Exhibit 10.27
AGREEMENT dated as of April 1, 1994 between XXXXXXX XXX XXXX, INC.,
a New York corporation with offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(hereinafter referred to as "Licensor"), and WINDSOR OPTICAL, INC., a Delaware
corporation with offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000
(hereinafter referred to as "Licensee").
W I T N E S S E T H:
In consideration of the mutual covenants and the undertakings
hereinafter set forth, Licensor and Licensee do hereby respectively grant,
covenant, and agree as follows:
1. (a) Licensor hereby grants to Licensee, on the terms and conditions
hereinafter set forth, an exclusive license (the "License"), limited to the
territory of the United States and its territorial possessions, Canada, Puerto
Rico, the Caribbean Islands, Central America and Mexico (hereinafter referred to
as the "Territory"), to use the xxxx "XXXXXXX XXX XXXX" (hereinafter referred to
as the "Licensed Xxxx") in connection with the manufacture, distribution, and
sale solely of prescription eyeglass frames and sunglasses, designed or approved
by Licensor pursuant to this Agreement (hereinafter referred to as the
"Articles").
(b) Notwithstanding the License granted in paragraph 1(a), (i)
Licensor retains the right to use and to grant to others the right to use the
Licensed Xxxx (A) in the Territory and elsewhere on and in connection with all
product types not included in the Articles and (B) in any area of the world
other
than the Territory on or in connection with all product types whether or not
included in the Articles, and (ii) Licensee is aware of and hereby acknowledges
that (A) Licensor has entered and may enter into licenses and other agreements
with various persons for the use of the Licensed Xxxx and other trademarks of
Licensor in the Territory and elsewhere in connection with articles other than
the Articles, and (B) the License granted herein to Licensee will not conflict
with such licenses and agreements and Licensee will take no action that would
lead to a conflict with such licenses and agreements.
(c) Neither Articles nor any modifications or adaptations thereof
may be manufactured, distributed, or sold by Licensee under any xxxx other than
the Licensed Xxxx. Licensor reserves all rights to the Licensed Xxxx, except as
specifically granted herein to Licensee, and Licensor may exercise such rights
at any time. Licensee acknowledges that it has been granted no rights to any
other trademarks owned or used by Licensor or to the name or likeness of Xx.
Xxxxxxx Xxx Xxxx (except as otherwise Permitted by this Agreement) and that such
other trademarks may be used by Licensor and by such third parties to which
Licensor has granted or may grant the right to use such trademarks.
(d) Licensee shall use its best efforts to (i) exploit the License
throughout the Territory and (ii) manufacture and sell the maximum quantity of
Articles therein. Licensee agrees not to export Articles from the Territory and
not to sell to any
-2-
third party which it believes, or has a reasonable basis to believe, intends to
export Articles from the Territory.
(e) During each Annual Period, Licensee shall spend for promotional
materials and national trade advertising of the Articles and the Licensed Xxxx
no less than percent ( %) of Net Sales (as defined herein). Licensee shall
submit, by facsimile if necessary, proposed advertisements for Licensor's
approval, including specific details as to the contents, budget, timing, and
media placement of such advertisements, at least 45 days in advance of the
insertion order date, and must receive written approval from Licensor before
proceeding with such advertisements. If Licensor fails to respond to such
request within 15 days after receipt of such request, the proposed advertisement
shall be deemed approved. After any advertisement has been provided or approved
by Licensor, Licensee shall not depart in any respect from the contents, budget,
timing, and media placement specified and approved by Licensor, without the
prior written approval of Licensor by mail or facsimile. If Licensor fails to
give written approval of the contents, the budget, the timing, or the media
placement of any advertisement submitted by Licensee, such advertisement shall
not be used in any manner. All advertisements shall be subject to the
restrictions contained in paragraph 6(c) of this Agreement. Licensee
acknowledges that Licensor's approval or disapproval of any advertising
proposals may be based, without limitation, solely on Licensor's subjective
aesthetic standards.
-3-
Confidential Treatment Requested - Portions filed seperately with the
Commission.
Notwithstanding the foregoing provisions of this paragraph 1(e),
Licensee may supply advertising "slicks", the contents of which have been
approved by Licensor in the manner set forth above, to retail optical stores and
retail optical departments which sell the Articles for use in local advertising;
provided, however, that Licensee shall take all steps necessary to insure that
such retail optical stores and departments utilizing such slicks shall not place
any advertising based upon such slicks next to or in conjunction with any other
advertisement of such store or department. An advertising "slick" for purposes
of this paragraph 1(e) means camera-ready copy depicting the Articles and/or the
Licensor which has been approved by Licensor and prepared in such a way that
additional print may be overlaid in places provided therefor prior to actual
publication or placement in any advertising media.
