1.1 In this Agreement the following expression shall have the following
meanings:
1.1.1 "Annual Account", "Final Account" shall have the meaning
given to that expression in Clause 8;
1.1.2 "Actual Price" shall mean the total price of the Licensee
at which Licensed Products are sold by the Licensee to
Distributors or Stockists (net of any sales taxes) in the
currency in which the Licensee invoices its Distributors or
Stockists;
1.1.3 "Approved" shall mean the object of any Approval or that
Approval has been given (as appropriate);
1.1.4 "Carrera's Intellectual Property" shall mean:
(a) all trademarks and designs registered in the name of
Carrera anywhere in the world from time to time;
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(b) all trade names, brand names and/or trademarks (whether
registered or not) which have been and/or which are
used and/or owned by Carrera from time to time in which
Carrera from time to time claims any rights;
(c) all designs (whether registered or not which have been
and/or which are used and/or owned by Carrera from time
to time in which it claims any rights, including (but
not limited to) check designs (in whatever size and in
whatever material);
(d) any works in which copyright vests in Carrera from time
to time;
(e) all patents (registered or applied for) in the name of
Carrera from time to time;
1.1.5 Distributors" for the purposes of the Clause 4.4 of this
Agreement, shall mean the distributors for the Licensed
Products which are notified to Carrera within 6 (six) months
of the Effective Date and annually thereafter.
"Distribution Agreement" shall mean the agreement between
the Licensee and a Distributor concerning the Distributors
appointment, rights and obligations as a Distributor;
1.1.6 "Effective Date" shall mean the date in which this Agreement
has been signed by the partis, as indicated at the
beginning of page 1;
1.1.7 "Factory" for the purposes of rile Clause 5.E of this
Agreement, shall mean the industrial manufacturing premises of
the Licensee or a company of the Licensee's Group as shall be
notified to Carrera within I (one) month of the Effective
date;
1.1.8 "Force Majeure Event" shall have the meaning given to it in
Clause 25;
1.1.9 "Information" shall mean all and any information that may from
time to time be useful in connection with:
(a) the marketing, sale, product formulation, product
manufacture, advertising and/or packaging of any of
the Licensed Products, and/or
(b) any other matters relating to the Licensees
activities under this Agreement, whether received
from Carrera or learned or obtained by he Licensee in
the course of its activities under this Agreement,
except such information as
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may be generally and commonly known to those in the
industry of the Licensed Products;
1.1.10 "Licence Fee" shall have the meaning given to it in Clause 7;
1.1.11 "Licensed Products" shall mean any Products which:
(a) feature such of Carrera's Intellectual Property as may
from time to time be Approved. including (but not
limited to) the Trademarks;
(b) are of a type and specification which have been
specifically Approved for manufacture, supply and sale
tinder this Agreement;
1.1.12 "Licensed Year" shall mean each calendar year during the term
of this Agreement;
1.1.13 "Licensee's Group" shall mean the Licensee, its Subsidiaries.
its Holding Company, its ultimate Holding Company, and
Subsidiaries of its Holding Company or ultimate Holding
Company;
1.1.14 "List Price" shall mean the standard wholesale price list or
lists of the Licensee in and for each market at which Licensed
Products are to be sold to Stockists or Distributors (net of
any sales taxes) which shall:
(i) be notified to Carrera from time to time under Clause
6.11;
(ii) indicate the prices before any settlement discount or
other discount, allowance or rebate has been
deducted;
(iii) form the basic prices for the Licensed Products from
which any trade discounts are deducted; and
(iv) be in tile currency in which the Licensee invoices
its Stockists or Distributors;
1.1.15 "Net Sales" shall mean the value of total sales of Licensed
Products invoiced by the Licensee to Stockists or Distributors
(as the case may be), after deducting the value of all
reasonable returns made to the Licensee. For this purpose, the
value of Net Sales shall be calculated by reference to the
List Price less trade discounts;
1.1.16 "Products" shall mean the Products as represented in Schedule
2 and shall include the containers and packaging in which such
products are sold or to be sold;
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1.1.17 "Representatives" shall mean the staff; agents and
representatives used and/or employed by the Licensee to market
and/or sell the Licensed Products from time to time under this
Agreement;
1.1.18 "Stockists" for the purposes of the Clause 4.4 of this
Agreement, any retailer details of which are notified to
Carrera within 6 (six) the Effective Date and annually
thereafter;
1.1.19 "Subsidiary" shall mean any company and legal entity in with
the Licensee hold more than 50% (fifty per cent) of the voting
shares;
1.1.20 "Territory" shall mean the countries indicated in Schedule 3,
in which the Trademarks have been currently filed and/or
registered;
1.1.21 "Trademarks" means those trademarks of Carrera listed in
Schedule 1;
1.1.22 ""Working Day" shall mean any day on which banks are open for
business in Traun other than a Saturday or Sunday.
1.2 In this Agreement references to:
(a) Clauses, Schedules and panics are references to Clauses of
and parties to this Agreement respectively;
(b) the singular includes the plural and vice versa (unless the
context requires otherwise);
(c) any one gender includes the other genders; and
(d) any statutory provision or enactment includes any subsequent
amendment or re-enactment of that statutory provision or
enactment.
1.3 The Schedules form pan of this Agreement, and reference to this
Agreement includes the Schedules.
2. GRANT OF LICENCE
Carrera hereby grants to the Licensee an exclusive licence:
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2.1 to manufacture Licensed Products at the Factory strictly in
accordance with the samples collections and relevant
specifications from time to time Approved under this Agreement
and to use:
(a) the Trademarks; and
(b) such other parts of Carrera's Intellectual Property
as may be:-
(i) required by such specifications;
(ii) Approved from time to time only for the
purpose of such manufacture;
2.2 to use such information as may from time to time be provided
by Carrera concerning the manufacture and marketing of
products of the same type of merchandise as the Licensed
Products exclusively in connection with the manufacture and
sale of the Licensed Products under this Agreement;
2.3 to market and sell Licensed Products;
(a) to the Distributors for distribution to Stockists or
other Distributors; and/or
(b) to Stockists for sale to consumers, other Stockists
or Distributors and so that the goodwill arising from
such use shall inure to Carrera;
2.4 to use such of Carrera's Intellectual Property in such a
manner as is specifically Approved and as may from time to
time be specifically Approved in any event only in relation to
the manufacture and sale of the Licensed Products under this
Agreement and so that the goodwill arising from such use shall
inure to Carrera; and
2.5 in consideration for the performance by the Licensee of its
obligation under this Agreement (including but not limited to
tile development of the Licensed Products), to retain and be
entitled to all of the proceeds of sale by the Licensee of
Licensed Products, subject to the payment of all Licence Fees,
minimum Licence Fees and other sum due to Carrera under this
Agreement.
3. TERM
3.1 This Agreement shall come into force on the Effective Date and
(subject to the provisions Car extension and termination in
this Agreement) shall have effect from
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the Effective Date to December 31, 2001, with automatic
renewal for a further period of 5 (five) years and will thus
terminate on December 31, 2006, without period of notice.
3.2 Notwithstanding what it is provided in the above Clause 3.1,
Carrera may terminate this Agreement at the end of the sixth
Licensed Year if the Licensee during the fifth Licensed Year
does not reach an amount of Net Sales of US$ 15.000.000.
Carrera shall inform the Licensee in writing 10 (ten) months
before the expiry of the sixth Licensed Year. It is understood
that such a term will replace the term of 6 (six) months
indicated in the following Clause 15.4.
4. DISTRIBUTION
4.1 The Licensee may (subject to Clauses 4.2 and 4.4) appoint as
many Distributors in the Territory as it may see fit provided
that tile Licensee shall at all times be adequately
represented throughout the Territory so as to comply with its
obligations under Clause 6.27.
4.2 In the case of any proposed Distributor which is not a company
within the Licensee's Group each Distribution Agreement shall
incorporate provisions which are equivalent to the Licensees
obligations under Clauses 6.10 and 11.3, 11.5 and 11.7.
