LICENSE AGREEMENT
AGREEMENT made as of this 29th day of July, 1998 by and
between LOTTO S.p.A., a corporation organized and existing
under the laws of Italy and having its registered office at
200, Via S. Gaetano -MONTEBELLUNA (Treviso) -(ITALY)
(hereinafter referred to as "LICENSOR") on the first hand, and
AARICA HOLDING INC., a company duly organized and existing
under the laws of United States, having its registered office
at 1080 Howell Branch Road, Winter Park, FL (hereinafter
referred to as "LICENSEE") on the second hand
WHEREAS
a) LICENSOR is the registered owner and/or has made application
for registration of the Trademarks (as hereinafter defined) in
the Territory (as hereinafter defined) in connection with the
manufacture, distribution, promotion and sale of Products (as
hereinafter defined);
b) LICENSOR is in possession of valuable know-how relating to some
techniques and methods manufacture, merchandising and marketing relating to
the Products;
c) LICENSEE desires to utilize such know-how to enable it to
manufacture, promote and sell the Products in the Territory under the
Trademarks; and
d) LICENSOR has agreed to make available to LICENSEE such
know-how and to permit LICENSEE to manufacture and distribute
the Products in the Territory under the said "know-how" and
give to LICENSEE the right to use the Trademarks in relation
thereto on the terms and conditions hereinafter appearing.
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as
follows:
1. Definitions
For purposes of this Agreement, the following definitions
shall apply: 1.1 -"Technical Information" shall include, but
not be limited to, all LICENSOR know- how, designs, materials,
production methods and techniques, formulae, specifications,
directions and standards for manufacturing and packaging and
all
commercial and marketing information applicable to the
Product(s) and all subsequent modifications, improvements and
additions thereto.
1.2 -"Product(s)" shall mean exclusively, Men's, Ladies' and
Children's shoes, apparel and accessories relating thereto to
be agreed upon in writing season by season by LICENSOR and
LICENSEE, manufactured and/or designed by LICENSOR in whole or
in any part with use of any Technical Information and
distributed under the Trademarks at the date of execution of
this Agreement or any other product that LICENSEE
manufactures, packages and or distributes in accordance with
the terms of this Agreement. 1.3 -"Trademarks" shall mean all
the trademarks and logos set forth in Exhibit " A" and any
further registration or application for registration for any
trademark or logo as may be agreed to in writing between the
parties hereto from time to time during the term of this
Agreement.
1.4 -"Territory" shall mean inside the territory of United
States of Mexico and any other country the parties shall agree
upon in writing during the term of this Agreement 1.5-
"Effective date" shall mean January 1st, 1999. 1.6 -"
Affiliated company(ies)" shall mean any entity or company
directly or indirectly owned or anyway controlled by LICENSEE.
2. Manufacturing and Trademark License
Subject to the terms and conditions hereinafter set forth,
LICENSOR hereby grants to LICENSEE during the term of this
Agreement an exclusive license to use the Technical
Information for the manufacturing, packaging and distribution
of the Products in the Territory, and to use the Trademarks in
connection with the said Products in the Territory, strictly
in accordance with this Agreement (hereinafter collectively
called the "license"). The license is granted only as
indicated above, and specifically excludes any right to
practice, use or apply the Technical Information or Trademarks
to manufacture, assemble and/or distribute any Product or
other items in or to any parties located in any other country
or to assist or procure the manufacture or use of the Products
and of the Trademarks outside the Territory as indicated
above.
3. Manufacturing, Packaging and Distribution
3 .1 -Products shall be manufactured and packaged from such
materials and using such production methods and techniques as
LICENSOR shall specify.
3.2 -LICENSEE recognizes the importance to both parties of
high standards of quality in relation to the Products
manufactured under this license.