(f) The "Annual Period" shall be from July 1 to the next succeeding
June 30, except that the first Annual Period shall be from the date of this
Agreement to June 30, 1995 and the last Annual Period shall be from the last
July 1 during the Agreement to the termination date of the Agreement.
(g) Licensee agrees that neither Licensee nor its affiliates will
advertise, promote, or otherwise use the Licensed Xxxx with any trademark, name,
personal endorsement or other identification of any other designer or celebrity
or in connection with the merchandise of any other designer or celebrity.
Notwithstanding the foregoing, nothing contained herein shall prohibit
-4-
Licensee from promoting Articles in a catalog containing merchandise of another
designer or celebrity.
(h) Licensee agrees that neither Licensee nor its affiliates will
use the name, trademark, personal endorsement or other identification of any
other designer or celebrity in the Territory in connection with any product type
included in the definition of Articles during the term of this Agreement.
2. (a) The term of this Agreement shall be for the period commencing on
the date of this Agreement and ending June 30, 1997.
(b) Licensor reserves the right at its option to enter into
agreements with third parties prior to the termination of this Agreement
pursuant to which such third parties may manufacture, and, subsequent to the
expiration of this Agreement, distribute and sell Articles in the Territory,
subject to Licensee's limited right to sell and dispose of inventory after
expiration or termination of this Agreement pursuant to Section 12(b).
3. (a) Licensee's first collections under this Agreement shall be a Fall
line which is expected to be shown to Licensee's customers for Fall, 1994.
(b) Prior to beginning the production of any item, Licensee shall
submit concepts, materials, sketches, colorations, and samples to Licensor from
which Licensor may select those of which Licensor approves for use in connection
with that collection of Articles. No such concept, material, sketch, coloration,
or
-5-
sample may be used by Licensee in connection with the Articles unless Licensor
shall have approved in writing such use. Licensor may, at Licensee's request
(but is not required to) submit concepts, materials, sketches, colorations, and
samples to Licensee for use in connection with collections of Articles. No
design submitted or approved by Licensor and used in a collection may be used
again in a subsequent collection or in any other line of Licensee without the
written approval of Licensor. Licensee agrees promptly to reimburse Licensor for
any such items submitted. Licensee will reimburse Licensor and Licensor's
employees for any out-of-pocket expenses incurred at Licensee's request, whether
for travel or otherwise. All travel by Xx. Xxxxxxx Xxx Xxxx pursuant to this
Agreement at Licensee's request shall be first-class. All concepts, materials,
sketches, colorations, and samples either provided or approved by Licensor shall
be kept confidential prior to use by Licensee and may be used by Licensee solely
in connection with the manufacture, distribution, and sale of the Articles in
the Territory pursuant to this Agreement. Licensee will be responsible for the
production of the Articles and samples thereof and will bear all costs in
connection therewith. Licensor may use and permit others to use such concepts,
materials, sketches, colorations, and samples in any manner she desires,
provided that such use does not conflict with any rights granted Licensee
hereunder.
(c) No later than one month prior to the initial delivery to
Licensee's distributors of each collection of Articles,
-6-
Licensee shall make available to Licensor in New York City for its inspection,
free of any charge, the entire collection of Articles consisting of one sample
of each separate Article together with its tags, labels, and packaging.
(d) In providing any information hereunder Licensor is acting in an
advisory capacity only and Licensor shall have no responsibility for the
operation or production of the manufacturing, distribution, advertising, or
sales facilities contemplated under this Agreement or for any decisions that may
be made in connection therewith, whether upon the recommendation of Licensor or
otherwise.
4. (a) Licensee agrees that the design, contents, workmanship, and all
other characteristics of the Articles shall at all times be of the highest
quality, consistent with the prestige and reputation which Licensor and the
Licensed Xxxx have developed heretofore, and the Articles shall be distributed
and sold with packaging and sales promotion materials appropriate to maintain
such quality image. All Articles will be manufactured, sold, labeled, packaged,
distributed, and advertised in accordance with all applicable laws and
regulations. Licensor shall have the right to approve the styles, designs,
packaging, contents, workmanship, and quality of all Articles to insure that
Articles manufactured, sold, or distributed hereunder are consistent with the
quality standards set forth herein. At Licensor's request, Licensee will deliver
to Licensor or make available to Licensor in New York City free of any cost to
Licensor then current production samples of
-7-
Articles produced hereunder so that Licensor may assure itself of the
maintenance of the quality standards Set forth herein. After production,
Licensee will also furnish Licensor with one item of each style of the Articles.
