EXHIBIT 10.11
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SECOND ADDENDUM TO LICENSE AGREEMENT DATED JUNE 24, 1997
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THIS SECOND ADDENDUM TO LICENSE AGREEMENT DATED JUNE 24, 1997 by and
between Xxxxx Xxxxx, Inc., a Delaware corporation with a principal place of
business at 00000 X.X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Licensor") and
Signature Eyewear, Inc., a California corporation, with a principal place of
business at 000 X. Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 ("Licensee") is dated
July 30, 2002 and is effective as of the date hereof. The License Agreement
Dated June 24, 1997 shall be referred to hereinafter as "License Agreement" and
this Second Addendum to the License Agreement shall be referred to hereinafter
as "Second Addendum".
1. The First Addendum to License Agreement Dated June 24, 1997 is hereby
terminated.
2. In the event of a conflict or ambiguity between this Second Addendum and the
License Agreement, the Second Addendum shall control. Any matter not addressed
in this Second Addendum shall be governed by the License Agreement.
3. The original exhibits attached to the License Agreement shall remain in full
force and effect with respect to Licensed Products (hereinafter defined) except
that Exhibit C is stricken and replaced with the attached Exhibit C and the
royalties set forth in the attached Exhibit C shall govern.
4. This Addendum shall be in effect from the date first written above.
5. Section 3.1 of the License Agreement is stricken and replaced with the
following:
The License shall be in effect from the date first above
written to December 31, 2005 (the "Term"), or such later
date as may be determined in accordance with Section
3.2, if not sooner terminated pursuant to the terms of
this License.
6. Section 3.2 of the License Agreement is stricken and replaced with the
following:
If not earlier terminated, Licensee may renew this
License Agreement for one (1) two (2) year term upon
written notice of intent to renew given no sooner than
one hundred fifty (150) days and no later than ninety
(90) days prior to December 31, 2005. Provided however,
that at Licensor's option, this License Agreement shall
not be renewed if: (i) Licensee is material breach of
this License Agreement; and (ii) within 30 days of
receipt of such renewal notice, Licensor notifies
Licensee in writing that it elects not to permit renewal
of the License as a result of such material breach
(which notice specifies in reasonable detail the nature
of such breach); and (iii) Licensee fails to cure and
correct such breach within 30 days of receipt of such
notice. Any such renewal shall be on the same terms as
this License Agreement.
* Certain portions of this Exhibit have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
7. Section 3.7 of the License Agreement is stricken and left "Intentionally
Blank".
8. Section 6.2 is stricken and replaced with the following:
Licensee warrants that it will budget and spend for
advertising, merchandising and marketing (including
point of purchase displays) of the Licensed Products in
U.S. dollars at least [*] during each Contract Year
commencing with the Contract Year January 1, 2002 to
December 31, 2002.
9. Section 8.4 of the License Agreement is stricken and left "Intentionally
Blank".
10. Section 8.6 of the License Agreement is stricken and replaced with the
following:
8.6.1 Licensee shall comply with all reasonable
procedures which Licensor may from time to time
implement regarding the approval of Products and
advertising materials for the Products and/or Licensed
Product. The approval procedures shall be carried out on
prescribed forms to be supplied to Licensee by Licensor,
and shall incorporate the basic approval requirements
and steps outlined in the following subsections.
Licensee shall be provided with reasonable notice of any
change in the procedures. All approval submissions will
be routed through Licensor. Licensee shall retain in its
files all materials relating to approvals while this
Agreement remains in effect and for one year thereafter.
8.6.2 Licensee shall submit to Licensor for review and
approval the following materials for Licensed Products,
in the order stated:
(i) a concept for the proposed Product showing by rough
artwork and product designs the nature and appearance of
the proposed Product;
(ii) finished artwork for the Product showing the exact
use of the Copyrights and Trademarks on or in connection
with the proposed Product;
(iii) a prototype or early sample of the Product, and
any revised prototype or samples, at each major phase of
development prior to commencement of production;
(iv) one identical production sample of the Product, to
be submitted immediately upon commencement of
production.
Licensee shall comply with all of the foregoing approval
steps for each Licensed Product, obtaining written
* Omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
approval from Licensor at each step of the process. Upon
request of Licensor, Licensee shall provide Licensor
with all results of product safety testing conducted
with respect to the Products whether by Licensee or
third parties. Failure to obtain any such approvals
shall be a material breach of this Agreement and upon
the demand of Licensor, and in addition to any other
remedies Licensor may have, Licensee shall remove the
unapproved Licensed Product from sale.
