3/04/98-X
TRADEMARK LICENSE
AND TECHNICAL ASSISTANCE AGREEMENT
FOR WOMEN'S COLLECTIONS
AGREEMENT dated this 4th day of March, 1998, by and between LATITUDE
LICENSING CORP. (Licensor") a corporation organized and existing under the laws
of the State of Delaware having its offices at 00, Xxxxxxxxx Xxxxx - Xxxxx 000 -
Xxxxxxxxxx, XX 00000.
and
I.C. XXXXXX AND COMPANY, L.P. ("Licensee"), a limited partnership organized
and existing under the laws of Delaware, having its offices at 0000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000-0000 and 000 Xxxxx Xxxxxx, Xxxxx 0000 - Xxx Xxxx
00000.
W I T N E S S E T H
WHEREAS, Licensor is the holder of all rights to license certain trademarks
and tradenames hereinafter defined (the "Marks") within the Territory
hereinafter defined (the "Territory") which Marks are known throughout the world
in connection with creative design and products of high quality in various
fields of fashion and accessories; and
WHEREAS, Licensor possesses certain technical know-how and expertise with
respect to the design, manufacture, promotion and marketing of the Products, as
said term is defined hereinafter; and
WHEREAS, all the designs and models have been created and are owned, by
Xxxxx-Xxxxxxx Xxxxxxxxxxx and Francois Girbaud (the "Designers")
WHEREAS, Licensor, due to the character of its Designers and the quality of
its techniques, has acquired worldwide recognition and prestige in the field of
fashion design, is developing worldwide licenses as part of the GMW marketing
plan and Licensee is desirous of consulting and cooperating with Licensor in the
design and marketing of said Products; and
WHEREAS, Licensee wishes a license to engage in the Territory in the
manufacture, importation, distribution, and sale of certain products that bear
the Marks and to avail itself of the creative design, know-how and quality
control services of Licensor; and
WHEREAS, Licensee is desirous of securing the design and technical
expertise and quality control services of Licensor in connection with
manufacturing and promoting the Products;
WHEREAS, Licensee has requested, and Licensor has agreed to grant to
Licensee, the right and license to use the Marks upon and subject to the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
hereinafter set forth, the parties have agreed as follows:
1. Grant
1.1 Licensor hereby grants to Licensee, and Licensee hereby accepts, for
the term of this Agreement pursuant to the terms, conditions and covenants
hereinafter set forth, an exclusive license (even against Licensor and its
affiliated entities):
(a) to manufacture and/or cause to be manufactured anywhere in the world,
subject to Section 7.2.1. herein, and to import, promote, distribute and sell
within the territory with exclusivity Licensor's collections of clothes as
follows: a "Women's Xxxx" collection, and a "Women's Casual" collection
including outerwear, as further described in Exhibit C (the "Products")
fashioned after archival and newer designs created by Licensor or an affiliate
thereof, and designs or adaptations of designs provided or recommended by
Licensee and approved by Licensor (which approval shall not be arbitrarily
withheld), under the terms and conditions hereinafter set forth and bearing the
trademarks set forth in Exhibit A attached hereto (the "Marks"). Licensee
agrees to label the Women's Jeans collection and the Women's casual collection
differently so that there is some product line differentiation. Products
authorized by this Agreement shall include tops and bottoms which incorporate
active influences in terms of silhouettes, fabrics, details and other technical
influences as adapted to Xxxx wear and Casual wear including but not limited to
products such as tee-shirts, polo shirts, sweat shirts, sweat pants, coats and
trousers.
(b) To use and display the Marks, within the Territory, but solely in
advertising and promoting the Products within the limits herein set forth, to
the specific exclusion of any use of said Marks in combination with any other
trademarks not approved by Licensor or in any form in connection with any other
products or with Licensee's overall business operation (except for accurate
references to relationship between Licensor and Licensee and as required by law)
or in Licensee's trade or corporate names, except as may otherwise be provided
herein.
(c) To use and display the Marks in connection with the branding,
advertising, and promotion of the Boutique described in Section 8.9 of this
Agreement.
1.2 The License herein granted shall only extend to top quality products,
designed, manufactured, promoted, advertised and sold according to high
standards of quality and in full compliance with the terms and conditions
hereof, so as to maintain, enhance and protect the image and prestige associated
with the Marks. What constitutes the different segments of the collections
shall be decided by Licensor with reasonable consultation with Licensee and
shown later on the labels and packaging.
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1.3 Licensor hereby represents to Licensee (i) that it has all the
necessary rights to grant to Licensee the exclusive license in the Territory to
import, promote, distribute and sell the Products in accordance with the terms
of this Agreement, and that it will not, directly or indirectly, take any
action or cause others to take any action inconsistent therewith, (ii) that
Licensor has or will secure the rights to authorize Licensee to manufacture
products at least in the countries listed in Exhibit B hereto (the
"Manufacturing Countries"), (iii) that Licensor will take all reasonable and
diligent steps in the Territory and the Manufacturing Countries to obtain and
maintain valid and in effect trademark registrations for the Marks to cover all
the Products. and (iv) that Licensor will fully cooperate with Licensee in
implementing the provisions of this Agreement which relate to the protection of
the Marks, in protecting the rights of Licensee to use the Marks, and in
preventing the importation into the Territory of Products manufactured by or for
other licensees of the Marks outside of the Territory. Licensee's right to
manufacture shall be limited to the Manufacturing Countries. Any changes in the
list of such countries shall be immediately notified to Licensor pursuant to
Section 25.
1.4. Notwithstanding any other provision of this Agreement, Licensor hereby
acknowledges that Licensee manufactures, promotes and distributes other
collections of apparel depicting a variety of trademarks and markings, including
but not limited to the branded BOSS collections and the Xxxxxxx Hills Polo Club
collections, and that nothing in this Agreement is intended to restrict in any
way Licensee's ability to use such other trademarks and markings and to conduct
those other business as presently conducted or as they may be expanded in the
future in Licensee's regular course of business.
1.5. In connection with the development and implementation of the licensing
relationship between the parties and in order to resolve any potential issues
with respect to the labeling of certain of Licensee's Boss product lines,
Licensee acknowledges that Licensor or its affiliates own the horizontal,
rectangular label shown in Exhibit D hereto as positioned on the fly of pants.
In furtherance thereof, Licensee agrees that, commencing with garment
collections to be shown to the trade at the February 1999 Magic Show (USA) and
thereafter, Licensee will not manufacture or distribute any pants which have on
the fly of the pant a label which bears the horizontal rectangular shape and
size of the label shown in Exhibit D hereto. From and after February 1999,
Licensee may continue to distribute existing inventory of pants bearing the
horizontal, rectangular label shown in Exhibit D until such inventory is
exhausted, and Licensee's customers may likewise continue to sell products
bearing such labels which are in their possession or were on order prior to
February 1999 until such inventory is exhausted. Notwithstanding anything else
in this Agreement, Licensor (for itself and its affiliates) agrees that it will
not object to the use by Licensee (and its affiliates) of the particular labels
and markings to be positioned on the fly of pants which are shown on Exhibit E
attached hereto and others not limited by color, or size (if larger) or design
(if similar).
1.6. The Product shall be exhibited and presented in a New York showroom,
distinct and separate from the showroom used for Licensee's other lines of
non-Girbaud apparel. The showroom used by Licensee for the Products shall
follow the concept of the Paris showroom featuring an example of "shop in the
shop", and separate and exclusive sales personnel.
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2. Term and Territory
2.1 The initial term of this Agreement shall commence and become effective
as of the date first written above and shall expire on December 31, 1999 unless
sooner terminated as hereinafter provided. Licensee shall have the option to
renew this Agreement for an additional term of three (3) years commencing on
January 1, 2000 and ending on December 31, 2002. At the end of that term,
Licensee shall again have an additional option to renew for five (5) years,
until December 31, 2007. Licensee shall be entitled to these two options to
renew only if there has been no material default on the part of the Licensee of
which licensee shall have been notified at the time and which has not been
cured, during each term of this Agreement. Licensee shall notify Licensor of
its intent to renew at least six (6) months before the expiration of each term.
2.2 The License herein granted shall only extend to the United States of
America (Fifty states and the District of Columbia), Puerto-Rico and the US
Virgin Islands, and shall include sales made to all branches of the United
States military for distribution in United States military installations
anywhere (the "Territory").
2.3 Licensee shall promptly refer to Licensor all requests or inquiries
relating to the Products from outside the Territory or from within the Territory
if the request or inquiry concerns the possible sale or delivery outside the
Territory. Likewise, Licensor shall (and shall cause its affiliates to)
promptly refer to Licensee all requests or inquiries relating to the Products
from within the Territory or from outside the Territory if the request or
inquiry concerns the possible sale or delivery inside the Territory.