4.3 The Licensee shall use its best endeavours to procure that
each Distributor adheres to all material provisions of its
Distribution Agreement and in particular (but without limiting
the above) that no Distributor does anything which if done by
the Licensee would be a breach of Clause 13.
4.4 The Licensee recognises the fundamental importance of
Distributors and Stockists being compatible with the high
quality and prestigious nature of Carrera's business and of
the selection of Distributors and Stockists whose marketing
policies or trading sites in no manner diminish the reputation
and standing of Carrera or Carrera's Intellectual Property and
accordingly the Licensee shall only select and deal with
suitable Distributors and/or Stockists.
5. CARRERA'S OBLIGATIONS
Carrera shall during the continuance of this Agreement;
5.1 procure that a Director, employee or agent of Carrera shall visit the
Factories at such times and for such periods as may be agreed with
Carrera to assist and enable the Licensee to perform properly its
duties under this Agreement and in particular to verify that such
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manufacturer does not infringe, piraty or improperly use any of the
Carrera's Intellectual Property;
5.2 give (if appropriate) Approval of the sample collection of Products
proposed to be Licensed Products and any advertising material for
Licensed Products. For the avoidance of doubt Carrera is free, at its
own discretion, to approve or disapprove what it is provide in this
clause 5.2;
5.3 communicate and make available to the Licensee such information and
knowledge as may be possessed by Carrera as can be imparted to the
Licensee by documents, designs, samples or advertising material and
which Carrera at its sole discretion considers the Licensee reasonably
requires to sell the Licensed Products under this Agreement;
5.4 use its best endeavours to give a prompt decision as regards any matter
for which Approval is required under this Agreement;
5.5 not grant to any other licensee or prospective licensee the right to
use its Trademarks which include the words Carrera's in connection with
the production of Licensed Product in the Territory.
6. OBLIGATIONS OF THE LICENSEE
The Licensee shall:
6.1 not use or disclose any Information other than:
(a) as may from time to time be necessary in connection with the
manufacture and sale of the Licensed Products under this
Agreement; and
(b) as specifically authorised in this Agreement or approved from
time to time;
6.2 not use any of Carrera's Intellectual Property other than:
(a) as may from time to time be necessary and Approved in
connection with the manufacture and sale of the Licensed
Products under this Agreement or
(b) as specifically authorised in this Agreement or Approved from
time to time;
6.3 work in close co-operation with Carrera from time to time with a
view to improving or extending the range of Licensed Products;
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6.4 make available to Carrera from time to time free of charge 2 (two)
samples of any Products variations (including packaging, containers.
cases and the like) which the Licensee wishes to become Licensed
Products;
6.5 manufacture the Licensed Products strictly in conformity with approved
samples and agreed relevant specifications;
6.6 procure that the Licensed Products are manufactured to a high standard
of quality and reliability and in accordance with all conditions to
which Approval of particular Licensed Products may be subject;
6.7 in the manufacture, supply, importation and sale of Licensed Products
comply at its own expense with all applicable laws, bylaws.
regulations and similar requirements in the Territory so far as they
relate to the Licensed Products or to their manufacture. supply,
importation and/or sale;
6.8 at its own expense obtain and maintain in flu force and effect all
licences, permissions and consents and. comply with all requirements
necessary for the importation of any items provided to the Licensee by
Carrera for the purpose of this Agreement, including but not limited to
the payment of all duties, taxes and other charges;
6.9 permit Carrera to have access and to inspect all the operations of the
Licensee (including the Factory) during business hours on reasonable
notice of not less than 5 working days for the purposes of ensuring the
compliance of the Licensee with this Agreement;
6.10 nor (and shall procure that no other company within the Licensee's
Group shall):
6.10.1 sell, take orders for, or otherwise dispose of the Licensed
Products other than in the fulfilment of orders from
Distributors or Stockist;
6.10.2 actively market or seek customers, Distributors or Stockists
for the Licensed Products outside the Territory without
Approval; or
6.10.3 establish or maintain any distribution depot outside the
Territory in relation to the Licensed Products without
Approval;
6.11 give written details to Carrera as soon as practicable before the
launch of each collection of Licensed Products, the List Price for the
Licensed Products and of any changes in the List Price during the term
of this Agreement provided that (for the avoidance of doubt) the
Licensee shall be free to determine both the List Price and the Actual
Price of the Licensed Products at its absolute discretion;
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6.12 within 14 (fourteen) days of the end of each quarter send by facsimile
transmission to Carrera, in Johann Roithner Str 131, A 4050 Traun
(Austria) a sales report setting out details of orders of Licensed
Products booked in that month (including type of Licensed Product
specifying the gender of products and the number of units ordered);
6.13 supply to Carrera such information relating to the manufacture, supply,
marketing and sale of Licensed Products as may upon reasonable notice
be reasonably requested by Carrera from time to time save for any
technical information of a confidential nature relating to the
Licensee's production activity;
6.14 not use any of Carrera's intellectual Property of any of its business
documentation or in any other way (including but not limited to all
stationery, order forms, invoices, credit notes, labels and the like)
unless such use and the precise juxtaposition of Carrera's Intellectual
Property has been Approved after copies of such business documentation
have been supplied to Carrera for such purpose in which case such use
shall only be in strict accordance with the Approval and in strict
conformity with the samples sent to Carrera for such Approval;
6.15 accept the return of and replace or give credit for any Licensed
Products delivered to any of the Distributors or the Stockists by or on
behalf of the Licensee where such Licensed Products have been lawfully
returned or rejected by the Distributor or Stockist (whether due to
late delivery, defect in the Licensed Products, or any other breach by
the Licensee of the conditions of sale);
6.16 not in the manufacture. supply, marketing or sale of the Licensed
Products permit any Trademarks, names or markings to be used on or in
connection with or applied to the Licensed Products or any other
articles other than:
(a) the Trademarks;
(b) such other Trademarks, names or other markings of Carrera
which are from time to time Approved for that purpose; or
(c) those which are required by the laws of or generally accepted
code of practice in the relevant part of the Territory; and
(d) such Trademarks, names or other markings of the Licensee which
are from time to time Approved:
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6.17 not (and shall procure that no company within the Licensee's Group
shall) engage directly or indirectly in the manufacture, supply,
marketing or sale of any products (other than the Licensed Products)
bearing or sold in connection with:
(a) any of Carrera's Intellectual Property; or
(b) any Trademarks or trade names confusingly similar to or
otherwise infringing any of Carrera's Intellectual Property;
6.18 not without the prior written consent of Carrera mortgage, charge,
sub-contract, Subsidence or assign or otherwise transfer or deal with
this Agreement or any part of this Agreement or any of its rights or
obligations under this Agreement or purport to do any of such acts or
things;
6.19 promptly pay to Carrera all Licence Fees, minimum Licence Fees and
other sums due to Carrera under this Agreement;
6.20 when ordering components, packaging, tickets, labels, stationery or any
other items which incorporate any of Car-es-a's Intellectual Property
for use in relation to the production, supply or sale of the Licensed
Products from a supplier the Licensee shall:
(a) exercise proper and adequate supervision over the operations
of each supplier including (but not limited to) quality
control to ensure that all times such items produced are of
the quality required under this Agreement;
(b) ensure that each supplier does not use any of Carrera's
Intellectual Property without the prior written authority of
the Licensee acting under the terms of its Licence from
Carrera;
(c) ensure that no supplier shall dispose of or sell any material
or items containing or embodying any of Carrera's Intellectual
Property other than to the Licensee in fulfillment of orders
received from the Licensee; and
(d) arrange for authorized representatives of Carrera to have
access to any supplier's premises on reasonable notice during
normal business hours for the purposes of inspecting their
methods of manufacture, the material used, and the packaging
and sorting of the products which contain or embody any of
Carrera's Intellectual Property, and for the purposes of
quality control in relation thereto;
6.21 not make-or give any representations or warranties in relation to the
Licensed Products other than those which are true and accurate in all
material respects;
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6.22 not incur or attempt to incur any obligation or liability on behalf of
Carrera,
6.23 both throughout the duration of this Agreement and for at least two
years thereafter:
6.23.1 keep full and accurate records of all Licensed Products sold
and all its dealings under or in connection with this
Agreement; and
6.23.2 permit Carrera to inspect such records at any time on
reasonable notice of not less than 5 working days and to make
and retain copies of them.