LICENSEE therefore undertakes and agrees that all Products
manufactured pursuant to the license shall conform in ll
respects with formulae, designs, specifications, directions
and standards for manufacturing and packaging communicated
from time to time by LICENSOR in written or graphic form to
LICENSEE which shall conform with LICENSOR's internationally
recognized Products' standards. However, LICENSOR acknowledge
that due to specific need of LICENSEE's market and Territory
LICENSEE might request to manufacture special Products to be
sold in the Territory which could not conform to the
abovementioned standards and specifications. In such case
LICENSEE shall submit such Products to LICENSOR for approval
which approval shall not be unreasonably withheld. If so
requested by LICENSOR, LICENSEE undertakes to affix to all
Licensed Products anti-imitation tags and/or labels which
shall be purchased by LICENSEE from LICENSOR or any other
source which can supply a similar quality product, at
competitive prices. 3.3 -LICENSOR shall have the right to have
its representatives present in LICENSEE's or its affiliate
plant or other point of manufacture or distribution during any
or all manufacturing, packaging and distribution activities in
connection with the Products. LICENSEE shall permit such
representatives to observe, inspect and test all machinery,
facilities, equipment, raw materials, ingredients, containers,
packaging materials and labels which are used in connection
with such manufacturing, packaging and distribution
activities, and to observe, inspect and test or have LICENSEE
tested work in progress and finished units of the Products.
3.4 -Prior to any distribution of any Product manufactured
under this Agreement, LICENSEE shall submit upon request
production samples of finished units of that Product,
including the packaging and labels to LICENSOR, and LICENSEE
shall not commence distribution of that Product until LICENSEE
has received the initial approval of LICENSOR for such
samples. LICENSOR shall inspect such samples and give its
answer to LICENSEE within 8 (eight) working days after receipt
by it of the samples, otherwise such samples shall be deemed
approved by LICENSOR. If forthcoming, such approval shall be
communicated to LICENSEE by cable or telex. Thereafter,
LICENSEE shall submit to LICENSOR reasonable numbers of
samples of finished units of the Products, including packaging
and labels from time to time when requested to do so by
LICENSOR. LICENSEE shall withdraw from the ~ course of
manufacture or from the market any of the Products
manufactured under.
this Agreement which do not conform with the formulae,
specifications, directions and standards referred to in
Section 3(2) hereof LICENSEE shall make no changes in the
formulae, designs, specifications, directions and standards
for manufacturing and packaging the Products without prior
written approval of LICENSOR.
4. Technical Assistance and Know-How
4.1 -LICENSOR shall from time to time and to such extent as it
shall consider reasonably necessary under this Agreement,
furnish to LICENSEE technical assistance and know-how in
connection with the manufacture packaging and distribution of
the Products. In providing such technical assistance and
know-how, LICENSOR is acting in an advisory capacity only and
shall not have responsibility for the manufacture of the
Products or otherwise. 4.2 During the term of this Agreement,
LICENSOR will supply LICENSEE, free of charge, in form of
samples of unfinished articles or in written form in English,
with LICENSOR's design of Products, which will be created or
developed by LICENSOR for each season. 4.3 -In case of supply
by LICENSOR to LICENSEE of the samples of finished articles of
the Products, LICENSEE shall pay to LICENSOR the relevant
amount to be calculated on the basis of FOB-price. Payment for
these samples shall be made by LICENSEE in US Dollars or in
the currency otherwise made known by LICENSOR to LICENSEE
within thirty (30) days after receipt by LICENSEE of the above
mentioned samples.
4.3.1 In the case LICENSOR or any affiliated company will
supply, upon request of LICENSEE, any kind of materials,
accessories, finished or unfinished products and/or equipments
to be used in connection with LICENSEE's activity, LICENSEE
will have to submit to LICENSOR a purchase order specifying
all the instructions related to shipping and invoicing
modalities, documentations and declarations requested.
LICENSEE is responsible for checking that the importation and
all the related instructions are in accordance with the
prevalent Laws in the Territory. Such supplies will be paid
with a warranted form of payment at 30 days from the date of
shipment.
4.4 In the event that LICENSEE desires to revise or add other
design(s) to the designs ~ furnished by LICENSOR, LICENSEE
shall submit to LICENSOR its own design(s) and/or proposals
with respect to such revision(s) or addition(s) to LICENSOR's
" designs, and LICENSEE before utilizing such design revisions
or additions shall
obtain the written approval of LICENSOR to the samples made by
LICENSEE for such revision(s) or addition(s), which approval
shall not be unreasonably withheld ; 4.5 In the event it is
necessary for a LICENSOR's employee to travel to LICENSEE's
facility, or other points of manufacture, in connection with
such Technical Assistance, LICENSEE shall reimburse LICENSOR
for all costs so incurred, including travel expenses from
LICENSOR's premises to LICENSEE's facility (or other point of
manufacture) and living expenses, only at LICENSEE's request.
