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EXHIBIT 10.32 **
LICENSE AGREEMENT
This Agreement is entered into this 9th day of December, 1996, by and
between Coach, a division of ▇▇▇▇ ▇▇▇ Corporation, a Maryland corporation having
offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred
to as "Licensor") and Movado Group, Inc., a New York corporation with offices at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as
"Licensee").
WHEREAS, Licensor is the owner of the trade name Coach (hereinafter
referred to as "the Trade Name") and the trademarks COACH, COACH and Lozenge
Design, and COACH and Tag Design (hereinafter collectively referred to as "the
Licensed Marks"), which Licensed Marks are depicted in Schedule 1 attached
hereto and made a part hereof, the Licensed Marks having been used in connection
with a wide variety of leather goods and accessories and having been registered
on the Principal Register of the United States Patent and Trademark Office and
in numerous other countries throughout the world;
WHEREAS, Licensee manufactures, markets and sells watches and desires
to use the Trade Name and Licensed Marks in connection with the manufacture,
marketing and sale of watches; and
WHEREAS, Licensor is willing to grant Licensee the right to use the
Trade Name and Licensed Marks under the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
(** CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED FROM PAGES 9, 12-18,
20-22, 26 AND SCHEDULE 4 AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 ("1934 Act")).
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1. DEFINITIONS
As used herein the term(s):
1.1 "Licensed Products" shall mean watches and component parts thereof
and only watches and component parts thereof marketed or sold under the Trade
Name and/or the Licensed Marks, provided, however, that nothing in this
Agreement shall be construed to allow Licensee to establish a separate business
in watch components that bear the Trade Name and/or Licensed Marks.
1.2 "Licensor Channels" shall mean retail outlets controlled by
Licensor, including without limitation Licensor's catalog, Licensor's stand
alone retail stores, Licensor's factory outlet stores, Licensor Special Accounts
(as hereinafter defined) and Licensor's retail stores that are situated within
department stores located outside the United States.
1.3 "Non-Licensor Channels" shall mean retail outlets not controlled by
Licensor, including without limitation department stores, jewelry store chains,
Licensee's factory outlet stores and Licensee Special Accounts (as hereinafter
defined).
1.4 "Market Roll-Out" shall mean Licensee's initial distribution of
Licensed Products to Non-Licensor Channels.
1.5 "Contract Year" shall mean each twelve (12) month period following
the Market Roll-Out of the Licensed Products.
1.6 "Wholesale Price" shall mean the regular published wholesale price
charged by Licensee for Licensed Products.
1.7 "Authorized COACH Retailer" shall mean any retail outlet not
controlled by Licensor but authorized by Licensor to sell products bearing the
COACH, COACH and Lozenge Design or COACH and Tag Design trademarks.
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1.8 "Licensee Special Accounts" shall mean those accounts identified in
Schedule 2 and made a part hereof.
1.9 "Licensor Special Accounts" shall mean those accounts identified in
Schedule 3 and made a part hereof.
1.10 "United States" shall mean the United States of America, its
territories and possessions, including without limitation Puerto Rico.
2. GRANT OF LICENSE
2.1 Upon the terms and conditions hereinafter set forth, Licensor
grants to Licensee a license to use the Trade Name and Licensed Marks on or in
connection with the manufacture, packaging, sale, marketing and distribution of
the Licensed Products. This license shall be exclusive to Licensee and shall
extend to all countries where Licensor has the right to use the Licensed Marks,
provided, however, that Licensor shall retain the right, and Licensee shall have
no right, to use the Trade Name and Licensed Marks on or in connection with the
sale, marketing and/or distribution of the Licensed Products to Licensor Special
Accounts.
2.2 In the event Licensee shall notify Licensor that Licensee intends
to make substantial preparations to market the Licensed Products in a country or
countries where Licensor does not have exclusive rights to use the Licensed
Marks as evidenced by one or more registrations for the Licensed Marks, Licensor
will promptly, at its sole expense, file such applications or take such other
actions as may be reasonably necessary to secure such rights; provided, however,
that in the event Licensor is not able reasonably to secure such rights and
Licensee does not sell the Licensed Products in such country or countries then
the parties will mutually agree upon an appropriate reduction in the Minimum and
Target Non-Licensor Channel Sales (non-U.S.).
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3. OWNERSHIP OF LICENSED MARKS
3.1 Licensee hereby acknowledges that Licensor is the owner of all
right, title, and interest in and to the Trade Name and Licensed Marks, and
agrees that it will not, during the term of this Agreement or thereafter,
challenge Licensor's rights in and to same. Licensee further agrees that it will
not attack the validity of this License.
3.2 Licensee recognizes the great value of the goodwill associated
with the Trade Name and Licensed Marks and acknowledges that the Trade Name and
Licensed Marks and all rights therein, and goodwill pertaining thereto, belong
exclusively to Licensor. Licensee further acknowledges that all use of the Trade
Name and Licensed Marks by Licensee, shall insure to the benefit of Licensor.
4. RELATIONSHIP OF PARTIES
Licensee is a "related company" pursuant to 15 U.S.C. Sec. 1127.
Neither party is an agent or employee of the other, nor shall either party in
any event be liable for the other's acts or omissions. This Agreement does not,
and shall not, be deemed to make any party hereto the agent, partner, joint
venturer or legal representative of any other party for any purpose whatsoever.
Neither Licensor nor Licensee shall have the right or authority to assume or
create any obligations or responsibility whatsoever, express or implied, on
behalf of, or in the name of, the other, or to bind the other in any respect
whatsoever, except as may be herein provided.
5. USE OF THE LICENSED MARKS AND TRADE NAME
5.1 Licensee agrees to use the Licensed Marks only in the form approved
by Licensor. All use of the Licensed Marks on the Licensed Products and on
labels, packaging, in advertising
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and otherwise must faithfully reproduce the form approved by Licensor. Approval
of the form of use of the Licensed Marks, once given, shall be continuing until
Licensee receives written notice to the contrary from Licensor. In the event
Licensee receives such written notice, all uses of the Licensed Marks to which
such notice applies shall cease not later than six (6) months after receipt of
such notice provided, however, that for up to two (2) years following such
notice Licensee shall have the right to sell and distribute Licensed Products in
inventory at the time of such notice that bear Licensed Marks in a form which is
no longer approved by Licensor.
5.2 Licensee shall comply with all notice and marking requirements of
any law or regulation applicable or necessary for the protection of the Licensed
Marks, including those which Licensor, in its legal judgment, may deem
appropriate. Licensor shall use its best efforts to communicate such
requirements to Licensee as soon as practicable. Licensee shall not, at any
time, do or permit any third party within its control or with whom Licensee has
a contractual relationship to do any act or thing that will, in any way, impair
the rights of Licensor in and to the Licensed Marks or which will affect the
validity thereof.
