This Agreement in made and entered into this __________ day of , 2005 by and between
(The "Franchisor)", a corporation duly organized and existing under the laws of__________ with its principal place of business at address , and Seoul Corp.("Franchisee"), a corporation duly organized and existing under the laws of the Republic of xxxxx ("xxxxx") with its registered head office at address , xxxxx.
WITNESSTH :
Whereas Franchisor is the owner of the trademarks, copyrights, and trade secrets identified in Article 1(hereinafter referred to as "Properties"), and desires to grant a license to Franchisee to utilize the said Properties in the manufacture and sale of the merchandise identified in Article 1(hereinafter referred to as "Merchandise") in( ); and
Whereas Franchisee desires to utilize the said Properties in connection with the manufacture, sale, promotion, and distribution of the Merchandise :
Now, therefore, it is agreed :
Article 1. Definitions
1. "Properties" as herein defined shall mean the ( ) trademark and any trademarks, copyrights, trade-names,, marks, symbols, logos, designs, manufacturing techniques, sales techniques and methods, skills and trade secrets owned by Franchisor or which are used in the business of manufacturing and selling products marketed under ( ) the trademark in ( ).
2. "Merchandise" as herein defined shall mean products and items identical to those now or in the future manufactured or sold by Franchisor under its trademarks in ( ) and any other item approved in writing by Franchisor.
The Merchandise shall include any items or products listed in Franchisee's sole discretion throughout the term of this Agreement.
3. "Territory" as herein defined shall mean ( ).
4. "Contract Year" as defined herein shall mean whatever month there may be from the commencement of this Agreement to ( ), and thereafter the tweleve(12) months period between (January)1st and (December) 31st of every calendar year of this Agreement.
5. "Net Sales" as herein defined shall mean Franchisee's gross sales less sales commissions, volume discounts actually granted, allowances for returns actually given, advertising costs, transportation costs, packing costs and if Franchisee purchased raw materials and other materials from Franchisor to be used in manufacture of the Merchandise, the costs and charge for such purchase.
6. "Month" as herein defined shall mean the calendar month.
Article 2. License and Territory
1. Franchisor hereby grants to Franchisee and Franchisee hereby accepts the exclusive license to sell Merchandise and to utilize the said Properties in connection with the business of the manufacture, sale, promotion, and distribution of the Merchandise in the Territory subject to the terms of this Agreement.
2, During the term of this Agreement, Franchisor shall not, directly or indirectly, sell, distribute, promote or offer for sale of the Merchandise, raw materials and other materials thereof and similar merchandise thereto through other channel than Franchisee in the Territory, nor appoint any agent, distributor, licensee, franchisee or competitor of such merchandise other than Franchisee in the Territory. Franchisor shall not sell the Merchandise, raw materials and other materials thereof to any person or company who intends or has reason to resell or distribute such merchandise in the Territory.
Article 3. Exports
Notwithstanding provisions set forth in the paragraph 2 of Article 2 hereof, Franchisor has reserved the right to export the Merchandise to ( ) or ( ) in the Territory without any of payment to Franchisee.
Franchisee shall neither export the Merchandise nor permit the same to be exported, sold, or offered for sale, outside the Territory unless authorized to do so by Franchisor.
Article 4. Services to be Rendered by Franchisor
Franchisor shall, upon the written request of Franchisee or on Franchisor's initiative, provide, in confidence, the following services and/or information related to the Merchandise which are then or then about to be manufactured by Franchisor hereunder. All materials and information provided hereunder shall be in the English language and ( ) standard weights and measures, including improvements and modification made by Franchisor during the term of this
Agreement. Franchisee shall be responsible for obtaining, at its costs,. any translations or conversions required by Franchisee.
a) Those furnished to Franchisee free of any payment other than the royalty hereinafter provided : information respecting the use of the material referred to in b) (iv) of this Article ; a layout, specifications, designs and drawings of plant; a sample of the raw materials that go into each Merchandise; Information as to the production capacity of each operation; cost production sheets for manufacture broken down for each operation; information
relating to quality control and to time saving devices and process techniques and procedures for manufacturing; information on inspection and testing methods: advertising and promotional data, including material used in ( ) national campaigns, promotional and advertising material, such as books, catalogues, cards, etc., all in the same from as given by franchisor to its sales people: information relating to display ideas including samples; merchandising assistance as to Franchisor's intended use thereof ; and access to Franchisor's sales showroom and factories during regular business hours : and
b) Those furnished to Franchisee : (i) samples of all complete line of the Merchandise and packaging thereof : (ii) the formula and ingredients for each Merchandise and raw materials thereof; (iii) a complete set of samples' of new lines of the Merchandise to be manufactured by Franchisee, the selection to be made by Franchisee; (iv) samples of each component part of any Merchandise including quantities, qualities and other information for the successful manufacture thereof. Franchisee will pay for the materials, overhead, and shipping for each of the Merchandise furnished pursuant to (i),(ii) and (vi), and will pay the shipping costs for samples furnished pursuant to (iii)
Article 5. Guaranty
Franchisor guarantees that :
a) The services a nd information furnished by Franchisor hereunder shall be fir and suitable for Franchisee's use, manufacture, sales, distribution, package and promotion of the Merchandise in the Territory :
b) the Merchandise, raw materials and other materials supplied and/or procured by Franchisor for Franchisee here-under shall be free from any defect in material and workmanship, be fir for the use, sales and/or manufacture of the Merchandise and be merchantable in the Territory :
c) the samples of the Merchandise furnished by Franchisor hereunder shall be efficient for Franchisee to select the Merchandise for the purpose of successful sales and manufacture thereof.