4.6 -Subject to the prior approval by LICENSOR, LICENSEE may
from time to time send one or more of its employees to
LICENSOR's factory for the purpose of obtaining technical
assistance in connection with the manufacture of Products.
LICENSEE shall bear all expenses related to the remuneration,
traveling and lodging related costs of its personnel sent to
LICENSOR's factory;
5 -Confidentiality
5.1 -LICENSEE acknowledges that all Technical Information
furnished by LICENSOR to LICENSEE during the term of. this
Agreement which are proprietary to LICENSOR is of a highly
confidential and secret nature. .
5.2 -All of such Technical Information proprietary to LICENSOR
is given and received in strict confidence and is to be used
by LICENSEE solely for the purpose of carrying out this
Agreement. LICENSEE shall keep in strict confidence the
aforesaid Technical Information and shall not, for any reason
whatsoever, reveal, disclose, sell or transfer any part of
such Technical Information, directly or indirectly, to its own
employees or agents or to any third party except as permitted
by the terms of this Agreement. 5.3 -In the performance of its
obligations under this Section 5, LICENSEE shall at its own
cost take all precautions and steps which may be reasonably
requested in order to protect such Technical Information.
Nothing herein shall be interpreted as prohibiting LICENSOR at
its own expenses from bringing such legal actions within or
outside the Territory as LICENSOR shall deem to be in its best
interest.
5.4 -LICENSEE shall have the right to disclose said Technical
Information received only to those of LICENSEE's employees who
require same and LICENSEE agrees to exercise an high degree of
care in the selection of its employees to whom said CJ
Technical Information, or any part thereof, will be disclosed.
5.5- LICENSEE's obligations set forth in this Section 5 shall
survive and remain in force -- even after expiration or
termination of this Agreement and for a period of 2 (two)
years thereafter.
6. Trademark and other Industrial Property Rights
6.1 -LICENSEE acknowledges that LICENSOR is the exclusive
owner of the entire right, title and interest in the
Trademarks and all other industrial property rights of
LICENSOR. LICENSEE further acknowledges that LICENSEE shall
acquire no right or interest in the Trademarks or any other
industrial property right of LICENSOR by reason of this
Agreement or otherwise and that the Trademarks shall be used
by LICENSEE solely in connection with the manufacturing,
packaging, advertising and sale of the Products in the manner
provided by this Agreement.
6.2 -If legally required, LICENSEE and LICENSOR shall execute
an appropriate form of license agreement for recording of, and
any amendment to, this Agreement.
6.3- LICENSEE shall not in the Territory or in any other
country during the term of this Agreement or at any time
thereafter apply for or seek registration of or anyway use any
words, trade marks, trade names or logos which are the same as
or confusingly similar to any of the Trademarks or which may
in any manner be used in unfair competition therewith.
LICENSEE further undertakes and agrees that it will not at any
time do, or so far as it is able to allow to be done, any, act
or thing which may in any way impair the rights of LICENSOR in
and to any of the Trademarks and that it will not represent in
any way that it has any other right or title to any of the
Trademarks other than the rights of exclusive use as licensed
by LICENSOR here- under.
It is furthermore understood and agreed upon that nothing in
this Agreement shall be considered as an authorization or
permission to include any of the Trademarks in the LICENSEE
trade-style and trade name.
6.4 -All packaging and labeling for the Products shall if so
requested by LICENSOR include the statement "Distributed in
(name of the Territory concerned) under license from LOTTO
S.p.A. Italy" or such other statements and notice as LICENSOR
shall from time to time direct.
6.5 -All markings, formats, designs and logos of the Products
shall be subject to the prior approval of LICENSOR if not
already in use by the same.
Any new marks, logos, layouts, designs and the like shall be
used only with the written approval of LICENSOR and
registration therefore will be the sole and exclusive right
and property of LICENSOR.
