Exhibit 10.29
LICENSE AGREEMENT
THIS AGREEMENT made this 1st day of January, 1993 by and between XXXXX
INVESTMENT CO., INC. ("Xxxxx"), a Delaware corporation, and DIPLOMAT-AMBASSADOR
EYEWEAR GROUP ("Licensee") a Pennsylvania corporation.
W I T N E S S E T H:
Xxxxx is the owner and registrant of the trademark and subsisting
registrations for the Xxxx "Xxxxx New York", registered in the United States
Patent and Trademark Office.
Licensee is engaged in the manufacture, sale and distribution of optical
frames and sunglasses, and Licensee desires to obtain from Xxxxx a license to
use the Xxxx in connection with such goods under and subject to all of the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing and
of the mutual covenants contained herein, and intending to be legally bound
hereby, agree as follows:
I. Definitions
As used in this Agreement, the following terms and phrases shall have the
following meanings:
1.1 Annual Period. The period from commencement of the Term through
December 31, 1993 and each consecutive twelve (12) month period thereafter
during the Term.
1.2 Approval. The approval, not to be unreasonably withheld, by Xxxxx of
one or more designs, samples, items of Packaging, advertising or promotional
materials or other items for which approval is required under this Agreement, in
writing in a document which identifies the item or items approved and is signed
by an authorized representative of Xxxxx. Xxxxx shall be deemed to have approved
any item submitted to it by Licensee for Approval under the terms of this
Agreement, if Xxxxx fails to approve, disapprove or otherwise respond to the
submission in writing within fourteen (14) days after receipt of the items
submitted.
1.3 Guaranteed Minimums. The guaranteed minimum Royalties payable by
Licensee under Paragraph 3.2.
1.4 Xxxxx Merchandise. Any and all items of Merchandise which in any
manner bear, incorporate or embody the Xxxx or any design, pattern, sketch or
idea supplied by Xxxxx.
1.5 Xxxx. Xxxxx' trademark, "Xxxxx New York".
1.6 Merchandise. The items of merchandise covered by the license granted
under this Agreement include only opthalmic eyewear, sunglasses and eyewear
accessories.
1.7 Net Sales. The invoiced amount of Xxxxx Merchandise billed or shipped
by Licensee, less actual trade discounts, returns and allowances and sales tax,
if any, with no deduction made for other discounts or uncollectible accounts or
for any cost incurred by Licensee in the manufacture, sale, distribution, or
exploitation of the Xxxxx Merchandise. In the event of sales by Licensee of
Xxxxx Merchandise to outlet stores or other purchasers under Licensee's direct
or indirect control, Net Sales shall be calculated on the basis of a sales price
and invoiced amount that Licensee would charge to an unrelated third party in an
arms-length transaction, regardless of the price actually charged or invoiced.
1.8 Packaging. All tags, labels, cartons or containers and packing or
wrapping material used or to be used by Licensee in connection with Xxxxx
Merchandise.
1.9 Royalties. The royalties to be paid by Licensee to Xxxxx for or in
connection with the license to use the Xxxx granted under this Agreement,
provided for in Article III and all other applicable portions of this Agreement.
1.10 Term. The Initial and Renewal Terms, if any, of this Agreement,
provided for and defined in Article VIII, taken collectively.
1.11 Termination Inventory. The inventory provided for in Paragraph 8.5 of
Xxxxx Merchandise finished products, Xxxxx Merchandise on order, work in process
and of Packaging and advertising and promotional material on hand at the time of
the termination of this Agreement.
1.12 Territory. The geographical area consisting of the United States, its
territories and possessions and Canada. However, the license with respect to
Canada may be terminated at any time and for any reason by Xxxxx, and Xxxxx
shall not be liable for any damages which Licensee may suffer due to such
termination. In the event that Xxxxx exercises its right to
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terminate the license for Canada granted herein, all requirements of this
Agreement, including the guaranteed minimum Royalties as set forth in Paragraph
3.2, shall remain unchanged. In addition, the parties shall comply in all
respects with Paragraphs 8.5 and 8.6 regarding the Canadian inventory and
termination sales thereof.
II. License
2.1 Grant of License. Xxxxx hereby grants to Licensee an exclusive license
throughout the Territory to use the Xxxx in connection with the manufacture,
advertising, merchandising, promotion, sale and distribution of Xxxxx
Merchandise approved by Xxxxx, in accordance with the terms of this Agreement.
The license granted herein extends only to the Merchandise, Territory and uses
expressly provided for in this Agreement, and Licensee shall not use or attempt
to use the Xxxx on any other products or goods in any other area or any other
manner whatsoever.
2.2 Distribution Channels. Licensee acknowledges that Xxxxx has
established a reputation for unique high quality fashionable merchandise sold in
high quality and high fashion stores, and that Xxxxx maintains a marketing
strategy of retaining and projecting to consumers that reputation and ambience
for its products. Accordingly, in order to protect Xxxxx' marketing strategy,
goodwill and prestige and reputation, Xxxxx Merchandise shall be sold only in
better department stores and in better specialty stores and the license granted
under this Agreement extends only to the use of the Xxxx in connection with the
manufacture, advertising, merchandising, promotion, sale and distribution of
Xxxxx Merchandise for sale to customers in such better department stores and
better specialty stores.