5.3 Any use of the Trade Name by Licensee shall be solely in connection
with the manufacture, marketing, sale and/or distribution of the Licensed
Products. Licensee shall not, at any time, do or permit any third party within
its control or with whom Licensee has a contractual relationship to do any act
or thing that will, in any way, impair the rights of Licensor in and to the
Trade Name or which will affect the validity thereof.
6. QUALITY CONTROL
6.1 Licensee acknowledges that the Licensed Marks have established
prestige and goodwill and are well recognized in the minds of the public, and
that it is of great importance to each
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party that in the manufacture and sale of the Licensed Products, the high
standards and reputation that Licensor has established be maintained.
6.2 Licensor shall have the right to exercise quality control over
Licensee's use of the Licensed Marks on and in connection with the Licensed
Products to a degree reasonably necessary to maintain the validity thereof and
to protect the goodwill associated therewith. Licensor is familiar with the
quality of Licensee's watches sold under the trademark ESQ, and hereby affirms
that that level of quality and workmanship generally conforms with the standards
of quality and workmanship prescribed by Licensor. The parties acknowledge that
Licensor has examined the General Acceptance Requirements pertaining to the ESQ
watches. Licensee agrees that the Licensed Products it will market and sell
under the Trade Name and Licensed Marks will be of a quality at least as good as
the ESQ watches and will be manufactured substantially in accordance with
General Acceptance Requirements that meet or exceed the General Acceptance
Requirements pertaining to the ESQ watches. Licensee shall develop General
Acceptance Requirements specifically pertaining to the Licensed Products and
provide said General Acceptance Requirements to Licensor. Said General
Acceptance Requirements shall be followed during the term of this Agreement,
unless modification thereof is approved by Licensor. Licensor will verify
compliance with this paragraph by examining the Licensed Products, from time to
time, as it receives them from Licensee for sale in Licensor's retail stores.
6.3 Licensor shall have the right to inspect Licensee's manufacturing
facilities for the Licensed Products, including without limitation the
facilities of third-party manufacturers with whom Licensee contracts, up to four
times per Contract Year. Any such inspection will occur during business hours
and only after giving Licensee at least five (5) days written notice of such
inspection.
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6.4 Licensee shall handle all customer inquiries and complaints
relating to the Licensed Products in a manner consistent with the manner in
which it handles customer inquiries and complaints relating to the products it
sells under the ESQ trademark. Licensee shall provide the same service,
warranties, and repair and replacement rights to wholesale purchasers and
consumers of the Licensed Products as Licensee provides to purchasers of its ESQ
watches. Licensee shall be solely responsible for all costs associated with (a)
the handling of customer inquiries and complaints relating to the Licensed
Products, and (b) the provision of service, warranties, repair and replacement
relating to the Licensed Products.
7. PRODUCT DEVELOPMENT
7.1 Licensee shall prepare and submit to Licensor for approval all
product designs for the Licensed Products. All product designs, prototypes,
patterns, stylings and copyrightable material used on or as a part of the
Licensed Products are and will be owned exclusively by Licensor. Licensor,
however, shall not have exclusive rights to any designs, prototypes, patterns,
stylings and/or copyrightable material that were previously used by Licensee or
by any third party on or as a part of watches other than the Licensed Products;
provided, however, that any newly developed product designs, prototypes,
patterns, stylings or copyrightable material used on or as a part of the
Licensed Products which are unique combinations of design elements and/or
components, regardless of whether any independent or separate such design
elements and/or components were previously used by Licensee or others, shall be
owned exclusively by Licensor. Licensee shall not proceed with the manufacture
of a new product design for any Licensed Product, nor shall Licensee discontinue
an existing product design for any Licensed Product, without the written
approval of Licensor, which approval shall not be unreasonably withheld or
delayed.
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Licensee, at its own cost and expense, is responsible for developing all
prototypes relating to the Licensed Products and for the sourcing of all
Licensed Products.
7.2 Licensee shall prepare and submit to Licensor for approval specific
suggested retail prices for the Licensed Goods in both Licensor and Non-Licensor
Channels. All initial suggested retail prices, and any subsequent changes
thereto, must be approved, in writing, by Licensor, such approval not to be
unreasonably withheld or delayed. Licensee acknowledges that in order to
preserve the goodwill attached to the Licensed Marks, the Licensed Products are
to be sold at prices and terms reflecting the prestigious nature of the Licensed
Marks, it being understood, however, that Licensor is not empowered to fix or
regulate the prices at which the Licensed Products are to be sold. Nothing
contained in this Agreement is intended or will be construed as giving either
party any right of approval with respect to any of the prices at which the other
party sells or offers to sell any of the Licensed Products.
7.3 Licensee shall prepare and submit to Licensor for approval,
specific, written plans for the Market Roll-Out of the Licensed Products, such
approval not to be unreasonably withheld or delayed. The parties further agree
to work together to develop specific, written plans for the roll-out of the
Licensed Products to Licensor Channels.
8. PRODUCT SALES AND DISTRIBUTION
8.1 Licensee shall sell to Licensor Licensed Products to be sold
through Licensor Channels in accordance with Licensee's standard terms and
conditions of sale except to the extent any such terms and conditions conflict
with any provision expressly contained herein. Licensee shall also sell Licensed
Products through Non-Licensor Channels including, without limitation, Authorized
COACH Retailers.
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8.2 All Licensed Products for retail sale in Licensor Channels shall be
sold to Licensor at a price equal to *
. Within thirty (30) days following the end of each Contract
Year quarter, Licensor will deliver to Licensee a statement signed by an
authorized officer of Licensor reporting Licensor's sales of Licensed Products
made in the immediately preceding quarter through Licensor's factory outlet
stores, breaking out such sales in dollar amounts and units sold by SKU
designation.
8.3 Any liquidation by either Licensee or Licensor of any Licensed
Products which are excess inventory, discontinued product or quality imperfect
product, through either Licensor or Non-Licensor Channels, shall be done on such
terms and conditions that the parties hereto will agree upon with the exception
of any terms or conditions relating to price.
8.4 Subject to Paragraphs 8.6, 10.2 and 10.3, Licensee, working closely
with Licensor, shall be responsible for the world-wide manufacture and
distribution of Licensed Products, provided, however, that Licensee shall not,
without prior written approval of Licensor, which approval shall not be
unreasonably withheld or delayed, sell or distribute Licensed Products to any
Non-Licensor Channels that are not Authorized COACH Retailers. The parties
acknowledge that from time to time Licensor may approach Licensee to discuss
whether particular approved retail outlets and/or Authorized COACH Retailers
should remain as approved retail outlets and/or Authorized COACH Retailers.
