EXHIBIT 10.4
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LICENSE AGREEMENT
XXXXX XXXXXX MANUFACTURING B.V.
AND
USA OPTICAL DISTRIBUTORS, INC.
Certain portions of this agreement and the amendments thereto marked by
[***]have been omitted pursuant to previously granted Orders Granting
Confidential Treatment Under the Securities Exchange Act of 1934 and were filed
separately with the Securities and Exchange Commission pursuant to the initial
requests for confidential treatment.
LICENSE AGREEMENT
THIS AGREEMENT is made the 28th day of May, 1991.
BETWEEN
1. XXXXX ASHLEY MANUFACTURING B.V., a company incorporated in the Netherlands
and having its principal place of business at Xxxxxxxxxxxxx 00, 0000 XX
Xxxxxxxxx, Xxx Xxxxxxxxxxx (hereinafter called "the Licensor") of the one
part; and
2. USA OPTICAL DISTRIBUTORS, INC., a company incorporated in the State of
California having its principal office at 000X Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, X.X.X. (hereinafter called "the Licensee") of the
other part
WHEREAS:
1. The Licensor is a member of the Xxxxx Xxxxxx group of companies which
designs, manufactures and retails home furnishing products and garments,
marketed and sold in many countries of the world, including North America.
2. The Licensor is the registered proprietor of the trademarks XXXXX ASHLEY
and a distinctive oval device.
3. The Licensor is the proprietor of a wide range of distinctive textile
designs and patterns featured on Xxxxx Xxxxxx home furniture products and
garments.
4. The Licensee is an established designer, importer and wholesaler of
fashionable eyeglass frames, including in its range of eyewear styles a
portfolio of recognized brand names.
5. The Licensee now wishes to design, import and sell in North America certain
styles of eyeglass frames under the XXXXX XXXXXX xxxxx name.
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IT IS THEREFORE AGREED AND DECLARED AS FOLLOWS:
1. DEFINITIONS
As used in this Agreement:
1.1 "Affiliate" of a party means a company which is affiliated to such party by
one or more shareholdings such that, directly or indirectly, one of them is
subject to the control of the other or both are subject to the common
control of a third party;
1.2 "Approved Outlets" means first class retail outlets of a quality and
standing consistent both with the high reputation of the Licensor for
design, merchandising excellence and service and having the image and
market positioning of the XXXXX XXXXXX xxxxx;
1.3 "Commencement Date" means September 1, 1991, or such later date prior to
October 1, 1991 when the Licensor notifies the Licensee of its approval of
the Marketing Plan for the First Contract Year.
1.4 "Contract Term" means the term of this Agreement as provided in Clause 13;
1.5 "Contract Year" means a period of twelve consecutive months from 1st
February to 31st January during the Contract Term save that the first
Contract Year shall be deemed to commence on the Commencement Date and to
end on 31st January 1993 and the last Contract Year shall be deemed to
commence on 1st February of the Year during which the Contract Term
terminates and to end on the date of actual termination;
1.6 "Xxxxx Ashley Designs" means surface prints originated or developed by the
Licensor or its Affiliates;
1.7 "Xxxxx Xxxxxx Group" means the Licensor and its Affiliates referred to
collectively;
1.8 "Xxxxx Ashley Outlets" means outlets operated by a member of the Xxxxx
Xxxxxx Group in the Territory under the XXXXX ASHLEY name with the consent
of the Licensor;
1.9 "Licensee" means USA Optical Distributors, Inc., and any of its Affiliates;
1.10 "Licensor" means Xxxxx Xxxxxx Manufacturing B.V.;
1.11 "Marketing Plan" means a plan for marketing Products prepared by the
Licensee and agreed with the Licensor for each Contract Year as provided in
Clause 6;
1.12 "Minimum Royalty" means the minimum sum payable to the Licensor by the
Licensee by way of Royalty in respect of each Contract Year as provided in
sub-clause 9.3;
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1.13 "Net Sales" means the gross amount of wholesale sales of Products invoiced
by the Licensee less any deductions for returns, discounts or allowances
granted to customers, all of which are reasonable and customary in the
eyewear industry in the Territory, and less any bad debts, as that term is
recognized under generally accepted accounting principles in the Territory;