Licensee agrees that all Articles to be sold hereunder will be at least equal in
quality to the samples delivered or made available to Licensor and approved by
Licensor. Licensor and its duly authorized representatives shall have the right
to examine Articles in the process of being manufactured and to inspect all
facilities utilized by Licensee in connection with the manufacture of Articles.
(b) All Articles will bear the Licensed Xxxx. The form of each
label, inscription or marking must be approved by Licensor in writing. If
Licensor has not responded within 15 days of receipt of a request for approval,
the item shall be deemed approved.
(c) Licensee will use and display the Licensed Xxxx only in such
form and manner as is specifically approved in writing by Licensor. Licensee
will cause to appear on all Articles produced hereunder, on their tags, labels,
final sale packaging, and the like, on all advertising and promotional material
used in connection therewith, and on all materials on or in connection with
which the Licensed Xxxx appears, including without limitation business cards,
invoices, order forms, and stationery, such legends, markings, and notices as
may reasonably be necessary in order to give appropriate notice of any
copyright, trademark, trade name, or other rights therein or pertaining thereto,
or as Licensor
-8-
may reasonably request. At least 45 days before using or releasing any such
material, Licensee shall submit to Licensor, for its approval, proposed
advertising and promotional copy, all printed material, and finished art work
for tags, labels, final sale packaging, and the like.
(d) After any sample, copy, art work, or other material has been
approved, Licensee shall not depart therefrom in any respect without the prior
written approval of Licensor. If Licensor disapproves any sample Article or any
sample tag, label, package, or the like, such shall not be used in any manner in
connection with the Licensed Xxxx or as an Article hereunder.
(e) Licensee acknowledges that Licensor's approval or disapproval
pursuant to paragraphs 3 and 4 may be based, without limitation, solely on
Licensor's subjective aesthetic standards, which shall be exercised in good
faith. If Licensor does not respond to any request for approval within 15 days
of receipt of such request, the item shall be deemed approved.
5. (a) (i) In consideration of the License granted and the services
to be performed by Licensor hereunder, Licensee shall,
subject to the terms and provisions hereof, pay to
Licensor, for each Annual Period, a guaranteed minimum
fee (the "Guaranteed Minimum Fee") as follows:
-9-
Annual Period Guaranteed Minimum Fee
First $
Second $
Third $
(ii) The Guaranteed Minimum Fee for each respective Annual
Period shall be paid in four equal quarterly
installments on the first day of each July, October,
January and April during such Annual Period, except that
during the first Annual Period the Guaranteed Minimum
Fee shall be paid as follows: $ on the date of this
Agreement, and $ on each of October 1, 1994,
January 1, 1995, and April 1, 1995. Notwithstanding the
foregoing, no amount shall be payable by Licensee to
Licensor in payment of the Guaranteed Minimum Fee for
any Annual Period if the amount of Guaranteed Minimum
Fee and Percentage Fee (as hereinafter defined)
theretofore paid Licensor for such Annual Period equals
or exceeds the total Guaranteed Minimum Fee for such
Annual Period.
-10-
Confidential Treatment Requested - Portions filed seperately with the
Commission.
(iii) The Guaranteed Minimum Fee payments for each Annual
Period shall be credited only against Percentage Fee
payments for the same Annual Period as provided for in
paragraph 5(b).
(iv) In the event of the termination of this Agreement
pursuant to paragraph 12, all amounts due in payment of
Guaranteed Minimum Fees or the balance of the then
current term shall immediately, without notice or
demand, become due and payable.
(b) (i) In consideration of the License granted and the services
to be performed by Licensor hereunder, Licensee shall
pay to Licensor a percentage fee (the "Percentage Fee")
based upon Net Sales of all Articles during each Annual
Period. For purposes of this Agreement, "Net Sales"
shall be deemed to mean the invoiced amount of Articles
sold by Licensee or any of its affiliates, less actual
trade discounts, returns, and charges for customs duty,
freight, and sales taxes, if any. No deduction shall be
made for other discounts,
-11-
advertising, or other costs incurred by Licensee.
(ii) The Percentage Fee that Licensee shall pay to Licensor
for each Annual Period shall be an amount equal to (a)
percent ( %) of Net Sales other than to QVC
Network ("QVC") and (b) percent ( %) of Net
Sales to QVC, during such Annual Period.