8.5 Licensee shall use reasonable efforts to prevent and/or stop any
diversion of Licensed Products from Licensor approved retail outlets or
Authorized COACH Retailers to any retail outlet which is neither Licensor
approved nor an Authorized COACH Retailer. Licensee acknowledges that its
standard terms of sale shall be to require all retail outlets to whom it sells
Licensed Products to agree to only sell such Licensed Products to the end-using
consumer. Should
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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Licensor notify Licensee of any diversion of Licensed Products, or should
Licensee become aware of any such diversion, Licensee shall take all reasonable
steps necessary to end such diversion, including without limitation tracking
down the source of the diverted Licensed Products and discontinuing all sales of
Licensed Products to said source. Licensee shall keep Licensor appraised of any
such efforts.
8.6 Licensor shall be responsible for order fulfillment relating to the
sale of Licensed Products through Licensor's catalog. Licensor shall maintain
sufficient inventories of Licensed Products in its factory outlet stores and
retail stores and in connection with the fulfillment of its catalog sales and
Licensor Special Accounts to adequately service its customers. Licensee shall
maintain appropriate inventories of both finished Licensed Goods and components
thereof as necessary to service Licensor's ongoing business.
8.7 Licensee shall have the sole right to sell to those accounts
designated herein as Licensee Special Accounts. With respect to such Licensee
Special Accounts, Licensor shall provide such marketing and other assistance as
Licensee shall reasonably request, recognizing that Licensee has primary
responsibility for serving each such Licensee Special Account, and Licensee
shall pay Licensor a royalty "premium" on all sales of Licensed Products to such
Licensee Special Accounts as set forth in Paragraphs 11.1 and 11.2. In the event
that there is a material change in Licensor's ability to provide such marketing
and other assistance as Licensee shall reasonably request in connection with
Licensee Special Accounts, Licensor and Licensee will negotiate in good faith
with respect to the royalty "premium" to reflect the changed circumstances.
8.8 Licensee and Licensor anticipate that the account lists designated
as Licensee Special Accounts and Licensor Special Accounts (see Schedules 2 and
3) may be modified during the term of this Agreement. Any such modifications
shall be agreed to by the parties, in a writing
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signed by both parties, but in no event shall such modifications occur more than
once per Contract Year.
8.9 Licensee shall take the lead, with active support of Licensor, to
introduce the Licensed Products to Licensor's retail management and staff and,
at Licensee's expense, will regularly train such persons on sales, display and
security techniques related thereto according to a schedule to be mutually
agreed upon by the parties.
8.10 Should this Agreement be terminated pursuant to either Paragraph
10.2 or 10.3, Licensor agrees that, to the extent it continues to offer for sale
Licensed Products with the same or substantially identical designs as any
Licensed Products at any time previously sold by Licensee to Licensor hereunder,
Licensor will source all such Licensed Products exclusively from Licensee
pursuant to terms and conditions of sale as are negotiated in good faith and
without unreasonable delay by the parties at the time of such termination; in
the event the parties cannot in good faith agree on such terms and conditions of
sale, Licensor will source such Licensed Products pursuant to the same terms and
conditions of sale as provided hereunder, subject to any cost based price
increases implemented from time to time by Licensee. Notwithstanding the
foregoing, Licensor shall have the right to source any such Licensed Products
from any third party other than Licensee provided that Licensor first pays
Licensee the present fair market value of Licensee's right to be the exclusive
source for such Licensed Products for a period equal to ten (10) years from and
after the date each design for such Licensed Products was first approved by
Licensor hereunder. In the event Licensee elects not to supply such Licensed
Products to Licensor, then Licensor's obligation to source such Licensed
Products from Licensee shall cease. It is explicitly understood that this
Paragraph 8.10 shall apply only if this Agreement is terminated pursuant to
either Paragraph 10.2 or 10.3, and in no event shall Licensor's obligation to
source Licensed Products from Licensee
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pursuant to this paragraph continue for more than ten (10) years from and after
the Market Roll-Out of the Licensed Products.
9. MARKET ROLL-OUT
It is the intention of the parties that the Market Roll-Out of the
Licensed Products will commence on or about March 1, 1998. If by October 1, 1998
the Market Roll-Out has not occurred, and if such delay is not due to the act or
acts of Licensor or Licensor's failure to act or if such delay is not due to
reasons of force majeure, Licensee shall be in breach of this Agreement. If by
October 1, 1998 Licensee has not begun distribution of Licensed Products to
Licensor Channels, and if such failure to distribute is not due to the act or
acts of Licensor or Licensor's failure to act or if such delay is not due to
reasons of force majeure, Licensee shall be in breach of this Agreement.
10. SALES TARGETS AND MINIMUMS
10.1 The parties have established certain sales targets and minimums
pertaining to Licensee's sale of Licensed Products to Non-Licensor Channels.
These targets and minimums are set forth below:
*
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
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*
*
*
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
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*
10.2 If Licensee's sales to Non-Licensor Channels in the United States
during Contract Year 3 are not at least *
, Licensor shall have the right to
terminate this Agreement, such termination to become effective upon the
conclusion of Contract Year 4. Should Licensor choose to exercise this
termination option, it must give written notice of such termination to Licensee
within sixty (60) days following Licensor's receipt of the annual sales report
Licensee is required to provide pursuant to Paragraph 13.2 below. Upon
termination of this Agreement at the conclusion of Contract Year 4, Licensee's
right to use the Licensed Marks pursuant to this Agreement shall immediately
cease and any remaining inventory of Licensed Products shall be delivered to
Licensor. The transfer of remaining inventory from Licensee to Licensor shall be
done on terms and conditions that the parties hereto will agree upon; provided,
however, that in the event the parties are unable to agree on such terms and
conditions on or before sixty (60) days prior to the conclusion of Contract Year
4, then Licensee shall have the right to transfer all or any part of the
remaining inventory to one or more third parties to whom any Licensed Product
was at any time previously sold under Paragraph 8.3 hereof on such terms and
conditions as Licensee in its sole and absolute discretion shall deem
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
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appropriate. If Licensee's sales to Non-Licensor Channels outside the United
States during Contract Year 3 are not at least *
for Contract Year 3), Licensor shall have
the right to itself distribute or appoint one or more third parties to
distribute Licensed Products outside of the United States. Should Licensor
choose to either itself distribute or to appoint one or more distributors
outside of the United States it must give written notice of such to Licensee
within sixty (60) days following Licensor's receipt of the annual sales report
Licensee is required to provide pursuant to Paragraph 13.2 below. Upon such
written notice, Licensee shall no longer sell or distribute Licensed Products
outside the United States. Should Licensor choose to either itself distribute
Licensed Products outside the United States or appoint one or more distributors
outside the United States, Licensor or its appointed distributor(s) shall source
Licensed Products from Licensee pursuant to the same terms and conditions,
including without limitation price, applicable to the sale of Licensed Products
to Licensor, as provided hereunder.