1.14 "Parties" means the Licensor and the Licensee;
1.15 "Products" means ophthalmic frames for prescription eyeglasses, eyeglass
cases and other accessories and related items, all of which are agreed as
Products intended for sale bearing the Trademarks, and which are listed in
Schedule I to this Agreement;
1.16 "Royalty" means the Royalty payable by the Licensee to the Licensor and
described in Clause 9;
1.17 "Selected Designs" means Xxxxx Xxxxxx Designs selected from time to time by
agreement between the Parties for application to the Products or packaging
or promotional materials therefor;
1.18 "Territory" means the United States of America, its territories and
possessions and Canada;
1.19 "Trademarks" means the trademarks of the Licensor listed in Schedule II,
together with such additional trademarks (if any) as may be included in
this Agreement from time to time by agreement between the parties;
2. CONDITION PRECEDENT
The Licensor's approval of the Marketing Plan for the first Contract Year
under sub-clause 6.4 is a condition precedent to the Licensor's grant of
the license under clause 3, and to all other rights, duties and obligations
under this Agreement which are unrelated to the Licensor's approval of the
Licensee's first Marketing Plan or to the Parties' confidentiality
obligations under clause 10. If the Licensor does not approve the
Licensee's first Marketing Plan by October 1, 1991, then this Agreement
shall (unless the Parties otherwise agree in writing) terminate on that
date. Upon such a termination, the parties shall have no further rights,
duties or obligations under this Agreement, except the confidentially
obligations under clause 10.
3. GRANT OF LICENSE
3.1 With effect from the Commencement Date the Licensor hereby grants to the
Licensee exclusive rights throughout the Contract Term
(a) to use the Trademarks on or in connection with the importation,
distribution, marketing and sale of Products, and
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(b) to apply Selected Designs to packaging or promotional materials for
the Products in the Territory upon the terms and conditions of this
Agreement.
3.2 Whilst the Licensor shall not, throughout the Contract Term, grant to any
third party the right to use the Trademarks for the sale of Products within
the Territory, nothing herein shall restrict the use, licensing,
manufacture or sale (as the case may be) by the Licensor or any Licensor
Affiliate either in the Territory or elsewhere of any goods other than
Products.
4. PRODUCT QUALITY AND APPROVAL
4.1 The type and quality of each item to be imported, marketed, distributed or
sold as a Product by the Licensee shall be the subject of discussion and
agreement with the Licensor prior to its adoption as a Product.
4.2 The Licensee may propose new styles to the Licensor at two possible times:
either at the same time as it is proposing a new Marketing Plan pursuant to
sub-clause 6.5, or at other times during the course of any Contract Year.
Styles proposed by the Licensee at the same time as the Marketing Plan
shall fall within categories of Products approved in that Marketing Plan.
Styles proposed at any other time during the Contract Year must fall within
categories of Products previously approved by the Licensor as part of the
most recently approved Marketing Plan.
4.3 Each style approved by the Licensor as a Product shall be included in
Schedule I.
4.4 Approval of a Product shall be evidenced by the authorized officers of the
Licensor and Licensee initialing that item when it is newly included
therein; PROVIDED THAT, without prejudice to the Licensor's absolute right
to approve the quality of any Product sold by the Licensee as elsewhere
herein provided, the Licensor's approval of any style as a Product shall be
deemed to have been granted if the Licensor fails to respond to the
Licensee's request therefor:
(a) in the case of styles submitted with the Marketing Plan, within TWENTY
(20) business days of receiving that request;
(b) in the case of styles submitted at other times during the Contract
Year, within FIFTEEN (15) business days of receiving that request.
4.5 Products shall be of the best quality materials and consistent both with
the highest standards of craft and skill associated with the reputation of
the Licensor as designer, manufacturer and retailer of high quality fashion
goods.