6.6 -In case of unfair competition or infringement by third
parties in the Territory of the 17 Trademarks, registered
formats, layouts, designs and logos or any other industrial
property rights of LICENSOR comes to the knowledge of
LICENSEE, it shall ask
for LICENSOR's approval concerning the prosecution of such
case by LICENSEE, such approval not to be unreasonably
withheld. All expenses directly or indirectly connected with
the said legal actions shall be borne by LICENSEE, unless
differently agreed upon between the parties. 6.1- LICENSEE
declares that it has full knowledge of the administrative
position of the Trademarks and LICENSOR does not give to
LICENSEE any representation or warranty about validity,
enforceability, or freedom from infringement of proprietary
rights of any third party register ability of any of the
Trademarks, except that LICENSOR does represent to LICENSEE
that at the best of LICENSOR's knowledge the Trademarks are
valid, enforceable, owned by LICENSOR and do not infringe upon
the rights of third parties.
7. Manufacturing and packaging requirements
It is understood and agreed by the parties hereto that the
necessity of compliance with all legal requirements, rules and
regulations relating to the manufacture, packaging, labeling,
marketing and/or sale of the Products under this Agreement
shall be the sole responsibility and obligation of LICENSEE at
its entire cost. LICENSEE shall indemnify and hold LICENSOR
harmless against any and all claims, damages, penalties and
other actions and costs (including reasonable fees of legal
counsel) arising out of or related to the failure of LICENSEE
to wholly or partially comply with the legal requirements and
regulations relating to the manufacturing, packaging,
labeling, marketing and/or sale of the Products by LICENSEE.
8. Lotto points of sale
Notwithstanding the License granted by LICENSOR to LICENSEE
hereunder nothing in this Agreement shall be construed as
prohibiting LICENSOR to directly or indirectly open retail
shops or points of sale of the Products in the Territory under
the "Lotto" trade name. However, any opening of such shops
shall be previously agreed upon between the parties taking
into account the impact in the market of such initiative.
LICENSOR reserves the right to supply the said shops or point
of sale with a certain number of Products "made in Italy" for
promotional purpose exclusively if mutually agreed by both
parties.
9. Manufacturing and packaging by third parties (Sub-contractors)
Subject to LICENSOR's prior written approval LICENSEE will be
entitled to have in whole or in part Products manufactured and
packaged by subcontractors in and outside the Territory under
LICENSEE's entire responsibility.
In order to be so authorized, LICENSEE shall submit to
LICENSOR, in advance, full name and address of the proposed
subcontractors and full details about their plants,
facilities, technical knowledge and background, to allow
LICENSOR to evaluate the quality standards and the reputation
of the subcontractors.
LICENSOR shall not unreasonably refuse its approval of the
proposed subcontractors, but, independently of any of such
approval given by LICENSOR, LICENSEE shall be and remain
directly responsible towards LICENSOR for full and complete
fulfillment by the said subcontractors of any and all
obligations under this Agreement and, in any case, LICENSOR
shall be and always remain fully entitled to regard any
failure, violation or default under the terms of this
Agreement by any of the said subcontractors, as a failure,
violation or default by LICENSEE itself. Notwithstanding this
Sec. 9, it is agreed and understood that Products shall be
distributed, sold, promoted and invoiced exclusively by
LICENSEE.
10. Consideration and Royalty
10.1 In consideration of the License granted hereunder,
LICENSEE shall pay to LICENSOR, as from the Effective Date, a
royalty equal to 5% (five per cent) based on the Products' net
selling price. It is understood that LICENSEE's undertaking to
pay such Royalty of this Agreement is a material obligation of
LICENSEE without which LICENSOR would not have been prepared
to enter into this Agreement and failure to pay such Royalty
for any annual period during the term hereof shall entitle
LICENSOR to terminate this Agreement by written notice to
LICENSEE, in accordance with Section 14.3.1. 10.2 -Within June
30 and December 31 of each Contractual Period of execution of
this agreement, LICENSEE shall render to LICENSOR a written
statement in English showing the aggregate of the net selling
prices and number of units of products sold during the 6 (six)
months ended on such date, and the amount of such royalty owed
to LICENSOR in respect thereof, which royalty shall be paid at
30 days to LICENSOR at the bank chosen by LICENSOR, taking
into account the provision of article 11 of this Agreement
concerning Minimum Royalties.