2.4 Licensee recognizes and acknowledges that similar products may be
under license to other licensees for areas outside the Territory and that no
Products will be sold, directly or for export, shipped to a destination or
delivered by Licensee outside the Territory. Licensee shall not, directly or
indirectly, market, distribute or sell Products outside the Territory and shall
use its reasonable commercial efforts to ensure that Products it has sold or
distributed are not resold or redistributed outside the Territory, nor shall
Licensee sell or distribute Products to any person or entity which it knows, has
reason to believe or has been notified by Licensor that such person or entity
has exported or intends to export Products from the Territory. Licensor shall
exercise reasonable commercial efforts to ensure that products manufactured by
or for other licensees of the Xxxx outside the Territory are not exported to the
Territory in violation of Licensee's exclusivity under this Agreement.
3. Use of the Trademarks
3.1 Licensee shall have the right and the obligation during the term of
this Agreement, to use the Marks with respect to and only with respect to the
Products and the Territory as defined herein (and in other parts of the world as
it relates to manufacturing Products bearing the Marks). All Products
manufactured, sold and distributed pursuant to this Agreement shall bear one or
more of the Marks except as hereinafter provided and no such Products shall be
sold or otherwise distributed by Licensee under any trademark other than one or
more of the Marks. Licensee shall not use the Marks on or in connection with
products manufactured from designs not approved pursuant to this Agreement.
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3.2 The license herein granted shall apply only to those Marks included in
Exhibit A and shall not include nor be deemed to include any other trademarks
which Licensor or its affiliates and subsidiaries may now or hereafter own.
Licensor agrees during the term of this Agreement to maintain and uphold the
reputation and goodwill attendant to the Marks and not to take any action which
is likely to adversely affect the public image of the Marks and the quality of
the products sold thereunder.
3.3 Except as provided herein, Licensee further agrees that it will not
reproduce or use the distinguishing styling features or the patterns provided by
Licensor or an affiliate or subsidiary of Licensor for the manufacture and sale
of Products under any label or trademark other than the Marks or for the
Products. Nothing in this Agreement is intended to preclude Licensee from
utilizing in any of its other products collections, any designs, markings,
garment features, coloring method of fabrication, materials, construction, or
pattern that are common in the trade or merely functional or utilitarian in
nature.
3.4 Sales by Licensee shall be deemed to have been made by Licensor for
purposes of trademark registration and all uses of the Marks by Licensee shall
be deemed to inure to Licensor's benefit. Licensee will not, at any time,
knowingly do or suffer to be done, any act or thing which may, in any way,
adversely affect any rights of Licensor in and to the Marks or any registrations
thereof which will, directly or indirectly, reduce or detract from the value of
the Marks. Licensee further agrees that it shall not sell the Products as
miscuts, seconds, irregulars or as otherwise damaged merchandise except as
otherwise permitted under this Agreement, if it were detrimental, in Licensor's
reasonable opinion, to the goodwill embodied in the Marks.
3.5 Licensor reserves all rights to the Marks except as specifically
granted herein to Licensee and may exercise such rights at any time. Licensee
acknowledges that Licensor is the sole and rightful owner of all right, title
and interest in the Marks and shall not claim any title to the Marks nor any
right to use said Marks or any confusingly similar variation thereof except as
provided herein. Licensee shall not question, attack, contest or otherwise
impugn the validity of the Marks or their registration(s), Licensor's
proprietary rights nor Licensor's rights in the designs including, but not
limited to, in connection with any action brought seeking to enforce the terms
of this Agreement. The use of the Marks pursuant to or as specified in this
Agreement shall be for the benefit of Licensor, and shall not vest in Licensee
any title to or right or presumptive right to expand or continue such use.
Licensee, for itself and its affiliated companies, covenants and agrees that it
shall, at no time, adopt or use any trademark, trade name or corporate name
which is likely to cause confusion with any of the marks or with any other
trademark or name used or owned by Licensor except with the prior written
consent of Licensor. The provisions of this Paragraph shall survive the
expiration or earlier termination of this Agreement.
3.6 All Products bearing the Marks shall be manufactured exclusively from
designs and specifications provided by Licensor and its affiliate or otherwise
selected by Licensee from the archives of Licensor and its affiliates or created
by Licensee and submitted to Licensor for approval under the terms of this
Agreement (which approval shall not be unreasonably withheld). No Products
other than those manufactured in strict compliance therewith shall bear the
Marks. Licensee shall use only the Marks indicated in Exhibit A and only in
connection with the Products as defined in Section 1. The license herein
granted shall confer unto Licensee no proprietary rights whatsoever in the name
Marithe & Francois Girbaud, the Marks, logos or the
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goodwill now attached or hereafter to become attached thereto. Without limiting
Licensee's ability to conduct its other businesses, Licensee shall only use the
Marks as provided herein and in full compliance with the terms and conditions
hereof and only for the duration of this Agreement.
3.7 Notwithstanding any other provision of this Agreement Licensor
acknowledges that Licensee intends to select from existing and archival designs,
fabrics and stylistic features associated with the Marks and the Products and
also to recommend to Licensor modifications updates, and desirable additions to
those designs and stylistic features associated with the Marks and products
bearing the Marks so as to maintain the image for the Products, the Marks and
the tags labels and other collateral used with the Products that is suitable for
successful distribution in the Territory at competitive price ranges. Licensor
agrees to consider in good faith and reasonably all such design and stylistic
feature recommendations made by Licensee and, unless they significantly detract
from the goodwill associated with the Marks to approve the implementation of
those recommendations by Licensee subject to Licensor's right to review and
approve samples under this Agreement. Licensee shall have discretion to select
designs and stylistic features associated with former collections of apparel
sold under the Marks for incorporation into Licensee's Products and shall have
no obligation to accept any designs fabrics or stylistic features that, in
licensee's reasonable opinion would not be commercially successful in the
Territory or would be too expensive to manufacture in light of the expected
marketability.
3.8 Subject to Section 3.7, the use of the Marks, including the specific
design, artwork or graphics thereof and any tags, wrappers, letterhead,
invoices, stationery or other items incorporating the Marks must be in full
compliance with the Licensor's written policies and procedures, as they are
communicated to Licensee from time to time, and is, in each instance, subject to
the prior written approval of Licensor, which approval shall not be unreasonably
withheld. Licensor can only promulgate policies and procedures that change the
guidelines for use of the Marks prospectively and not with respect to any
Products already approved by Licensor for Products collections which have been
designed. The Marks may only be used by Licensee as part of an approved label
and may only be used in their entirety. Licensee shall not alter or modify the
Marks in any manner whatsoever nor shall Licensee add to, remove or abbreviate
any part or distinctive feature thereof including script, graphics, colors or
logos.
3.9 Licensee shall cooperate fully and in good faith with Licensor for the
purpose of securing, preserving and protecting Licensor's rights in and to the
Marks in the Territory and the Manufacturing Countries. Without limiting the
rights of Licensee under this Agreement, Licensee shall execute, deliver and/or
file any and all documents and do all other acts and things which Licensor
reasonably requests, provided the request does not prejudice other business of
Licensee, to make fully effective or to implement the provisions of this
Agreement relating to the ownership or registration of the Marks in the
Territory and Manufacturing Countries. All costs and expenses for any
application for registration or extension of registration with respect to the
Products within the Territory and Manufacturing Countries shall be borne by
Licensor.
3.10 Licensee will use the Marks in the Territory strictly in compliance
with the legal requirements obtaining therein. Whenever any of the Marks is
used on any Product or item of packaging or labeling or in any advertisement or
other promotional material, it must be followed, in the case of a registered
trademark by the registration symbol, i.e. -Registered Trademark-, and in the
case of all other trademarks by the symbol -TM-, or other appropriate symbols of
similar import acceptable to
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Licensor. Licensee shall duly display all other notices with respect to the
Marks on the Products and otherwise as are or may be required by the trademark
laws and regulations applicable within the Territory or any portion thereof.
3.11 Any copyright, design patent or any similar industrial or intellectual
property right which exist or may be created in any sketch, design, sample,
print, package, label, tag or the like used uniquely in connection with the
Products shall be the property of Licensor, and if not created by Licensor they
shall be deemed works made by Licensee for hire for Licensor. Licensee shall
place a copyright notice whenever required by Licensor to protect said
copyrights. Licensee shall not, knowingly, at any time, do or cause to be done
any act or thing which may adversely affect any rights of Licensor in such
sketches, designs, samples, prints, packages, labels, tags and the like and will
do at Licensor's cost all things reasonably required by Licensor to preserve and
protect said rights.
Nothing herein is intended to preclude licensee from utilizing in any of
its other product collections, any designs, markings, garment features,
coloring, method of fabrication, materials, construction, or patterns that are
not uniquely associated with Licensor's products or which are otherwise common
in the trade or merely functional in nature, and licensee shall not assign any
rights thereof to Licensor.