8.6.3 With respect to each different time of advertising
material which Licensee (or any party acting on its
behalf) proposes to produce and use under this Agreement
and with respect to all marketing and presentation of
the Licensed Products in National and International
trade shows and consumer fairs and shows, Licensee shall
submit to Licensor for review and approval by Licensor
the following materials, in the order stated:
(i) proposed concept with written copy for the item of
advertising material with attached rough art showing how
the Copyrights and Trademarks will be used in connection
with the copy;
(ii) final copy for the item showing the use of the
Copyrights or Trademarks;
(iii) a final printed sample of the item (as, for
example, in the case of labels, hangtags, printed
brochures, catalogs and the like).
Licensee shall comply with all of the foregoing steps
for each item of advertising material, trade shows,
consumer fairs and shows, obtaining written approval
from Licensor, at each step of the process, unless by
prior written notice from Licensor it is exempted from
any such step with respect to a specific item of
advertising material.
Failure to obtain any such approvals shall be a material
breach of this Agreement and upon the demand of
Licensor, and in addition to any other remedies Licensor
may have, Licensee shall remove the unapproved
advertising and/or or pull unapproved materials from
distribution.
8.6.4 Licensee shall submit to Licensor for review and
approval all packaging materials for Licensed Products,
in the order stated:
(i) a concept for the proposed packaging showing rough
artwork, copy and packaging designs, and the nature and
appearance of the proposed packaging;
(ii) finished artwork and copy for the packaging showing
the exact use of the Copyrights and Trademarks on or in
connection with the proposed packaging;
(iii) a prototype or early sample of the packaging, and
any revised prototype or samples, at each major phase of
development prior to commencement of production;
(iv) one identical production sample of the packaging to
be submitted immediately upon commencement of
production.
Licensee shall comply with all of the foregoing approval
steps for each Licensed Product, obtaining written
approval from Licensor at each step of the process. Upon
request of Licensor, Licensee shall provide Licensor
with all results of package quality assurance testing
conducted with respect to the Products whether by
Licensee or third parties. Failure to obtain any such
approvals shall be a material breach of this Agreement
and upon the demand of Licensor, and in addition to any
other remedies Licensor may have, Licensee shall remove
from sale the Licensed Product contained in any and all
unapproved packaging.
8.6.5 Licensor shall have the right to disapprove any
materials submitted under Sections 8.6.2, 8.6.3 and
8.6.4 if it determines, in its sole discretion, that the
materials in question would impair the value and
goodwill associated with the Licensed Marks, the
Licensed Products and/or Licensor's licensing program.
Failure to obtain any such approvals shall be a material
breach of this Agreement and, in addition to any other
Licensor remedies, and upon demand of Licensor, Licensee
shall remove all Licensed Product from sale and/or
discontinue advertising.
8.6.6 Licensor agrees to use reasonable efforts to
notify the Licensee in writing of approval or
disapproval by Licensor of any materials submitted to
Licensor under Sections 8.6.2, 8.6.3 and 8.6.4 within 10
business days after Licensor's receipt of such
materials, and agrees, in the case of disapproval, to
notify Licensee in writing of the reasons for
disapproval. Licensee's lack of receipt of notice shall
not under any circumstances be construed as approval.
8.6.7 In order to maintain a consistent brand image,
Licensee shall submit to Licensor a comprehensive
marketing plan for the next calendar year no later than
three months prior to the commencement of the next
calendar year which plan shall include advertising
strategy and tactics, including timetables
("Comprehensive Marketing Plan"). The Comprehensive
Marketing Plan shall be subject to the prior written
approval of Licensor, which approval shall not be
unreasonably withheld. Licensor may, at its option,
provide a strategic outline for the Comprehensive
Marketing Plan.
11. Section 8.9 of the License Agreement is stricken and left "Intentionally
Blank".
12. Except as modified by the Second Addendum, all other terms and conditions of
the License Agreement shall remain in full force and effect.
XXXXX XXXXX, INC.
Licensor
By: /s/ Xxxxxxx Xxxx
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Title: V.P.
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Date: 8/02/02
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SIGNATURE EYEWEAR, INC.
