CUSTODIAN ACCOUNT CONTRACT
concluded by and between
Look Eventmanagement GmbH
(company number 78297 v Vienna Commercial Court)
1010 Vienna, Passauerplatz 1,
represented by:
Wolfgang Schwarz, general manager,
hereinafter referred to in abbreviated form as "LOOK," and
FANN, A.S.
Erwin [illegible], General Manager,
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hereinafter referred to in abbreviated form as the "Depositor," as follows:
Deposit Agreement
Content:
Peamble
Art. 1 Object
Art. 2 Selection-criterias
Art. 3 Licensing procedure
Art. 4 Sale and resale
Art. 5 Industrial trademark rights
Art. 6 Sales support by LOOK
Art. 7 Contract period: Notice of cancellation
Art. 8 Contractual penalty
Art. 9 Safeguarding clauses
Art. 10 Applicable law: Jurisdiction
Art. 11 Miscellaneous Provisions
Enclosed 1 Selecting criteria
Peamble
Fann runs retail for cosmetic health and perfume products and has area wide
distribution networks for such products in the countries of Czech Republic and
Slovakia .
LOOK runs in 1010 Vienna, Passauerplatz 1 an event und marketing agency.
LOOK is also an owner of Austrian/ international Word-/Picture-trade mark
"CATWALK". LOOK produce and sell with the label "CATWALK" cosmetic-, perfume-
goods as well as products for health care and beauty care. The sales mix
presently includes Eau de Parfum, Eau de Toilette, Body Splash and body milk.
The trademark "CATWALK" shall be used in context with the target audience,
presentation, market performance, an image etc. greater for pretense and
presentation.
LOOK and Fann would like to promote together the distribution for the trade
mark "CAKEWALK". The goal is to establish the trade mark "CAKEWALK" in the
Austrian market, and to intensify the distribution and sales as well as open a
new selling market for sales and add customers.
This are the fundamentals between both parties for the deposit agreement.
Art. 1 Objects
1.1. The object of this agreement is the purchase/sale of high quality
perfume- and cosmetic products ("The Products") from LOOK to the Depositary.
1.2. The agreement is personal nature; any passing on, cession and
transmission without written prior agreement are prohibited.
1.3 LOOK has during the term the right any time to stop the sale of single
products. Or LOOK has the right any time during the term to demand that the
depositary is a required buy either new products, products of the existing
trademark or of a new trademark.
Art. 2 Selecting criteria
2.1 The selection criteria are attached to the agreement. (Enclosure 1)
2.2 If the depositary has more then one shop at different places the
Selecting criteria are apply to every single shop.
2.3 At first the Selecting criteria are the condition to authorize the
depositary to sell the
products in accordance with the Licensing procedure stated in Art. 3. Further
the depositary has during the term time to respect all Selecting criteria.
2.4 LOOK is allowed to drop a single selecting criteria, which is named in
the preamble, change it or supplement it, if LOOKS consider this is reasonable
for altered consumer buying habits and / or market chances. Any changing is to
be made in writing pursuant Art. 11.1.
Art. 3 Licensing procedure
3.1 Upon entering into this deposit agreement LOOKS shall inspect every
depositary shop in order to decide if every shop will fulfill the Selecting
criteria mention in Art. 2 and Enclosure 1. LOOK is bound to perform such
inspection within a time period of 3 months upon receiving a written request.
The ensuing procedure will be pursuant Art. 3.2 or 3.3 or 3.4.
3.2 If the authorizing shops differ significantly from the named Selecting
criteria, LOOKS shall tell in writing to the applicant a rejection and indicate
significant reasons.
3.3 If the shop fulfills the Selecting criteria-with reservation to any
necessary work in the shop- the applicant shall receive a written statement. If
the necessary work is completed within a time period of six months, the parties
will conclude this deposit agreement within one year upon received the request
mentioned in Art. 3.1.
3.4 If the request fulfills the Selecting criteria completely then the
applicant will receive a written statement and the Deposit agreement has to be
complete within one year upon receiving the request mentioned in Art. 3.1.
3.5 The Licensing procedure pursuant to this article shall take place
subject to the reservations that LOOK has the opinion to reject the deposit
agreement closing particularly with regard to the market power of a region.
Art. 4 Purchase and resale of Products
4.1 The general conditions of sale contracts and price lists of LOOK are
part of every LOOKS' products sale to the depositary.
4.2 The depositary is authorized to sell the products exclusively to
Austrian consumers. Other sales or resales of the products are prohibited
without LOOK's prior written permission. The LOOK's product sale shall take
place until 01.31.01 exclusively by the depositary.