(iii) Licensee shall deliver to Licensor within 30 days
following the end of each three month period (other than
the last three month period) during each Annual Period,
a statement signed by an executive officer of Licensee
and certified as accurate, indicating by month and by
style number the amount of Net Sales during such three
month period. Each such statement shall also indicate in
detail, separately for each jurisdiction in the
Territory, the number, description, invoice price, and
the total amount of gross sales of all Articles shipped
during the period covered, the amount of actual trade
discounts, returns, and charges for
-12-
Confidential Treatment Requested - Portions filed seperately with the
Commission.
customs duty, freight, and sales taxes which may be
deducted therefrom, a computation of the amount of the
Percentage Fee payable hereunder in respect of such Net
Sales for such period, and also the amount and details
of the advertising and promotional expenses relating to
the Articles and the Licensed Xxxx incurred during such
period. Such statements shall be furnished to Licensor
whether or not any Articles have been sold during the
period for which such statement is due. All monetary
amounts shall be expressed in United States Dollars. In
the event Licensee makes any sales denominated in a
foreign currency, the Percentage Fee shall be expressed
both in such foreign currency and in United States
Dollars, the latter on the basis of the average buying
rate and selling rate of the foreign currency to United
States Dollars in effect in the capital city of such
country on the last banking day of such quarter.
-13-
(iv) Licensee shall deliver to Licensor within 60 days
following the end of each Annual Period, a report
certified by an executive officer of Licensee covering
such Annual Period and containing the same information
required to be contained in the statements referred to
in paragraph 5(b) (iii).
(v) The Percentage Fee shall be paid quarterly for each
Annual Period. The Percentage Fee for each three month
period (other than the last three month period) during
each Annual Period shall be paid simultaneously with the
delivery of the statement referred to in paragraph 5(b)
(iii) relating to such three month period during such
Annual Period, and the Percentage Fee for the last three
month period of each Annual Period shall be paid
simultaneously with the delivery of the report referred
to in paragraph 5(b) (iv) relating to such Annual
Period. The Percentage Fee for each such three month
period shall be computed on the basis of Net Sales from
the beginning of such Annual Period
-14-
through the last day of the most recent three month
period, with a credit for the Guaranteed Minimum Fee and
for the Percentage Fee theretofore paid to Licensor for
such Annual Period.
(vi) In no event shall any payment of Percentage Fee for any
Annual Period in excess of payments of Guaranteed
Minimum Fee for the same Annual Period be credited
against the Guaranteed Minimum Fee due to Licensor for
any other Annual period.
(c) All payments made hereunder by Licensee to Licensor shall be
made in New York City, New York, in United States Dollars. Licensee shall not be
relieved of its obligation to make payments required hereunder as heretobefore
provided notwithstanding any circumstances which make it impossible for Licensor
or Licensee to take payments out of any jurisdiction in the Territory. In the
event that Licensee shall be prevented by any law, decree, or regulation of any
governmental authority within the Territory from transmitting any payment
hereunder at the time and in the manner provided herein Licensee shall, not
later than the date on which such transmittal is required to be made hereunder,
deposit the full amount thereof to the credit of Licensor in such bank or
depository as Licensor shall specify and furnish evidence of such deposit to
Licensor. Licensee shall apply at its sole expense for
-15-
all export or currency licenses, and shall take all other actions which may be
necessary or expedient to facilitate the prompt receipt by Licensor of all
payments hereunder in the manner and at the times provided herein.
(d) Licensee shall compute and pay on behalf of Licensor all taxes,
if any, which any foreign jurisdiction may impose on Licensor with respect to
the amounts paid to Licensor by Licensee other than personal income taxes, if
any. The amount of such taxes paid by Licensee shall be deducted from each
payment of the Percentage Fee. Licensee shall furnish Licensor with an official
receipt promptly after each such payment of taxes. In the event such taxes are
not paid when due, all resulting penalties and interest imposed on Licensor
shall be borne by Licensee.
6. Licensee shall prepare and maintain, in accordance with generally
accepted accounting principles consistently applied, complete and accurate books
of account and records (including without limitation the originals or copies of
documents supporting entries in the books of account) covering all transactions
relating to the License hereby granted, including transactions relating to
fulfillment by Licensee of its advertising obligations set forth in Section
1(e). Licensor and its duly authorized representatives shall have the right,
during regular business hours and upon reasonable notice, to examine such books
of account and records and all other documents and materials in the possession
or under the control of Licensee with respect to the subject matter and the
terms of this Agreement and Licensor shall have free and full
-16-
access thereto for such purposes and for the purpose of making extracts
therefrom. All such books of account, records, and documents shall be kept
available by Licensee for at least three years after the Annual Period to which
they relate.
7. (a) If, as a result of any examination of Licensee's books and records,
it is shown that Licensee's fee payments for any period were less than the
amount which should have been paid for such period by an amount equal to at
least five percent of the fee actually paid during such period, Licensee
promptly shall reimburse Licensor for the cost of such examination and Licensor
shall have the right to terminate this Agreement immediately upon written
notice.
(b) All payments required to be made to eliminate any discrepancy as
revealed by any examination of Licensee's books and records shall be made
promptly upon demand.