10.3 If Licensee's sales to Non-Licensor Channels in the United States
during Contract Year 5 are not at least *
Year 5), both Licensor and Licensee shall each
have the option to terminate this Agreement, such termination to become
effective upon the conclusion of Contract Year 6. Should either party choose to
exercise this termination option, the party so doing must give written notice to
the other party within sixty (60) days following Licensor's receipt of the
annual sales report Licensee is required to provide pursuant to Paragraph 13.2
below. Upon termination of this Agreement at the conclusion of Contract Year 6,
Licensee's right to use the Licensed Marks pursuant to this Agreement shall
immediately cease and any remaining inventory of Licensed Products shall be
delivered to Licensor. The transfer of remaining inventory from Licensee to
Licensor shall be done
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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on terms and conditions that the parties hereto will agree upon; provided,
however, that in the event the parties are unable to agree on such terms and
conditions on or before sixty (60) days prior to the conclusion of Contract Year
6, then Licensee shall have the right to transfer all or any part of the
remaining inventory to one or more third parties to whom any Licensed Product
was at any time previously sold under Paragraph 8.3 hereof on such terms and
conditions as Licensee in its sole and absolute discretion shall deem
appropriate. If Licensee's sales to Non-Licensor Channels outside the United
States during the Contract Year 5 are not at least *
Channel Sales (non-U.S.) for Contract Year 5), Licensor shall have
the same right to itself distribute or appoint one or more third parties to
distribute the Licensed Products outside the United States as provided in
Paragraph 10.2, upon the same notice and conditions set forth therein.
10.4 All sales figures and sales calculations referred to in this
paragraph shall be based on Wholesale Price, and are represented in U.S. Dollar
amounts.
11. ROYALTY
11.1 Licensee shall pay to Licensor a royalty based on Licensee's sales
of the Licensed Products to all Non-Licensor Channels (Combined U.S. and
non-U.S.). The sales to which the royalty rates will be applied, except for
sales to Licensee Special Accounts, shall be based on Wholesale Price, and no
reduction in the royalty shall be allowed for discounts given off Wholesale
Price. With respect to sales to Licensee Special Accounts, the sales to which
the royalty rates will be applied shall be based on actual invoice price net of
all taxes, duties, freight, insurance and credits for returns actually made, but
no deduction shall be made for discounts for cash or
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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prompt payment or for uncollectible accounts. The base royalty rates to be
applied to Licensee's sales are as follows:
*
With respect to all sales to Licensee Special Accounts, Licensee shall pay, in
addition to the base royalty, * .
11.2 Starting in Contract Year 3 and continuing throughout the term of
this Agreement, once Licensee's actual sales of the Licensed Products to
Non-Licensor Channels in a particular Contract Year reach the established target
sales figure for that Contract Year as set forth in Paragraph 10.1 above under
the heading * , a
royalty rate of * shall be applied to all sales in that Contract Year over and
above the established target sales figure, and Licensee shall make its royalty
payments on such sales in such year to Licensor based upon that * royalty
rate, except that with respect to all such sales to Licensee Special Accounts,
royalties shall be calculated as described in Schedule 4 attached hereto, and
Licensee shall make its royalty payments on such sales in such year to Licensor
based on such calculations. Starting in Contract Year 6 and continuing
throughout the term of this Agreement, once Licensee's actual sales of the
Licensed Products to Non-Licensor Channels in a particular Contract Year reach
the established "super" target sales figure for that Contract Year as set forth
in Paragraph 10.1 above under the heading *
* , a royalty rate of * shall be applied to
all sales in that Contract Year over and above the established "super" target
sales figure, and Licensee shall make its royalty payments on
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
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such sales in such year to Licensor based on that * royalty rate, except that
with respect to all such sales to Licensee Special Accounts, royalties shall be
calculated as described in Schedule 4 attached hereto and Licensee shall make
its royalty payments on such sales in such year to Licensor based on such
calculations.
11.3 If during a particular Contract Year Licensee's actual sales never
reach the established minimum sales figure for that Contract Year as set forth
in Paragraph 10.1 above under the heading *
, Licensee shall pay to Licensor, within ninety (90)
days following the conclusion of the Contract Year, an additional sum equal to
the difference between the royalties actually paid by Licensee that Contract
Year and the royalties that would have been paid by Licensee that Contract Year
had Licensee's sales of the Licensed Products to Non-Licensor Channels been
equal to the established minimum sales figure.
11.4 Licensee shall also pay to Licensor a royalty based on Licensee's
sales of *
. The sales to which
the royalty rate will be applied shall be based on the Wholesale Price. The
royalty rate to be applied to such sales shall be * . Said royalty is in
addition to any royalty factor included in other sales by Licensee to Licensor.
11.5 Licensee shall make its royalty payments to Licensor on a
quarterly basis, together with a statement setting forth the quarterly sales of
the Licensed Products to Non-Licensor Channels, said payments and statements
being due no later than thirty (30) days following the end of each Contract Year
quarter. All royalty payments shall be made in U.S. Dollars. Except as provided
in Paragraph 11.4, Licensee shall not pay royalties on its sale of Licensed
Products to Licensor Channels.
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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12. MARKETING AND ADVERTISING
12.1 Licensee shall prepare and submit to Licensor for approval all
proposed advertising, promotional materials, product displays and product
display policies for the Licensed Products. Licensor shall have final approval
on all such advertising, promotion, product displays and product display
policies, which approval shall not to be unreasonably withheld or delayed.
Approval of any submission shall be deemed given in any event absent notice of
disapproval within thirty (30) days after such submission.
12.2 No later than March 1 of each calendar year during the term of
this Agreement, Licensee shall prepare and present to Licensor for feedback and
input an annual operating plan setting forth the information described below
(the "Plan"). The Plan shall set forth in reasonable detail, Licensee's plans
for conducting the Licensed Products business during the next Contract Year and
during the next three Contract Years, with particular emphasis on the marketing,
promotion and sales of the Licensed Products. The Plan shall include, without
limitation, (a) a description (including timing) of the types and numbers of
designs intended to be developed or manufactured (including any new products);
(b) sales volume projections by model type, in units and dollars; (c) price
marketing strategies, including wholesale and suggested retail pricing by model
type and market; (d) assessment of customer base and customers; (e)
distribution, including distribution outlets and breakdown by geographic area;
(f) advertising plans, number and cost of advertisements already ordered, where
advertisements will be published, the fees paid to advertising agents, the
proposed schedule and costs of any and all major advertising campaigns and the
format for all advertising not already approved by Licensor; (g) media plan and
budget, including breakdown by geographic area; (h) packaging, point of sale and
trade exhibitions; and (i) the results of market research relating to the
Licensed Products and similar products, and market
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trends, and a detailed sales forecast by category, product group and market for
the Licensed Products.
