LICENSE CONTRACT
This License Contract is entered into as of October 29, 1999 ("Effective date")
by and among Daewoo Electronics Co. LTD. ("Daewoo"), a corporation duly
organized and existing under the law of the Republic of Korea, having its
principal office at 686, Ahyon-dong, Mapo-gu, Seoul, Korea; and Emerson Radio
Corp. ("Emerson"), a corporation duly organized and existing under the law of
the State of Delaware, U.S.A., having its principal office at 9 Entin Road,
Parsippany, New Jersey 07054-0430, U.S.A.
1. Emerson will continue to be the entity to procure business in the U.S. for
Daewoo for the products listed on the attached Exhibit ("product") which Daewoo,
as independent contractor, manufactures to be shipped under the
Emerson(Registered) trademark.
Emerson and Daewoo each shall, during the continuance of this agreement,
diligently and faithfully fulfill their obligations under this agreement and
shall undertake to use reasonable efforts to maximize the sales of the products
in the U.S.A. and shall maintain and safeguard the goodwill, reputation,
prestige and interest of the other and shall not do anything that will prevent
such sale or interfere with the development of the product in the U.S.A.
In accordance with past practice, Emerson shall keep Daewoo informed upon
request of Daewoo of market conditions within the U.S.A. for the products and
activities and prices of competitors and provide available information relevant
for the purpose of furthering the sale of the products. Emerson shall render to
Daewoo, during the term of this agreement, and thereafter, such assistance as
Daewoo may reasonably request in support of Daewoo's efforts to receive,
collect, recover or sue for payment due from purchasers of the products under
orders solicited by Emerson.
2. All orders for product will continue to be written directly to Daewoo which
will be responsible for order processing, shipment, credit, collections, and
after sales services. Daewoo will also continue to be responsible for returns
and returns processing for all products sold under this program, and all sales
will be subject to Daewoo's return for credit policy. Emerson shall not, without
the written consent and the authority of Daewoo, collect any monies from any
customers of the products.
3. Daewoo will pay Emerson the commissions as set forth on the attached
Exhibit for Emerson's sales and marketing services as follows:
A. Commissions will be calculated on net sales, less actual returns.
B. Commencing April 1, 2000, Daewoo will also pay Emerson the minimum
commissions also set forth on the attached Exhibit.
C. Emerson will continue to be responsible for any commissions it pays to
its sales representatives to acquire the business covered by this
agreement.
D. Any commissions stipulated and paid hereunder shall be deemed to cover
all the costs, fees, charges and expenses incurred by Emerson in
connection with the respective sale of the products.
4. This agreement shall remain in effect from the Effective date through and
including March 31, 2003, unless otherwise provided herein ("term").
5. Emerson will continue to have, in its sole discretion, the right to take
any action regarding its exclusively owned trademark, including that necessary
to protect the integrity of its mark (which would include, among other things,
the right to receive and approve samples and literature to assure quality and
proper usage of its mark). Emerson shall not, in the U.S.A., deal in any of the
products set forth on the attached Exhibit on its own behalf or as a
representative of any other supplier or manufacturer. Daewoo agrees that it
shall comply with all action required by Emerson to protect its mark, notify
Emerson promptly of any alleged infringement of its rights in and to its
trademarks and cooperate with Emerson in the enforcement of its trademark(s).
Emerson represents and warrants that it is the owner of the trademarks
applicable to the products and has the right to authorize Daewoo to sell the
products in the U.S., and Emerson shall indemnify and hold Daewoo harmless from
and against any costs, legal fees or damages finally awarded in connection with
a breach of this warranty. Upon termination or expiration, Daewoo shall have no
further right to sell products with the Emerson trademark, except that Daewoo
(utilizing Emerson's sales and marketing services as defined in this agreement)
shall be permitted to sell products or components bearing the trademark which
are in stock, on hand, or on order as previously confirmed by Emerson, at the
time of termination or expiration, for a period of time not to exceed six (6)
months from such date of expiration or termination, at prevailing market prices.
Commissions shall be due on all such sales.
In the event that all such product is not sold within such six (6) month
period, Emerson has the right to purchase such remaining product at Daewoo's
factory cost. Any such product not purchased by Emerson may only be sold by
Daewoo without the Emerson trademark.