Article 6. Guidance
Franchisor shall arrange for its personnel, at the request of Franchisee to visit Franchisee's place of business to assist Franchisee for reasonable periods of time in undertaking the manufacture and sale of the Merchandise. From the date of departure of such personnel from their headquarters to visit Franchisee to the date of their return to such headquarters. Franchisee agreed to reimburse Franchisor for the adequate traveling and living expenses incurred by such personnel during said period or on any other basis agreed by both parties hereto.
Article 7. Training
Franchisor agrees that, upon request made by Franchisee in writing, a reasonable number of personned of Franchisee may visit Franchisor's place of business in ( ) for the purpose of obtaining guidance and training by Franchisor in the use of the Properties. It is understood by both parties that the number of personnel engaging. In such visits, the number of visits and the nature and extent of the guidance and training provided shall be reasonable and consistent with the purpose of this Agreement. Franchisee shall bear all of the actual expense in connection with such visits and guidance and training activity.
Article 8. Franchisee's Obligation
During the term of this Agreement Franchisee shall :
a) Not use the Franchisor's trademarks or any part or simulation thereof in its corporate, business, or firm name or title, nor use nor permit the use of said trademarks of formulas, samples, methods, or data supplied by Franchisor hereunder or any methods, inventions, devices, or other knowledge or information acquired by Franchisee in the course of manufacturing the Merchandise, for any other purpose than upon or in connection with the Merchandise;
b) Not allow to be sold any Merchandise ( ) whose expiry date for quality or fitness has passed the date or length of time in which the Merchandise should be hold shall according to Franchisor's standards and guidelines; provided however after removal of Franchisor's trademarks, Franchisee may sell in closeout sales :
c) Not do anything which might prejudice or invalidate any of the Properties ;
d) Keep Franchisor informed as to all locations where the Merchandise are manufactured by Franchisee ;
e) Except in the case of closeouts, cause each Merchandise manufactured or sold by Franchisee and all boxes, cartons and other containers in which same are sold at wholesale and retail to be legibly imprinted with the Franchisor's trademarks and/or such other trade name and trademarks, if any, as Franchisor may, from time to time, direct.
Article 9. Labeling, Packaging and Advertising
1. All Merchandise shall have, in a manner previously approved by Franchisor, a label with the trademark agreed between the parties hereto. All advertising and promotional materials used by Franchisee must have the prior written approval of Franchisor.
2. Franchisee shall submit to Franchisor for its prior written approval, all new tags, labels and containers, and all packaging, advertising, promotional and display materials or the like containing or referring to the Properties.
Article 10. Use of Trade Name
During the term of this Agreement, Franchisee shall use the corporate or business name of ( ) or ( ) ,or otherwise where the description of ( ) is to be used, Franchisee may incorporate a subsidiary company by using any of such names, but if the operation of the subsidiary company shall be by sublicense, then Franchisee shall issue a written guarantee to Franchisor as to its subsidiary. Upon termination of this Agreement, Franchisee
shall remove or cause to remove the word ( )from the corporate and business name and appoints and authorizes Franchisor to file such removal with the ( ) and with any other agency of the government of ( ) .
Article 11. Trademarks
1.Franchisee hereby undertakes and agrees that, except as Franchisor may otherwise consent in writing, it shall use the trademark "( ) " on all Merchandise manufactured by it or purchased from Franchisor and sold in the Territory.
2.Franchisee recognizes Franchisor's ownership of the said trademark in ( ) , but that in ( ) Franchisee has obtained using rights of th trademark ( ) for ( ) , and that Franchisee shall retain such using rights during the term of this Agreement and extension.