4. Royalties
4.1 Subject to the provisions of Section 1.4 above, Licensee agrees to
exercise its best efforts to promote and maximize sales of the Products
throughout the Territory. Licensee shall conduct its activities pursuant to this
Agreement so as to enhance the goodwill and reputation of the Marks and shall
not engage in conduct known to be detrimental to the same.
4.2 In consideration of the rights granted to Licensee pursuant to this
Agreement, Licensee shall pay to the Licensor for each Calendar Year during the
Term, or any portion thereof, Royalties in an amount of 6.25% of all Net Sales
(the "Royalties"). The Royalties for close-out sales as defined under Section
4.9 and irregulars shall be 3.0% of Net Sales of the close-out Products. In no
event shall the amount of Royalties (including close-out Royalties) due and
payable for any Calendar Year be less than the minimum amount ("Minimum
Royalties") set forth for each Calendar Year during the Term, including any
possible renewal term, as follows:
1998 0
1999 $ 700,000
2000 $ 800,000
2001 $1,000,000
2002 $1,500,000
2003 $1,500,000
2004 $1,500,000
2005 $1,500,000
2006 $1,500,000
2007 $1,500,000
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A License Acquisition fee in the amount of $600,000 shall be paid by
Licensee to Licensor within three days of execution of this Agreement by both
parties.
The term "Calendar Year" shall mean January 1 through December 31 of each
year of the term.
4.3 The term "Net Sales" shall mean the invoiced price (excluding sales
tax, insurance and shipping charges) for Products shipped or sold by Licensee or
any of its subsidiaries or affiliates, or authorized sub-licensees, during the
relevant period, less credits granted for Products actually returned and
accepted, and reasonable customary and usual trade discounts and xxxx-xxxxx
actually granted to non-affiliated customers and an allowance for bad debt. Bad
debt shall consist of any accounts receivable of a customer who is under a
bankruptcy or insolvency proceeding, or which is otherwise uncollected despite
Licensee's collection efforts for at least 120 days after the due date. For
purposes of calculating royalties due for any sale, transfer or other
distribution of Products made otherwise than at arm's length, the Net Sales
price of such Products shall be deemed to be the Net Sales price of a
corresponding sale to unaffiliated independent retailers. The royalties herein
provided shall be due and paid on sales of any and all Products bearing the
Marks and/or sales of any and all Products manufactured by Licensee or its
affiliates. Except as may be otherwise provided herein, no deduction shall be
made for any discount, xxxx-down, advertising allowance, other allowances of any
kind or for any purpose whatsoever or costs incurred by Licensee. Royalties
shall not be due to Licensor on products sold by Licensee to Licensor under this
Agreement.
4.4 In the event that Licensee sells Products in a currency or currencies
other than United States dollars, the Net Sales price, with respect to such
sales, shall be computed on the basis of the average exchange rates of said
currency or currencies into US dollars, as of the close of business on the last
day of each of the three months of each applicable calendar quarter as published
in The Wall Street Journal.
4.5 The Minimum Royalties for each calendar year shall be paid in 12
equal monthly payments, each in the amount of 1/12 of the Minimum Royalties
payable for that Calendar Year as stated above in Section 4.2. Within 60 days
of the end of a Calendar Year commencing with Calendar Year 1998, Licensee
will calculate actual Royalties owed to Licensor based on actual Net Sales of
Products during the Calendar Year and shall by the 60th day remit to Licensor
the difference between the total Royalties paid during the Calendar Year as
Minimum Royalties and the actual Royalties due. If the Minimum Royalties are
greater that the actual Royalties due then Licensee shall not owe Licensor
any further payments for the Calendar Year. There will be no deductions or
set offs from any payments whatsoever, unless specifically agreed to by the
Parties.
4.6 Licensee shall, within thirty (30) days of the end of each Calendar
quarter and within ninety (90) days of the end of each Calendar Year during the
term hereof, provide Licensor with a certified statement of sales of the
Products during the immediately preceding calendar quarter or Calendar Year, as
the case may be. Said statement shall be signed by a duly authorized officer of
the Licensee and be certified by said officer as true and accurate. Said
statement shall conform to a format agreed upon between the parties and, at the
option of Licensor, be subdivided by Product.
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4.7 All royalties payable hereunder shall be paid directly to a bank
designated by Licensor, in writing, as depositary (the "Depositary").
4.8 Late payments of royalties shall bear interest at the Citibank, N.A.,
New York prime rate plus 3%, but, in no event shall exceed the maximum rate
permitted under applicable law.
4.9 For the purpose of this Agreement, close-outs are defined as Products
sold at a reduction of twenty (20%) percent or greater from Licensee's regular
full list price of such Products and Licensee acknowledges that the excessive or
indiscriminate disposal of close-outs may adversely affect the prestige attached
to the Marks. Licensee shall therefore exercise its best reasonable efforts to
plan and conduct its manufacturing and sales operations with a view to limiting
the quantity of close-outs and to disposing of all Products through normal
channels of distribution and otherwise only through stores specialized in high
quality close-outs, including outlets such as Xxxx Stores, T.J. Maxx, Filene's
Basement, and the like that offer for sale other similar designer labels. All
sales of close-outs shall comply with the terms specified herein.
4.10 Only genuine end-of-season close-outs may be sold under the label, or
with any reference to the Marks. No close-outs shall be shipped until at least
ninety (90) days shall have elapsed from the date of the first substantial
delivery by Licensee of a season's collection of which it is a part.
4.11 For purposes of calculating Royalties the Net Sales price of such
authorized close-out sales shall be based on the actual reduced Net Sales price
for said Products. On excessive, unauthorized close-out sales which shall be
defined as close-out sales equivalent to more than 25% of Net Sales for the
first Calendar Year and to more than 10% for any subsequent Calendar Year, the
Royalties shall be computed at the normal Net Sales price as applied to the
initial standard (i.e., non close-out) selling price of the Product. Within
sixty (60) days of the close of each calendar quarter and within ninety (90)
days of the close of each Calendar Year, Licensee shall furnish to Licensor a
statement setting forth the amount of total regular sales and total close-out
sales. At the option of Licensor, said statement shall be subdivided by Product
class.
4.12 Receipt or acceptance by Licensor of any royalty payments due
hereunder, in an amount or amounts which are less than amount or amounts due,
shall not constitute a waiver of Licensor's rights in or to the balance thereof
which shall remain due and payable pursuant to the terms of this Agreement. Any
excess Royalties paid by Licensee hereunder shall be counted as a credit against
future Royalties due to Licensor.
4.13 Licensee shall provide Licensor for each calendar quarter within
forty-five (45) days of the end of the preceding calendar quarter, reports
setting forth in reasonable detail sales by US dollars and unit shipments with
respect to each product line and models in each product line, aggregate sales to
regular price customers, off-price customers, large retailers, specialty
retailers and sales by significant geographic segments. Such report shall be in
accordance with Licensee's current reporting capabilities and format.
5. Designs and Technical Assistance
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5.1. Technical Assistance
Licensor will provide technical assistance defined as but not
restricted to: new products concepts/ideas, styles, fabrics, colors, trims and
packaging; prototype garments, fabrics swatches, lab dips, samples patterns,
access to and recommendations from product segment archives; fabric sources.
5.2 Collections
Licensor shall provide Licensee with recommendations for a full and
varied collection of Products (as a "collection" is customarily defined in the
trade) for each of the four seasons (fall, winter, spring, summer) that Licensor
in consultation with Licensee and subject to Section 3.7 above shall deem
appropriate for sale in the Territory. Licensor shall develop each seasonal
collection in a timely manner so that Licensee shall have sufficient time to
produce the Products but in any event in accordance with the following minimum
lead times:
Collection Delivery date by Licensor
Fall August 15
Winter November 15
Spring February 15
Summer May 15
The recommended collection will contain, in the different lines, a basic
core offering of Jeans and tops in addition to a Casual sportswear line of tops
and bottoms pieces designed to be worn separately or collectively to support
another basic core line of casual pants and tops for Casual, as well as tops and
bottoms in familiar styles adapted to incorporate active influences of fabrics,
details, silhouettes and technical adaptations thereof. The Women's collection
covered by this Agreement shall be identified, as described in section 8.7
herein, by a specific marking, such as shown in Exhibit F.
5.3 GRIDS
Subject to the right of Licensee under Section 3.7, Licensor shall
make available to Licensee in New York, on a basis sufficiently timely to meet
scheduled deliveries to customers, as stated in Section 5.2 above such samples,
patterns, sketches, photographs, technical specifications and other materials
and information relating to the design and manufacture of the Products (all such
materials and information are hereinafter referred to as "Technical
Information") as they may create in the normal course of their operations and as
may be reasonably necessary to enable Licensee to carry out its obligations
under this Agreement. Without limiting the generality of the foregoing, the
Technical Information will include the basic cuttings for the collections, the
patterns for each model, a sample of each model in base size, technical
specifications concerning the making and fitting of each model and information
concerning the selection, fabrication and treatment of materials and fabrics
(including the names and references of the manufacturers) and
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supplies and accessories (labels, designs, etc.). If Technical Information,
including finished samples, is shown to any third person with or without the
prior written consent of Licensor, Licensee shall take any and all action
necessary to ensure that such third person fully conforms to all applicable
terms and conditions hereof, specifically to avoid any unauthorized use of the
Technical Information. All such Technical Information shall remain the sole
property of Licensor and Licensee shall have no ownership interest therein.