This Clause 6.23 shall continue in force after and notwithstanding the
expiry or termination of this Agreement, whatever the reason for termination;
6.24 conduct its business in connection with the Licensed Products in all
respects in a manner which will maintain the reputation and standing of
Carrera for high quality prestige products;
6.25 ensure that the collection of Licensed Products is exclusive to Carrera;
6.26 not (and shall procure that 110 other company within the Licensee's
Group shall) supply products:
(a) of the same or a confusingly similar design; or
(b) in the same or confusingly similar packaging or presentation
as any of the Licensed Products other than in accordance with
this Agreement and any similar agreement(s) with Carrera. This
Clause 6.26 shall continue in force after and notwithstanding
the expiry or termination of this Agreement, whatever the
reason for termination:
6.27 use its reasonable endeavours to maximize the profitable sales of
Licensed Products throughout the Territory;
6.28 only use such packaging for with or as part of the Licensed Products
as has been Approved;
6.29
(a) provide full details to Carrera of the proposed designs and
specifications (which may be by way of samples) for the
particular Licensed Product concerned for Approval before
commencement of sales of any Licensed Product;
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(b) revise such designs and specifications or samples in
accordance with the reasonable directions of Carrera from
time to time and;
(c) provide full details to Carrera of any proposed changes in any
of the designs or specifications or samples for any Licensed
Product for Approval of such changes before any such changes
are implemented (save to the extent that such changes are
required by applicable law);
6.30 not (and shall procure that no company within the Licensee's Group and
no Distributor shall) sell, transferor otherwise dispose of any second
quality, rejected or damaged Licensed Products without Approval;
6.31 procure that all Representatives shall be capable and experienced and
shall be chosen and shall conduct themselves so as to preserve and
enhance the reputation of and goodwill attached to the Trademark;
6.32 within (one) month of the Effective Date prepare and deliver to Carrera
a detailed written business plan for the marketing and sale of the
Licensed Products under this Agreement. That business plan shall
include (but is' not limited to):
(a) the timetable for the launch and development of the Licensed
Products;
(b) sales projections both in unitary aud monetary value relating
to sub clause (a) above; and
(c) such other details as Carrera may reasonably from rime to time
direct.
7. LICENCE FEES
7.1 In consideration of the license hereby granted by Carrera and the
obligations undertaken by Carrera under this Agreement, the Licensee
shall pay Carrera licence fees in each Licensed Year (collectively
referred to as "the Licence Fees") as represented in Schedule 4.
7.2 The Licence Fee for any particular Licensed Products shall accrue on
whichever is the earlier of:
(a) delivery of those Licensed Products to the Distributor or
Stockist (as appropriate) or
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(b) the rendering of the relevant invoice by the Licensee for
those Licensed Products.
7.3 The Licensee shall pay the Licence Fee half yearly in respect of sales
of Licensed Products (accrued in accordance with clause 7.2) in the
relevant half year, within 30 days after 30 June, and 31 December in
each year. In calculating the Licence Fee to be remitted to Carrera,
the Licensee shall deduct such minimum Licence Fees already paid in
respect of the relevant two quarters of the half year under Clause 9.
The balance of the Licence Fee due shall be paid in accordance with
this Clause 7.3 and no other deduction or set off of any kind shall be
permitted. For the avoidance of doubt where the Licence Fees due fall
short of the minimum Licence Fees already paid no reconciliation or
repayment by Carrera to the Licensee shall be required as the minimum
Licence Fees are non-returnable.
7.4 All Licence Fees, minimum Licence Fees, and other amounts due to
Carrera under this Agreement shall be exclusive of:
(a) Value Added Tax (V.A.T.) (if appropriate);
(b) sales tax;
(c) use tax; or
(d) any and all other similar taxes which shall be paid by the
Licensee to Carrera at the applicable rate in addition to such
amounts.
8. ACCOUNTING
8.1 The Licensee shall within 30 days. after 30 June and 31 December in
each year, deliver to Carrera at Johann Roithner Sir. 131, A 4050 Traun
(Austria) (or such other address as Carrera may nominate in writing
from time to time) a report in writing certified as correct by a duly
authorised officer of the Licensee. That report shall specify in
respect of the 6 month period ending on each such date flail details of
Net Sales set out as follows and as shown in the respective Schedules;
(a) Schedule 5.E - Net Sales by country in the
currency used for each Licensed Product
including the exchange rate and the Licence
Fee payable;
(b) Schedule 5.2 - Discounts actually given for each country
including the units invoiced, gross sales.
Net Sales and average sales prices; and
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(c) Schedule 5.3 - The List Prices for each country including a
description of the Licensed Product in terms
of style numbers, sales area applicable,
prices for each Licensed Product, the
start date when the current List Price was
first valid and the currency.
8.2 The Licensee shall within 45 days after the end of each Licensed Year
deliver to Carrera at Johann Roithner 131, A4050 Traun (Austria) (or
such other address as Carrera may nominate in writing from time to
time) full and accurate account in respect of the Licensed Year to
which it relates (the "Annual Account") in writing certified as correct
by:
(a) a duly authorised officer of the Licensee; and
(b) one of the six largest international firm (or an Approved
firm) of certified public accountants.
8.3 Within 30 days of the termination or expiry of this Agreement, the
Licensee shall submit an account (the "Final Account") to Carrera in
respect of the period from the date of the last Annual Account up to
the date of termination. The Final Account shall be prepared in
accordance with the requirements of this Agreement applicable to Annual
Accounts.
8.4 At the same time as delivery of the Annual Account to Carrera, the
Licensee shall pay the Licence Fees shown to be due by such Annual
Account, without any deduction or set off of any kind. if and to the
extent that they have not already then been paid. Within 30 days of
delivery of an Annual Account to Carrera, Carrera shall refund to the
Licensee such amounts (if any) of Licence Fees as have been paid by the
Licensee to Carrera in the relevant Licensed Year in excess of those
required to be paid under this Agreement.
8.5 The Licensee shall at Carrera's expense promptly deliver to Carrera
copies of any and all invoices and/or other documents. records or
evidence which Carrera may from time to time request in connection with
any Annual and/or Final Account.
8.6 Subject to Clause 7.3, the Licensee shall pay all Licence Fees
(including minimum License Fees) to Carrera gross and flee of any
withholding or other tax. The Licensee accordingly take such steps.
carry out such actions and execute such documents as may from time to
time be required to enable the Licensee to' pay all License Fees due to
Carrera under this Agreement gross and free of any such withholding or
other tax. If, notwithstanding the above, any withholding or other tax
is lawfully imposed in relation to the payment of any Licence Fee due
or paid under this Agreement, the Licensee shall promptly provide to
Carrera copies of such official demands and certificates of receipt of
tax payment as the Licensee may receive or be entitled to receive in
relation to the relevant Licence Fees.
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8.7 All payments of Licence Fees ro be made by the Licensee to Carrera
under this Agreement shall be made in USS and shall be paid by
telegraphic transfer into Carrera's bank account as Carrera may
nominate in writing from time to time;
8.8 Interest shall accrue on all sums due from the Licensee to Carrera and
outstanding beyond the due date of payment. Such interest shall accrue:
(a) at the LIBOR rate for US$) plus 2% (two per cent) per annum of
noon London time on the last working day preceding the
expiring date of payment; and
(b) on a daily basis both before and after any judgement.
8.9 If any investigation, set forth under clause 6.23, shows that the
relevant Account(s) rendered by the Licensee had underestimated the
Licence Fee due to Carrera by more than 3% (three per cent) then all
costs and expenses incurred by Carrera in relation to such
investigation and report shall be borne by the Licensee on a frill
indemnity basis and the Licensee shall reimburse Carrera on demand for
such costs and expenses plus interest, as determined in clause 8,8.