12.3 As soon as possible upon the execution hereof, and thereafter at
all times during the term hereof, Licensee shall employ a Marketing Manager who
shall be responsible for the day-to-day operation of the Licensed Products
business, and who shall be mutually agreed upon by the parties. Licensee shall
hire a sales manager for the Licensed Products business at least six months
prior to March 1, 1998, the date intended for the Market Roll-Out of the
Licensed Products. Licensee shall assign all needed designers to develop the
Licensed Products.
12.4 Licensee agrees that at a minimum it will make the following
annual advertising expenditures in connection with the Licensed Products:
*
In the event Licensee fails to make the foregoing minimum advertising
expenditures in connection with the Licensed Products in any given Contract
Year, Licensee shall have the first six months of the following Contract Year to
make advertising expenditures sufficient to cover the shortfall. Any such
advertising expenditures made to cover a previous Contract Year's shortfall
shall not be credited toward Licensee's minimum required advertising
expenditures for the Contract Year in which such shortfall expenditures are
made. "Sales" as used in this paragraph shall mean all sales, based on Wholesale
Price or based on actual invoice price in the specific case of sales to Licensee
Special Accounts, of Licensed Products made by Licensee to Non-Licensor Channels
anywhere in
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
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the world. All amounts are shown in U.S. Dollars. Licensee further agrees that
in Contract Years 3 through 10, at least *
.
12.5 Licensee shall exercise reasonable efforts to maintain and
safeguard the established image and good will represented by and embodied in the
Trade Name and Licensed Marks. "Image" as used herein refers primarily to
quality and style of packaging, advertising and promotion, creation and
introduction of new product designs and styles, type of outlets with reference
to the quality of service provided for and the quality of presentation of the
Licensed Products. Licensee shall take all reasonable and necessary steps, and
all steps reasonably requested by Licensor, to prevent or avoid any misuse of
the Trade Name or Licensed Marks by any of Licensee's customers or contractors.
12.6 Licensor shall use reasonable efforts to assure that the
established value associated with the Trade Name and Licensed Marks does not
materially and substantially diminish.
12.7 Licensor agrees that its total retail advertising expenditures,
including catalog expenditures, relating to the Licensed Products shall be
*
. If Licensor fails to spend this additional amount on
advertising, the difference between the amount actually spent and the royalties
actually received shall be credited against Licensee's future royalties. Within
ninety (90) days following the end of each Contract Year of this Agreement, and
within ninety (90) days
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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after the termination of this Agreement, Licensor shall deliver to Licensee a
statement signed by an authorized officer of Licensor reporting Licensor's
actual advertising expenditures relating to the Licensed Products, Licensor's
actual retail sales of Licensed Products, and Licensor's actual percentage rate
of spending on advertising for COACH products other than the Licensed Products
during the previous Contract Year.
12.8 The parties shall mutually agree upon and establish a minimum
amount of space in Licensor's catalog to be devoted to the Licensed Products
each Contract Year. Licensor agrees that the catalog space devoted to the
Licensed Products shall not be less than that which Licensor devotes to its
other product classifications having similar profit contribution, *
12.9 The parties agree that each party shall make no public statements,
including without limitation any statements or comments to the press, regarding
this Agreement, the relationship between the parties or the Licensed Products
business, except with the prior consent of the other party; provided, however,
that the foregoing shall not apply to any disclosure either party is required to
make by law, including without limitation, disclosure required by the federal
securities laws.
12.10 Licensor shall hire or assign a person at Licensor's business to
coordinate Licensor's efforts relating to the marketing and sale of the Licensed
Products.
13. BOOKS AND RECORDS
13.1 Licensee shall keep and maintain at its regular place of business,
or at such off-site documents storage facility as Licensee shall use from time
to time for the retention of its business records generally, complete and
accurate records and accounts in accordance with Generally
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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Accepted Accounting Principles showing the business transacted in connection
with the Licensed Products manufactured and sold pursuant to this Agreement,
including without limitation records and accounts relating to sales, shipments
and orders for Licensed Products and expenditures on advertising for at least
six (6) years following the creation of the record or account. Licensor shall
keep and maintain at its regular place of business, or at such off-site document
storage facility as Licensor shall use from time to time for the retention of
business records generally, complete and accurate records and accounts in
accordance with Generally Accepted Accounting Principles substantiating the
information required to be reported by Licensor under Paragraphs 8.2 and 12.7
hereof, for at least six (6) years following the creation of such record or
account or for such other period of time as specified in Licensor's written
record retention policy.
13.2 Within ninety (90) days following the end of each Contract Year of
this Agreement, and within ninety (90) days after the termination of this
Agreement, Licensee shall deliver to Licensor a statement signed by an
authorized officer of Licensee reporting actual sales of the Licensed Products
to Non-Licensor Channels (based on Wholesale Price), royalties due, royalties
paid and advertising expenditures during the preceding Contract Year. Sales of
Licensed Products to Non-Licensor Channels shall be broken out to accurately
reflect sales to U.S. Non-Licensor Channels, sales to Non-U.S. Non-Licensor
Channels, sales to Licensee Special Accounts and sales by model type in units
and dollars. Said statement shall also report actual sales of the Licensed
Products to Licensor Channels. In the case of termination of this Agreement,
such information shall be provided for the period ending at termination.
13.3 Both Licensor and Licensee, or either party's duly authorized
agents or representatives, shall each have access to and the right to examine
all records and accounts that the other party is required to maintain pursuant
to Paragraph 13.1 at such party's premises, provided that any such
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examination (a) shall be at the examining party's expense, (b) shall be during
normal business hours upon reasonable prior notice which shall be no less than
five (5) business days, and (c) shall not unreasonably interfere with the other
party's operations and activities. Should an audit disclose that Licensee
underpaid royalties for any given year, Licensee shall forthwith and upon
written demand pay Licensor the amount owed, together with interest thereon, at
a rate of ten percent (10%) per annum calculated from the due date of such
royalties unless Licensee shall, by written notice sent to Licensor within
twenty (20) days after notice to Licensee of such audit results, reasonably
dispute the same in which event the parties shall each name an independent
auditor who shall together appoint a third auditor to make a determination as to
the matter, which determination shall be binding on the parties. Should an audit
disclose that Licensee's annual advertising expenditures in any given year
failed to meet the minimum required hereunder, Licensee shall forthwith upon
written demand pay Licensor the difference, unless Licensee shall, by written
notice sent to Licensor within twenty (20) days after notice to Licensee of such
audit results, reasonably dispute the same in which event the parties shall each
name an independent auditor who shall together appoint a third auditor to make a
determination as to the matter, which determination shall be binding on the
parties; or unless Licensee still has time to make up the shortfall pursuant to
Paragraph 12.4. Further, should an undisputed audit or the binding
determination made by any auditor appointed as hereinabove provided disclose
that Licensee underpaid royalties by a margin exceeding five percent (5%) in any
given year, or that Licensee's annual advertising expenditures failed to meet
the minimum required hereunder by a margin exceeding five percent (5%), Licensee
shall pay for all costs relating to the audit, including without limitation, all
costs relating to any subsequent binding determinations made by any appointed
auditor.