Upon the expiration or earlier termination of this Agreement, all Technical
Information in the possession or under the control of Licensee shall be
immediately returned to Licensor. In order to reimburse Licensor for its costs,
and not as a purchase price or with any transfer of ownership, Licensee shall
pay to Licensor an amount equal to two and one half (2.5) times the ordinary
wholesale price for any samples so ordered, F.O.B. place of shipment, plus
shipping costs and duties, of all samples furnished to Licensee hereunder. Such
amounts shall be paid within thirty (30) days of delivery. Licensor shall not
request that Licensee make any material changes or modifications to products
designs approved by Licensor under this Agreement and any such changes shall be
the prospective only.
5.4 Archives
Licensor must keep a current archive of products previously offered
under the Marks in an accessible location in the New York Metropolitan area.
Licensor will maintain in the New York Metropolitan area at least one
representative of Licensor with authority to act for Licensor under this
Agreement and to facilitate consultation between Licensor and Licensee. Any
archive piece borrowed by Licensee from Licensor shall be logged by Licensor and
must be returned within three (3) months. Licensee acknowledges that the
failure to return any archive piece within the required time shall be
detrimental to Licensor, the Marks and the Products and may subject Licensee to
liability for damages to Licensor. Licensee may remove small pieces of fabric
from archival pieces for the purpose of sourcing the fabric necessary to
manufacture the Products. Licensee may not reproduce the products in the
archives without the prior written consent of Licensor which shall not be
arbitrarily withheld.
5.5 Product Development
Licensor will consult with, help and advise Licensee during the
product development process with regards to the proper execution of the product.
Licensor will review all garments style and fabric prototypes prior to
finalization and provide input Licensee at a time in the product development
process where garments are reasonably complete but the feasibility of
changes/modifications still exists.
5.6 Sample Approval
Prior to manufacturing, selling or distributing any products in any
seasonal collection, Licensee shall make available for inspection in New York by
Licensor CAD samples (computer assisted designed samples) with proposed colors
and fabrics, as well as samples of actual clothing items, when available after
the CADs have been reviewed, of each Products in any proposed seasonal
collection. Samples shall be made available sufficiently far in advance of
first manufacture to permit Licensee to make any changes requested by Licensor
and in no event less than three (3) weeks before first manufacture. Licensee
shall notify Licensor of the date on which samples are made available and of the
scheduled first production date. Licensor shall inspect said
11
samples and either approve or reject the same, such approval or rejection to be
done by Licensor, in writing, on each photograph or CAD provided by Licensee and
depicting each sample no later than five (5) days after the inspection date.
Any sample not rejected in a timely fashion shall be deemed approved. Once a
sample has been approved, Licensee shall not make any material changes (and
Licensor shall not require any changes) to the design thereof, including
materials, fabrics, colors and quality of workmanship, without Licensor's prior
written approval. All samples of products submitted to Licensor pursuant to
this Section 5.6 shall be provided at Licensee's sole cost and expense. No
products shall be displayed, manufactured, distributed (including offerings for
samples) and/or sold by Licensor unless such products are at least equal in
quality, workmanship, fit and design to the samples previously approved by
Licensor in accordance with this Section 5.6. All materials used shall conform
to the specifications indicated in the technical information concerning each
product approved provided by Licensor.
5.7 Quality Control
In order to control the production and quality of manufacturing,
Licensor may, at its option, send one (1) representative to Licensee's
facilities, five (5) times a year, (corresponding to the five fashion seasons).
Licensor shall be responsible for the cost of business class round-trip air fare
for such visits from Europe to the United States and for all lodging and food
expenses related to such visits. The Licensee may, at its option and at its
cost, send technicians to Licensor's facilities, in order to obtain any
information necessary to the realization of the collection (but without
prejudice to Licensor's obligation to provide any necessary Technical
Information in New York). Such visit shall be at a date to be agreed upon by
both parties, on or before the delivery of each collection. Nothing in this
Section shall grant Licensor the right to inspect or visit any portion of any
facility where Licensee conducts its other lines of business.
6. Protection of Technical Information
6.1 Licensee agrees that it shall treat all non-public information
relating to the design, manufacture, marketing and sale of the Products as
proprietary information of Licensor. No proprietary information other than
manufacturing specifications and finished samples, shall be shown to any third
party without the prior consent of Licensor. If technical information,
including finished samples, is shown to any third party with or without the
prior written consent of Licensor, Licensee shall take any and all reasonable
action to ensure that such third party fully conforms to all applicable terms
and conditions hereof, specifically to avoid any unauthorized use of the
technical information. Licensee shall use its reasonable efforts to ensure that
its employees, agents, subcontractors (if any) and others subject, directly or
indirectly, to its control, do not disclose or make any unauthorized use of any
technical information. Likewise Licensor shall treat all non-public information
relating to the manufacture, sourcing, marketing, forecasts and sale of the
products by Licensee and its agents and all business information related to the
boutique, as later defined in this Agreement as proprietary information of
Licensee. No proprietary information of one party shall be disclosed to any
third party or used for any purpose not related to this Agreement by the other
party.
6.2 Subject to the other provisions of this Agreement, any Designs and
other materials provided or approved by Licensor for use under this Agreement
shall remain the property of Licensor and are licensed hereunder solely and
exclusively for use in connection with the
12
manufacture and sale of the Products in the Territory. Licensor may use and
permit others to use said Designs and other material in any manner they desire,
provided that such use does not conflict with any rights granted to Licensee
hereunder. Licensee specifically acknowledges that such Designs and other
materials may be used by Licensor and other licensees on the Products in
jurisdictions outside the Territory and on products other than Products anywhere
in the world.
6.3 Licensee shall take all reasonable precautions to protect the secrecy
of the materials, samples, designs and Technical Information described in this
Section 6 prior to their commercial distribution or the showing of samples for
sale. All such Technical Information shall remain the sole property of Licensor
and Licensee shall have no ownership interest therein, subject to the second
sentence of Section 3.3. above. Upon the expiration or earlier termination of
this Agreement, all Technical Information in the possession or under the control
of Licensee shall be immediately returned to Licensor.
7. Manufacture
7.1 Licensor shall consult with Licensee regarding the manufacturing
process, methods of production, treatment, fabrics and technical specifications
necessary for the production of high quality products from designs approved by
Licensor. All such information shall be strictly confidential and shall not be
disclosed by Licensee nor its agents and/or employees without the prior written
consent of Licensor.
7.2 Subject to Section 7.2.1, the Products shall not be manufactured by
anyone other than Licensee and/or quality manufacturers chosen by Licensee and
not disapproved by Licensor or an affiliate thereof. Licensee shall take
reasonable and diligent steps necessary to ensure that such manufacturer fully
conforms to all applicable terms and conditions hereof, that said manufacturer
produces only those Products specifically ordered by Licensee and in the
quantities ordered without over-runs or extra labels, and, that said
manufacturer controls the manufacture and production to avoid any possible use
that might be detrimental to the Marks, or unauthorized use of the Technical
Information.
7.2.1 In order for Licensor to identify any manufacturers known to
Licensor to be objectionable, based on counterfeiting, parallel market sales
concerns, or other dishonest business practices. Licensee shall provide to
Licensor a list of its current manufacturers and of any new manufacturers. The
list shall be kept confidential by Licensor and shall not be used for any
purpose other than as relates to this Agreement. Licensor shall then indicate
to Licensee its disaproval, if any, of any manufacturer and Licensee shall make
reasonable efforts to discontinue its relationship with such manufacturer.
Should Licensee continue to work with such manufacturer, Licensee shall be held
responsible for any damages arising from such relationship notwithstanding
anything to the contrary stated in Section 25.3.
7.3 (a) In order to maintain the distinctiveness of the image, quality
and special characteristics of the Products, Licensor may recommend, but not
require, that Licensee use fabrics and yarns produced by manufacturers specified
by Licensor, so long as the quality of products and price and reasonable
delivery terms shall be equivalent to those offered by other manufacturers.
When Licensee elects to deal with such manufacturers, it shall also use its
reasonable commercial efforts to maintain the good commercial relationship with
these
13
manufacturers. In this regard, Licensee undertakes, except in the case of
defective low quality or untimely goods, not to make any changes or
cancellations of orders of such fabrics and yarns contrary to commercial usage
and prejudicial to the interest of Licensor.