10.3- For the purpose of this Section 10:
10.3.1 -The Products shall be deemed to have been sold upon
dispatch of invoice to purchaser, or delivery of the Products
to purchaser, whichever is the earlier .
10,3.2 -The "net selling price" means the gross selling price
as invoiced by LICENSEE after deduction of taxes, effective
discounts or allowances granted by LICENSEE , and returns. If
said returns are more than 2% they must be verified by
LICENSOR.
10.4 -LICENSEE and any Affiliated Company shall during the
continuance of this Agreement keep at its usual place of
business true and particular accounts and records of the
Products manufactured and sold under this Agreement and of the
amount of all royalties paid or payable hereunder.
10.5 -A duly authorized representatives of LICENSOR shall have
the right at any reasonable time during business hours to
inspect and audit the accounts and records of LICENSEE and any
Affiliated Company relating to the manufacture, sale and/or
disposal of the Products and of the invoice price and all
other matters directly or indirectly relevant to the
calculation of the amount of royalty due and such
representatives shall be entitled to take copies of or
extracts from any such records.
10.6 -Royalty payments hereunder shall be made in US Dollars,
or in the currency otherwise made known by LICENSOR to
LICENSEE. In the event of LICENSEE's being unable to effect
payment of any royalty due hereunder in accordance with this
Agreement by reason pf any refusal of any duly authorized
Authority to permit such payment under applicable exchange
control regulations or by reason of any other official order,
LICENSEE shall not be relieved of its obligation to make such
payment but LICENSOR shall not be entitled to exercise any
right of termination hereunder by reason of delay or failure
to make the payment provided that: 10.6.1 -LICENSEE uses every
reasonable endeavor to obtain permission to make said payment,
and 10.6.2 -LICENSEE shall effect payment in any other
permitted manner required by LICENSOR. 10.7 -The Parties
recognize that if the government or any other competent
authority of the Territory imposes a withholding tax on
royalties payable hereunder, LICENSEE shall be entitled to
deduct from them such applicable withholding tax, provided
that (i) such tax is in fact remitted to the government, and
(ii) LICENSEE gives LICENSOR official evidence of such
payment. It is understood and agreed upon that if a convention
to avoid double taxation on royalties is or shall come in
force between the government of the Territory and the
Government of Italy, then any applicable provision of such a
Convention apply shall apply to this Agreement.
10.8 -LICENSEE shall in no event, without LICENSOR's prior
written authorization, be entitled to set off any amounts it
may claim are owed to it by LICENSOR for any reason
whatsoever, against any royalties owed to LICENSOR pursuant to
this Agreement. 10. 9 -All late payments of royalties shall
bear interest at a rate of two percent (2% ) per month or, if
such rate should exceed any applicable permissible legal
interest rate, then at the highest legally permissible rate.
11. Minimum Sales and Royalty
11.1 -During the term of this Agreement LICENSEE undertakes to
pay to LICENSOR for each year of execution of this Agreement,
starting from the Effective Date, such minimum royalty as
provided in Exhibit "C" hereof, in two equal installments on
June 30th and December 31st of each year of execution of this
Agreement. To this purpose, starting from the date of
execution of this agreement, LICENSEE shall open and maintain
a revolving bank guarantee in the amount to be paid every six
months to LICENSOR as Minimum Royalty. 11.2 -It is understood
and agreed that LICENSEE's undertaking to pay such minimum
royalty and to open and maintain the relevant bank guarantee
are material obligations of LICENSEE, ' without which LICENSOR
would not have been prepared to enter into this Agreement and
failure to fulfill such obligations for any annual period
during the term hereof shall entitle LICENSOR to terminate
this Agreement by written notice to LICENSEE in accordance
with Section 14.3.1.
12. Advertising
12.1 -LICENSEE shall express and identify properly in all
advertising and promotion that the Products are "Distributed
in (name 'of the Territory concerned) under license from LOTTO
S.p.A." or any such other statement or notice identifying the
Products as having been manufactured, packaged and sold under
license from LICENSOR.
12.2- LICENSEE agrees to continuously submit to LICENSOR
significant examples of any and all advertising and
promotional material and activity and to consider the advice
and suggestions of LICENSOR with respect to Products
advertising and promotion.