2.3 Prohibition on Exports. Licensee shall not export Xxxxx Merchandise
from the Territory to any area outside of the Territory and shall not sell or
distribute Xxxxx Merchandise to any person or entity that Licensee knows or has
reason to know intends so to export Xxxxx Merchandise.
2.4 Resolution of Conflicts. Licensee recognizes that Xxxxx has granted,
and may in the future grant, licenses to other parties to use the Xxxx or one or
more of Xxxxx' other trademarks in connection with the manufacture, promotion
and distribution of wearing apparel, accessories or related items. If Licensee
or the licensee under any other such license notifies Xxxxx of an existing or
potential conflict in definition of the merchandise covered by, or the rights of
the licensee under, their respective licenses and license agreements, Xxxxx
shall endeavor to deal with the issue by discussions with authorized
representatives of
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the affected party, and Licensee shall fully cooperate in any such efforts.
Xxxxx may at any time determine finally to resolve any such conflict by written
notice of its determination and resolution to the affected licensees, and all
such determinations shall be final and binding upon Licensee.
2.5 Reservation of Rights. Xxxxx reserves all rights to the Xxxx
including, without limitation, all rights to use the Xxxx and to grant others
the right to use the Xxxx in any area and with regard to any product, except as
specifically granted and licensed to Licensee under this Agreement.
2.6 Covenant Not to Compete.
2.6.1 Xxxxx shall not design, manufacture or sell Merchandise or
license the design, manufacture or sale thereof in the Territory in competition
with Licensee during the Term.
2.6.2 Licensee shall not, during or after the Term of this
Agreement, use designs or styles unique to Xxxxx Merchandise on or in connection
with any other brand of product and will assign to Xxxxx the beneficial
ownership of all rights that Licensee has acquired or may acquire in such
designs or styles upon expiration or termination of this Agreement.
III. Royalties
3.1 Percentage Royalty.
3.1.1 In consideration of the license granted and the services to be
performed by Xxxxx under this Agreement and subject to Guaranteed Minimums,
Licensee shall pay to Xxxxx Royalties equal to ( %) percent of the Net
Sales of all Xxxxx Merchandise, in accordance with all the terms and conditions
of this Agreement.
3.1.2 Licensee shall be obligated to pay and account for Royalties
for all Xxxxx Merchandise billed or shipped, even if the Merchandise improperly
bears the Xxxx or the applicable transaction is otherwise in breach or violation
of the terms of this Agreement; provided that this subparagraph 3.1.2 shall not
be considered to authorize such transactions and that the payment or obligation
to pay Royalties for such transactions shall not in any manner limit Xxxxx'
right to terminate this Agreement or to exercise any other right or remedy that
Xxxxx may have as a result of the breach of this Agreement by such transactions.
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3.2 Guaranteed Minimum Royalties.
3.2.1 Notwithstanding the amount of Royalties computed and payable
under Paragraph 3.1, the Guaranteed Minimum Royalties to be paid from Licensee
to Xxxxx for each Annual Period during the Term shall be as follows: for the
First Annual Period, the amount of $ ; for the Second Annual Period, the
amount of $ ; and for the Third Annual Period, the amount of $ .
3.2.2 Guaranteed Minimums for each Annual Period shall be paid as
follows:
First Annual Period:
$ contemporaneously with the execution of
this Agreement;
$ on or before April 1, 1993;
$ on or before July 1, 1993; and
$ on or before October 1, 1993.
Second Annual Period:
$ on or before January 1, 1994;
$ on or before April 1, 1994;
$ on or before July 1, 1994; and
$ on or before October 1, 1994.
Third Annual Period:
$ on or before January 1, 1995;
$ on or before April 1, 1995;
$ on or before July 1, 1995; and
$ on or before October 1, 1995.
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Fourth Annual Period (First Renewal Term):
$ on or before January 1, 1996;
$ on or before April 1, 1996;
$ on or before July 1, 1996; and
$ on or before October 1, 1996.
Fifth Annual Period:
$ on or before January 1, 1997;
$ on or before April 1, 1997;
$ on or before July 1, 1997; and
$ on or before October 1, 1997.
For purposes of computation of Royalties, Guaranteed Minimum payments shall be
considered as advances against Royalties otherwise payable in the same Annual
Period, but Guaranteed Minimums shall not be carried forward to any subsequent
Annual Period and shall not, under any circumstances, be repayable or refundable
to Licensee.