8.10 This Clause S shall continue in force after and notwithstanding any
expiry or termination of this Agreement, whatever the reason for
termination.
9. GUARANTEED MINIMA AND LUMP SUM
9.1 The Licensee undertakes to pay to Carrera a yearly minimum and
non-returnable Licence Fee as represented in Schedule 6.
9.2 The Licensee shall pay the minimum Licence Fees in 4 (four) equal
instalments on or before 31 March, 30 June, 30 September and 3 December
in each Licensed Year without any deduction or set off of any kind
which payments shall be made in accordance with the method set out
under Clause 8.7.
9.3 All payments of the minimum Licence Fees set out above shall count
towards settlement of the relevant Licence Fees tinder Clause 8.
9.4 The Licensee undertakes to pay to Carrera an amount of 200.000 US$ as
signing fee. Said fee shall be fully earned and non-refundable upon
payment. The payment of signing fee set out above shall be made at the
Effective Date in accordance with the method set out under clause 8.7.
10. SAMPLES
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As soon as available, the Licensee shall supply Carrera free of charge
with 2 (two) samples of each model and variation of Licensed Product to
be offered for sale that is to say two full collections of the Licensed
Products. rf any model of Licensed Product is updated or new model
introduced, the Licensee shall send to Carrera as soon as available two
samples of each such updates of new models. The Licensee shall provide
such further samples as may from time to time reasonably be requested
by Carrera at cost equal to the List Price less a discount of 50%
(fifty per cent) plus relevant taxes and duties.
11. MARKETING
11.1 The Licensee shall (subject to the giving of all necessary Approvals
under Clause 11.3) spend on marketing the Licensed Products in each
subsequent Licensed Year commencing January a sum equivalent to not
less than $0/a (five per cent) of the Net Sales of all Licensed
Products in the preceding Licensed Year broken up approximately as
follows:
(i) 3% on consumer and trade advertising
(ii) 2% on point of purchase materials, countercards and catalogues.
The Licensee shall provide Carrera with evidence of such expenditure in
each such period or the Licensed Year to date (as appropriate) with
each Annual Account provided under Clause S.
11.2 If at the end of a Licensed Year the Licensee has not spent all the
amount relating to the Licensed Year that is drawing to a close, the
Licensee is permitted to carry the balance forward to the following
Licensed Year. The balance in question shall be over and above the
Licensee's contractual obligations for the following Licensed Year.
11.3 The Licensee shall not advertise or promote the Licensed Products in
any manner without Approval as to the form and content of the
advertisement or promotion and the particular manner in which the
advertisement or promotion is to be published or otherwise presented to
potential customers.
11.4 The Licensee shall supply Carrera free of charge with a reasonable
quantity of catalogues, brochures, leaflets and similar material which
publicise the Licensed Products.
11.5 The Licensee shall procure that all advertising carried out by or on
behalf of the Licensee for the Licensed Products shall be carried out
in consultation and co-operation with such advertising agency or
agencies as Carrera may from time to time direct on a preferred
supplier basis. The Licensee shall also use its reasonable endeavours
to encourage its Distributors to consult and co-operate with such
advertising agency or agencies.
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11.6 The marketing programme for each year shall be discussed and agreed
between Carrera and the Licensee as required from time to time and not
less than once before the commencement of each year and in particular
with regard to the development in the Territory. The Licensee shall as
soon as practicable and on a regular, basis send to Carrera a schedule
of the advertisements the Licensee has decided to place with the media
and the date on which each advertisement will appear.
11.7 All marketing of the Licensed Products shall be carried out in a
tasteful and appropriate manner and not in any way which might
detrimentally affect Carrera's reputation for high quality prestige
products.
12 RESERVATION OF RIGHT
Carrera may suggest the Licensee at any time to appoint any person,
firm or company as a Distributor in those of the countries of Territory
for which the Licensee does not currently have a Distributor or where
the existing distribution network is not sufficient to represent the
Products. In such event the Licensee shall. when commercially
practicable at its own discretion, enter into a Distribution Agreement
with a Distributor, suggested by Carrera or chosen by the Licensee with
respect of the provisions of the above Clause 4.4.
13. INTELLECTUAL PROPERTY
13.1 Carrera shall have sole responsibility of the filing, registration and
prosecution of any Carrera's Intellectual Property. For this purpose
the Licensee will:
(a) co-operate fully with Carrera in connection with such filing,
registration and/or prosecution;
(b) supply to Carrera such samples, containers, labels, documents
and things as may from time to time be required by Carrera.
13.2 Carrera warrants that to the best of its knowledge Schedule 1 sets out
an accurate list of its Trademark registrations and applications at the
date of this Agreement in International Trademark Class, as represented
in the above mentioned Schedule 1, so far as it relates to the Products
in the Territory Carrera shall use its reasonable endeavours to
maintain those registrations and any registrations resulting from those
applications.
13.3 All intellectual property rights in and to the Licensed Products shall
vest in Carrera including (but not limited to):
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(a) copyright and design or similar rights in;
(i) all external features of the Licensed Products; and
(ii) all drawings, sketches, plans, designs, artwork,
illustrations, models, tooling, and moulds created
for the purpose of designing and/or producing the
Licensed Products; and
(b) all patents, Trademarks and patent and/or Trademark
applications in respect of the Licensed Products and which
form part of Carrera's Intellectual Property.
13.4 Without prejudice to Clause E all intellectual property rights in and
to all names, brands, trade names and Trademarks (both registered and
unregistered) applied to or used in connection with any or all of the
Licensed Products shall vest in Carrera. The Licensee shall not use or
permit to be used any such name, trade name and/or Trademark on any
Products other than in accordance with this Agreement either throughout
this Agreement or after its termination. This Clause 13.4 shall
continue in force after and notwithstanding the expiry or termination
of this Agreement, whatever the reason for such termination.
13.5 Without prejudice to Clauses 13.3 and 13.4, the Licensee shall procure
that, or if outside its control, use every reasonable effort to procure
that:
(a) its employees, officers and/or agents;
(b) its suppliers and their employees, officers and/or agents;
(c) its advertising agents and their employees, officers and/or
agents;
(d) other third parties who may from time to time carry out any
creative, literary or artistic work in connection with
advertising and/or marketing of the Licensed Products;
shall at Carrera's expense promptly do all such acts and execute all
such documents as Carrera may from time to time reasonably require to
vest or transfer title to all intellectual property rights in the
following in or to Carrera and/or to perfect or confirm such title
and/or to obtain waivers of all moral rights in the following;
(i) the Licensed Products;
(ii) the names, brands, trade names and Trademarks applied to or
used in connection with any or all of the Licensed Products;
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(iii) copyright and design or similar rights in:
(aa) all external features of the Licensed Products; and
(bb) all drawings, sketches, plans, designs, artwork,
illustrations, models, tooling and moulds created for
the purpose of designing and/or producing the
Licensed Products;
(iv) all parents and patent applications in respect of the Licensed
Products; and
(v) all advertising and/or marketing material used and/or prepared
in relation to the Licensed Products including (but not
limited to) all copyright works embodying and/or embodied in
such advertising and/or marketing material.
This Clause 13.5 shall continue in force after and notwithstanding the
expiry or termination of this Agreement, whatever the reason for such
termination.
13.6 The rights of the Licensee under Clause 2 shall include (to the extent
necessary to enable the Licensee to fulfil its obligations tinder this
Agreement) the right to use in accordance with this Agreement any
copyright. Trademarks, designs or other intellectual property right
obtained by Carrera under this Agreement in relation to the Licensed
Products.
13.7 The Licensee shall not at any time during the continuation of this
Agreement seek to register in any country any of the Carrera's
Intellectual Property. The Licensee acknowledges the sole and exclusive
rights and title of Carrera in and to Carrera's Intellectual Property.
13.8 The Licensee shall promptly notify Carrera of any infringement or
suspected infringement of any of Carrera's rights in any of Carrera's
Intellectual Property which may come to the Licensee's knowledge.