8. (a) Licensee agrees that no name or names shall be used in connection
with the Licensed Xxxx in any advertising, publicity, labeling, packaging, or
printed matter of any kind utilized by Licensee in connection with the Articles
except as Licensor may, from time to time, consent in writing. Licensee agrees
to use its best efforts to prevent the unauthorized use of the Licensed Xxxx and
of any derivatives thereof. Licensee agrees not to use the Licensed Xxxx or the
name or likeness of Xx. Xxxxxxx Xxx Xxxx or any derivative thereof in its
corporate name or business name or, unless approved by Licensor in writing, on
its business stationery, purchase orders, invoices, or letterhead.
-17-
(b) Licensee acknowledges that Licensor is the owner of all right,
title, and interest in and to the Licensed Xxxx throughout the world in any form
or embodiment thereof and is also the owner of the goodwill attached or which
shall become attached to the Licensed Xxxx. Sales by Licensee shall be deemed to
have been made by Licensor for purposes of trademark registration and all uses
of the Licensed Xxxx by Licensee shall inure to the benefit of Licensor.
Licensee shall not do or suffer to be done any act or thing which will in any
way adversely affect any rights of Licensor in and to the Licensed Xxxx or any
registrations thereof or which, directly or indirectly, will reduce the value of
the Licensed Xxxx or detract from its reputation.
(c) Licensee shall timely execute any documents, including
Registered User agreements and applications to record the Licensee as a
Registered User, to confirm Licensor's ownership of all rights in and to the
Licensed Xxxx in the Territory and the respective rights of Licensor and
Licensee pursuant to this Agreement. Licensee will cooperate with Licensor, in
connection with the filing and prosecution by Licensor of applications in
Licensor's name to register the Licensed Xxxx for Articles in the Territory and
the maintenance and renewal of such registrations as may issue. Licensee will
reimburse Licensor for any and all costs incurred in connection with
applications to register the Licensed Xxxx for Articles in any jurisdiction in
the Territory and the maintenance and renewal of such registrations as may
issue.
-18-
(d) Licensee will use the Licensed Xxxx in the Territory strictly in
compliance with applicable legal requirements and will use such markings in
connection therewith as may be required.
(e) Licensee will never challenge Licensor's ownership of or the
validity of the Licensed Xxxx or any application for registration thereof, or
any trademark registrations thereof, or any rights of Licensor therein.
(f) Any copyright which may be created in any sketch, design, print,
package, label, tag, or the like designed or approved by Licensor will be the
property of Licensor. Licensee will not, at any time, do or suffer to be done
any act or thing which may adversely affect any rights of Licensor in such
sketches, designs, prints, packages, labels, tags, and the like and will, at
Licensor's request, do all things reasonably required by Licensor to preserve
and protect said rights. Licensee shall have the full right to use during the
term of this Agreement any sketch, design, print, package, label, tag or the
like designed or approved by Licensor in connection with this Agreement.
(g) Licensee acknowledges that the Licensed Xxxx has acquired a
valuable secondary meaning and goodwill with the public, and that products
bearing the Licensed Xxxx have acquired a reputation of highest quality and
style. Accordingly, notwithstanding any provision in this Agreement to the
contrary, Licensee undertakes and agrees not to use the Licensed Xxxx in any
manner whatsoever which, directly or indirectly, would derogate or detract
-19-
from its or Licensor's repute, including but not limited to selling the Articles
to discount department and chain stores. Licensee recognizes that the
undertaking on its part set forth in this paragraph represents a major
inducement and consideration for Licensor to enter into this Agreement and will
consult with Licensor regarding its plans for marketing and distributing
Articles.
(h) Licensee acknowledges that Licensor has made no representation
or warranty that Licensor has enforceable legal rights in and to the Licensed
Xxxx in any jurisdiction other than the United States. In the event that
Licensor does not have such rights in any foreign jurisdiction or jurisdictions
such event shall not be deemed to be a breach or default under this Agreement.
9. In the event that Licensee learns of any infringement or imitation of
the Licensed Xxxx or of any use by any person of a trademark similar to the
Licensed Xxxx, it shall promptly notify Licensor thereof in writing and if, in
Licensee's reasonable opinion, such infringement, imitation, or use also
constitutes an infringement of the rights herein granted to Licensee, Licensee
shall specifically so state in its notice. In such latter case, if appropriate
action is not taken by Licensor within 20 days after the date of its receipt of
such notice from Licensee, Licensee shall have the right to prosecute such
trademark infringer but in such event Licensee will keep Licensor advised in
advance of its intentions in such action, will consult with Licensor with
respect thereto, and will not settle such action without Licensor's written
-20-
approval (which approval may not be unreasonably withheld). If, however,
Licensor does take such action, Licensor shall permit Licensee to join such
action as an additional plaintiff. In either case, Licensor and Licensee agree
to cooperate fully with the party conducting the action. Any recovery obtained
against the third-party infringer shall be applied first against the legal fees
incurred in connection with such action and shall then be allocated between
Licensor and Licensee in the same proportion as the judgment or decision, as the
case may be, allocates damages or the award; if such judgment or decision fails
to make such allocation, such shall be determined by mutual agreement or by
arbitration in New York City in accordance with and pursuant to the then
existing rules of the American Arbitration Association.