3.3 Payment and Periodic Reports. Royalties shall be paid, without set-off
or deduction for any reason, and accounted for quarterly, within twenty-five
(25) days after the end of each quarter. At the time each Royalty payment is
due, Licensee shall deliver to Xxxxx a statement signed and certified as
accurate by Licensee's chief financial officer or by another officer or official
of Licensee, approved by Xxxxx in advance in writing, accounting for the Net
Sales and Royalties for the applicable quarter. Such statement shall show the
total amount of gross sales of all Merchandise billed or shipped during the
quarter; an itemized list of any amounts which may, under this Agreement, be
deducted from gross sales for computing Net Sales; a computation of the amount
of Royalties payable on account of the Net Sales for the quarter; advertising
expenditures under Paragraph 4.6 during the quarter; and such other information
including, without limitation, customer and financial information and reports,
as Xxxxx may reasonably require. At Xxxxx' request, Licensee shall provide the
foregoing information on a customer-by-customer basis. Xxxxx may, at any time,
provide Licensee with a standarized form for accounting for Royalties and
Licensee shall use any such form for the statements under this paragraph. The
statements provided for in this paragraph shall be furnished to
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Xxxxx whether or not Licensee has sold, shipped or billed any Xxxxx Merchandise
during the quarter for which the statement is due.
3.4 Annual Reports. Not later than forty-five (45) days after the end of
each Annual Period, Licensee shall deliver to Xxxxx a statement, signed and
certified by Licensee's then regularly engaged independent certified public
accountant (or, if Licensee has no such regular engagement, by a reputable
independent certified public accountant) stating for the Annual Period the
information required in the quarterly statement under Paragraph 3.3 and such
other information as Xxxxx may reasonably request within a reasonable time prior
to the date on which the statement is due.
3.5 Books and Records and Audit.
3.5.1 Licensee shall prepare and maintain, in accordance with
generally accepted accounting principles consistently applied, complete and
accurate books of accounts and records covering all transactions arising out of
or relating to this Agreement, which books and records shall at least be in
sufficient detail to permit Xxxxx to monitor compliance by Licensee with all of
its obligations under this Agreement. Xxxxx and its duly authorized
representatives shall have the right, upon five (5) days prior written or oral
notice, during regular business hours, throughout the Term and for three (3)
years thereafter, to audit such books of account and records and to examine all
other documents and materials in Licensee's possession or control relating to
this Agreement and Licensee's performance hereunder. Licensee shall maintain
such books of account, records and documents and material available for Licensee
for at least three (3) years after the termination of this Agreement. Except as
provided in subparagraph 3.5.2, any audit under this Paragraph shall be at
Xxxxx' expense.
3.5.2 If any audit of Licensee's books and records by Xxxxx under
subparagraph 3.5.1 discloses that the payments made by Licensee to Xxxxx during
the period covered by the audit were up to ( %) percent less than the
payments that should have been made under this Agreement, Licensee shall pay the
deficiency, plus interest at a rate equal to ( %) percent above the rate
announced by Citibank as its "Prime Rate", within fourteen (14) days after
demand therefor by Xxxxx. If an audit shows that the amount paid by Licensee was
more than ( %) percent less than the amount which should have been paid, the
interest payable shall be at a rate of five (5) percentage points above such
Prime Rate and Licensee shall, in addition, reimburse Xxxxx for all costs of the
audit within fourteen (14) days after demand by Xxxxx.
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IV. Performance
4.1 Performance Standards.
4.1.1 Throughout the Term, Licensee shall use its best effort and
cause its officers, employees, agents and contractors to use their best efforts
to sell the maximum quantity of Xxxxx Merchandise, promote business for Xxxxx
Merchandise and enhance the value and reputation of the Xxxx, consistent with
good business practices and the high standards and prestige represented by the
Xxxx. Xxxxx recognizes that Licensee does, and during the Term, will continue to
manufacture and sell other lines of eyewear, to wit, "Xxxxx Coventry", "Xxxxx
Xxxxx" and "Playskool", and Licensee agrees that the continuation of such lines
will not interfere with its performance under this agreement and particularly
the provisions of this subparagraph 4.1.1.
4.1.2 In the use of the Xxxx and all other aspects of the
performance of this Agreement, Licensee shall at all times comply with all
applicable laws and regulations including, without limitation, all laws and
regulations related to the manufacture, sale, labeling, packaging, distribution
and advertising of Xxxxx Merchandise sold within the Territory.
4.2 Abandonment. If Licensee shall fail to use the Xxxx in the manufacture
and sale of opthalmic eyewear or sunglasses or eyewear accessories within any
period of six (6) months or if Licensee shall determine or state in writing its
intention to cease so to use the Xxxx, Licensee shall be deemed to have
abandoned the use of the Xxxx, and Xxxxx may at any time thereafter terminate
this Agreement by written notice under subparagraph 8.3.1. The parties
acknowledge that the abandonment of the use of the Xxxx by Licensee will
irreparably damage Licensee's capacity to use the Xxxx under the terms of this
Agreement and, for purposes of termination under Article VIII, abandonment of
the use of the Xxxx under this paragraph shall be considered a breach or
violation of this Agreement which is not curable.