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14. TERM AND TERMINATION
14.1 This Agreement shall remain in full force and effect from the date
this Agreement is entered into by the parties until ten (10) years following the
Market Roll-Out of the Licensed Products, subject to the termination provisions
of Paragraphs 10.2 and 10.3 above or as provided below.
14.2 In the event either party commits a material breach of this
Agreement, the other party may, upon ninety (90) days prior written notice,
terminate the Agreement, provided, however, that the Agreement shall not be
terminated if the breaching party cures the breach within said ninety (90) days
after receipt of said notice.
14.3 Notwithstanding anything to the contrary in Paragraph 14.2,
Licensor shall have the right to terminate this Agreement immediately upon
notice to Licensee if any of the following events occur:
(a) More than once during any Contract Year, any installment of royalty
payments is not paid when due and such default continues for more than
fifteen (15) days after written notice thereof to Licensee;
(b) Licensee knowingly fails to manufacture the Licensed Products in
accordance with the General Acceptance Requirements and quality
standards prescribed in Paragraph 6 of this Agreement;
(c) Licensee repeatedly fails to secure Licensor's approval as required
herein;
(d) Licensee intentionally uses the Trade Name or any of the Licensed
Marks in a manner for which rights therein have not been granted and
which use impacts materially and adversely upon the Trade Name or
Licensed Marks;
(e) Licensee commits any material fraud upon Licensor in connection
with the performance of Licensee's obligations hereunder;
(f) Licensee makes an intentional written material misrepresentation
pertaining to sales of the Licensed Products;
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26
(g) Licensee intentionally participates in the diversion of Licensed
Products or knowingly permits a third party to do so.
Upon termination of this Agreement pursuant to this Paragraph 14.3, Licensor
shall have the option to purchase Licensee's inventory of Licensed Products as
provided below. If Licensor does not exercise its right to purchase Licensee's
inventory of Licensed Products as provided below, Licensee shall, for a period
of five (5) months from the date Licensor elects not to exercise its right to
purchase Licensee's inventory of Licensed Products, have the right to sell its
then-existing inventory of Licensed Products, provided such sales are made to
one or more third parties to whom any Licensed Product was at any time
previously sold under Paragraph 8.3 hereof on such terms and conditions as
Licensee in its sole and absolute discretion shall deem appropriate, and further
provided that Licensee otherwise complies with the terms herein, including the
payment of royalties. Notwithstanding the foregoing, Licensee shall not dispose
of its inventory as provided above without first providing to Licensor a
detailed list of its existing inventory of Licensed Products, including
Licensee's costs to manufacture or purchase such items and the date of purchase
or manufacture; Licensee shall use its best efforts to provide such detailed
list to Licensor as quickly as possible. Licensor shall have the right to
conduct a physical inventory to verify such list. At any time within thirty (30)
days of Licensor's receipt of Licensee's inventory list, Licensor shall have the
option to purchase any or all of Licensee's inventory of Licensed Products
* . In the event Licensor
elects to purchase part or all of said inventory, Licensor shall at its own
expense remove said inventory from Licensee's premises not more than sixty (60)
days after notice to Licensee of Licensor's election to purchase. Payment for
such inventory shall be made by Licensor within thirty (30) days after the
removal of the last of Licensee's Licensed Products.
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 Act.)
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14.4 Notwithstanding anything to the contrary in Paragraph 14.2, if
Licensee files a petition in bankruptcy, or by an equivalent proceeding is
adjudicated a bankrupt, or if a petition in bankruptcy is filed against Licensee
and is not dismissed within sixty (60) days, or if Licensee becomes insolvent or
makes an assignment for the benefit of creditors or any arrangement pursuant to
any bankruptcy law, or if Licensee discontinues its business or if a receiver is
appointed for Licensee, this Agreement shall automatically terminate without any
notice whatsoever being necessary, to the full extent allowed by applicable law.
All royalties on sales made prior to such act shall become immediately due and
payable. In the event this Agreement is terminated pursuant to this paragraph,
Licensee, its receivers, representatives, trustees, agents, administrators,
successors and/or assigns, shall have no right to sell any of the Licensed
Products covered by this Agreement or use the Trade Name in any manner
whatsoever, except with the special consent and written instructions of
Licensor, which instructions shall be followed. The non-assumption of this
Agreement by a trustee presiding over a bankruptcy proceeding pursuant to any
bankruptcy law where the Licensee is named as a debtor, shall operate to
automatically terminate this Agreement, without any notice whatsoever being
necessary, effective as of the date of the commencement of the bankruptcy
proceedings.
14.5 Notwithstanding anything to the contrary in Paragraph 14.2, if
Licensor files a petition in bankruptcy, or by an equivalent proceeding is
adjudicated a bankrupt, or if a petition in bankruptcy is filed against Licensor
and is not dismissed within sixty (60) days, or if Licensor becomes insolvent or
makes an assignment for the benefit of creditors or any arrangement pursuant to
any bankruptcy law, or if Licensor discontinues its business or if a receiver is
appointed for Licensor, Licensee shall have the right to terminate this
Agreement by giving written notice to Licensor within 30 days of such event.