Art. 5 Industrial trademark rights
5.1 LOOK allows the depositary the use of it industrial trademark rights,
such as brands, image, taste designs and patents, for the limited purpose of
this agreement. The depositary agrees explicit that he cannot derive property
rights by using LOOK trademarks.
5.2 The depositary has promptly to inform LOOK, if he has learned of a
violation of an Industrial trade mark right. In such a case LOOK shall decide on
further steps and if necessary assumes shall expenses. However, the depositary
shall support LOOK's defense best as he can.
5.3 The depositary has to co-ordinate with LOOK any use of LOOK's trades in
connection with advertising effort and merchandising effort.
5.4 As Licensee of Commercial trademark rights the depositary is bound to
respect the prestige of products in every way and refrain every marketing step
or advertising, whose how could damage the product (prestige). This does apply
particularly for the following advertising efforts:
o Advertising with a reduction in price in percentage
o Advertising with a reduction in price by indicating an earlier
or canceled price
o Low price advertising with the word "discount"
o Advertising with a reduction in price in combination with
products from other producer
Art. 6 Sales support by LOOK
6.1 LOOK will support the depositary in an ordinary financial way by his
sale efforts. All further details shall be agreeing as the case arises.
6.2 In this context LOOK shall provide the depositary with decoration and
advertising promotional material free of charge. This material remains LOOK's
property unless it passes to the consumer. This material has to return if LOOK
requests it.
6.3 The depositary should only use the advertising material for
advertising. Any commercial realization, particularly the sales of samples,
tests or mini samples are prohibited.
Art. 7 Contract period: Notice of cancellation
7.1 This contract shall apply for an indefinite period.
7.2 The contractual notice of cancellation can be made within a time period
of three months. The Notice of cancellation is to be made in writing.
7.3 The extraordinary notices of cancellation by LOOK without time period
under the following cases are permitted. The extraordinary notice of
cancellation is to be made in writing.
(1) If the depositary violates his obligations in Art. 4.2
(2) If the depositary violates the rules of Art. 5 with respect of LOOK's
Commercial trademark rights.
(3) If the depositary's shop does not execute or does not longer execute
the Selecting criteria in Enclosure 1 and this condition continues for
eight weeks after a written statement by LOOK.
(4) If the depositary violates in other ways essential provisions of this
agreement.
(5) If a bankruptcy proceeding is instituted against a depositary shop or
the bankruptcy petition was rejected, because for insufficient of
assets or the company, which runs the shop is liquidated.
7.4 In case of a contractual notice of cancellation or an extraordinary
notice of cancellation the depositary is required by LOOK either to resell the
existing products during reasonable period of time under the condition of this
agreement or to retransfer the products to LOOK. In return the depositary will
receive the sale price less expenses.
Art. 8 Contractual penalty
8.1 For any depositary's violation of contractual duties, a 6,000 EURO
contract penalty is payable.
8.2 Art 8.1 applies pursuant to any single depositary's violation of
contractual obligations in section 3.6 enclosed 1, namely the sale of a LOOK's
product in other than authorized office premises, sell at wholesale or sale of a
product by mail order business or by sale of a product without the original
packing, particularly in case of changing of the labeling.
8.3 By paying the contractual penalty none of the following rights are
affected: termination rights, claim to compel to refrain from proceeding and
claim for damages.
Art. 9 Safeguarding clause (No Waiver)
9.1 Should be a single term of this agreement be ineffective, this does not
affect other terms of the agreement. In this case the parties shall endeavor to
find a new effective arrangement. The new effective arrangement shall be
economically equal to the ineffective arrangement.
9.2 The depositary knows, that the exemption of the deposit agreement is
not applicable under the anti trust rule Article 81 Abs.1 EGV (European Union
Treaty), if the depositary manufactures or let manufacture competing products.
Art. 10 Applicable law: Jurisdiction
10.1 Austrian law does apply to the exclusion of UN treaty on sale of
goods.
10.2 Place of Jurisdiction and place of performance are Vienna.
Art. 11 Miscellaneous Provisions
11.1 Modifications and amendments of this agreement are to be made in
writing singed by both parties.
11.2 Any assignment of contract rights and contract obligations to third
party requires LOOK is prior written agreement.
11.3 Depositary's general terms of delivery and / or general condition of
sale and general terms and conditions are not part of this agreement.
Enclosure 1: Selecting criterias
1. Personal requirements
1.1. Professional Training
The depositary and his salespeople have to have a qualified professional
training in the perfume and cosmetic's field, for example at least a 3 (three)
year professional experience.