Article 12. Property Right
1.Franchisee recognizes the great value of the goodwill associated with the Properties and acknowledges that the Properties and all rights therein and the goodwill pertaining thereto belong exclusively to Franchisor. Franchisee agrees to cooperate fully and in good faith with Franchisor for the purpose of securing, reserving, and protecting Franchisor's rights in and to the Properties and to notify Franchisor of any infringements of said Properties.
2. Franchisor shall, at its sole option and cost, pursue any such infringements. Franchisee hereby agrees that its every use of the Properties shall inure to the benefit of Franchisor and that Franchisee shall not at any time acquire any rights in such Properties by virtue of any use it may make of the Properties. Upon request of Franchisee, Franchisor shall file industrial property rights in relation to the Properties and/or the Merchandise in the
Territory for the purpose of securing Franchisee's selling and manufacturing activities of the Merchandise or, if Franchisor intends not to file such rights, Franchisor shall allow Franchisee to file such rights at Franchisee's own cost.
Article 13. Quality of Merchandise
Franchisee agrees that the Merchandise covered by this Agreement shall be of high standard and of such style appearance, and quality as to be adequate and suited to their exploitation to the best advantage and to the protection and enhancement of the Properties and the goodwill pertaining thereto, that such Merchandise will be manufactured, sold, packaged, promoted, and distributed in accordance with all applicable laws of the Territory and that the
policy of sale, distribution, and/or exploitation by Franchisee shall be of high standard and to the best advantage and that the same shall in no manner reflect adversely upon the good name of Franchisor or any of its activities or the Properties. To this end, Franchisee shall, before selling or distributing any Merchandise, furnish to Franchisor, free of cost for its written approval, a reasonable number of samples of the Merchandise. The quality and style of such Merchandise shall be subject to the approval of Franchisor. Any item submitted to Franchisor shall not be deemed approved unless and until the same shall be approved by Franchisor in writing. After samples have been approved pursuant to this Article, Franchisee shall not depart therefrom in any material respect without Franchisor's prior written consent. Franchisor shall not withhold its approval unreasonably. If Franchisor withhold its approval,
Franchisor shall give Franchisee a notice to that effect, accompanied by detailed reasons for withholding its approval in writing sixty(60) days after the date when Franchisee submitted samples to Franchisor. Should Franchisor fail to give such a notice to Franchisee within the said period, Franchisee may deem it that samples have been approved by Franchisor, and Franchisee may commence the sale of such Merchandise. Franchisee further agrees that representatives of Franchisor may have access to Franchisee's facilities during regular business hours to permit Franchisee to further check the nature and quality of the Merchandise.
Article 14. Materials
If Franchisee desires to purchase from Franchisor ( ) ' raw materials or other materials used by Franchisee, for the purpose of manufacturing the Merchandise pursuant to this Agreement, Franchisor shall supply such materials to Franchisee on the most favorable conditions. Acceptance of orders by Franchisor shall be subject to the terms and conditions of sales being acceptable to Franchisor and to payment being made by ( ) .
Article 15. License Fee
1. Franchisee shall pay to Franchisor upon the signing of this Agreement, a nonrefundable, noncreditable, initial license fee of ( ) .
2. For cash Contract Year, Franchisee shall pay to Franchisor royalties on each of the amounts of Net Sales of the Merchandise for each Contract Year as follows :
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3. Franchisee guarantees Net Sales of Merchandise for each Contract Year of this Agreement as follows :
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) ( )
Contract Year of ( ) and for each Contract Year there after ( )
Article 16. Payment
1. Franchisee agree to keep full, accurate, and compete books of account and other records in sufficient detail to enable the parties to properly ascertain the royalty payable hereunder and to permit Franchisor or their authorized representatives(including public accountants) access to and inspection of Franchisee's offices, factories, books and records, which shall include the right to make a complete annual or other public audit, all at Franchisor's own cost unless Franchisee shall have underpaid the royalty payable for a calendar year by ( %) or more in which case the costs of the audit shall be at Franchisee's expense.
2. On or before the ( ) day following each ( ) months af a Contract Year, Franchisee shall send Franchisor a signed statement setting forth the sales of the Merchandise for such ( ) months and shall concurrently pay to Franchisor a sum equivalent to the higher of the following : (i) the royalty based upon the sales of the Merchandise during such period of ( ) months., (ii) ( )of the royalty on minimum guaranteed Net Sales for the Contract Year of which said ( ) months is a part. If the total of the ( ) payment made for any Contract Year exceeds the amount which Franchisee is required to pay for such Contract Year hereunder, such excess shall be credited against the ( ) royalties becoming due to Franchisor in the ensuing Contract Year.
3. In calculating the ( ) amount of any royalty payment, the ( ) shall be converted into ( ) at the exchange rate at which Franchisee may legally purchase ( )with( ), Franchisee shall use the lengally available rate most favorable to Franchisor.