(b) Certain lines of Products or certain particular Products are and
may in the future be fabricated in special fabrics and yarns, developed by
Licensor. These fabrics and yarns carry with them a particular name and are or
will be protected by the registration of a xxxx or fabrication patent. These
fabrics or yarns constitute an essential and distinctive element of such
Products and it is thereby necessary, to protect the originality and technical
components of such fabrics and yarns, to license a very limited number of
manufacturers with the right to use the technical components and the know-how to
produce these fabrics. Licensee shall consequently deal with certain
manufacturers designated by Licensor in order to manufacture such Products. A
copy of orders placed by Licensee with such manufacturers shall be sent at the
same time to Licensor. Licensee shall be entitled to quality of products and
price and delivery terms from such manufacturers equivalent to those given to
other licensees of Licensor outside the Territory. Licensee undertakes, except
in the case of defective poor quality or late delivery of goods to maintain a
good commercial relationship with these manufacturers and not to make any
changes or cancellations of orders of such fabrics and yarns contrary to
commercial usage and prejudicial to the interest of Licensor.
7.4 Licensor reserves the right to require Licensee to terminate a
manufacturer whose workmanship has suffered , in the reasonable opinion of
Licensor, a deterioration in quality which is not satisfactorily corrected
within thirty (30) days after notice thereof to Licensee, or any manufacturer
who, in Licensor's reasonable opinion fails to comply with any provision hereof
or whose conduct, if committed by Licensee, would constitute a breach of this
Agreement, provided that Licensor must make a reasonable allowance for
completion of current orders by the manufacturer.
7.5 No disapproved or otherwise defective Products shall be sold by
Licensee under or with any reference whatsoever to the Marks if it were
detrimental to the Marks. Should any Products manufactured and sold by Licensee
be defective, in the sole opinion of Licensor, Licensee shall, at its sole cost
and expense, take any and all reasonable action necessary to withdraw and remove
said Products from the market through repurchase or otherwise.
8. Advertising and Promotion
8.1 Throughout the duration of this Agreement, Licensee shall spend upon
advertising of the Products throughout the Territory an annual minimum of three
percent (3%) of Net Sales (The "Minimum Advertising Expenses") but in any event,
no less than Five hundred fifty thousand dollars ($550,000) in 1998 and $400,000
in 1999. In each subsequent year the Minimum Advertising Expenses shall be not
less than $400,000. Such Minimum Advertising Expense is an independent
obligation, and amounts spent on advertising by Licensee shall not be deducted
from Royalties nor from any other amounts due and owing from Licensee to
Licensor under this Agreement.
8.2 In addition to the Minimum Advertising Expenses, Licensee shall pay
for the expenses of an advertising agency of Licensor's choice in the United
States, in a monthly amount
14
of $ 5,000, paid to Licensor each month, and to the production costs of photos
and images, in an amount of $65,000, paid to Licensor twice per year. The
agency shall consider Licensee's input in creative matters with respect to
Girbaud products sold by Licensee. Licensee shall be allowed to use the
photographs and images developed by Licensor or its agents concerning the
Girbaud products, free of charge from Licensor. Licensor shall make reasonable
efforts to secure, at the time of original agreements with artists, agencies
and/or models, all rights for U.S. usage for such photographs and images.
However, Licensee shall be responsible for the direct payments of any usage
rights and/or costs to third party, if any are applicable. Licensor and
Licensee shall evaluate each calendar year the need for and reasonableness of
continuing the payment by Licensee referenced above in connection with the work
of such agency.
(a) In 1998 and in 1999, an annual minimum of $400,000 of the Minimum
Advertising Expenses shall be spent on direct advertising expenses for promotion
such as television, radio, printed press, billboards advertising, celebrity
endorsements, events sponsorships, in-store point of sale items and store
promotions at the exclusion of any other expenses.
(b) For the subsequent years, expenses for new shop-in-shop fixturing may
be part of the Minimum Advertising Expenses. At no time shall the participation
in the Fashion Shows as described in Section 10.1 below may be included in the
Minimum Advertising Expenses.
8.3 Licensee shall exercise every reasonable effort to promote and
advertise the Products throughout the Territory and shall, prior to the end of
each calendar year, submit to Licensor, in reasonable detail, proposed plans and
budgets for the subsequent annual promotional campaign. Licensor shall
cooperate, as may reasonably be required by Licensee, in furnishing, at cost,
such advertising and promotional material, as is available to Licensor and which
appears suitable, in Licensor's opinion, for the Territory. Licensor and
Licensee shall cooperate closely in the creation and execution of advertising
programs.
8.4 Licensor is responsible for, and will control the brand's strategic
positioning and the voice of the brand. Licensor will provide communication
guidelines to Licensee to help in developing communication execution. Licensee
shall submit to Licensor for review, prior to submission to the advertising
agency, any campaign briefing materials, and shall consult with Licensor before
accepting any creative response to such briefing materials. The Trademarks, the
visual representation, and the image of the Products shall be subject to written
approval by Licensor (which shall not be unreasonable withheld) prior to public
distribution or display in any medium provided, however, that any advertising or
promotional materials supplied by Licensor will not require its approval prior
to dissemination by Licensee, except as otherwise provided in this agreement.
All advertising campaigns in the Territory shall correspond to the international
advertising theme and image worldwide. Licensor will make available to Licensee
all advertising campaigns produced worldwide. The Licensee shall cause its
advertising staff and/or agency to consult with Licensor's designated
advertising agency and/or creative staff, at least twice a year, for a review of
Product image and with a view toward coordinating and enhancing worldwide
advertising strategy. Approved advertising and promotional materials shall not
be disapproved by Licensor for use within the same campaign.
8.5 Licensee shall submit to Licensor, for its prior approval, not to be
unreasonable withheld any and all advertising for any medium referring to the
Products before publication or
15
dissemination thereof. Should Licensor deem said materials appropriate for use
outside the Territory, it shall have the right to use the same, provided,
however, any additional costs incurred thereby, if any, for advertising agency
fees talent, residuals, copyright clearance, photographers fees or otherwise
shall be paid and secured by Licensor.
8.6 Licensee shall, on January 31st of each year, commencing January 31,
1999, inform Licensor of its expenditures in fulfillment of its advertising and
promotional obligations during the preceding year and shall account to Licensor
for the use thereof.
8.7 Failure on the part of Licensee to make the Minimum Advertising
Expenses required hereunder during any contract year shall constitute a material
breach hereof. Notwithstanding, Licensor may, at its sole discretion, permit
Licensee to cure such breach by either paying to Licensor the amount by which
the actual expenses fell short of the Minimum required or, by allowing Licensee
to increase its advertising obligations for the immediately subsequent year by
an amount equal to the deficiency.
8.7.1 Notwithstanding any other provision of this Agreement, Licensor
acknowledges and agrees that Licensee may primarily focus its advertising and
promotion of the Products on the Girbaud brand and is not required (i) to
implement or follow as its primary campaign for the products in the territory
the "BE" theme adopted by Licensor in other geographic areas or (ii) to use "BE'
as a permanent marking on the Products. However, "BE" should appear on
removable and/or disposable elements, such as: hand-tags, ribbons, trimmings,
badges, tear-off labels, packaging.
8.8 Licensee may request, with reasonable advance notice, and Licensor
shall then arrange, the participation of one or both of the designers, when
available, in certain social events. Such participation shall be at licensee's
expense with first class hotels, air travel and local transportation. The
licensee shall pay for travel expenses comprising round-trip first class airline
tickets for two persons, twice a year, between Europe and the US, for the
Designers and/or their collaborators (Total 4 tickets per year). Such expenses
shall also include, for any trips in the US outside New York City, first class
air travel, first class local transportation and first class hotels.
8.9 Flagship Boutique
(a) Licensee agrees to open a flagship store for sale of Licensor's men's
and women's lines and other Girbaud licensed merchandise (the "Boutique") in a
mutually agreed location in Manhattan, New York City, with a target selling
space of no less than 800 square meters. The parties will cooperate in good
faith to make efforts to identify and select the space by March 15, 1998, with
an opening target date for the Boutique of September 30, 1998. Licensor
recognizes that factors outside of the control of Licensee and construction
requirements may cause the Boutique opening to occur at a later date.
(b) The presentation, organization and decoration of the Boutique shall be
similar to the Paris Girbaud Store, at rue Xxxxxxx Xxxxxx ("the Paris Girbaud
Store"), and on three levels above ground if at the currently selected location
at West Broadway and Xxxxxx Street. Licensor grants to Licensee and the
contractors in the project the rights necessary to imitate the
16
trade dress of the Paris Girbaud Store. The architect for the Boutique shall be
Xxxxxxxx Xxxxxxxx (provided he agrees to be available and can perform in
accordance with Licensee's requirements) who will be assisted by Xxxxxxx
Xxxxxxxxxxx and an American architect mutually agreed to by Licensor and
Licensee. Licensee is not responsible for delays or other nonperformance caused
by these individuals in the performance of their duties. The final decision on
the design of the Boutique shall be mutually agreed to by Licensor and Licensee.