10. (a) Licensee does hereby indemnify and agrees to save and hold
Licensor, its officers, directors, shareholders, employees and agents harmless
of and from any and all liability, claims, causes of action, suits, losses,
damages, and expenses (including, but not limited to, reasonable attorneys' fees
and expenses) for which they or any of them may become liable or may incur or be
compelled to pay in any action or claim (including, but not limited to, any
action or claim relating to products liability) against them or any of them, for
or by reason of any acts, whether of omission or commission, that may be
committed or suffered by Licensee or any of its officers, directors, affiliates,
agents, or employees in connection with Licensee's performance of this Agreement
or in connection with the manufacture, distribution,
-21-
sale, or promotion of the Articles. The indemnitees shall give Licensee prompt
written notice of any such action or claim and Licensee may then, in its sole
discretion, take such action as it deems advisable to defend such action or
claim on behalf of the indemnitees. In the event appropriate action is not taken
by Licensee within 20 days of its receipt of notice from the indemnitees, the
indemnitees shall have the right to defend such action or claim, but no
settlement thereof may be made without the approval of Licensee (which approval
may not be unreasonably withheld). In any case, the indemnitees and Licensee
shall keep each other fully advised of all developments and shall cooperate
fully with each other in all respects in connection with any such defense as is
made.
(b) Licensee shall procure and maintain at its own expense in full
force and effect at all times during which Articles are being sold, with a
responsible insurance carrier acceptable to Licensor, a public liability
insurance policy including products liability coverage with respect to the
Articles and contractual coverage relating to this Agreement, with a limit of
liability of not less than $2,000,000 (United States). Such insurance policy
shall be written for the benefit of Licensee and Licensor, and shall provide for
at least 30 days' prior written notice to Licensor and Licensee of the
cancellation or modification thereof. Such insurance may be obtained by Licensee
in conjunction with a policy of insurance which covers products other than the
Articles. Licensee shall deliver to Licensor, promptly upon issuance of same,
-22-
a full and complete copy of such insurance policy and of all renewals thereof.
Nothing contained in this paragraph 10(b) shall be deemed to limit, in any way,
the indemnification provisions of paragraph 10(a).
11. (a) If Licensee shall fail to pay any amount due hereunder, (i)
Licensee agrees to pay interest, at a rate equal to the lesser of (A)
percent per annum over the prime rate being charged in New York City by Chemical
Bank as of the close of business on the date the payment first becomes due and
(B) the highest rate then permitted by law, on such amount remaining unpaid from
time to time from and including the date such amount becomes due until the date
such amount is paid in full and (ii) if such default shall continue uncured for
a period of ten days after written notice thereof ("Notice of Default") has been
given by Licensor, Licensor shall have the right to terminate this Agreement,
which termination may be automatic, at the option of Licensor, upon notice
thereof in the Notice of Default or in any subsequent notice to Licensee. If
Licensee shall otherwise fail to perform any of the terms, conditions,
agreements, or covenants in this Agreement on its part to be performed and such
default shall, although capable of being cured, continue uncured for a period of
15 days after a Notice of Default has been given by Licensor, Licensor may, at
its sole election, terminate this Agreement, which termination may be automatic
upon notice thereof in the Notice of Default or in any subsequent notice to
Licensee. If any such default is incapable of being cured by Licensee, Licensor
shall
-23-
Confidential Treatment Requested - Portions filed seperately with the
Commission.
have the right to terminate the Agreement with immediate effect upon delivery of
written notice to Licensee. Licensee agrees that in the event of any default
under this paragraph 11(a) or in the event of a breach by Licensee of any other
provision of this Agreement, Licensee shall be responsible for all costs,
including without limitation legal fees and expenses, incurred by Licensor as a
result thereof. Nothing in this paragraph 12(a) shall be deemed to waive
Licensor's right to obtain damages for any default by Licensee, whether cured or
uncured.
(b) In the event Licensee files a petition for an order of relief
under any bankruptcy law, or if a petition for an order of relief is filed
against it and is not discharged or dismissed within 60 days thereafter, or if
it becomes insolvent, or makes an assignment for the benefit of its creditors,
or files a petition or otherwise seeks relief under or pursuant to any
bankruptcy, insolvency, or reorganization statute or proceeding, or if it
discontinues its business, or if a custodian, receiver, or trustee is appointed
for it or a substantial portion of its business or assets, Licensor may, at its
sole election, terminate this Agreement by written notice effective 60 days
after such filing or such other aforementioned event.