LICENSEE further agrees, upon request, to promptly
discontinue any advertising or practice reasonably deemed by
LICENSOR to have detrimental effect on
LICENSOR's goodwill and reputation. LICENSEE shall not
advertise the Products outside the Territory except in media
which are already circulating or broadcast in the Territory.
12.3 -Upon LICENSOR's request, LICENSEE shall apply to any and
all Products such reasonable tags or labels as LICENSOR shall
specify in writing in order to properly identify Products and
their origin. 12.4 -LICENSEE further undertakes to expend
annually to unrelated third parties, at least such percentages
of the total annual turnover reached by sale of Products
during each relevant Contractual Period, as shown in exhibit
"D" hereof, for advertising, sales promotion and similar
marketing activities, consistant with the LICENSEE marketing
plan.
13. Reports
As one of its material obligations hereunder, LICENSEE shall
render to LICENSOR a written royalty report, within June 30
and December 31 of each year of execution of this Agreement,
containing the following information covering the relevant
period: (i) a statement of the inventory at the beginning and
at the end of such six months period of each finished item of
the Products manufactured during such period; (ii) a statement
of the sale of Products invoiced during such period by
LICE~SEE and/or any Affiliated Company including the
quantities and price of each item sold.
14. Term and Termination
14.1 -This Agreement shall come into force at the date of
execution by both parties and shall remain in force for a 10
(ten) contractual years period, starting from the Effective
Date, After the first 10 (ten) contractual years period, this
Agreement will automatically be considered renewed on the same
terms and conditions for a further 10 (ten) contractual years
provided that during the term of the first 10 (ten)
contractual years as defined above LICENSEE has performed in
all material respects any of its obligations under this
Agreement and the two parties do come into agreement
concerning minimum royalties for the renewal term, U 14.2 -It
is agreed that the Minimum Royalties for the first contractual
year in case of renewal shall not be increased by more than
20% in respect of the last contractual year of the initial
term (i.e. 2008), and that increase for the following
contractual year shall not be more that 10% in respect to the
contractual year before.
14.3- Notwithstanding the above provision 14(1.1), this
Agreement may be immediately terminated without payment by
LICENSOR of any indemnity or other sums on account of such
termination under the following circumstances: 14.3.1 -By
either party if within 60 (sixty) days after notification to
the other party advising said party of a failure, violation or
default of any obligation under this Agreement the said other
party has not entirely cured such failure, violation or
default provided that such failure, violation or default has
to be regarded as serious according to the parties' will. In
particular, but not limited to, it is agreed and understood by
LICENSOR and LICENSEE that whichever failure to exactly
fulfill to any obligations under Sec. 6 (Trademarks and other
Property Rights), 9 (sub- contractors) and 10 (Royalty) shall
automatically be regarded as "serious". 14.3.2- By LICENSOR: (
i ) if any action involving bankruptcy or insolvency is
brought concerning LICENSEE, or (iii) if LICENSEE directly or
indirectly manufacture, promote, distribute or sell the
Products outside the Territory without LICENSOR's prior
written authorization. By LICENSEE: in case of any bankruptcy
or insolvency of LICENSOR. 14.3.3- Termination of this
Agreement as provided for by this Section 14.3.2 shall be by
written notice and shall be effective 60 (sixty) days after
receipt by LICENSEE. 14.4- Upon expiration or termination of
this Agreement for reasons specified above by this Section 14,
LICENSEE shall immediately remove from its premises and
elsewhere the Trademarks and all signs and advertising
relating to LICENSOR and the Products and Trademarks and
LICENSEE shall forever refrain from using in any manner the
Trademarks and all other trade names of LICENSOR identified
with or used on or in connection with the Products ( or any
words, marks, trade names or logos which are confusingly
similar thereto). 14.5 -It is understood by the parties hereto
.that in the event of termination of this Agreement for
reasons specified above by this Section 14 LICENSOR shall have
no obligations whatsoever to reimburse or otherwise compensate
LICENSEE in whole or in part, for its capital or labor
investment, undertaken in connection with the manufacture,
storage or distribution of the Products, including without
limitation its investment in machinery, fixtures, other
personal or real property or any improvements thereto, and
personnel employed by LICENSEE engaged in the manufacture,
handling, storage or distribution of the Products or to
compensate or indemnify LICENSEE in any other way whatsoever,
including without limitation on account. of the loss of
prospective profits on anticipated sales or commitments in
connection with the business or goodwill of LICENSEE.