13.9 The Licensee shall, at the expense of Carrera, give Carrera all such
information and assistance (other than financial assistance) as Carrera
may reasonably require to enable such proceedings or other action to be
taken in relation to such infringement as Carrera may in its sole
discretion deem necessary or desirable.
13.10 Subject to Clause 13.9 the Licensee shall not institute proceedings or
take any other action against any infringer or suspected infringer of
the rights of Carrera in Carrera's Intellectual Property without
Approval.
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13.11 Carrera gives no warranty that it will commence proceedings in any
particular case of infringement or alleged infringement, but Carrera
will use its reasonable endeavours to protect Carrera's Intellectual
Property and shall consider the economic and commercial interests of
the Licensee in each particular case.
13.12 Carrera warrants and represents to the Licensee that Carrera is the
registered proprietor of the Trademark registrations and applications
listed in Schedule 1 but Carrera gives no warranty that the
registrations are valid or enforceable or that any of the applications
will result in registration;
13.13 The Licensee shall at Carrera's request and expense execute, register
or assist in the registration of all registered user and such other
agreements or documents necessary to enable the Licensee to use any or
all of Carrera's registered Trademark relating to Licensed Products in
any part of the Territory in accordance with the terms of this
Agreement.
13.14 The Licensee shall not be entitled to alter or use any variation or
modification of or any addition to any Trademarks or trade names
forming part of Carrera's Intellectual Property (the "Varied Trade
Names") without Approval.
13.15 For the avoidance of doubt, all rights in Carrera's Intellectual
Property other than those specifically licensed or granted in or under
this Agreement are reserved by Carrera for its own use and benefit or
for the use of such third parties as may from time to time be Approved.
13.16 If the Licensee becomes aware of any third party claim that the
Licensee's use of any of the Carrera's Intellectual Property infringes
the intellectual property rights or any other rights of such third
party the Licensee will:
(a) immediately notify Carrera in writing of such claim and will
provide all relevant available details;
(b) not make any admission or settlement in respect of any such
claim;
(c) if required by Carrera in writing, cease any use of such of
Carrera's Intellectual Property as is the subject of such
claim for such periods as Carrera may from time to time
direct. Tn such a case the Licensee shall on presenting its
estimates agree with Carrera such reasonable adjustments to
the guaranteed minimum figures under Clause 9 resulting from
such loss of sales due to the period of non use of such
Trademark.; and
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(d) at the expense of Carrera, give Carrera all such information
and assistance as Carrera may require to enable Carrera to
take such proceedings or other action in relation to such
claim or claims as Carrera may decide.
13.17 Carrera shall (save as provided below) have conduct of all proceedings
involving third parties relating to Carrera's Intellectual Property and
shall in its sole discretion decide what action, if any, to take in
respect of any infringement or alleged' infringement thereof or any
other claim brought or threatened in respect of the use or registration
of the Carrera's Intellectual Property. Any sums recovered by Carrera
in any proceedings taken by it shall be retained by Carrera.
14. CHANGE IN CONTROL
The Licensee shall forthwith give Carrera written notice of:
14.1 any material change:
(a) in the control of the Licensee ("control" meaning the power to
direct the affairs of the Licensee, whether by contract,
ownership of shares, or otherwise); or
(b) the directors and/or management of the Licensee; and/or
14.2 any other fact, matter or thing affecting the Licensee during the
continuance of this Agreement which might affect Carrera or the
performance by the Licensee of its obligations under this Agreement.
15. TERMINATION
15.1 Carrera may terminate this Agreement with immediate effect by giving
written notice to the Licensee if any of the following events occurs:
(a) if the Licensee commits a breach of this Agreement which is
capable of remedy and fails to remedy such breach within 30
days of being requested to do so;
(b) if the Licensee:
(i) becomes insolvent;
(ii) enters into liquidation, receivership or administra-
tion;
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(iii) ceases or threatens to cease to carry on business;
(iv) enters into any composition or arrangement with its
creditors;
(v) makes a general assignment for the benefit of
creditors; or
(vi) shall generally not pay its debts as they fall due or
shall admit in writing its inability to pay its debts
generally;
(c) if the Licensee is guilty of any conduct which in the reason-
able opinion of Carrera is prejudicial to the goodwill,
business and/or reputation of Carrera to a material extent;
(d) if any of the events specified in Clause 14 occurs whether or
not notice of such an event is given;
(e) if the Licensee commits a breach of the provisions of Article
20 of this Agreement;
(f) if the Licensee directly or indirectly opposes (or assists any
third party to oppose) the registration or renewal of any
trademark or any trademark application or renewal within the
Carrera's Intellectual Property; or
(g) if the Licensee disputes or directly or indirectly assists any
third party to dispute the validity of any Trademark within
the Carrera's Intellectual Property.
15.2 The Licensee may terminate this Agreement with immediate effect by
giving written notice to Carrera if any of the following events occur:
(a) if Carrera commits a breach of this Agreement which is capable
of remedy and fails to remedy such breach within 30 days of
being requested to do so; or
(b) if Carrera:
(i) becomes insolvent; or
(ii) enters into liquidation, receivership or administra-
tion;
(iii) ceases or threatens to cease to carry on business;
(iv) enters into any composition or arrangement with its
creditors; or
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(v) makes a general assignment for the benefit of
creditors;
15.3 Subject to Clause 15.4, the Licensee shall at its own cost immediately
upon the termination or expiry of this Agreement (howsoever caused)
return to Carrera:
(a) all notepaper, visiting cards, display materials, patterns,
catalogues, advertising materials and any other matter bearing
or including any of Carrera's Intellectual Property; and
(b) any property which belongs to Carrera which is in the
Licensee's possession or under its control.
15.4 If this Agreement terminates for any reason whatsoever. the Licensee
shall be permitted to manufacture such Licensed Products or spare pans
therefore as shall be required solely for the purpose of replacing
Licensed Products in accordance with the Licensee's guarantees and
after sales service for the Licensed Products for a period of 6 months
immediately following termination, save the case that Carrera,
accordingly to the following Clause 15.5(e), purchases all the existing
stock of finished and semifinished Products.
15.5 On termination or expiry of this Agreement (howsoever occurring):
(a) the Licensee shall subject to the provisions of Clauses 15.4
cease to use any of Carrera's Intellectual Property except in
fulfilling any orders properly and lawfully placed with and
accepted by the Licensee before or within six months after
such termination in accordance with Clause 15.4 and for
fulfilment within that six month period;
(b) the Licensee shall (and shall procure that all companies
within the Licensee's Group shall):
(i) remove all of Carrera's Intellectual Property and all
items embodying Carrera's Intellectual Property
(including but not limited to all labels, packaging
and markings featuring any of the Trademarks or to
which any of the Trademarks have been applied) from
all its stocks of Licensed Products (other than such
stocks as are to be sold or used as replacements by
the Licensee under Clause 15.4) and may then sell or
dispose of such stocks as it sees fit; and
(ii) if and to the extent that it is not practical or
commercially worthwhile to remove Carrera's
Intellectual Property from such stocks, then if and
to the extent that such stocks are not purchased by
Carrera under Clause 15.5 (e), destroy the stocks
under the supervision of such person as Carrera may
direct; and
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(iii) without prejudice to Clause 13.5, at its own expense
obtain and deliver up to Carrera all material
prepared or purchased for the Licensee and paid for
by the Licensee for use in or in connection with the
advertising and/or marketing of the Licensed
Products, except for items in respect of which the
Licensee or its advertising agency obtains only the
right of use;
(iv) on the expiry or termination of this Agreement, for
whatsoever reason, the Licensee, within 8 (eight)
days upon request in writing by Carrera shall send to
Carrera a complete list of tile existing inventory
of the tools, finished and semifinished Products.