Only Girbaud branded products may be sold in the Boutique. Two annual Europe/US
trips, business class for up to 2 persons in charge of the Service Boutique,
shall be paid by Licensee.
(c) Licensee shall have the sole right to negotiate the terms for the
Boutique lease with the relevant landlord, and Licensor shall reasonably
cooperate with Licensee in lease negotiations as necessary and provide
information required by the landlord. Licensee shall have the right to relocate
the Boutique in the event the lease is lost or the terms thereof become
unreasonable in the future. In the event of termination of this Agreement,
Licensee shall be provided a commercially reasonable phase out period to close
the Boutique, negotiate a termination of the lease with the landlord, or take
out the Girbaud branding so as to maintain the facility for other purposes.
(d) Licensor agrees, for itself and all related companies, that they will
not permit any other party to open a Girbaud apparel store in New York City for
as long as the Boutique is open. It is understood that other Girbaud products
such as eyewear, footwear or other accessories or products may be sold in other
stores.
(e) Licensee will make all reasonable efforts (subject to product
availability and reasonableness of terms) to have at least 30% of the products
at the Boutique (measured by retail dollar volume) be products sold by Girbaud
entities in European markets, including (but not necessarily all of)
Jeans/Casual European products, the SPQRCITY line, underwear, shoes (France),
children's wear, and accessories. Licensee will also make its reasonable
efforts to display a representative collection of SPQRCITY Men and SPQRCITY
Women consistent with the role of the store as a flagship location, similar to
the presentation and space allocation in the Paris Girbaud store. Licensor
shall ensure that both the licensees of these European products (including any
Girbaud affiliated entities) and other Girbaud licensees make Girbaud products
available to Licensee, in a timely manner and on reasonable terms, for sale at
the Boutique and at a discount of at least 10 percent from the wholesale price
for those products.
(f) Licensee shall have the right to close the Boutique, without being in
default under this Agreement, in the event the Boutique suffers operational
losses in excess of One and one half Million Dollars ($1,500,000) in any
three-year period of the term. Licensor shall be consulted regularly in the
operation of the Boutique with the advice of the Designers. Before the third
anniversary of operation of the Boutique, Licensor shall have the option to make
an investment in the Boutique on terms to be agreed upon by the parties.
(g) Licensee shall send to Licensor sales and inventory reports for the
Boutique on a quarterly basis and internally calculated financial results twice
per year.
9. Sales
9.1 Licensee shall keep Licensor fully and promptly informed of all its
successive price lists and sales policies relating to the Products which
information shall be kept by Licensor in
17
strict confidence and not be used for any purpose not relating to this
Agreement. Licensee hereby acknowledges that repeated untimely deliveries by
Licensee to its customers (except for force majeure) and/or the delivery,
distribution and sale of defective Products would adversely affect the
reputation of the Licensor and the prestige of the Marks and shall constitute a
material breach of this Agreement.
9.2 All Products manufactured, distributed or sold by Licensee shall be
marked, labeled, packaged, advertised, distributed and sold in accordance with
the terms and conditions of this Agreement and in accordance with all laws,
rules and regulations applicable within the Territory and any subdivision
thereof and, in such a manner as to not mislead or deceive the public.
10. Fashion Shows
10.1 Licensee shall participate in and contribute to the costs and expenses
of two (2) annual fashion shows ("the Fashion Shows"). Licensee shall, within
ten (10) business days of receipt of the invoice pay to Licensor an amount of
$75,000 twice per Calendar Year, the first of such shows being scheduled for
April 1998, in New York City, provided that Licensor actually implements the
Fashion Shows. Licensee's obligation to participate in the Fashion Shows by
paying the amounts indicated above shall be an independent obligation and no
sums incurred by Licensee under this provision shall be deducted from Royalties
payable to Licensor, nor from any other amounts due and owing from Licensee to
Licensor under the terms of this Agreement.
This participation concerns international fashion shows that may take place
in America, Europe or Asia and which are intended to develop the image of the
product and of the trademark. At these Fashion Shows, the clothes of the
different lines, manufactured by different licensees, shall be presented. The
Licensee shall provide free of charge the clothes for the Fashion Shows.
10.2 Licensee may participate, at its discretion, in other major trade
shows, which participation shall be at its sole cost and expense. Any
expenditures so incurred shall be considered included in the Minimum
Advertising Expenses. Should Licensor organize cooperative exhibitions at such
other trade shows in the Territory with its licensees, Licensee shall
participate in such shows and shall share in the cost and expense thereof in an
amount representing its pro rata cost and expense, which amount shall be agreed
upon prior to the event.
11. Access to Books and Records
11.1 Licensee shall, at its sole cost and expense, maintain complete and
accurate sets of books and records (including the originals or copies of
documents supporting entries herein) covering all transactions arising out of,
in connection with or relating to this Agreement.
11.2 Licensor, and/or, its duly authorized representatives shall have the
right (subject to confidentiality obligations reasonable acceptable to Licensee)
upon five (5) days, prior written notice, to examine and audit said books,
records and all other documents in Licensee's possession or under Licensee's
control relating to the subject matter of and terms of this Agreement. Said
right shall be exercisable during normal business hours once each Calendar Year
during the term hereof and, once a year during the three Calendar Years
immediately following the expiration or
18
earlier termination hereof. All said books, records and documents shall be kept
and made accessible during the full term hereof and for three years thereafter.
11.3 Any auditor designated by Licensor to audit and examine Licensee's
books, records and documents, shall be approved in advance by Licensee, such
approval not to be unreasonably withheld. In the event that an audit or
examination of Licensee's books, records and documents reveals an underpayment
of any Royalties due hereunder, Licensee shall immediately pay to Licensor the
amount of such deficiency, plus interest thereon from the date said Royalties
were due at the interest sale rate specified in Section 4.8 hereof.
11.4 In the event that an audit of Licensee's books and records shall
reveal that Licensee's Royalties were underpaid by an amount equal to 5% or more
in any year, Licensee shall bear the cost of said audit.
12. Protection of the Marks
12.1 Licensor represents that the Marks are and shall be during the term of
this Agreement valid and enforceable trademarks in the Territory and the
Manufacturing Countries; that they are owned by Licensor or that Licensor is
authorized and empowered by the registered owner to grant the License herein
contained and that this Agreement does not conflict with any other Agreement to
which Licensor is a party, that the use of the Marks in the Territory will not
infringe upon any other trademark in the Territory and that the Licensor will
defend, indemnify and hold harmless Licensee against any claim against Licensee
(including by its manufacturers and customers) in connection with the use of the
Marks and any damages paid in settlement or as part of a judgment in such claim
(including attorney's fees and costs).
12.2 Licensee shall promptly notify Licensor, in writing, of any
infringement, threatened infringement, or otherwise unauthorized use or
threatened use of the Marks, or confusingly similar trademarks or tradenames,
whether in connection with the Products or otherwise, of which it may have
knowledge or suspicion. In the event of an infringement, threatened
infringement, or otherwise unauthorized use of the Marks, or confusingly similar
trademarks or tradenames, in the Territory or the Manufacturing Countries,
Licensee shall take such immediate action as may reasonably be necessary to
protect the Xxxx(s) and the rights of the Licensor therein, until Licensor is in
a position to take whatever action is required (provided that Licensor must act
diligently and promptly). Licensor and Licensee shall mutually decide what
actions shall be taken, including any actions in collaboration with
investigators or US Customs, cease and desist correspondence, and application
for injunctive relief, and for such purpose shall use the same counsel who
handles the Girbaud Trademarks matters unless otherwise agreed by both parties,
and, in such case, Licensee shall pay one half of the cost and expense incurred
in such actions, in the Territory or the Manufacturing Countries, up to and
including an amount equal to 0.25% of net sales payable for each year during
which any such actions are taken, brought and/or pending, within thirty (30)
days of receipt of the documented invoice. Licensor warrants payment of the
balance by Licensor. In the event of an award of monetary damages, the proceeds
thereof shall be shared pro rata to the expenses paid by the parties. Licensee
shall abide by regulations, laws and practices applicable to the Products in
force or use in the Territory in order to safeguard Licensor's rights to the
Marks.
19
12.3 Licensee shall be liable to Licensor for any unauthorized manufacture,
sale and/or use in the Territory or outside the Territory by itself and shall
cooperate with Licensor in any action based upon the unauthorized manufacture,
sale and/or use in the Territory or outside the Territory by any of Licensee's
manufacturers and suppliers of products, labels and tags bearing the Xxxx. At
Licensor's request, Licensee shall furnish Licensor with full documentation
evidencing the control and use of its labels including purchase orders and other
agreements between it and its manufacturers, if any. In the event the parties
determine it is necessary to terminate a relationship with a manufacturer who
has infringed the Xxxx, Licensee will terminate the relationship as soon as
commercially feasible allowing for completion of pending orders, and will not
place any new orders with that manufacturer.