14.6 -Termination or expiration of this Agreement shall not
relieve LICENSEE of any liability for an monies due to
LICENSOR at the time of such termination or
expiration nor shall it relieve LICENSEE of the
post-termination obligations imposed by this Agreement. At no
time during the term of this Agreement or at or after its
termination shall LICENSEE have right for any reason
whatsoever to withhold any payments due hereunder to LICENSOR
or to set off against any such payments any amounts which
LICENSEE claim are owed to it by LICENSOR. 14.7 -Within 30
(thirty) days of the effective date of such termination or
expiration of this Agreement, LICENSEE shall submit to
LICENSOR any inventory list of all unsold Products and all
unfinished Products as of the date of the said termination or
expiration. LICENSOR may in its discretion in all cases (but
shall in no case be bound to) repurchase or cause a third
party to repurchase all or any part of such inventory by
notifying LICENSEE in writing. In the event that LICENSOR
should not repurchase or should repurchase only part of the
inventory mentioned in the preceding paragraph, LICENSEE shall
have the right, for a period of 180 days after the effective
date of termination of this Agreement, under the terms and
conditions thereof, to sell in the Territory the said
inventory or that part of the inventory not repurchased.
15. Miscellaneous
15.1 -This Agreement is binding upon the parties hereto and
their respective successors in interest, but with respect to
LICENSEE this Agreement and the License granted hereunder,
failing LICENSOR's prior written approval which may not be
unreasonably withheld, is nondivisible. Any assignment,
transfer or sub-license (except as provided for in Sec. 9
herein)., may be granted by LICENSEE to one of its controlled
companies only with LICENSOR's prior approval which approval
shall not be unreasonably withheld LICENSOR shall have the
right, by written notice to LICENSEE, to assign this Agreement
or any rights and/or obligations hereunder to other companies
under LICENSOR's direct or indirect control. 15.2- Failure of
either party to enforce at any time or for any period of time
the provisions hereof in accordance with their terms will not
be construed to be a waiver of such provisions or of the right
of such party thereafter to enforce each and every such
provision. It is however understood that in case of violation
of any of its obligations under this Agreement each party
shall be granted a 60 (sixty) days cure period upon
notification by the other party of such violation.
15.3 -Should an approval be required by one of the parties to
the other under the provisions of this Agreement and failing
an answer after 15 (fifteen) days upon receipt of such
approval request by the party concerned such approval shall be
deemed as
granted, being it understood that any approval request under
this Agreement can not be unreasonably rejected. 15.4 -The
parties agree that this Agreement shall be construed and all
matters relating thereto shall be determined in accordance
with the Laws of Italy.
1.5.5 -This Agreement supersedes all prior agreements, oral or
written, between the parties hereto relating to the subject
matter covered herein and set forth the entire Agreement and
understanding between the parties as to the subject matter of
this Agreement, and neither of the parties shall' be bound by
any conditions, definitions, warranties or representations
with respect to the subject matter of this Agreement, other
than as expressly provided in this Agreement or as duly set
forth on or subsequent to the date hereof in writing and
signed by a proper and duly authorized representative of the
party to be bound thereby. 15.6 -The Exhibits hereinafter
listed are made a part hereof and form an integral part of
this Agreement: Exhibit " A" (Trademarks), Exhibit "B"
(Minimum Sales), Exhibit "C" (Minimum Royalty) and Exhibit "D"
(Minimum expenditure for Advertising & Promotion). 15.7- All
notices, requests, demands and other communications shall be
validly given if forwarded by registered mail or by telex or
telefax addressed to the party's address or telex or telefax
number appearing hereinafter, unless such party has notified
the other party of a substitute address or telex or telefax
number in writing:
To LOTTO S.p.A. at:
200, Via S. Gaetano -31044 MONTEBELLUNA (Treviso )
-Italy -
Telex N. 411047 LOTTO I Telefax N. 39-423-600402
Attn. President
To LICENSEE at:
Tel. Number
Telefax Number
Attn. President
15,7- For the purpose of the record of this Agreement with any
competent Authority in the Territory the Parties agree that
they, if necessary, shall execute appropriate extracts of this
Agreement or standard form agreements which will have the sole
aim to have this Agreement properly recorded. In no event
shall such extracts or standard form agreements prevail on any
and all provisions of this Agreement.