4.3 Restrictions on Promotionals. Licensee shall not, without the prior
written consent of Xxxxx, give away any Xxxxx Merchandise (other than point of
display items) or market, sell or distribute any Xxxxx Merchandise as a premium
or in connection with any tie-in or promotional campaign for any product or
products (except Xxxxx Merchandise).
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4.4. Quality.
4.4.1 The materials and workmanship of, and Packaging and sales and
promotional materials for, the Xxxxx Merchandise shall at all times be of high
quality, and the Xxxxx Merchandise shall at all times be designed, manufactured,
distributed and promoted in a manner appropriate for the high quality of such
Xxxxx Merchandise.
4.4.2 Xxxxx and its duly authorized representative shall have the
right, during normal business hours upon reasonable advance notice, to inspect
any facility used by Licensee in connection with the manufacture of Xxxxx
Merchandise or the manufacture or production of Packaging or advertising or
promotional material in order for Xxxxx to monitor the quality of the Xxxxx
Merchandise and Packaging and promotional materials and Licensee's compliance
with all other terms of this Agreement which relate to such manufacture and
production.
4.5 Advertising.
4.5.1 Until such time as Xxxxx institutes a national advertising
program, Licensee shall, during each Annual Period, expend not less than
( %) percent of the amount of the aggregate Net Sales for the Annual Period for
advertising, in promoting Xxxxx Merchandise in communications media, national
consumer publications, trade press, store promotional mailings or advertising
campaigns and store point of display items. Licensee shall comply with any
reasonable guidelines established by Xxxxx for advertising activities and
expenditures. If, notwithstanding Licensee's good faith effort, the amount
expended by Licensee for an Annual Period is less than ( %) percent of the
Net Sales for the Annual Period, the difference shall, at Xxxxx' option, either
be added to Licensee's required advertising expenditures for the next Annual
Period or be paid to Xxxxx within the earlier of thirty (30) days after the
delivery to Xxxxx of the annual report for the Annual Period under Paragraph 3.4
or ninety (90) days after the end of the Annual Period.
4.5.2 If, at any time during the Term, Xxxxx institutes a national
advertising program, Licensee shall participate to the extent reasonably
required by Xxxxx in such national advertising program, the contribution to same
by Licensee not to exceed ( %) percent of the aggregate Net Sales for the
Annual Period.
4.6 Approvals. Licensee shall not in any aspect of its performance under
this Agreement use any materials, designs, styles, fits or workmanship for
Xxxxx Merchandise or use any items of Packaging or advertising or promotional
materials which Xxxxx has not approved under the terms of this Agreement, which
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approval is not to be unreasonably withheld by Xxxxx. Xxxxx' Approval or
disapproval of any item or matter for purposes of this Agreement may be based
solely on Xxxxx' subjective standards and Approval may be given or withheld in
Xxxxx' sole discretion, provided that Xxxxx shall act in good faith.
V. Designs, Samples and Packaging
5.1 Designs. Xxxxx and Licensee shall cooperate in such manner as Xxxxx
may approve in the development and creation of designs, styles and design and
style ideas for each collection of Xxxxx Merchandise. All designs, styles,
patterns, photographs or ideas for Xxxxx Merchandise provided by Xxxxx to
Licensee or approved by Xxxxx for purposes of this Agreement shall be the
exclusive property of Xxxxx, and Licensee shall not use any of the foregoing
except for the manufacture, distribution and sale and advertising and promotion
of Xxxxx Merchandise in accordance with the terms of this Agreement.
5.2 Samples. Licensee shall submit to Xxxxx, free of charge, samples of
each item of Xxxxx Merchandise within a reasonable time prior to the
commencement of production of the item for sale and distribution, but not later
than thirty (30) days prior to the scheduled first showing of the collection of
Xxxxx Merchandise which includes the item. Licensee may, after the production
and distribution of the first collection of Xxxxx Merchandise under this
Agreement, suggest procedures for representative samples, subject to continuing
inspections under Paragraph 5.4, and Xxxxx shall consider and respond to any
such request in good faith but shall not be required to approve any such
procedures. Licensee may not sell or distribute any item of Xxxxx Merchandise
unless Xxxxx has approved the sample for the item in advance. In furtherance of
the foregoing, Licensee shall provide to Xxxxx, on an annual basis, a schedule
reflecting the dates of collection showings with an indication as to when the
Xxxxx Merchandise scheduled to be shown will be available for inspection by
Xxxxx prior thereto.
5.3 Packaging. To the extent reasonably feasible, the samples provided
under Paragraph 5.2 shall include all tags, labels and other items of Packaging
that relate to, or that Licensee intends to use with, the item submitted as a
sample. Licensee shall submit to Xxxxx samples of all other items of Packaging
within a reasonable time prior to the commencement of the production of such
items for use with Xxxxx Merchandise. Xxxxx shall not unreasonably require
Licensee materially to change labels, tags or other significant items or
Packaging from collection to collection.