4.6 Prior to commissioning production in commercial quantities of any Product
the Licensee shall:
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(a) procure that the Licensor shall, if it so chooses, have the right to
inspect the places of proposed manufacture of such Product for the
purpose of ascertaining that the Licensor's quality standards are
being met, and
(b) submit free of charge at least three samples of each such Product to
the Licensor for approval. No Product shall be sold by the Licensee in
the absence of such approval. All Products thereafter offered for sale
shall correspond with the approved sample.
4.7 No item which fails to meet the quality standards set forth in sub-clause
4.2 shall be sold as a Product. The Licensee shall procure that its
suppliers are held to the same requirement.
4.8 The Licensee shall ensure that all Products shall conform with all laws and
regulations applicable thereto in the Territory.
5. SALES AND PROMOTION
5.1 The Licensee shall use its best efforts to promote and extend the sale of
Products throughout the Territory to all potential Approved Outlets.
5.2 The Licensee shall secure and maintain the distribution of adequate stocks
of Products to (and only to) Approved Outlets such that the Products may be
made readily and continuously available to customers.
5.3 The Licensor hereby places the Licensee on notice that it may inspect such
Approved Outlets at any time throughout the Contract Term to assure itself
that the provisions of this Clause are being complied with. If the Licensor
notifies the Licensee that an outlet at which Products are sold does not
(in the absolute discretion of the Licensor) meet the standards of an
Approved Outlet, the Licensee shall procure that sales of Products at such
outlets be discontinued at the earliest possible opportunity.
5.4 Products shall not be exported or sold by the Licensee for re-sale outside
the Territory.
5.5 All advertising and promotional materials and activities relating to the
Products shall require the Licensor's prior approval and all advertising
and promotional proposals for the Products shall accordingly be submitted
by the Licensee to the Licensor for prior approval. In respect of proposals
by the Licensee for promotional materials and activities which have been
contemplated by the Marketing Plan for the period to which they relate, the
Licensor shall respond as quickly as practicable and in any event within
FIFTEEN (15) business days from receipt of the same, in default of which
response the Licensor's approval shall be deemed to have been granted.
5.6 The Licensor and its Affiliates in the Territory may purchase Products from
the Licensee at the lower of
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(a) Licensee's standard wholesale price, including customary trade
discounts and advertising allowances, or
(b) the lowest wholesale price at which the Licensee sells equivalent
quantities of Products to its customers in the Territory, on at least
net THIRTY (30) day terms.
6. MARKETING
Marketing Plans
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6.1 The Licensee shall, in consultation with the Licensor, prepare and propose
to the Licensor a Marketing Plan in respect of each Contract Year.
6.2 The Marketing Plan shall summarize all market information relevant to the
period to which it relates including (without limitation):
(a) a description of the Products to be sold, together with proposals for
categories and for designs of Products, and including proposed sources
of supply;
(b) the number and identity of prospective customer accounts;
(c) suggested wholesale price points for the Products;
(d) the anticipated volume expected to be sold of each of the Products;
(e) an analysis of competitors' Products by price band;
(f) proposals for the interpretation of the Xxxxx Xxxxxx xxxxx image in
terms of advertising concepts and point of sale and other promotional
materials;
(g) proposed advertising and promotional activities and expenditures for
the Products; and
(h) proposed methods of sales and distribution.
6.3 To the extent practicable, the Licensee shall, upon submission of the
Marketing Plan, provide the Licensor with three (3) samples of each Product
which is described in the Marketing Plan and which is being submitted for
approval.
6.4 The Marketing Plan for the First Contract Year shall be proposed to the
Licensor by the Licensee no later than 31st July 1991. The Licensor shall
respond to such proposal no later than 31st August 1991. Subsequent
Marketing Plans shall be submitted to the Licensor for
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approval no later than SIX (6) months in advance of the commencement of the
Contract Year to which they relate.