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28
14.6 Upon expiration or termination of this Agreement, Licensee shall
cease using the Trade Name and Licensed Marks, provided, however, that unless
such termination is pursuant to Paragraphs 10.2, 10.3, 14.3, 14.4 or 14.5,
Licensee may, for a period of no more than six (6) months after expiration or
termination, sell and distribute Licensed Products existing in inventory on the
date of expiration or termination. Licensee remains liable for the payment of
all royalties based on those sales and must otherwise comply with the terms
herein. If at the end of six months Licensee still possesses inventory of
Licensed Products, Licensee shall deliver to Licensor the remaining inventory,
and Licensee's right to use the Licensed Marks pursuant to this Agreement shall
cease. The transfer of remaining inventory from Licensee to Licensor shall be
done on terms and conditions that the parties hereto will agree upon; provided,
however, that in the event the parties are unable to agree on such terms and
conditions on or before thirty (30) days prior to the conclusion of such six (6)
month period, then Licensee shall have the right to transfer all or any part of
such remaining inventory to one or more third parties to whom any Licensed
Product was at any time previously sold under Paragraph 8.3 hereof on such terms
and conditions as Licensee in its sole and absolute discretion shall deem
appropriate. Upon expiration or termination of this Agreement for any reason,
Licensee shall relinquish to Licensor all newly developed product design
materials, prototypes, patterns, stylings and copyrightable material relating to
the Licensed Products owned exclusively by Licensor, as provided in Paragraph
7.1 herein, along with all tools, dies and molds used to make Licensed Products
from such product design materials, prototypes, patterns, stylings and
copyrightable material, immediately upon expiration or termination of this
Agreement.
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15. INDEMNIFICATION
Except as provided in Paragraph 16 below, Licensee hereby agrees to pay
on behalf of Licensor and to defend it against any and all claims, suits,
liabilities, causes of action, settlements, costs, damages, or expenses,
including reasonable attorneys' fees, arising out of Licensee's manufacture,
packaging, sale, marketing or distribution of the Licensed Goods. This
indemnification provision shall survive the termination of this Agreement.
16. TRADEMARK ENFORCEMENT
16.1 Licensee agrees to notify Licensor of any unauthorized use of the
Licensed Name and Marks by others, promptly as it comes to Licensee's attention.
Except as provided in Paragraph 16.2, Licensor shall have the sole right and
discretion to bring infringement actions involving the Licensed Marks, and any
award received by Licensor in any such actions shall belong solely to Licensor.
16.2 Licensor and Licensee shall cooperate in stopping, by any and all
legal means available, the manufacture, sale or distribution of counterfeit
watches or timepieces bearing marks which are identical to or indistinguishable
from the Licensed Marks (hereinafter referred to as "Counterfeit Merchandise").
Licensee, in consultation with and after receiving approval from Licensor, shall
have the right to bring counterfeiting actions against parties manufacturing,
holding, selling or distributing Counterfeit Merchandise as information about
such Counterfeit Merchandise is brought to Licensee's attention in the normal
course of Licensee's anti-counterfeiting efforts. Licensee shall bear all costs
associated with any such actions, and any award received by Licensee in any such
actions shall belong solely to Licensee.
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30
16.3 Licensor shall have the right to bring counterfeiting actions
against parties manufacturing, holding, selling or distributing Counterfeit
Merchandise as information about such Counterfeit Merchandise is brought to
Licensor's attention in the normal course of Licensor's anti-counterfeiting
efforts. Licensor shall bear all costs associated with any such actions, and any
award received by Licensor in any such actions shall belong solely to Licensor.
16.4 In the event that a third party institutes a trademark
infringement action against Licensee arising from Licensee's use of the Licensed
Name and Marks, Licensee shall promptly notify Licensor. Licensor shall defend,
at its own expense, any such action, and Licensee shall cooperate in such
defense as reasonably requested by Licensor, at Licensor's expense. Licensor
shall pay any settlements, costs, damages, or expenses, including reasonable
attorneys' fees, resulting from any such action. Any award received by Licensor
in such action shall belong solely to Licensor.
17. INSURANCE
17.1 Licensee shall obtain and maintain, at its own cost and expense,
Commercial General Liability insurance and Umbrella liability insurance written
on an occurrence basis with the following coverage and limits:
Limits
------
General Aggregate Limit $5,000,000
Products/Completed
Operations Aggregate Limit $3,000,000
Personal and Advertising
Injury - Per Injury $3,000,000
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17.2 Licensor shall be named as an additional insured on the Commercial
General Liability policy. Licensee shall provide Licensor with a certificate of
insurance evidencing all of the required coverage. The certificate shall also
provide evidence that the policy has been amended to afford at least thirty (30)
days advance written notice to Licensor of cancellation, nonrenewal or material
change of any of the required coverages.
18. NO ASSIGNMENT OR SUBLICENSE BY LICENSEE
This Agreement and all its rights and duties hereunder are personal to
the Licensee and shall not, without the written consent of Licensor, be
assigned, sublicensed or otherwise encumbered by Licensee or by operation of
law; provided, however, that notwithstanding anything to the contrary contained
herein Licensee shall have the right (a) to have the Licensed Products
manufactured by one or more third party manufacturers and, (b) to assign any or
all of its rights and duties hereunder to any other corporation which is wholly
owned, directly or indirectly, by Licensee provided that Licensee,
simultaneously with such assignment, enters into an agreement with Licensor in a
form reasonably satisfactory to Licensor by which Licensee guarantees all of the
obligations, including without limitation, all financial and performance
obligations, of such assignee.
19. CONDITION PRECEDENT
The effectiveness of this Agreement and each of the respective
obligations of the parties hereunder is subject to satisfaction on or prior to
June 1, 1997 of the following conditions:
(a) Licensor and Licensee shall have filed any and all notification and
report forms required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "Act") in connection with this Agreement and the required
waiting period (including any extensions
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thereof) under the Act and the regulations promulgated thereunder shall have
expired or notice of early termination shall have been received; and
(b) No investigation, action or proceeding by or before any court or
other governmental body shall have been commenced or threatened, and no inquiry
shall have been received that, in the opinion of either counsel to either
Licensor or Licensee may lead to an action or proceeding to restrain or
otherwise challenge the transaction contemplated under this Agreement.
20. MISCELLANEOUS
20.1 In the event that either party shall, at any time, waive any of
its rights under this Agreement, or the performance by the other party of any of
its obligations hereunder, such waiver shall not be construed as a continuing
waiver of the same rights or obligations or a waiver of any other rights or
obligations.
20.2 This Agreement constitutes the entire agreement between the
parties as to the Licensed Marks and no modifications or revisions thereof shall
be of any force or effect unless the same are in writing and executed by the
parties hereto.
20.3 Any provisions of this Agreement which are, or shall be determined
to be, invalid shall be ineffective, but such invalidity shall not affect the
remaining provisions hereof. The titles to the paragraphs herein are for
convenience only and have no substantive effect.
20.4 This Agreement is binding upon the parties hereto, any parent,
subsidiary and affiliated companies and their successors and assigns.
20.5 Licensee shall be responsible for compliance with the requirements
of all local laws in the countries where it manufactures, markets, distributes
or sells the Licensed Products, except for obligations with respect to filing as
registered user or similar obligations where required under
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applicable trademark law. It is understood that Licensor is responsible for the
costs and fees for, or incidental to, obtaining trademark registrations.