(c) subject to Clauses 15.1 and 15.2, all rights in Carrera's
Intellectual Property granted or licensed to the Licensee
under this Agreement will automatically revert to Carrera;
(d) the parties shall take whatever steps may be necessary to
cancel any registration of this Agreement or any registration
of the Licensee as an authorised user of any Carrera's
Intellectual Property;
(e) Carrera shall have the option, to be exercised by notice in
writing to the Licensee within 40 (forty) days after
termination, to purchase such proportion of the Licensee's
stock of finished Licensed Products and/or such proportion of
the Licensee's stock of semifinished Products and tools for
Licensed Products as Carrera may see fit at the lower of the
Licensee's cost price and the wholesale market price of such
items (but without any License Fees being due in respect of
such purchase stock of finished Licensed Product).
For the avoidance of doubt the provisions of Clauses 15 shall
apply notwithstanding the provisions of this Sub-Clause (e).
It is understood that if Carrera decides not to exercise the
above option, the Licensee shall, subject to the provisions of
Clauses 15.4, destroy the tools or cease to use them;
(f) Carrera shall, upon reasonable notice of not less than 5
working days, have the right to enter the premises of the
Licensee during normal business hours to establish the number
of Licensed Products held in stock.
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15.6 For the avoidance of doubt if this Agreement expires or is terminated
by Carrera in accordance with the provisions of this Agreement, the
Licensee shall have no claim whatsoever against Carrera for
compensation in respect of the loss of the Licence granted in this
Agreement.
15.7 Any termination of this Agreement shall be without prejudice to the
rights of either party accrued up to the date of termination and shall
not affect any rights or obligations under this Agreement which are
expressed to continue after termination.
15.8 This Article 15 shall continue in force after and notwithstanding the
expiry or termination of his Agreement whatever the reason for
termination.
15.9 In case of termination for breach, the termination shall not affect the
right of the non-defaulting party to claim for any damages loss, cost
and expense suffered as a consequence of the default of the other
party.
16. REMEDIES
The rights and remedies contained in this Agreement are cumulative and
not exclusive of any rights or remedies provided by law.
17. INDEMNITY BY LICENSEE
The Licensee shall indemnify and hold harmless Carrera (on a hill
indemnity basis) against all losses damages or other liabilities.
whether direct or consequential (including but not limited to legal
costs). which Carrera may incur or suffer as a result of any claims,
suits or actions by reason of (i) acts or omissions of the Licensee;
(ii) faults or defects in the Licensed Products which have or alleged
to have caused loss or damage to any person or property; and (iii) any
breach of the Licensee's obligations under this Agreement including,
but not limited to, those under Clauses 6.7 and 6.8.
18. INSURANCE
The Licensee shall carry insurance covering all risks of loss arising
from alleged product and contractual liability (including, without
limitation, claims relating to the design, manufacture, distribution.
or intended use of any Article), with a limit of liability of not less
than USS 15.000.000. (fifteen million) per occurrence, and Carrera
shall be named therein as an additional insured and a certificate
evidencing such coverage shall be issued to Carrera. Such certificate
shall provide for at least ten days' prior written notice to Carrera in
the event of cancellation of the insurance, and the certificate
evidencing its renewal shall be furnished to Carrera.
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19. CONFIDENTIALITY
19.1 Neither Carrera nor the Licensee shall whether during the continuance
of this Agreement or thereafter divulge to any third party:
(a) any secret or confidential information (or information which
might reasonably be considered to be confidential or secret by
the other) relating to the business or affairs of the other
(except that Carrera may divulge such information insofar as
such information relates to the Licensed Products); or
(b) any information (other than Information, which may be
disclosed by Carrera) which might reasonably be considered
likely to affect detrimentally the other's business, goodwill
or other legitimate interests except:
(i) as required by law;
(ii) for the purposes of obtaining professional advice; or
(iii) to the extent that such information is already in the
public domain other than through breach of this
Clause.
19.2 This Clause 19 shall survive the expiry or any termination of this
Agreement, howsoever arising.
19.3 The Licensee shall not make any public statement or announcement or
issue any press release concerning this Agreement without the prior
written consent of Carrera, except as may be required by applicable
law.
20. NON TRANSFERABILITY
Under no circumstances, the Licensee may assign all or any part of the
rights granted under this Agreement to any person whatsoever, including
a successor-in-interest to its business, either by contribution,
merger, split or transformation in any form whatsoever.
21. RELATIONSHIP BETWEEN THE PARTIES
21.1 Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between the parties or make one party the agent of the
other for any purpose.
21.2 The Licensee shall act in good faith and in the best interests of
Carrera in all its dealings regarding this Agreement and the Licensed
Products, the Licensee shall have no authority
<PAGE>
Safilo(R)
Group
or power to bind Carrera or any of its Agents or to incur any liability
whatsoever on its or their behalf.
21.3 Each party represents and warrants to the other party that it has the
full right, power and authority to enter into this Agreement and to
perform all of its obligations under this Agreement.
22. NOTICES AND APPROVALS
22.1 Any notice, approval or other document or consent required to be given
under this Agreement shall be in writing and shall be sufficiently
given to the party to be served if it is:
(a) delivered by hand; or
(b) sent by facsimile transmission with a confirmation copy sent
by registered or similar air-mail post;
to the address shown on page 1 or to such other address(es) as may be
notified from time to time in accordance with this Agreement.
22.2 Such notices shall be marked for the attention of the Managing Direc-
tor.
22.3 Any notice or other document served by post in accordance with this
Agreement shall be deemed served on the earlier of:
(a) actual receipt; or
(b) the expiry of five Working Days after posting, provided it is
posted in U.S.A. or Italy (excluding days when postal services
in the area of posting, sorting or destination are disrupted
by industrial action).
23. ENTIRE AGREEMENT
23.1 This Agreement supersedes all previous oral or written agreements or
arrangements between the pal-ties (if any) in relation to its subject
matter and embodies the entire understanding of the parties in relation
to its subject matter.
23.2 Any representations made by either party which have in any way induced
the other party to enter into this Agreement have been reduced to
writing and are included in this Agreement.
<PAGE>
Safilo(R)
Group
23.3 No amendments to or modifications of any of the provisions of this
Agreement shall be effective unless they are in writing and signed by a
duly authorised representative of each of the panics.
24. SEVERABILITY
24.1 Each of the provisions contained in this Agreement and in each Clause
and Paragraph of this Agreement shall be construed as independent of
every other such provision, so that if any provision of this Agreement
or the application of any provision to any person, firm or company or
to any circumstances shall be determined by any competent court or
authority to be invalid or unenforceable then such determination shall
not affect any other provisions of this Agreement (or the application
of such provision to any person, firm or company or circumstances) and
alt of such other provisions shall remain in full force and effect.
24.2 If any such provisions shall be found to be invalid or unenforceable
but would be valid if some part thereof were deleted or the period or
area of application reduced such provisions will apply with such
modification or modifications as may be necessary to make them valid
and effective.
25. FORCE MAJEURE
25.1 If either party is prevented, hindered or delayed from or in performing
any of its obligations under this Agreement (other than an obligation
to make payment) by a Force Majeure Event then:
25.1.1 that party's obligations under this Agreement shall be
suspended for so long as the Force Majeure Event continues and
to the extent that party is so prevented, hindered or delayed;
25.1.2 as soon as reasonably possible after commencement of the Force
Majeure Event that party shall notify the other party in
writing of the occurrence of the Force Majeure Event, the date
of commencement of the Force Majeure Event and the effects of
the Force Majeure Event on its ability to perform its
obligations under this Agreement;
25.1.3 that party shall use all reasonable efforts to mitigate the
effects of the Force Majeure Event upon the performance of its
obligations under this Agreement; and
25.1.4 as soon as reasonably possible after the cessation of the
Force Majeure Event that party shall notify the other party in
writing of the cessation of the Force Majeure Event and shall
resume performance of its obligations under this Agreement.
<PAGE>
Safilo(R)
Group
25.2 If the Force Majeure Event continues for more than six months either
party may terminate this Agreement by giving not less than 30 days
notice in writing to the other party.
25.3 For the purposes of this Clause, "Force Majeure Event" means any event
beyond the reasonable control of a party and which is unavoidable
notwithstanding the reasonable care of that party including, but not
limited to, acts of God; war, riot, civil commotion; malicious damage;
compliance with any law or governmental order, rule regulation or
direction; accident; breakdown of plant or machinery; fire; flood or
storm.