12.4 Upon the expiration or earlier termination of this Agreement, Licensee
shall immediately and absolutely cease and discontinue the use of the Marks in
any manner or form whatsoever subject, however, to the provisions of Section 13
hereof.
13. Termination
13.1 In the event of a breach of a payment obligation by Licensee under
this Agreement not cured in all material respects within ten (10) days from the
receipt of a written notice thereof, or in the event of any other breach of this
Agreement by Licensee not cured in all material respects within forty five days
from the date of receipt of written notice thereof, this Agreement may be
terminated by the Licensor. The exercise or failure to exercise the
aforementioned right of termination during an extended period of time shall not
be considered a waiver by Licensor of any right to terminate this Agreement nor
of any other legal or equitable rights and remedies. A good faith payment
dispute shall not be deemed a breach of this Agreement by Licensee. In the
event of a breach of this Agreement by Licensor not cured in all material
respects within forty-five (45) days from the date of receipt of written notice
thereof, this Agreement may be terminated by the Licensee. The exercise or
failure to exercise the aforementioned right of termination during an extended
period of time shall not be considered a waiver by Licensee or any right to
terminate this Agreement nor of any other legal or equitable rights and
remedies.
13.2 This Agreement shall immediately terminate and, Licensor shall be
relieved of all liability to Licensee, if Licensee: (i) admits in writing its
inability, or is unable, to pay its debts as they mature, (ii) makes a general
assignment for the benefit of creditors, (iii) is adjudicated a bankrupt or
files a petition or answer, seeking reorganization or an arrangement with
creditors, (iv) files a petition or otherwise avails itself of any bankruptcy or
insolvency law or statute of any country or any state or subdivision thereof,
now or hereafter in effect, (v) suffers a petition or proceeding filed against
it under any provision of the Bankruptcy Act or any other insolvency law or
statute of any country or any state or subdivision thereof, which petition or
proceeding is not dismissed within sixty (60) days after the commencement
thereof, (vi) has a receiver, trustee, custodian, conservator or other person
appointed by any court to take charge of its affairs or assets or business and
such appointment is not vacated or discharged within sixty (60) days thereafter,
or (vii) discontinues its business as it relates to the Products or suspends it,
for whatever cause, for more than 120 consecutive days.
14. Remaining Inventory
20
14.1 Upon the expiration or earlier termination of this Agreement, for any
reason whatsoever, Licensee shall, within thirty (30) days thereof, deliver to
Licensor a complete and accurate schedule of Licensee's inventory of Products,
work in progress and raw materials. Such schedule shall be prepared as of the
close of business on the date of such termination.
14.2 Licensor shall thereupon have the option, exercisable by written
notice delivered to Licensee within thirty (30) days of receipt of the schedule
of inventory, to purchase any or all of the inventory for an amount equal to
Licensee's actual cost, F.O.B. factory or LDP with freight or warehouse, as
defined according to Generally Accepted Accounting Principles of the United
States. Should Licensor send such notice, Licensee will ship to Licensor all
of the inventory specified therein, within thirty (30) days of receipt thereof
for inventory located in Licensee's facilities, or, for all other inventory,
promptly thereafter but no more than forty five (45) thereafter. Licensor shall
pay Licensee for such inventory within thirty (30) days of receipt.
14.3 In the event that Licensor elects not to exercise its option to
purchase the remaining inventory, Licensee shall have a period of six (6) months
from the effective date of termination to complete work in progress and to sell
and deliver to other purchasers its remaining inventory under Licensor's Marks
on a non-exclusive basis. Licensee will make its reasonable effort to sell only
to the previous season's customers and to sell only at regular prices.
Royalties on said sales shall be due on the 30th day following the sale thereof.
14.4 The right provided immediately above shall only apply to the remaining
inventory of Products as are in good saleable condition. Licensee shall not
commence the manufacture of Products during said period and, at the end of such
six (6) month period, shall not sell any of its then remaining inventory, unless
completely debranded by the removal of all labels, tags, lining, embroidery
which identifies the Xxxx(s).
14.5 If termination is due to the uncured defective quality of the Products
manufactured, imported, sold or distributed by Licensee or the unauthorized use
of Licensor's Marks by Licensee or its manufacturers, Licensee shall be deemed
to have waived the provisions of this Section 14 and shall not sell or
distribute any remaining inventory, whatsoever, unless completely debranded.
14.6 All imprints, lettering, stationery, tags, labels, packaging, lining,
embroidery or other reproductions of or reference to the Marks shall be removed
from all inventory remaining after such six (6) month period and shall be
immediately returned to Licensor at no charge or shall be destroyed together
with such remaining inventory which cannot be debranded. Either operation shall
be conducted under the control of Licensor. In the event that Licensee shall be
deemed to have waived the six (6) month inventory liquidation period, as
provided in Section 14.3 above, the provisions of this Section 14.6 shall be
applicable immediately upon receipt of the Notice of Termination.
14.7 Upon the expiration or earlier termination of this Agreement, for any
reason whatsoever, all rights of Licensee under this Agreement shall terminate
forthwith and all Royalties on sales theretofore made shall become immediately
due and payable. Licensee shall, subject to the provisions of Section 14.3,
immediately discontinue all use of the Marks, any imitation or simulation
thereof or any Marks similar thereto (subject to the second sentence of Section
3.3
21
above) and shall promptly transfer to Licensor, at cost, all registrations,
filings, and rights with regard to the Marks it may have had.
14.8 Upon the expiration or earlier termination of this Agreement, Licensee
shall deliver to Licensor, freight and insurance charges at Licensee's expense
unless Licensor's default or its notice of non-renewal has caused such
termination, all technical information, fabric production information, patterns,
markers (provided that markers and graded patterns, with respect to which
Licensee has not recovered the value thereof, shall be purchased from Licensee
by Licensor at original invoice cost), sketches, designs, colors and the like in
its possession or control, designed or approved by Licensor or its duly
authorized representatives, and, at cost, all samples, labels, tags, packaging
material, business supplies and advertising and promotional materials bearing
the Marks in Licensee's possession or control.
15. Force Majeure
15.1 Neither party shall be responsible for any delay of failure in
performance of any part of this Agreement to the extent that such delay of
failure is caused by fire, flood, explosion, war, embargo, labor problems,
shortage, government requirement, civil or military authority, act of God, act
of omission of carriers or other similar causes beyond its control. If any such
event of force majeure occurs, the party delayed or unable to perform shall give
immediate notice to the other party, and shall resume performance once the
condition cases with an option in the affected party to extend the period of
this Agreement up to the length of time the condition endured. During the event
of force majeure the parties shall consult with each other regarding efforts to
mitigate the force majeure and continue performance hereunder.
15.2 Licensor shall have the right to terminate this Agreement in whole or
as to a portion thereof without further liability by Licensee:
(a) In the event that the manufacturing and/or sales operations of
Licensee are suspended or disrupted because of a recognized cause of force
majeure (including strikes, lockouts, war, natural disaster or other similar
cause), and should such suspension or disruption last for a consecutive period
of one hundred and eighty (180) days within any six (6) month period, unless
Licensee shall forthwith take affirmative steps to rectify the situation, except
that if it is apparent at the time of such suspension or disruption that it
cannot be rectified within the one hundred and eighty (180) day period, Licensor
may terminate forthwith.
(b) In the event that payment to Licensor of any Royalties or other
sums due under this Agreement is prohibited or otherwise made impossible for a
period of ninety (90) days by the laws and/or regulations in effect in the
Territory or any portion thereof.
16. Assignment, Sublicenses
16.1 The License and rights granted hereunder are personal in nature.
Licensee recognizes and acknowledges that Licensor has agreed to contract with
Licensee in reliance upon the experience, reputation and personal qualities of
the management and shareholders of Licensee. Licensor shall have the right to
terminate this Agreement in the event Licensee (or an authorized assignee or
successor under the control of Licensee) shall no longer be under the control of
22
Licensee. Licensee shall not sell, transfer, sublicense or assign its rights
and interest hereunder, without the prior written consent of Licensor, which
consent shall not be unreasonably withheld; provided, however, that Licensee
shall be permitted, upon notice to Licensor, to transfer, sublicense or assign
its rights and interest hereunder to any corporation or other legal entity which
is under common control with Licensee. For the purpose of this Section 16,
"Control", shall mean majority ownership.
16.2 Any sale or other transfer of all or a majority of the outstanding
capital stock of Licensee, excluding sales of capital stock of Licensee in a
public offering that widely distributes such stock, but, including specifically,
without limitation, any merger, consolidation or similar combination, shall be
deemed an assignment of the Licensee's rights, interest and obligations under
this Agreement. However, an assignment to an entity controlled by Licensee
shall be permitted.