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5.4 Continuing Inspection. Upon Xxxxx' request at any time and from time
to time, Licensee shall submit to Xxxxx a reasonable number of production
samples of items of Xxxxx Merchandise or Packaging material in order for Xxxxx
to monitor production in accordance with Xxxxx Approvals, quality standards and
other requirements of this Agreement. If Xxxxx notifies Licensee in writing of
the disapproval of any production sample, Licensee shall immediately take such
action as may be necessary for the item to meet Xxxxx Approval and cease
production and distribution and sale of the item pending Approval. Xxxxx shall
not unreasonably disapprove any production sample under this paragraph.
VI. Trademark and Trademark Protection
6.1 Ownership.
6.1.1 Licensee acknowledges that, as between Xxxxx and Licensee,
Xxxxx is the owner of all right, title and interest in and to the Xxxx in any
form or embodiment and is also the owner of the good will attached or which
shall become attached to the Xxxx in connection with the business and goods in
relation to which the same has, is or shall be used. Sales by Licensee shall be
deemed to have been made for purposes of trademark registration, and all uses of
the Xxxx by Licensee shall inure to the benefit of Xxxxx.
6.1.2 At Xxxxx' request, Licensee shall execute any documents,
including registered users agreements, reasonably required by Xxxxx to confirm
Xxxxx' ownership of all rights in and to the Xxxx in the Territory and the
respective rights of Xxxxx and Licensee under this Agreement. Licensee shall
cooperate with Xxxxx in connection with the filing and prosecution by Xxxxx of
applications in Xxxxx' name relating to the use of the Xxxx for Merchandise in
the Territory.
6.1.3 Licensee shall never challenge or encourage anyone to
challenge Xxxxx' ownership or the validity of the Xxxx or any application for
registration thereof or any trademark, copyright or other registration thereof
or any rights of Xxxxx therein.
6.2 No Adverse Acts. Licensee shall not, at any time or in any manner,
knowingly engage in any activity or do or permit any act which may in any way
adversely affect any rights of Xxxxx to the Xxxx or any registrations or
applications for registration thereof or which may directly or indirectly reduce
the value of the Xxxx or derogate or detract from its repute.
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6.3 No Secondary Marks. Licensee shall not use any other trade names,
trademarks or other designations (including, without limitation, Licensee's own
corporate name or trade name) in connection with the Xxxx in any advertising,
publicity, labeling, Packaging or printed matter utilized by Licensee in
connection with Xxxxx Merchandise. Licensee shall not join the Xxxx with any
other names or marks to form a new xxxx and shall not itself use the Xxxx as a
corporate name or trade name or in any other manner other than in connection
with the manufacture, distribution, sale and promotion of Xxxxx Merchandise
under this Agreement.
6.4 Trademark Notices. Licensee shall cause the designation "R" to appear
immediately after, on the upper right, of the Xxxx on all Packaging and
advertising and promotional material and shall, in addition, cause to appear on
all Packaging and advertising and promotional materials and on all forms,
invoices, stationary, business cards and other documents and materials of any
kind bearing the Xxxx such designations, legend, or markings or notices as may
be necessary, or as Xxxxx may require, to give notice of the status of the Xxxx
and Xxxxx' rights and interests therein.
6.5 Copyrights. Any copyright that may be created by statute, common law
or otherwise in any design, sketch, print, Packaging or similar matter shall be
the sole property of Xxxxx. Licensee shall take such action as may be necessary
or as Xxxxx may require to confirm, preserve or protect such copyright,
including placing of copyright notices on the appropriate items. Licensee shall
not claim for itself or for any party other than Xxxxx copyrights in any such
items and shall not file or attempt to file any copyright registrations
therefor.
VII. Warranties, Indemnification and Infringement
7.1 Warranties.
7.1.1 Xxxxx represents and warrants to Licensee that Xxxxx has the
full right, power and authority to enter into this Agreement and to grant the
rights, licenses and privileges granted by Xxxxx hereunder to Licensee and to
perform all of Xxxxx' obligations hereunder.
7.1.2 Licensee represents to Xxxxx that Licensee has the full right,
power and authority to enter into this Agreement and to perform all of its
obligations hereunder.
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7.2 Indemnification by Xxxxx. Xxxxx shall indemnify, defend and hold
harmless Licensee from and against any and all claims, causes of actions, suits,
damages and expenses (including reasonable attorneys' fees and expenses) arising
out of any claim that Licensee's use of the Xxxx in accordance with the terms of
this Agreement constitutes an infringement of a valid trademark in the
Territory, upon Licensee giving Xxxxx prompt written notice and authority and an
opportunity to undertake and fully conduct the defense thereof.
7.3 Indemnification by Licensee and Insurance.
7.3.1 Licensee shall indemnify, defend and hold harmless Xxxxx from
and against any and all claims, causes of action, suits, damages and expenses
(including reasonable attorneys' fees) which Xxxxx may incur or for which it may
become liable or required to pay by reason of any defect or alleged defect in
any Xxxxx Merchandise; the breach by Licensee of any provision of this Agreement
or of any of Licensee's duties hereunder; or the acts or omissions of Licensee
or of any of its servants, agents, employees or contractors in connection with
the performance of this Agreement (excluding matters covered by Paragraph 7.2).