20.6 This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, applicable to contracts made and to be
wholly performed therein without regard to its conflicts of law rules. Any
action or proceeding arising out of or relating in any way to this Agreement,
shall be brought and enforced in the courts of the United States for the
Southern District of New York, or, if such courts do not have, or do not accept,
subject matter jurisdiction over the action or proceeding, in the courts of the
state of New York and each party hereby consents to the personal jurisdiction of
each such court in respect of any such action or proceeding. Each of the parties
hereby consents to service of process in any such action or proceeding by the
mailing of copies thereof by Registered or Certified Mail, postage prepaid,
return receipt requested, to it at its address provided for notices hereunder.
The foregoing shall not limit the right of any of the parties to serve process
in any other manner permitted by law or to obtain execution or enforcement of
any judgment in any other jurisdiction. Each of the parties hereby waives (a)
any objection that may now or hereafter have to the laying of venue of any
action or proceeding arising under or related to the Agreement in the court
located in the Borough of Manhattan, City and State of New York, (b) any claim
that a court located in the Borough of Manhattan, City and State of New York is
not a convenient forum for any such action or proceeding, and (c) any claim that
is not subject to the personal jurisdiction of the courts of the United States
of the Southern District of New York or of the courts of the State of New York
located in the Borough of Manhattan, City and State of New York. Notwithstanding
the foregoing, any matter as to which the parties are unable to agree as
provided under Paragraph 2.2 shall be settled and determined by arbitration in
New York, New
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York, in accordance with and pursuant to the then existing rules
of the American Bar Association. The arbitrator's decision shall be final and
binding on the parties.
20.7 Licensee acknowledges that it has received a copy of the ▇▇▇▇ ▇▇▇
Corporation Supplier Selection Guidelines and ▇▇▇▇ ▇▇▇ Corporation Global
Operating Principles (the "Guidelines"). Licensee hereby represents and warrants
that it has reviewed and understands the Guidelines, and Licensee and any
approved third-party manufacturer are presently in compliance and will remain in
compliance with the Guidelines for the term of this Agreement. Furthermore,
Licensee agrees to notify Licensor immediately if Licensee becomes aware that a
violation by Licensee or any approved third-party manufacturer of the standards
set forth in the Guidelines has occurred during the term of this Agreement. The
Guidelines are hereby incorporated herein by reference.
20.8 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
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20.9 All notices required hereunder shall be in writing and dispatched
by overnight courier addressed to Licensee or Licensor as set forth below, and
shall be effective upon receipt:
Licensor: Chairman and CEO
Coach
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Copies to: Director of Intellectual Property
Coach
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Chief Counsel - Intellectual Property
▇▇▇▇ ▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Licensee: President
Movado Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Copies to: Executive Vice President
Movado Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
General Counsel
Movado Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
Date: 12/9/96 COACH
A Division of ▇▇▇▇ ▇▇▇ Corporation
By: /s/ Lew Frankfurt
------------------------------
Name: Lew Frankfurt
Title: Chairman & CEO
Date:12/9/96 MOVADO GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
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SCHEDULE 1
COACH
[COACH LOGO]
[GRAPHIC OF COACH KEY CHAIN]
38
SCHEDULE 2
Licensee Special Account
DFS
39
SCHEDULE 3
Licensor Special Accounts
3M ▇▇▇▇▇▇▇ ▇▇▇▇▇ Nomura Securities
▇▇▇▇▇▇ Laboratories Hachette Filipacchi Oldsmobile
All State Insurance HBO Ono Pharmaceutical
Amer. Nat'l. Bank & Trust Heublein Ore-▇▇▇ Foods
Ameritech Hewlett-Packard Paddington Industries
Amoco Hilton Hotels Corp. ▇▇▇▇▇ ▇▇▇▇▇▇
Anheuser-▇▇▇▇▇ House of Seagram Parade Publications
Apple Computer Hyatt Hotels Corp. Paychex
AT&T IBM PC Week
BioGen Intel Corp. Pennzoil
Boeing Portland ISL Marketing (worldwide) Pepsi Cola
Buick ▇▇▇▇ ▇▇▇▇▇▇▇ Pepsico
Cadbury Beverages JVC of America Pfizer
Cadillac ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Petroleum
Capital Cities ABC Kitz, Inc. Pontiac
Chartwell Home Therapies Kobrand Price Waterhouse
Chase Manhattan Kodak Procter & ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ USA KPMG Peat Marwick Prudential, The
Chevrolet Kraft ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Co.
Chrysler ▇▇▇▇▇▇ & Co. Rainbow Programming
Citibank Levi ▇▇▇▇▇▇▇ & Co. Raystark Productions
Club De La Tour Lexus ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
CNA-ContinentalInsurance Liberty Mutual ▇▇ ▇▇▇▇▇▇▇▇▇ & Sons
Conde Nast Publications Lifetime Salomon Brothers
Coopers & ▇▇▇▇▇▇▇ Lockheed Corp. Sandoz Corp.
Coors Brewing Co. Lotus ▇▇▇▇ ▇▇▇ Companies
CS First Boston Lucent Technologies Schering-Plough
▇▇▇▇ ▇▇▇▇▇▇ Mattel Corporation Schweppes USA
Digital Equipment MCI Shell Oil Co.
Disney ▇▇▇▇ World Headquarters ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ Food Co. Merck & Co., Inc. Sony
Dow Chemical Co. ▇▇▇▇▇▇▇ ▇▇▇▇▇ State Farm Insurance Co.
Dreamworks Met Life Texaco
Dun & Bradstreet Miles Pharmaceutical Texas Instruments
Duracell USA Microsoft Time Warner
Eisai USA Mitsui Precious Metals Towers ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ Mitskoshi, Inc. Travelers Insurance
Elle Mobil Oil TWA
Ernst & ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ United Airlines
ESPN ▇▇▇▇ Dynamic Engines Universal Studios
▇▇▇▇▇ ▇▇▇▇▇▇ Motorola Vanity Fair
Exxon MTV Viacom
▇.▇. ▇▇▇▇▇▇ M&M Bars Wal*Mart
Ford Motor Co. Nabisco Brands Westinghouse Electric Corp.
Fortune NBA Whirlpool
Gap, The NBC Young & Rubicam
General Motors NCR
▇▇▇▇▇▇▇▇
40
EXAMPLES OF ROYALTY PAYMENTS
*
Schedule 4
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
41
EXAMPLES OF ROYALTY PAYMENTS
*
*
---------------------
*
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
42
EXAMPLES OF ROYALTY PAYMENTS
*
*
---------------------
*
*
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
43
EXAMPLES OF ROYALTY PAYMENTS
*
(Thousands of US$)
*
*
*
* (CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24B-2 OF THE 1934 ACT.)