25.4 Subject to Clause 25.1 and 25.2 neither party shall be liable for any
loss, liability, cost or damage suffered by the other party due to a
Force Majeure Event.
26. NO WAIVER
No forbearance, indulgence or relaxation shown or granted by either of
the parties in enforcing any of the terms and conditions of this
Agreement shall in any way affect, diminish, restrict. operate as or be
deemed to be a waiver of any breach of any such terms or conditions by
that party.
27. NO BROKERAGE FEE
Carrera is not and will not be obliged or required to pay any
brokerage, introduction or tinder's fee of any kind to the Licensee or
any third party in connection with this Agreement or its execution.
28. MISCELLANEOUS
28.1 The parties agree that this Agreement will be effective only after the
binding party has notified such Agreement to the competent local
antitrust authority and/or obtained the relevant authorisation.
28.2. In the event that this Agreement is translated into the Distributor's
language, only the English version is considered valid.
29. HEADINGS
<PAGE>
Safilo(R)
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The headings to this Agreement are for ease of reference only and shall
not be used in the interpretation of this Agreement.
30. APPLICABLE LAW
This Agreement is governed by Austrian law.
31. ARBITRATION
31.1 Any dispute arising out of or in connection with this Agreement shall
be finally settled in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce, by three
arbitrators designated in accordance with said Rules.
31.2 The place of the arbitration shall be London.
31.3 The arbitration courts decision shall be final and binding for both
panics to the Agreement.
31.4 The language to be used in the arbitration proceedings shall be English.
32. COUNTERPARTS
This Agreement may be executed in counterparts, each of which when
executed shall be an original but all the counterparts together shall
constitute one and the same instrument.
<PAGE>
Safilo(R)
Group
SCHEDULE 1
<TABLE>
<CAPTION>
TRADEMARKS
CARRERA
<S> <C> <C> <C> <C> <C>
COUNTRY REGISTR. REGISTR. EXPIRY INTERN. PRODUCTS
NO. DATE DATE CLASS
AUSTRIA 68966 21.04.17 30.04.01 18 bags
68966 21.04.71 30.04.01 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
CANADA TMA390023 15.11.91 15.11.06 25 apparel
GERMANY 949762 01.10.76 08.07.96 28 club, balls, club head cover, carry bags,
bag travel cover, gloves
bags, umbrellas
JAPAN 789824 05.06.68 12.08.98 25 apparel, towels, caps
Applic. n. 72152 14.07.95 25 apparel, shores
Applic. n. 72153 14.07.95 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
Applic. 18 bags, umbrellas
TAIWAN 518953 01.04.91 31.03.01 18 bags
SAUDI 19168 13.02.89 29.01.98 18 bags
ARABIA
U.K. Applic. n. 2116671 257.11.96 18 bags, umbrellas
25 apparel, shoes, hats, cap visors
28
clubs, balls, club head cover, carry bags,
bag travel cover, gloves
U.S.A. 1258309 22.11.83 22.11.03 25 shirts, sun visor hats
Applic. 27.11.96 18 bags, umbrellas
25 apparel, shoes, hats, cap visors
28
clubs, balls, club head cover, carry bags,
bag travel cover, gloves
INTERN.
REGISTR. 430574 22.04.77 22.04.97 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
<PAGE>
Safilo(R)
Group
<CAPTION>
<S> <C> <C> <C> <C> <C>
COUNTRY REGISTR. REGISTR. EXPIRY INTERN. PRODUCTS
NO. DATE DATE CLASS
ARGENTINA 1370579 27.12.89 27.12.99 18 bags, umbrellas
1325178 23.12.88 23.12.98 25 apparel, shoes
1311976 21.09.88 21.09.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
AUSTRALIA B498714 03.11.88 03.11.09 18 bags, umbrellas
B307087 20.06.79 11.05.98 25 apparel, shoes
B307089 20.06.79 11.05.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
AUSTRIA 104132 20.12.83 21.11.03 18 bags
BAHARAIN 11767 04.07.88 04.07.03 18 bags, umbrellas
11768 04.07.88 04.07.03 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
BRASILE 810729873 07.01.85 15.01.05 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
CANADA 410961 16.04.93 16.04.08 18 bags
CHILE 328524 27.12.77 16.03.98 25 apparel
328524 27.12.77 16.03.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
DUBAI Cautionary Notice March 25 apparel, shoes
1988
FINLAND 78659 07.09.81 07.09.01 25 apparel
78659 07.09.81 07.09.01 25 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
HONG B05202 27.06.95 10.03.99 18 bags, umbrella
KONG
INDIA S02045 31.03.95 09.12.95 18 bags, umbrella
JAPAN 1522699 28.08.92 29.06.02 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
2121073 27.03.89 27.03.09 25 apparel, towels, caps
2594298 29.10.93 29.10.03 18 umbrellas
(In kana 1536732 28.08.92 29.06.02 28 clubs, balls, club head cover, carry bags,
characters) bag travel cover, gloves
(in kana 2121074 27.03.89 27.03.99 25 apparel, towels, caps
characters)
KUWAIT 20121 02.04.89 09.06.98 18 bags, umbrellas
20122 02.04.89 09.06.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
MACAU 8275 06.01.94 06.01.04 25 apparel shores
<PAGE>
Safilo(R)
Group
<CAPTION>
<S> <C> <C> <C> <C> <C>
COUNTRY REGISTR. REGISTR. EXPIRY INTERN. PRODUCTS
NO. DATE DATE CLASS
MALAYSIA 88/0699 11.12.93 14.12.95 18 bags made of leather and imitations of
leather, umbrellas
MEXICO 337737 02.12.87 17.06.01 18 umbrellas
Applic. n. 118244 18 bags, umbrellas
Applic. n. 118244 25 apparel, shoes, hats, cap visors
NEW B119438 16.05.77 16.05.98 25 apparel, shoes
ZEALAND
B119439 16.05.77 16.05.98 28
NORWAY 101668 08.02.79 08.02.99 25+28 apparel
101668 08.02.79 08.02.99 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
OMAN Cautionary Notice 01.06.88 18 bags, umbrellas
Cautionary Notice 01.06.88 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
PANAMA 061030 09.03.94 09.03.04 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
PHILIPPINE 53206 07.08.92 07.08.12 25 apparel, shoes
QATAR 6611 30.04.92 14.05.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
6610 03.03.92 14.05.98 18 bags. Umbrellas
SAUDI 11253 05.02.85 20.08.02 28 clubs, balls, club head cover, carry bags,
ARABIA bag travel cover, gloves
SOUTH 771414 31.03.87 31.03.97 25 apparel, shores
AFRICA 771413 31.03.87 31.03.97 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
SOUTH 194457 22.06.90 21.06.00 18 bags
KOREA
SWEDEN 167990 08.06.79 08.06.99 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
TAIWAN 456132 01.10.89 30.09.99 18 umbrellas
379692 01.10.89 30.09.99 25 shoes
UNITED November 18 bags, umbrellas
ARAB 1995
EMIRATES November 25 apparel, shores
1995
November 28 clubs, balls, club head cover, carry bags,
1995 bag travel cover, gloves
<PAGE>
Safilo(R)
Group
<CAPTION>
<S> <C> <C> <C> <C> <C>
COUNTRY REGISTR. REGISTR. EXPIRY INTERN. PRODUCTS
NO. DATE DATE CLASS
VENEZUELA 94823F 16.06.80 16.06.95 25 apparel, shoes
(Renew
ed)
YEMEN 1665 19.07.88 19.07.98 28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
1666 19.07.88 19.07.98 18 bags, umbrellas
INTERN. 486028 20.03.84 20.03.04 18 bags, umbrellas
REGISTR.
for: Austria, Germany, France, Italy, Switzerland, Algeria, Benelux, Denmark, Bulgaria, Hungary, Croatia, Slovenia,
Czech Republic, Liechtenstein, Marocco, Monaco, North Korea, Romania, San Marino, Sudan, Tunisia, Vietnam,
Yugoslavia
INTERN. 486028 20.03.84 20.03.04 28 clubs, balls, club head cover, carry bags,
REGISTR. bag travel cover, gloves
for: Austria, France, Italy, Switzerland, Spain, Algeria, Denmark, Benelux, Bulgaria, Croatia, Slovenia, Czech Republic,
Liechtenstein, Marocco, Monaco, North Korea, Romania, San Marion, Sudan, Tunisia, Vietnam, Yugoslavia
INTERN. 430575 22.04.77 22.04.97 28 clubs, balls, club head cover, carry bags,
REGISTR. bag travel cover, gloves
for: Austria, Germany, Benelux, Italy.