7.3.2 Licensee shall, at its own expense, obtain and maintain
throughout the Term in full force and effect with an insurance carrier
acceptable to Xxxxx, products liability insurance with a limit of liability of
not less than $2,000,000, insuring against, without limitation, all damages,
profits, interest, attorneys' fees, costs and expenses arising out of any suit
or legal proceeding, claim or demand resulting from a defect or alleged defect
in any item of Xxxxx Merchandise or out of the use or condition of an item of
Xxxxx Merchandise. Such insurance policy shall name Xxxxx as a co-insured and
shall provide for at least thirty (30) days advance written notice to Xxxxx
before cancellation or substantial modification. Licensee shall promptly deliver
a certificate of such insurance to Xxxxx and, if Xxxxx so requests, a copy of
the policy for such insurance. The obligation of this subparagraph with respect
to insurance shall not be deemed to limit in any manner the indemnification
obligations of Licensee under subparagraph 7.3.1.
7.4 Infringements. Licensee shall promptly notify Xxxxx in writing of any
known or suspected infringements of the Xxxx or of any copyright or other rights
or property of Xxxxx, promptly after the same comes to Licensee's attention.
Xxxxx shall have the sole and exclusive right to take action or institute
proceedings with respect to such infringement, and shall proceed as it may, in
its sole discretion, deem appropriate or desirable.
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Licensee shall cooperate in any action or proceeding by Xxxxx with respect to an
infringement or suspected infringement in such manner as Xxxxx may request.
VIII. Term and Termination
8.1 Initial Term. The initial term of this Agreement ("the Initial Term")
shall commence upon execution of this Agreement and end on December 31, 1995,
subject to earlier termination as provided in this Agreement and to renewal as
provided in Paragraph 8.2.
8.2 Renewal Term. If Licensee is not in default of any of the terms of
this Agreement, has complied with its obligations under this Agreement in all
material respects (without regard to whether Xxxxx has given any notices of
default of failure to comply) and if it reasonably appears that Net Sales for
the last Annual Period of the Initial Term will exceed $ , Licensee
shall have the option, exercisable by written notice given to Xxxxx not later
than six (6) months prior to the expiration of the Initial Term, to renew this
Agreement for a first renewal term ("First Renewal Term") of two (2) years,
beginning on January 1, 1996 and ending on December 31, 1997, subject to earlier
termination as provided in this Agreement.
8.3 Termination.
8.3.1 Xxxxx may terminate this Agreement, effective immediately upon
giving Licensee written notice of termination, if (i) Licensee fails to make any
payment due to Xxxxx under this Agreement when such payment is due and continues
such failure uncured for ten (10) days after written notice thereof from Xxxxx
to Licensee, (ii) Licensee fails two (2) or more times during any Annual Period
during the Term to make any payment due to Xxxxx within ten (10) days after such
payment is due, without regard to any notice of such failure from Xxxxx, (iii)
Licensee abandons the Xxxx, as provided in Paragraph 4.2, (iv) the record or
beneficial ownership of Licensee or any of its parents or affiliates changes in
a manner so as to change the record, beneficial or actual control of Licensee,
or (v) Licensee defaults on any obligations secured by a security interest in or
other lien or encumbrance on Xxxxx Merchandise.
8.3.2 Either Xxxxx or Licensee may terminate this Agreement,
effective immediately upon giving the other party written notice of termination,
if (i) the other party breaches or fails to perform any of the terms or
provisions of this Agreement in a manner not provided for in subparagraph 8.3.1,
in any material respect and such breach or failure is not curable or, if
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curable, is not cured within twenty (20) days after written notice thereof from
the non-breaching party, or (ii) the other party files a voluntary petition or
proceeding in bankruptcy or under any federal or state bankruptcy or insolvency
or other law for the relief of debtors; consent to the appointment of a
receiver, custodian or liquidator for a portion of its business or property; has
filed against it and not dismissed within forty-five (45) days an involuntary
proceeding under any federal or state bankruptcy or insolvency or other law for
the relief of debtors or for the appointment of a receiver, custodian or
liquidator; makes an assignment for the benefit of its creditors; or ceases, or
admits its intention to cease, the manufacture, sale or distribution of Xxxxx
Merchandise or the conduct of its business in the ordinary course.
8.4 Termination of Rights.
8.4.1 Upon the expiration or termination of this Agreement for any
reason whatever, all rights of Licensee under this Agreement shall terminate and
automatically revert to Xxxxx. Licensee shall immediately discontinue all use of
the Xxxx and shall no longer have any right to use the Xxxx or any variation or
simulation thereof in any manner or for any purpose whatsoever. Licensee shall
transfer to Xxxxx by such documentation as Xxxxx may require all registrations,
filings, trademarks, copyrights and other rights with regard to the Xxxx which
Licensee may have possessed at any time. Subject to the provisions of Paragraph
8.6 concerning the sale of Termination Inventory, Licensee shall deliver to
Xxxxx, without charge, all sketches, samples, designs or other matters relating
to Xxxxx Merchandise and all Merchandise, Packaging materials and advertising
and promotional materials bearing the Xxxx in any form.