4. All payments by Franchisee under this Agreement shall be made in ( ) in ( ), unless otherwise directed by Franchisor. If the law of the Territory prohibits any payment becoming due hereunder from being made in( ) as aforesaid, then as long as such prohibition exists, payment shall be made in the currency of the Territory and the respective obligations of the parties hereunder shall continue unaffected thereby except that if by reason of such law payment for the items to be furnished by Franchisor under Article
4 b) cannot be made in ( )as aforesaid, Franchisor shall not be required to furnish the same as long as such condition shall continue to exist.
5. Any taxes required to be withheld from royalties due to Franchisor, shall be paid by Franchisee to the appropriate governmental agency, and the royalties remitted by Franchisee to Franchisor shall be the net amount after such taxes have been withheld. In the event that an exemption from such withholding or other taxes is available under a treaty or otherwise, Franchisee shall advise Franchisor accordingly and shall obtain such exemption for Franchisor. Franchisee further agrees to act as agent for Franchisor in such tax matters and to report to Franchisor promptly thereon, in particular, Franchisor shall provide certification or proof of payment of any taxes due and paid, with the royalty reports submitted to Franchisee, including the sending of copies of the respective tax returns, tax assessments and vouchers on any taxes paid by it on behalf of Franchisor, sufficient for Franchisor to obtain credit for such payments in( ).
Article 17. Default
If either party shall (i) fail to make any payment on its due date; or (ii) default in the performance of any other term or provision of this Agreement and such default if not cured by it within thirty (30) days after notice by the other party; or (iii) go into liquidation, be dissolved, become insolvent or bankrupt or a receiver of any of its assets is appointed; or (iv) without the written consent of the other party first had and obtained, directly or
indirectly assign, hypothecate or otherwise part with this Agreement, an interest therein, its business or any substantial portion of its assets: then and in any such event, the other party, by notice to such party, given at any time after the occurrence of such event, forthwith terminate this Agreement as and for a breach hereof, whereupon this Agreement shall then terminate as fully and completely as if it had reached its expiration date.
Article 18. Term
This Agreement shall commence on ( ) and terminate on ( ). Franchisee, at its option, may renew this Agreement for( ) additional( ) year terms, provided that Franchisee is in full compliance with the provisions of this Agreement and has provided Franchisor with written notices of its intent to renew this Agreement at least six(6) months prior to the termination date set forth above or the date of termination of each successive( )year term.
Article 19. Disputes
Any controversy, claim, or dispute arising out of or relation to this Agreement or the breach or alleged breach thereof, shall be finally settled by arbitration in ( ) to be conducted by ( )in accordance with the Commercial Arbitration Rules of the said Association. The provisions of this Article shall survive the termination, expiration, breach or alleged breach of this Agreement.
Article 20. Set after Termination
Upon the expiration or sooner termination of this Agreement, Franchisee shall forthwith and thenceforth abstain from:
a) Using any of the Properties and shall accordingly remove Franchisor's labels from all Merchandise prior to selling or offering same for sale ;
b) In any way using or referring the Franchisor and/or its past association with Franchisor;
c) Manufacturing or dealing in any manner whatsoever in any Merchandise made in accordance with formulas, samples, and data supplied by Franchisor hereunder;
d) Using any of said formulas, samples, methods and data, or copies thereof ;
e) Using any boxes, cartons, or containers bearing the Franchisor's name or trademarks; and
f) Otherwise incorporating the whole or any part of the construction or any of the feature of the Merchandise as disclosed by Franchisor to Franchisee during the term of this Agreement.
Article 21. Assignment
This Agreement and all rights and duties hereunder are personal to Franchisor and Franchisee and shall not, without the written consent of the other party, be assigned, mortgaged, or otherwise encumbered by either party or by operation of law; provided however, Franchisee may sublicense, may use contractors in manufacturing operations and
may use sales agents or distributors in the sale of the Merchandise after mutual negotiation.
Article 22. Notices
All notices and statements to be given shall be sent by registered mail to the respective address of the parties as set forth above unless notification of a change of address is given in writing, and the date of mailing shall be deemed the date the notice or statement is given.
Article 23. Non- Waiver
None of the terms of this Agreement can be waived or modified except by an express agreement in writing signed by both parties. There are no representations, promises, warranties, covenants, or undertaking other than those contained in this Agreement, which represents the entire understanding of the parties.
Article 24. Governing Laws
This Agreement shall be interpreted in accordance with the laws of ( ) and shall be binding upon the parties hereto, their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their proper officers duly authorized the day and year first above written.
Franchisor :
By
( )
Franchisee :
By
( )
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