Licensee
By: /s/ Xxxxxxx Xxxxxx
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Title: Chief Financial Officer
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Date: 8/06/02
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EXHIBIT "C"
ROYALTY SCHEDULE
The following royalty rate shall apply during the Term:
For the period January 1, 1998 through June 30, 2002, a royalty of
[*]% of total Net Sales on annual Net Sales of $[*] to $[*];
For the period January 1, 1998 through June 30, 2002, a royalty of
[*]% of total Net Sales on annual Net Sales of $[*] and above;
For the period July 1, 2002 through the end of the Term and any
renewal permitted pursuant to Section 3.2, a royalty of [*]% of
total Net Sales, [*] of the amount of annual Net Sales.
An additional [*]% of total Net Sales shall be paid on all sales made directly
to distributors and in countries in the Territory other than the U.S.
Minimum Royalty
There shall be a Minimum Royalty deemed earned upon execution of this Addendum
and payable within thirty days after each Contract year for which the payment is
due, including any renewal term, as follows:
For Contract Year 1997 there shall be no Minimum Royalty;
For Contract Year 1998, the Minimum Royalty shall be $[*];
For Contract Year 1999, the Minimum Royalty shall be $[*];
For Contract Year 2000, the Minimum Royalty shall be $[*];
For Contract Year 2001, the Minimum Royalty shall be $[*];
For Contract Year 2002, the Minimum Royalty shall be $[*];
For Contract Year 2003, the Minimum Royalty shall be $[*];
For Contract Year 2004, the Minimum Royalty shall be $[*];
For Contract Year 2005; the Minimum Royalty shall be $[*];
* Omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
For each Contract Year of any renewal period, the Minimum Royalty shall be $[*].
In the event of Licensee's default, all Minimum Royalty payments shall be
accelerated and due in full.
Licensee agrees to pay Licensor $[*] upon License Agreement signing, which shall
be applied against the first royalties (minimum or actual) accruing in 1998.
This provision has been satisfied in accordance with its terms prior to the date
of the Second Addendum.
This Exhibit, dated July 30, 2002, is incorporated by reference in the Second
Addendum to License Agreement dated July 30, 2002.
Approved:
Xxxxx Xxxxx, Inc.
By: /s/ Xxxxxxx Xxxx
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Signature Eyewear, Inc.
By: /s/ Xxxxxxx Xxxxxx
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* Omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
ACKNOWLEDGMENT OF ASSIGNMENT
This Acknowledgment of Assignment is effective the 1st day of January, 2003
(the "Effective Date") by and between Xxxxx Xxxxx, Inc. ("EB") and Signature
Eyewear, Inc. ("Acknowledging Party").
WHEREAS, EB has assigned, transferred, and set over to Xxxxx Xxxxx
Diversified Sales LLC ("EB Sales"), a wholly owned limited liability company,
all rights, interest, powers and privileges of EB under the License Agreement
entered into on June 24, 1997 by and between EB and Acknowledging Party (the
"Agreement");
WHEREAS, by such assignment, EB Sales has assumed all duties, liabilities
and obligations of EB under the Agreement; and,
WHEREAS, the parties desire the assignment to be effective as of January 1,
2003; and,
WHEREAS, EB and EB Sales desire that Acknowledging Party acknowledge and
consent to such assignment.
IT IS THEREFORE AGREED that for and in consideration of the following, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged:
1. Acknowledging Party hereby consents to the assignment of the Agreement from
EB to EB Sales.
2. From the Effective Date to the date of the expiration or the termination of
the Agreement, and thereafter as to any surviving duties, liabilities and
obligations, EB Sales shall solely perform all such duties, liabilities and
obligations as required under the Agreement. Further, EB Sales shall be
responsible for and liable to Acknowledging Party for any and all failures or
breaches of EB in its performance of EB's duties, liabilities and obligations
arising or required under the Agreement prior to the Effective Date (for which
EB may defend and indemnify EB Sales for any and all related costs, attorneys'
fees, damages and awards). EB Sales is entitled to exercise any and all rights,
interests, powers and privileges of EB arising or permitted prior to or based
upon events occurring prior to the Effective Date.
3. Notwithstanding the foregoing paragraph, EB hereby guarantees the performance
of EB Sales under the Agreement.
Xxxxx Xxxxx, Inc. Xxxxx Xxxxx Diversified Sales LLC
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxx
Acknowledged and Consented to by the below named Acknowledging Party:
SIGNATURE EYEWEAR, INC.
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Print Name of Acknowledging Party
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Date: 12/29/02
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