8.4.2 Upon termination or expiration of this Agreement for any
reason, including termination under Paragraph 8.3.2(ii), no trustee in
bankruptcy, assignee for the benefit of creditors, custodian, receiver, sheriff
or court officer or other successors to Licensee or its assets or business shall
have any right to continue this Agreement or to use or exploit the Xxxx in any
manner whatever.
8.4.3 Notwithstanding the provisions of subparagraph 8.4.2, in the
event that under the United States Bankruptcy Code or any amendment or successor
thereto (collectively the "Bankruptcy Code"), the trustee in bankruptcy of
Licensee or Licensee, as bankruptcy debtor, is permitted to and does assume this
Agreement and thereafter proposes to assign this Agreement by an assignment
which fulfills the applicable requirements of the Bankruptcy Code, other trustee
or Licensee shall notify Xxxxx of the proposed assignment in advance, in
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writing, setting forth the name and address of the proposed assignee, the
proposed consideration for the assignment and all other material terms and
details of the proposal. Such notice shall be considered an offer to Xxxxx to
have this Agreement assigned to Xxxxx or to its designee for the consideration
(or its reasonable equivalent in money) and under the other material terms in
the notice. Xxxxx may exercise the option and accept the offer by giving the
trustee or Licensee, as appropriate, written notice of exercise and acceptance
within twenty (20) days after Xxxxx receives the notice from the trustee or
Licensee. If Xxxxx fails to give notice and exercise the option within such
twenty (20) day period, the trustee or Licensee may complete the proposed
assignment, but only to the party and for the consideration and under the terms
described in the notice.
8.5 Termination Inventory. Within thirty (30) days after the expiration or
termination of this Agreement, Licensee shall prepare and deliver to Xxxxx a
written Termination Inventory, including a complete and accurate schedule as of
the date of expiration or termination of all completed Xxxxx Merchandise on
hand; Xxxxx Merchandise on order; work in process relating to Xxxxx Merchandise
on hand, including uncut piece goods and products and materials in the process
of manufacture; and all Packaging materials, advertising and promotional
materials and other documents or items that bear the Marks or Xxxxx' name in any
form in Licensee's possession or control or in the process of manufacture for
Licensee. Xxxxx shall have the option, exercisable within ten (10) days after
receipt of the Termination Inventory, to purchase all or any portion of the
items in the Termination Inventory for a purchase price equal to
( %) percent of Licensee's cost. Licensee shall deliver to Xxxxx the items in
the Termination Inventory to be purchased, within five (5) days after receipt of
Xxxxx' notice exercising its option to purchase, and Xxxxx shall pay the
purchase price within thirty (30) days after receipt of all items of the
Termination Inventory purchased.
8.6 Termination Inventory Sales. For a period of six (6) months after the
expiration of Xxxxx' option to purchase Termination Inventory under Paragraph
8.5, Licensee may sell finished Xxxxx Merchandise in the remaining Termination
Inventory or finished Xxxxx Merchandise completed from work in process in the
remaining Termination Inventory, on a non-exclusive basis, in accordance with
all of the terms of this Agreement. Royalties for all such sales shall be paid
and accounted for by Licensee within thirty (30) days after the end of such six
(6) month period. Any items in the Termination Inventory not sold and remaining
after the selling period provided for in this paragraph shall be delivered to
Xxxxx, disposed of or destroyed in accordance with Xxxxx' instructions.
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Confidential Treatment Requested - Portions filed seperately with the
Commission.
8.7 Subsequent License. Immediately upon the expiration or termination of
this Agreement for any reason, Xxxxx shall have the free and unrestricted right
to grant other parties one or more licenses to use the Xxxx in connection with
the manufacture, sale and distribution or advertising and promotion of
Merchandise in the Territory or to enter into such other transactions as it
desires for the use of the Xxxx with Merchandise or in any other manner, without
any obligation of any kind to Licensee. The right of Licensee to sell items of
Termination Inventory under Paragraph 8.6 is non-exclusive only and shall not in
any manner limit Xxxxx' rights to enter into other licenses or transactions.
8.8 Reservation of Rights. Notwithstanding any termination of this
Agreement, Xxxxx shall have and hereby reserves all rights and remedies which
are granted or available to it under this Agreement or applicable law, and
termination shall not be deemed to be an exclusive remedy or to limit Xxxxx in
any manner from enforcing any other rights or remedies.
