AMENDMENT NO. 1 TO LICENSE AGREEMENTS
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THIS AMENDMENT MADE IN XXX XXXX XX XXX XXXX, XXXXX XX XXX XXXX BY
AND BETWEEN HOUBIGANT, INC., a Delaware corporation, c/o Kaye, Scholer, Fierman,
Xxxx & Handler, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (hereinafter referred
to as the "Grantor"), and XXXX PERFUMES CORP., a Delaware corporation (f/k/a New
Xxxx Acquisition Corp.), as the successor-in-interest, by operation of law, of
Parfums Parquet, Inc., a Delaware corporation, a successor-in-interest to New
Fragrance License Corp., pursuant to a Plan and Agreement of Merger, dated as of
Xxxxx 00, 0000 ("XXX"), 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (hereinafter
referred to as "PPI"), and HOUBIGANT (1995) LIMITEE, a Canadian corporation,
duly incorporated, and successor-in-interest to 3088766 Canada Ltd., having a
principal place of business at 0000 Xxx Xxxxxx Xxxxx, (Xxxxxx) X0X 0X0 Xxxxxx
("Limitee" and together with PPI the "Licensee").
WHEREAS, the Grantor and the Licensee are parties to a certain
license agreement dated May, 1994, as amended, to manufacture and distribute
certain fragrances including Chantilly (the "Fragrances") in the western
hemisphere (excluding Canada) (the "Western Hemisphere License Agreement").
WHEREAS, the Grantor and the Licensee are parties to a certain
license agreement dated August 10, 1994, as amended, to manufacture and
distribute the Fragrances in the balance of the world (excluding Canada) (the
"Worldwide License Agreement").
WHEREAS, Limitee is the assignee from ACB Mercantile Inc. ("ACB") of
a certain license agreement dated April 1, 1993 between Grantor and ACB, as
amended, granting Limitee as ACB's assignee a license to manufacture and
distribute the Fragrances in Canada ("Old License Agreement"), or the License
Agreement, dated __________, 1996, between Houbigant (1995) Limitee and
Houbigant, Inc., as amended, with respect to the Canadian territory, which
agreement will replace the Old License Agreement (together with the Old License
Agreement hereinafter referred to as the "Canadian License" and together with
the Western Hemisphere License Agreement and the Worldwide License Agreement,
the "License Agreements"). Capitalized terms used but not defined herein have
the meanings given them in the respective License Agreement.
WHEREAS, the parties desire to amend each of the License Agreements
to reflect an addition to the schedule of Trade Marks annexed to each of the
License Agreements.
WHEREAS, the parties wish to provide for a modification of the
royalty payments to be due under the License Agreements with respect to a new
line of products to be marketed under the name "White Chantilly" by the Licensee
("White Chantilly Products").
THEREFORE, the parties hereto agree with respect to White Chantilly
as follows:
1. The definition of the term "Trade Marks" in each of the License
Agreements is hereby amended by the addition of the words "White Chantilly" as a
trade xxxx, and the definition of the term "Products" in each of the License
Agreements shall be deemed to include White Chantilly Products.
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2. Anything to the contrary in the License Agreements
notwithstanding, Royalties shall be payable to the Grantor under each License
Agreement with respect to sales of White Chantilly Products if and when and to
the extent that the cumulative amount of the Licensee's Net Profit (as defined
in paragraph "3" below), if any, exceeds the Licensee's Investment which
Licensee represents and Grantor accepts being $532,000.
3. "Net Profit" for any period means the excess, if any, of all
sales of White Chantilly Products for that period determined in accordance with
generally accepted accounting principles (less all applicable returns,
allowances and reserves (including reserves for uncollectibles)) ("Net Sales")
over the sum of the following items for or with respect to that period (i) all
Direct Costs, (ii) the portion of Overhead allocated to the White Chantilly
Products and (iii) all applicable sales taxes (as defined in paragraph "4"
below) (collectively, the "Allocated Overhead Portion").
For this purpose:
(i) "Direct Costs" means all variable and fixed costs that directly
benefit and exclusively relate to sales of or sales activities relating to White
Chantilly Products, including but not limited to all costs of sales including
direct labor and direct product costs (such as costs of essential oils and other
components, and of bottling and packaging materials) and expenditures relating
to all shipping and handling, promotion and advertising (including but not
limited to cash and trade discounts, trade programs, national, local and
international advertising (including physical material used for broadcasting or
print promotion expenses (including the preparation and distribution of
promotional material) demonstration allowances, testers, promotion
(ii) "Overhead" means all of the costs and expenses of the Licensee
and its Consolidated Group, other than their Investment and Direct Costs, but
including but not limited to all selling, general and administrative expenses
(such as salespersons' salaries and commissions and related payroll taxes,
general advertising, rent, travel and entertainment, depreciation, amortization,
corporate and administrative salaries, employer payroll taxes, interest accrued
or paid, accounting, auditing and legal expenses).
4. The parties agree that the Allocated Overhead Portion shall be
20% of the Net Sales of White Chantilly Products for each of the first and
second 12 month periods following the initial shipment of White Chantilly
Products and for each 12 month period thereafter shall be 15% of the net sales
of White Chantilly Products.
5. The Licensee shall deliver to the Grantor, within 30 days after
the close of each quarterly period ending on a March 31, June 30, September 30
and December 31 as long as any License Agreement remains in effect (commencing
with the quarterly period ending December 31, 1995), a written report showing,
in reasonable detail, the calculation of the Licensee's cumulative Net Profit,
if any, for that quarter (provided that the first such report shall include the
period from commencement of activities relating to White Chantilly Products
through December 31, 1995).
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6. Except as expressly set forth above, the License Agreements shall
remain in full force and effect and unaffected hereby.
IN WITNESS WHEREOF, the parties have caused this amendment to be
executed as of July __, 1996.
HOUBIGANT, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chief Executive Officer
XXXX PERFUMS, CORP.
By: /s/ Xxxxxx XxXxxxxxx
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Xxxxxx X. XxXxxxxxx
Group Vice President
Consented to:
THE CHASE MANHATTAN BANK, formerly known as Chemical Bank, as
successor-in-interest to Chemical Bank of New Jersey, N.A., individually and as
Collateral Agent for Itself and Fleet Bank,
national association
By: /s/ Xxxxxx Xxxx
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Xxxxxx X. Xxxx
Vice President
FLEET BANK, national association as successor-in-
interest to NatWest Bank, N.A. (f/k/a National
WestminsterBank USA)
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
Vice President
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