16.3 A sale or other transfer of all or substantially all of the assets of
Licensee shall be deemed an assignment of Licensee's rights and interest under
this Agreement, but such an assignment to an entity controlled by Licensee shall
be permitted.
16.4 Licensor shall, with the prior written consent of Licensee, which
consent shall not be unreasonably withheld (except as otherwise provided in this
Section 16) have a right to sell, transfer, lease or assign its rights and
interest in this Agreement, provided that no such consent shall be required in
the case of a sale, transfer, lease or assignment by Licensor to a corporation
in which Licensor beneficially own a majority of the voting stock, and provided
further, that Licensor hereby agree and acknowledge that their services are
personal in nature and essential to this Agreement. Sublicensing of the
Licensed Marks, Products and/or Territories shall not be permitted without the
express prior written consent of Licensor (but this does not prohibit the
subcontracting of manufacturing and other production tasks by Licensee).
17. Arbitration
17.1 Any claim controversy arising out of or relating to this Agreement
shall be resolved by arbitration in the City of New York pursuant to the rules
then obtaining of the American Arbitration Association. The panel of
Arbitrators appointed to settle any controversy or claim shall consist of three
(3) arbitrators experienced in agreements of this type.
17.2 The arbitrators sitting in any such controversy shall have no power or
jurisdiction to alter or modify any express provision of this Agreement or to
make any award which by its terms effects such alteration or modification.
17.3 The parties consent for award enforcement purposes to the jurisdiction
of the appropriate state and/or federal courts within the State of New York and
further consent that any demand for arbitration or any process or notice of
motion or other application to the court or a judge thereof, in connection with
the same, may be served in or out of the State of New York, by registered mail
or by personal service, provided a reasonable time for appearance is allowed.
17.4 The provision for arbitration herein shall not be deemed a waiver of
the rights of either party to any provisional remedy provided under state or
federal law. It is agreed that in the
23
event of any violation hereof, the other party hereto shall have the right to
seek a preliminary injunction enjoining any further violation of this Agreement
pending arbitration.
18. Relationship
Nothing herein shall create or be deemed to create any agency, partnership,
joint venture or other similar relationship between the parties hereto.
Licensee shall not represent itself as the legal representative, agent or
partner of Licensor and shall have no right to create or assume any obligations
express or implied, on behalf of Licensor.
19. Merger
This Agreement sets forth the entire and complete Agreement among the
parties hereto with respect to its subject matter. This Agreement supersedes
and annuls all prior understandings, arrangements and agreements, oral or
written, between the parties relating to its subject matter. Neither this
Agreement nor any provision hereof may be modified, waived or discharged except
by subsequent written instrument signed by each party.
20. Severability
If for any reason whatsoever, any provision of this Agreement shall be
declared invalid, illegal or unenforceable, in whole or in part, such provision
shall be ineffective to the extent of such invalidity, illegality or
unenforceability without effecting the validity, legality or enforceability of
the remaining provisions hereof or any other portion thereof not declared
illegal or unenforceable shall remain in full force and effect.
21. Reversion of Rights and Territories
Upon the expiration or earlier termination of this Agreement, and subject
to the other provisions of this Agreement, all rights with respect to the Marks,
Products and Territory shall immediately revert to Licensor.
22. Remedies and Waivers
No failure on the part of the Licensor or Licensee to exercise, and no
delay on its part in exercising any right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy. The rights and remedies provided herein are
cumulative and are not exclusive of any other rights or remedies provided by law
or in equity.
23. Notices
All reports, approvals and notices required or permitted to be given under
this Agreement shall, unless specifically provided otherwise in this Agreement,
be deemed to have been given if mailed by (i) registered or certified mail,
return receipt requested (if such service is available), postage prepaid, or
(ii) telecopy, receipt confirmed, and follow up hard copy by overnight express
24
to the party concerned at its address indicated below (or at such other address
or addresses as any party hereto may from time to time respectively designate by
notice in writing to the other party).
If to Licensor, to: LATITUDE LICENSING CORP.
00 Xxxxxxxxx Xxxxx - Xxxxx 000
Xxxxxxxxxx, XX 00000
with a copy to: XXXXXX & MAYNADIER, LLC.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
If to Licensee, to: I.C. XXXXXX AND COMPANY, L.P.
000 Xxxxx Xxxxxx - Xxxxx 0000- Xxx Xxxx, XX 00000
Attn.: Chairman and Co-CEO
with a copy to: I.C. XXXXXX AND COMPANY, L.P.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn.: President and Co-CEO
with a copy to: PIPER AND MARBURY - Attn: Xxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxxxx Center - 00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xx 00000
24. Governing Law
This Agreement shall be construed, and interpreted in accordance with and
as governed by the laws of the State of New York, without regard to the conflict
of laws provisions thereof.
25. Indemnification and Insurance
25.1 Licensee does hereby indemnify and hold harmless Licensor from and
against any and all losses, liability, damages and expenses (including
reasonable attorneys fees and expenses) which it may incur or be obligated to
pay as a result of or in defending any action, claim or proceeding against
Licensor, for or by reason of any acts or omissions committed or suffered by
Licensee or any of its servants, agents or employees in connection with
Licensee's performance of this Agreement. Licensee shall immediately notify
Licensor of any claim or law suit seeking damages in excess of $100,000. The
provisions of this Section and Licensee's obligations hereunder shall survive,
the expiration or earlier termination of this Agreement. In the event that a
judgment, levy, attachment or other seizure is entered against Licensor arising
from any claim as to which indemnification is provided hereunder, Licensor shall
promptly post the necessary bond to prevent execution against any property of
Licensor.
25.2 Licensee shall procure and maintain in full force and effect, at its
sole cost and expense, at all times during which Products are being sold, a
product liability insurance policy with respect to the Products with a limit of
liability of not less than $1,000,000. Such insurance policy shall include
Licensor as an additional insured thereunder and shall provide for at least
25
thirty (30) days prior written notice to Licensor of the cancellation or
substantial modification thereof. Such insurance may be obtained by Licensee in
conjunction with a policy of products liability insurance which covers products
other than the Products. Licensee will deliver a certificate of such insurance
to Licensor promptly upon issuance of said insurance policy and shall, from time
to time upon reasonable request by Licensor, promptly furnish to Licensor
evidence of the maintenance of said insurance policy. Likewise without
limitation of its indemnification obligations under this Agreement, Licensor
shall procure and maintain in full force and effect, at its sole cost and
expense, at all times during which Products are being sold, a product liability
insurance policy with respect to potential liability under this Agreement with a
limit of liability of not less that $1,000,000.
26. Plural, Singular
Whenever the singular is used it shall include the plural and vice versa.
27. Headings
The headings of the Articles and Paragraphs of this Agreement are for
convenience only and shall in no way be deemed to limit or affect the terms or
conditions of this Agreement.
28 . Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.222922
29. Limitation of Liability
Except with respect to indemnification obligations due to third
parties and to the provisions of Section 7.2.1 herein, neither party shall be
liable to the other for any special, indirect, consequential or similar damages
arising from a breach of this Agreement or of any order hereunder even if
advised of the possibility of such damages.
IN WITNESS WHEREOF, the parties have executed, by their respective duly
authorized officers, this Agreement as of the day and year first above written.
LATITUDE LICENSING CORP. I.C. XXXXXX AND COMPANY, L.P.
By: /s/ Francois Girbaud By: /s/ Xxxxxx X. Xxxxx
----------------------- -----------------------
Name: Name: Xxxxxx X. Xxxxx
Title: Title: Chairman and Co-CEO
Xxxxx\womeagr.doc
26
TRADEMARK LICENSE
AND TECHNICAL ASSISTANCE AGREEMENT
FOR WOMEN'S COLLECTIONS
1. Grant......................................................................2
2. Term and Territory.........................................................4
3. Use of the Trademarks......................................................4
4. Royalties..................................................................7
5. Designs and Technical Assistance...........................................9
6. Protection of Technical Information.......................................12
7. Manufacture...............................................................13
8. Advertising and Promotion.................................................14
10. Fashion Shows.............................................................18
11. Access to Books and Records...............................................18
12. Protection of the Marks...................................................19
13. Termination...............................................................20
14. Remaining Inventory.......................................................20
15. Force Majeure.............................................................22
16. Assignment, Sublicenses...................................................22
17. Arbitration...............................................................24
18. Relationship..............................................................24
19. Merger....................................................................24
20. Severability..............................................................24
21. Reversion of Rights and Territories.......................................24
22. Remedies and Waivers......................................................24
23. Notices...................................................................24
27
24. Governing Law.............................................................25
25. Indemnification and Insurance.............................................25
26. Plural, Singular..........................................................26
27. Headings..................................................................26
28 . Counterparts.............................................................26
29. Limitation of Liability...................................................26
28