IX. General Terms
9.1 Confidentiality. Xxxxx and Licensee acknowledge that all information
and data which the parties have learned or will learn in connection with this
License Agreement and activities and transactions hereunder concerning the
business and operation of the parties and all tangible manifestations of such
information and data including, without limitation, designs, patterns, sketches,
business and marketing plans, customer lists, and financial and operating
reports constitute valuable proprietary confidential information and trade
secrets of the parties, and the parties shall not disclose any such data or
information or use any such data or information for themselves or any other
person or entity, except for the proper and authorized performance of this
Agreement in accordance with all of the terms hereof.
9.2 Arbitration.
9.2.1 Subject to the provisions of subparagraph 9.2.2, all disputes
arising under this Agreement or the obligations of the parties hereunder shall
be submitted to arbitration in New York, New York before a panel of three
arbitrators, in accordance with the then prevailing Rules for Commercial
Arbitration of the American Arbitration Association. The arbitrators in any such
arbitration shall award costs to the prevailing party and may, but shall not be
required to, award reasonable attorneys' fees. The decision of the arbitrators
shall be final and binding on all parties, except that the arbitrators shall
have no power to vary the terms of this
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Agreement. Judgment on the arbitrators' award may be entered in any court in the
State of New York or in any other court of competent jurisdiction.
9.2.2 The parties acknowledge that a breach of this Agreement
involving the improper or unauthorized use of the Xxxx or other matters may give
rise to irreparable harm pending the outcome of arbitration under subparagraph
9.2.1. Accordingly and notwithstanding the provisions of subparagraph 9.2.1,
either party may, upon a breach or threatened breach of this Agreement, bring an
action in a court of competent jurisdiction and apply therein for temporary or
preliminary injunctive or other equitable relief, pending resort to, and a
decision in, arbitration under subparagraph 9.2.1. If otherwise appropriate
under applicable law, a court may entertain any such action and grant injunctive
or equitable relief, and the provisions of subparagraph 9.2.1 providing for
arbitration shall not be construed to prevent the action or relief.
9.3 Assignability.
9.3.1 Xxxxx may assign this Agreement to a successor to all or
substantially all of its business or the portion of its business which utilizes
the Xxxx, if the successor assumes all of Xxxxx' responsibilities, obligations
and liabilities hereunder. Xxxxx may, in addition, assign the right to receive
payments, but not any obligations, under this Agreement to a financial or
similar institution for purposes of financing, so long as Xxxxx remains
responsible for all of its obligations hereunder.
9.3.2 This Agreement is personal to Licensee, and Licensee may not
assign, sublicense or otherwise transfer all or any portion of this Agreement or
any rights or obligations hereunder, whether voluntarily, involuntarily, by
operation of law or otherwise, and any such attempted assignment or other
transfer shall be null and void and of no effect.
9.4 Applicable Law. New York law shall govern the validity, construction,
interpretation and effect of this Agreement.
9.5 No Agency. Nothing contained in this Agreement shall be deemed or
construed as constituting the parties hereto as partners or joint venturers or
either party as an agent of the other and, without limiting the foregoing,
Licensee shall have no authority to bind or obligate or to incur any
indebtedness for Xxxxx, and no such authority shall be implied.
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9.6 Failure to Exercise Rights. The failure of either party to act or
exercise any right under this Agreement, upon the breach of any of the terms
hereof, or otherwise, shall not be construed as a waiver of such breach or as
preventing either party from thereafter enforcing strict compliance with any and
all of the terms hereof.
9.7 Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such provision shall be considered severable, and the
remaining provisions of this Agreement shall continue in full force and effect
and shall be valid and enforceable to the fullest extent permitted by law.
9.8 Entire Agreement. This Agreement contains the entire understanding
between the parties, no other representations or covenants having induced either
party to execute this Agreement. This Agreement and obligations and duties under
this Agreement may not be amended or modified in any manner, in whole or in
part, except by a written agreement or amendment or modification duly executed
by the party to be charged.
9.9 Headings. The Article and paragraph headings of this Agreement are for
convenience of reference only and do not form a part of the covenants, terms or
conditions of this Agreement or give full notice thereof.
9.10 Notices. All notices, reports, statements, exercises of options or
other communications required or permitted under this Agreement shall be in
writing and shall be sufficiently given only if personally delivered; mailed by
registered or certified mail, return receipt requested; sent by overnight
express courier, with written receipt of delivery; or transmitted by telecopier
and confirmed by first class mail within twenty-four (24) hours. All notices
shall be sent or delivered to the following addresses or to such other addresses
as either party may, by notice direct:
If to Xxxxx: Xxxxx Investment Co., Inc.
000 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx
with copies to: Xxxxx Apparel Group, Inc.
0000 Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
If to Licensee: Diplomat-Ambassador Eyewear Group
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
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with a copy to: Xxxx Xxxxxx, Esq.
Suite 405
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Notices given by mail shall be deemed given on the second business day after the
date on which they are mailed. All other notices shall be deemed as given on
receipt.
IN WITNESS WHEREOF, the parties, each by their duly authorized
representative, have executed this License Agreement as of the date first above
written.
XXXXX INVESTMENT CO., INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Vice President
DIPLOMAT-AMBASSADOR EYE GROUP
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx
President
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