15.8 Neither party shall under any circumstances be liable for
any claim whatsoever arising of the other party hereto nor any
of its customers or any other third party due to such party's
failure of or any delay in performance of any of its
obligations arising in connection with this Agreement if the
performance of such obligation is prevented, restricted or
materially interfered with as a result of any acts, causes or
circumstances beyond the reasonable control of such party so
affected, including without limitation acts of God, acts or
omissions of any other entity or person, fire, flood, strike
or labor dispute of any kind, embargo, war, riot, insurrection
or acts of civil or military authority. 15.9 -The parties
agree that any and all disputes related to or stemming from
this agreement, its application and/or termination (including
post-termination obligations) shall be finally settled by
Arbitration under the Rules of Conciliation and Arbitration of
the International Chamber of Commerce. The Arbitration shall
be held in New York by a Board of three Arbitrators appointed
under the above Rules. The language of Arbitration shall be
English. The Arbitration award shall be final and binding and
any court with proper jurisdiction shall be entitled to issue
a decree enforcing such decision.
IN WITNESS WHEREOF, the parties hereto have signed these
presents as of the date and year first above written.
for LOTTO S.P.A.
---------------------------------
Ablerto Caberlotto
President
for LICENSEE
--------------------------------
Carol Kolozs
President
To the effect of Sections 1341 and 1342 of the Italian Civil
Code, the parties hereby expressly declare that they have
carefully and entirely read all content of Sections 2
(Manufacturing and Trade Mark License), 3 (Manufacturing,
packaging and distribution) 5 Confidentiality 6 (Trade Mark
and other Industrial property rights)
7 (Manufacturing and Packaging Requirements), 9
(Subcontractors), 10 (Consideration and Royalty), II (Minimum
Royalty), 14 (Term and Termination), 15 (Miscellaneous)
hereinabove and that they expressly approve the entire content
of the abovementioned Sections.
for LOTTO S.P.A.
---------------------------------
Ablerto Caberlotto
President
for LICENSEE
--------------------------------
Carol Kolozs
President
EXHIBIT A
TRADEMARKS
Trademark international registration no. Granting date Lotto fig.
Lotto fig. 25(loc.39) 251.143 11.09.90
Lotto fig. 5,910,16,18,21,25(loc.39) 393.689 30.11.84
Lotto fig. 10,25 (Ioc. 39) 393.690 30.11.84
Lotto fig. 28 164.878 5.6.95
Lolto+Double diamond 10,25 (loc. 53) 379.672 16.6.84
Lollo+Double diamond 25 (Ioc. 39) 379.671 13.7.84
Lotlo 18(loc.3) 487.299 30.11.84
Double diamond dev. 25 164.880 2.4.93
Double diamond dev. 18 164.881 28.9.94
Double diamond dev. 28 164.879 2.4.93
EXHIBIT " B "
MINIMUM SALES
Contractual year Minimum Sales
1999 USD 2.000.000.=
2000 USD 2.200.000.=
2001 USD 2.444.000.=
2002 USD 2.715.000.=
2003 USD 3.016.000.=
2004 USD 3.351.000.=
2005 USD 3.723.000.=
2006 USD 4.136.000.=
2007 USD 4.595.000 =
2008 USD 5.1055.000.=
EXHIBIT "C"
MINIMUM ROYALTY
Contractual year Minimum
Royalty
1999 USD
100.000
2000 USD
110.000
2001 USD
122.000
2002 USD
135.000
2003 USD
150.000
2004 USD
167.000
2005 USD
186.000
2006 USD
206.000
2007 USD
230.000
2008 USD
255.000
EXHIBIT "D "
MINIMUM EXPEDITURE FOR ADVERTISING & PROMOTION
4% (four percent) of the total annual turnover