Approval by Licensor
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6.5 No Marketing Plan shall be implemented unless and until the written
approval of the Licensor has been obtained, provided that if the Licensor
fails to respond to the proposal for a Marketing Plan referred to in
sub-clause 6.4 within TWENTY (20) business days after receipt thereof, the
Plan shall be deemed approved as submitted.
6.6 The Licensee shall spend no less than THREE PER CENT (3%) of its annual Net
Sales of Products on advertising and promotional activities for the
Products in the Territory.
Additional Products
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6.7 The Parties recognize a request by the Licensee to sell sunglasses bearing
the Trademarks, either under this Agreement or a separate agreement.
Accordingly the Licensor agrees to enter into good faith discussions with
the Licensee within ONE HUNDRED AND EIGHTY (180) days from the Commencement
Date, with a view to accommodating the Licensee's proposal. The Licensor
further agrees that, until such period has expired, it will not approach
other potential distributors for sunglasses in the Territory, provided that
such restriction shall not in any event endure beyond a period of ONE
HUNDRED AND EIGHTY (180) days from the Commencement Date. If the Licensor
and the Licensee do not enter into an agreement for the Licensee to sell
sunglasses bearing the Trademarks, whether pursuant to this or another
agreement, and the Licensor enters into an agreement with a third party to
sell sunglasses bearing the Trademarks in the Territory, the Licensor shall
hold that third party to the same standards as the Licensee under this
Agreement with respect to quality, styling and Approved Outlets.
7. MARKET REPORT
Within two months of the end of each Contract Year the Licensee shall
submit to the Licensor a written report giving a full resume of sales and
promotional activities and expenditures during the Year.
8. TRADEMARKS AND COPYRIGHT
8.1 The Licensee acknowledges that the Trademarks and the goodwill attaching
thereto are and shall remain the property of the Licensor.
8.2 The Licensee shall not promote or sell Products except in conjunction with
Trademarks and shall not use Trademarks or Selected Designs except in
relation to Products in a manner approved by the Licensor.
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8.3 All labels, packaging, display, and promotional and advertising materials
relating to the Products and their promotion and sale shall bear an
acknowledgement as to the proprietorship of the Trademarks and the license
granted to the Licensee as follows:
"Sold by USA Optical under license from Xxxxx Ashley"
8.4 Wherever Selected Designs are used on packaging (and elsewhere as the
Licensor may require or approve) the Licensee shall affix or apply a notice
acknowledging the Licensor's copyright ownership as follows:
"(C) Xxxxx Xxxxxx 19 [date* of design]"
8.5 Save as provided in sub-clause 8.3 and except as otherwise agreed in
writing, there shall be no use of the Licensee's name or trademarks on the
Products or on any labels, packaging, display or advertising materials
related to the Products.
8.6 All rights arising from the use by the Licensee of the Trademarks shall
enure to the benefit of the Licensor. This license shall operate solely as
a permission for the Licensee to use the Trademarks and Selected Designs in
the manner herein specified and shall not be deemed to confer on the
Licensee any proprietary right in the Trademarks or Selected Designs, nor
shall the Licensee acquire any registered design, registered trademark or
other industrial property rights relating thereto.
8.7 If the Licensee becomes aware of any infringements of the Trademarks or
copyrights in the Selected Designs, or any act of unfair competition or any
trademark application in the Territory which in any way may impair the
value or validity of the Trademarks, or the other rights granted
by the Licensor hereunder, the Licensee will promptly notify the Licensor
of that event. The Licensor undertakes that it will respond to such
notification by taking such steps as it may deem reasonably necessary to
protect the Licensee's rights hereunder, it being understood that the
institution and conduct of any litigation which ensues, the selection of
counsel and the settlement of the litigation and claims affecting the
Trademarks or Selected Designs shall be entirely within the discretion of
the Licensor, under the Licensor's control and at the Licensor's expense.
Should legal action against a third party be deemed necessary or desirable
by the Licensor, the Licensee will, if requested by the Licensor, cooperate
with the Licensor in rendering appropriate assistance in instituting and
prosecuting such legal action, provided that the reasonable expenses which
the Licensee thereby incurs and the other costs and expenses of such legal
action, including legal fees, shall be borne by the Licensor.