(c) No assignee for the benefit of creditors, custodian, receiver,
trustee in bankruptcy, sheriff, or any other officer of the court or official
charged with taking over custody of Licensee's assets or business shall have any
right to continue this Agreement or to exploit or in any way use the Licensed
Xxxx if
-24-
Licensor exercises its right of termination pursuant to paragraph 10(b).
(d) Notwithstanding the provisions of paragraph 11(c), in the event
that, pursuant to any bankruptcy law, a trustee of Licensee (hereinafter
referred to as the "Trustee") or Licensee as debtor in possession is permitted
to assume this Agreement and does so and, thereafter, desires to assign this
Agreement to a third party, which assignment (i) satisfies the requirements of
such bankruptcy law, (ii) is to a party that has established a reputation for
producing products of the same type as the Articles and of a quality that is at
least equal to the quality of Articles produced by Licensee and consistent with
the standards set forth in this Agreement for Articles, (iii) is to a party that
can demonstrate its financial ability to perform the obligations of Licensee
pursuant to this Agreement, and (iv) provides that any payments in excess of the
amounts set forth hereunder be paid only to Licensor, the Trustee, or Licensee,
as the case may be, shall notify Licensor of the terms of such proposed
assignment in writing. The giving of such notice shall be deemed to constitute
an offer to Licensor to have this Agreement assigned to it or to its designee
for the consideration, or its equivalent in money, and upon such terms, as are
specified in the notice. The aforesaid offer may be accepted only by written
notice given to the Trustee or Licensee, as the case may be, by Licensor within
15 days of Licensor's receipt of the notice from such party. If Licensor fails
to give its notice to such party within the said 15 days, such party may
complete the
-25-
assignment referred to in its notice, but only if such assignment is to the
entity named in the notice and for the consideration and upon the terms
specified therein. Nothing contained herein shall be deemed to preclude or
impair any rights which Licensor may have as a creditor in any proceeding or
shall be deemed to be a consent to any assignment.
(e) Notwithstanding any termination in accordance with the
foregoing, Licensor shall have and hereby reserves all the rights and remedies
which it has, or which are granted to it by operation of law, with respect to
the collection of fees payable by Licensee pursuant to this Agreement, with
respect to damages for breach of this Agreement by Licensee, with respect to the
recovery from Licensee of all costs incurred by Licensor as a result of any
breach of this Agreement by Licensee, including without limitation all legal
fees and expenses, and to enjoin the unlawful and unauthorized use of the
Licensed Xxxx.
12. (a) On the expiration or termination of this Agreement for any reason
whatsoever, all the rights of Licensee hereunder shall forthwith terminate and
automatically revert to Licensor and Licensee shall forthwith discontinue all
use of the Licensed Xxxx and shall no longer have the right to use the Licensed
Xxxx or any variation or simulation thereof. Licensee shall thereupon deliver to
Licensor, free of charge, all labels, tags, and other material in its possession
with the Licensed Xxxx thereon and Licensee shall cause stencils, sketches, and
other design materials not in its possession to be destroyed or rendered
-26-
unusable. Licensee agrees not to reproduce or adapt any of such stencils,
sketches, or other design materials for use on merchandise subsequent to the
termination of this Agreement.
(b) Notwithstanding the provisions of paragraph 12(a), in the event
of the expiration or termination of this Agreement other than by Licensor in
accordance with paragraph 11, Licensee shall be permitted, for an additional
period of six months, on a non-exclusive basis, to sell and dispose of its
inventory of Articles from the collections prepared during the final year of
this Agreement (but no other Articles) on hand on the date of such termination
or expiration, subject to an accounting for and the payment of the Percentage
Fee on sales during such additional period and subject to the other terms and
conditions of this Agreement. Such accounting and payment shall be due within 30
days after the last day of such six-month period.
13. Licensor and Licensee each represents and warrants to the other that
the negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on directly between them in such a manner as not to
give rise to any valid claims against either of them for a brokerage commission,
finder's fee or other like payment, except for any payments which may be due to
Xxxx Xxxxxx Enterprises, Inc. Licensee agrees to indemnify Licensor against any
and all liabilities (including, without limitation, reasonable attorneys' fees
and disbursements paid or incurred in connection with any such liabilities) for
any brokerage or finder's fees or other commissions or fees that may be asserted
-27-
against Licensor by reason of any actions of Licensee or on Licensee's behalf in
connection with or as a result of this Agreement or the transactions
contemplated hereby, except for any payments that may be due to Xxxx Xxxxxx
Enterprises, Inc.