1.2 Advanced training
The depositary may attend regularly in LOOK's advanced training meetings
respectively his qualified salespeople. LOOK shall be solely responsible for
expenses incurred in connection therewith - cost for journey expenses,
entertainment expenses and overnight excesses
1.3 Consulting presentation
The depositary is liable to provide proportionally to his sales floor and
the quantity of brands sufficient salespeople for consulting and presentation.
1.4 Reliability
The depositary shall all time faithfully, industriously and to the best of
his ability, experience and talents support LOOK by the selective distribution
of the products.
Therefore LOOK shall be denied the admission, if the applicant gives a
substantive reason for insufficient support. This is particularly the case, if
the applicant once delivered demonstrable as a retailer of selective cosmetics
to the grey market.
2. Requirements in respect of the shop
2.1 Character of shops
LOOK ships to perfume shops, cosmetic shops, drugstores with perfume,
leading department stores, prestige fashion boutiques and drugstore with perfume
compartments, but in all cases under the requirement, that the character of the
shop is compatible with the prestige and exclusiveness of LOOKs brand.
2.2 Location of the shops
The location of the shop has to match with the prestige and the
exclusiveness of LOOK's brand.
2.3 Equipment and arrangement of the shops
Equipment and arrangement of the shops, range of products, advertising and
the sale presentation must not reduce the brand image. For the evaluation of
these criteria particularly the storefront as well as the interior decoration,
floor pavements, character of the wall, ceilings, chattels, sales floors, also
illumination, as well as an unsoiled and proper overall impression. On the front
of the shop, there must be one or more display windows or other similar
presentation possibilities (for example: show case. The equipment of such
presentation has to match with the prestige and exclusiveness of LOOK's brands.
The company sign must not obscure the decoration for the public and not
implicate a service reduction.
2.4 Labeling of a shop
The labeling of a shop, for example the name of the company or cooperate
logo must not damage the prestige of LOOK's brand or give the impression of a
restricted stock, restricted equipment or consulting.
2.5 Closeness of LOOK's products to other goods
The goods which are close to LOOK's products must not reduce or damage the
image of LOOK's brand. This does apply to completed perfume areas in department
stores, which in evidence is perfume shop, which is manned and has a separate
cash desk.
3. Requirements with regards to the products
3.1 Sales mix
The depositary is bound to stock currently a representative sales mix (at
least 2/3 of lines and references) inclusive of the novelties. He shall provide
a reasonable position for the products in the shops and in the display windows.
Thereby the sales floors shall be in a well-balanced
proportional to the offering brands and provides the depositary an opportunity
to place the products in respond its image and its market weight.
Within the period of time of 12 months after the closure of the depositary
agreement the shops has to provide a sufficient quantity of competing brands in
order to underline the image and the market weight (significance) of the
products.
3.2 Supply inventory
The depositary is bound to have a sufficient inventory stocks in order to
fulfill his sales mix liability.
3.3. Storage conditions
The products are stored under condition for their conservation and in
particularly to prevent a high humidity, a high temperature or heavy luminary.
3.4 Product quality
It is prohibited for the depositary to sale damage products or other
products in a defective condition. The depositary shall return the products to
LOOK or destroy such products.
3.5 Character of display and the sales of products
The depositary is bound exclusively to sell the products in shops, which
are named in this agreement. In particular it is prohibited to deal with
wholesale and with mail-order business. In addition the depositary is bound to
sell the products only with original packing and without any modification of
labels.
3.6 Electronic media
Product marketing in the electronic media is allowed. But it is prohibited
to offer the sale in the electronic media.
4 Other requirements
4.1 Sales promotion
The depositary shall to support the product sale to the customers as best
as possible.
The depositary shall be efficiently as possible participate in sales
promotion. He has to use the promotion material (Section 4.2) effectively. In
case of need for the coordination of marketing arrangements a dialogue between
LOOK and the depositary shall take place at least every 14 days.
4.2 Product placing
The depositary is bound to place the products inside the segment
"Fragrance" and "Care". Thereby he shall pay attention to the market importance
by placing the products on the rack.
4.3 Sale of new products
The depositary is bound immediately to establish new LOOK products in his
sales program and pursuant section 4 and all other provisions of this agreement
he shall take active part in the new product sale.
4.4 Presentation of products by LOOK's co-worker
The depositary is bound to grant LOOK's co-worker a sale promotion in the
depositary's shops if the presentation is reasonable in the view of special
realities of the business premises.
Look Eventmanagement GmbH
By: /s/ Wolfgang Scwharz
FANN, A.S.
By: /s/ Ervin [Illegible]