U.K. Applic. n. 2116668 25.11.96 18 bags, umbrellas
25 apparel, shoes, hats, cap visors
28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
U.S.A. Applic. 27.11.96 18 bags, umbrellas
25 apparel, shoes, hats, cap visors
28 clubs, balls, club head cover, carry bags,
bag travel cover, gloves
</TABLE>
<PAGE>
Safilo(R)
Group
SCHEDULE 2
PRODUCTS
1 GOLF APPAREL*
2 GOLF SHOES
3 GOLF CLUBS
4 GOLF BALLS
5 GOLF CLUB HEAD COVER
6 GOLF BAGS*
7 GOLF CARRY BAGS
8 GOLF BAG TRAVEL COVER
9 GOLF GLOVES
10 GOLF HATS AND CAP VISORS*
11 GOLF UMBRELLA*
12 GOLF TOWELS*
(*) For these Products the Trademark should be always used by the Licensee
together with the word "GOLF". This is for avoiding any confusion with
products similar to the Products and for which other licensees may have
granted a license on the Territory.
Jn the case that in some of the countries of the Territory results that the
above Products are not covered in the relevant class, Carrera undertakes to
proceed for filing an application to provide for the extention of the
registration.
<PAGE>
Safilo(R)
Group
SCHEDULE 3
TERRITORY
TERRITORIES PRODUCTS (1)
Algeria 3-4-5-6-7-8-9-11
Argentina 1-2-3-4-5-6-7-8-9-11
Australia 1-2-3-4-5-6-7-8-9-11
Austria 3-4-5-6-7-8-9-11
Baharain 3-4-5-6-7-8-9-11
Benelux 3-4-5-6-7-8-9-11
Brasile 3-4-5-7-8-9
Bulgaria 3-4-5-6-7-8-9-Il
Canada 1-6
Chile 1-3-4-5-7-8-9
China (2)
Croatia 3-4-5-6-7-8-9-11
Czech Republic 3-4-5-6-7-8-9-11
Denmark 3-4-5-6-7-8-9-11
Dubai 1-2
U.A.E. 1-2-3-4-5-6-7-8-9-11
Finland 1-3-4-5-7-8-9
France 3-4-5-6-7-8-9-11
Germany 3-4-5-6-7-8-9-11
Hong Kong 6-11
Hungary 6-11
India 6-11
Indonesia (2)
Italy 3-4-5-6-7-8-9-11
Japan 1-2-3-4-5-7-8-9-10-12
<PAGE>
Safilo(R)
Group
Jugoslavia 3-4-5-6-7-8-9-11
Korea South 6
Korea North 3-4-5-6-7-8-9-11
Kuwait 3-4-5-6-7-8-9-11
Liechtenstein 3-4-5-6-7-8-9-11
Macao (Portugal) 1-2
Malaysia 6 (only bags made of leather and
imitations of leather)-11
Mexico 1-2-6-10-11
Monaco 3-4-5-6-7-8-9-11
Marocco 3-4-5-6-7-8-9-11
New Zealand 1-2-3-4-5-7-8-9
Norway 1-3-4-5-7-8-9
Oman 3-4-5-6-7-8-9-l 1
Panama 3-4-5-7-8-9
Philippines 1-2
Quatar 3-4-6-7-8-9-11
Rumania 3-4-5-6-7-8-9-11
San Marino 3-4-5-6-7-8-9-11
Saudi Arabia 3-4-5-6-7-8-9
Singapore (2)
Spain 3-4-5-7-8-9
Slovenia 3-4-5-6-7-8-9-11
South Africa 1-2-3-4-5-7-8-9
Sudan 3-4-5-6-7-8-9-11
Sweden 3-4-5-7-8-9
Switzerland 3-4-5-6-7-8-9-11
Taiwan 2-6-11
Thailand (2)
Tunisia 3-4-5-6-7-8-9-11
United Kingdom 1-2-3-4-5-6-7-8-9-10-1 1-12
<PAGE>
Safilo(R)
Group
U.S.A. 1-2-3-4-5-6-7-8-9-10-11 -12
Venezuela 1-2
Vietnam 3-4-5-6-7-8-9-Il
Yemen 3-4-5-6-7-8-9-11
(1) The numbers of this column indicates the Products in Schedule 2 for
which a registration already exists, as results also in Schedule 1.
Subject to what it is stated in Clause 13.2 of this Agreement, for the
missing Products the proceeding for filing an application to provide
for the registration are being or will be arranged.
(2) Subject to what it is stated in Clause 13.2 of this Agreement, these
countries will be part of the Territory as soon as Carrera provides
with the filing of the relevant trademark applications. Carrera
undertakes to inform the Licensee as soon as it has provided.
<PAGE>
6
SCHEDULE 4
LICENCE FEES
(clauses 1.1.10 and 7.1)
The Licensee shall pay ro Carrera the License Fees as follows:
o for the Licensed Products sold by the Licensee to Stockists and
Distributors an amount equal to the 6% (six per cent) of Net Sales;
o for the first contractual period, from the Effective Date to December
31, 1997, the above percentage will be calculated on the Net Sales
effected in the same period. The relevant amount will be paid in
accordance with article 7.3 of this Agreement.
<PAGE>
Safilo(R)
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SCHEDULE 5.1
<TABLE>
<CAPTION>
NET SALES
<S> <C> <C> <C> <C> <C>
COUNTRY EXCHANGE UNITS NET SALES NET SALES LICENCE FEES
RATE LOCAL US$ US$
CURRENCY
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Safilo(R)
Group
SCHEDULE 5.2
DISCOUNTS
- --------------------------------------------------------------------------------
UNITS INVOICED
- --------------------------------------------------------------------------------
GROSS SALES
- --------------------------------------------------------------------------------
DISCOUNTS
- --------------------------------------------------------------------------------
SALES
AVERAGE SALES
PRICES
- --------------------------------------------------------------------------------
<PAGE>
Safilo(R)
Group
SCHEDULE 5.3
<TABLE>
<CAPTION>
LIST PRICES
<S> <C> <C> <C> <C>
DESCRIPTION OF SALES AREA PRICE DATE OF VALIDITY CURRENCY
PRODUCTS
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Safilo(R)
Group
SCHEDULE 6
GUARANTEED MINIMA
(Clause 9.1)
The Licensee shall pay to Carrera a yearly minimum and non-returnable Licence
Fee as follows:
o an amount equal to the 80% (eighty per cent) of the royalty calculated
on turnover of the previous Licensed Year. In no event shall the amount
paid be lower than the followings:
1997: 290.000 US$
1998: 450.000 US$
1999: 630.000 US$
2000: 780.000 US$
2001: 900.000 US$
2002: 1.100.000 US$
2003: 1.250.000 US$
2004: 1.450.000 US$
2005: 1.600.000 US$
2006: 1.800.000 US$
<PAGE>
Safilo(R)
Group
IN WITNESS of this Agreement the duly authorised representatives of the parties
have executed this agreement on or before the date specified at the beginning of
this Agreement.
Signed by)
/s/ Tabacchi Vittorio
- -----------------------------------
Attorney )
-for and on behalf)
of CARRERA OPTYL MARKETING GmbH )
Signed by)
/s/ Ron R. Karrani
- -----------------------------------
President )
for and on behalf)
of GRAFIX TIME Corporation )