14. (a) Licensee represents and warrants that it has full right, power,
and authority to enter into this Agreement.
(b) Licensee has delivered to Licensor the audited balance sheet of
Licensee as of 12/31/92 and related statement of income for the year then ended.
Licensee represents and warrants that such statements present fairly the
information purported to be shown therein, have been prepared in accordance with
generally accepted accounting principles, are correct and complete, and are in
accordance with the books and records of Licensee. Licensee further represents
that since the end of Licensee's last fiscal year there has at no time been a
material adverse change in the financial condition of Licensee and there is no
fact known to Licensee which materially adversely affects or in the future may
materially adversely affect the financial condition or business of Licensee.
15. All reports, approvals, notices and statements required or permitted
by this Agreement to be given to a party shall be in writing and shall be deemed
to be duly given if personally delivered or mailed by certified or registered
mail, return receipt requested, to Licensor at its address as set forth on page
1, and to Licensee at the address set forth on page 1 of this Agreement (or at
such other address as a party may specify by
-28-
notice to the other).
16. Neither this Agreement nor the License or other rights granted
hereunder may be assigned, sublicensed, or transferred by Licensee, except as
specifically provided in paragraph 11(d), and any attempted violative
assignment, sublicense, or transfer, whether voluntary or by operation of law,
shall be void and of no force or effect. A change of control of Licensee or a
transfer of all or a controlling portion of the stock of Licensee shall be
deemed to be an assignment of this Agreement. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and shall be binding upon
the parties and their respective successors and assigns.
17. This Agreement contains the entire understands ing and agreement
between the parties hereto with respect to the subject matter hereof, supersedes
all prior oral and written understandings and agreements relating thereto, and
may not be modified, discharged, or terminated orally.
18. Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint venturers, or either as agent of the other, and
neither party shall have any power or authority to assume or create any
obligation or responsibility whatsoever, express or implied, on behalf of or in
the name
-29-
of the other, to bind the other in any manner, or to make any representation,
warranty, or commitment on behalf of the other.
19. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to principles of
conflict of laws. However, any and all disputes, controversies, and claims
arising out of or relating to this Agreement and pertaining to Licensor's
ownership of or the validity in any country of the Licensed Xxxx or any
registration thereof or any application for registration thereof shall be
governed by and construed in accordance with the trademark laws and related
laws, statutes, rules, and regulations of such country unless there are no laws,
statutes, rules, or regulations in such country dispositive of such disputes,
controversies, and claims, in which case any and all such disputes,
controversies, and claims shall be governed by and construed in accordance with
the federal trademark laws and related laws, statutes, rules, and regulations of
the United States unless there are no federal laws, statutes, rules, or
regulations of the United States dispositive of such disputes, controversies,
and claims, in which case any and all such disputes, controversies, and claims
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to principles of conflict of laws.
20. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to
-30-
insist upon strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
21. If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
22. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but both of which together shall constitute one and the same
instrument.
23. Since a breach of the provisions of this Agreement by Licensee could
not adequately be compensated by money damages, Licensor shall be entitled, in
addition to any other right or remedy available to it, to an injunction
restraining such breach or a threatened breach and to specific performance of
any such provision of this Agreement, and in either case no bond or other
security shall be required in connection therewith, and Licensee hereby consents
to the issuance of such injunction and to the ordering of specific performance.
24. At any time and from time to time, each party agrees, without further
consideration, to take such actions and to execute and deliver such documents as
may be reasonably necessary to effectuate the purposes of this Agreement.
-31-
25. Licensee hereby irrevocably consents to the jurisdiction of the courts
of the State of New York and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this
Agreement (other than as contemplated by the last sentence of paragraph 10), any
document or instrument delivered pursuant to, in connection with, or
simultaneously with this Agreement, or a breach of this Agreement or any such
document or instrument. Within 30 days after such service, or such other time as
may be mutually agreed upon in writing by the attorneys for the parties to such
action or proceeding, Licensee shall appear or answer such summons, complaint,
or other process. Should Licensee so served fail to appear or answer within such
30-day period or such extended period, as the case may be, Licensee shall be
deemed in default and judgment may be entered by Licensor against Licensee for
the amount as demanded in any summons, complaint, or other process so served.
26. Licensee agrees to obtain, at its expense, any and all required
approvals of this Agreement or any of the transactions contemplated hereby by
any government in the Territory outside of the United States or any agencies or
subdivisions thereof.
-32-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement the day and year first above written.
WINDSOR OPTICAL, INC.
By: /s/ Xxx X. Xxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxx
Title: President
XXXXXXX XXX XXXX, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
Title:
-33-