6. Notwithstanding the provisions of this agreement, this agreement may be
terminated: a.) by agreement in writing of the parties; b.) by the non-
defaulting party, upon any default by the other party in the performance of any
of its obligations under this agreement, if such default is not remedied within
forty-five (45) days after receipt of notice thereof from the non-defaulting
party; c.) by either party, upon the other party's: (1) making assignment of all
or a substantial portion of assets for the benefit of creditors, being adjudged
bankrupt, or becoming insolvent; (2) filing a petition seeking its dissolution
or liquidation, not stayed or dismissed within sixty (60) days; or (3) ceasing
to do business for any reason; or d.) by either party if an event of force
majeure continues for more than three (3) months.
Upon termination of this agreement, Emerson is entitled to receive the
commission in respect of sales resulting from orders received by Daewoo and
previously confirmed by Emerson up to the date of such termination or for the
sale of products or components bearing the trademark which are in stock, or on
hand at the time of termination as provided in paragraph 5 above. Except for
claims arising from obligations set forth in paragraphs 5, 7, 8 and 9, no
further amounts for indemnification or otherwise, shall be payable by either
party to the other party, its officers or employees, upon or after termination
of this agreement. Termination of this agreement shall not release either party
from any accrued obligation hereunder.
7. Daewoo shall defend and indemnify Emerson, its subsidiaries, and their
representatives from and against any and all claims, damages and costs of any
nature (including attorneys' fees and expenses), directly arising from or
related to Daewoo's manufacture or distribution of the products or the conduct
of its business and shall maintain insurance satisfactory to Emerson.
Emerson shall indemnify, protect and save Daewoo from all claims, demands,
suits or actions for damage to property or persons which may be sustained by any
third party directly arising from or related to the conduct of Emerson's
business.
8. Each party will not disclose any confidential information to third parties
without the express written consent of the other party, unless compelled by
law/legal process/applicable securities/national securities exchange rules or
regulations.
9. Miscellaneous.
A. Each party warrants that it is validly existing, has the full power and
authority to execute and perform under this agreement, shall comply with all
applicable laws, rules, codes, etc. relating to the conduct of its business and
its obligations hereunder, and that it and its products are and will continue to
be Year 2000 compliant.
B. The parties have agreed that this agreement be interpreted in the English
language and may be executed in any number of counterparts or by facsimile, all
of which will constitute one agreement. All notices will be delivered, in
English, by facsimile to the other party at its facsimile number noted below
(unless otherwise notified by facsimile) and be effective upon actual receipt.
C. This agreement supersedes all other agreements, oral or written, regarding
its subject matter and may not be changed, amended or waived, except in a
writing signed by both parties. This agreement and every term and condition
thereof shall inure to the benefit of the parties, and shall be binding upon any
successors to the parties, but neither party may, in any event, assign or
otherwise transfer this agreement or any rights thereunder directly or
indirectly or voluntarily or by operation of law, without the prior written
consent of the other party. If any provision of this agreement proves to be
invalid or unenforceable under existing or future law, the remaining provisions
of the agreement will remain in force in all other respects. The respective
representations and covenants of the parties shall survive any termination of
this agreement.
D. The law of New Jersey, U.S.A., excluding its conflicts of law provisions,
governs this agreement and the courts of New Jersey will have sole and exclusive
jurisdiction over the parties in any dispute, except each party has the right to
make application for, and seek enforcement of, injunctive relief in any court
having jurisdiction.
E. Daewoo shall preserve accurate records relating to the production,
distribution and after sales service of the products for a period of 3 years
from the expiration or termination of this agreement and shall permit, upon
request, Emerson or its agents to review such records.
F. Nothing herein contained shall entitle either party to enter into any
obligation or commitment binding upon the other party without the prior written
consent of such party which such party shall be under no obligation to give.
G. Emerson agrees that it has no authority to make or give and shall not make
any representation or give any guarantee or warranty in respect of the products
other than as Daewoo may from time to time in writing expressly authorize.
Emerson Radio Corp. Daewoo Electronics Co., Ltd.
By: /s/ Geoffrey P. Jurick By: /s/ Tak-Myung Kang
Geoffrey P. Jurick Tak-Myung Kang
Chairman of the Board, CEO Executive Managing Director
and President
[Facsimile No.: (973) 428-2424] [Facsimile No.: 0118223608000]