8.8 During the Contract Term, or upon the termination of this Agreement for any
reason, the Licensee shall, upon request of the Licensor, execute such
documents as the Licensor may reasonably require, including registered user
agreements, to reflect the Licensor's ownership of the Trademarks. The
Licensee hereby grants to the Licensor a power of attorney coupled with an
interest to execute such agreements as Licensee's attorney-in-fact. The
Licensor shall promptly provide the Licensee with copies of any such
agreements.
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8.9 The Licensor represents to the Licensee:
(a) that it is the owner of the Trademarks and of the copyrights in
all the Selected Designs;
(b) that it has the sole and exclusive right to deal with the same and
to enter into license agreements therefor;
(c) that none of the Trademarks or the Selected Designs infringes any
trademark, service xxxx, trade name, copyright design or work of
any other party.
9. ROYALTY
9.1 In consideration for the rights herein granted (and subject to the
payments of Minimum Royalty herein contained), the Licensee shall pay to
the Licensor a royalty at such rate as, after deduction of any
withholding or other taxes (if any) imposed within the Territory and
required to be deducted by the Licensee, shall amount to *** of the Net
Sales of all Products sold by the Licensee.
9.2 The Royalty shall be determined and paid in respect of each Contract Year
quarter ending on 30th April, 31st July, 31st October and 31st January
during the Contract Term.
9.3 In respect of each Contract Year, the amount of Royalty payable to the
Licensor shall in no event be less than the Minimum Royalty quoted below:
Contract Year US $
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1991/93 ***
1993/94 ***
1994/95 ***
1995/96 ***
Minimum Royalty shall be appropriately pro-rated for any period during
the Contract Term that is less than a full Contract Year.
9.4 the Minimum Royalty shall be payable as follows:
9.4.1 with respect to the Contract Year 1991/93
(a) on the ***, a first ***
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installment of ***;
(b) within *** of the end of each of the last ***, further
installments each of ***;
9.4.2 with respect to each subsequent Contract Year, within *** of the
end of each ***, a sum equivalent to *** attributable to such ***;
provided that, in each Contract Year, any excess of actual Royalty paid
per quarter over the applicable installment of Minimum Royalty shall be
carried forward and credited against subsequent installments of Minimum
Royalty payable in respect of such Contract Year.
9.5 Except as provided in subclauses 13.4 and 13.5, failure to pay the
Minimum Royalty as provided in sub-clause 9.4 shall constitute a material
breach of this Agreement within the meaning of sub-clause 13.2(a).
9.6 Royalty payments pursuant to sub-clause 9.7 shall credit the Licensee
with amounts of Minimum Royalty, and Minimum Royalty payments pursuant to
sub-clause 9.4.2 shall credit the Licensee with amounts of Royalty paid
during the Contract Year in excess of the Minimum Royalty.
9.7 Payment of Royalty in respect of each quarter shall be effected within
*** of the end thereof, and payment shall be accompanied by a report from
the Licensee showing the names of customers to whom the Licensee sold
Products during the period, and a precise computation of Net Sales upon
which the Royalty payment was based, including the quantity, description
and value of Products sold by the Licensee during the quarter, and any
deductions for returns, discounts, allowances granted to customers, or
bad debts.
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9.8 The Licensee shall keep adequate and accurate records in sufficient
detail to enable the Royalty to be readily determined and shall, upon the
Licensor's request, permit such records to be examined by the Licensor's
representative at any time during normal business hours to verify Royalty
reports and payments. In the event that such examination reveals an
understatement of Royalty due to the Licensor in excess of FOUR PER CENT
(4%), the Licensee shall be liable for costs of the Licensor's audit and
the incidental expenses incurred in connection with the audit. Those
costs and expenses shall be separate from and in addition to the
Royalties owed to the Licensor.
9.9 Unless otherwise specified by the Licensor, all payments due by the
Licensee to the Licensor hereunder shall be computed and paid in US
dollars.
9.10 All overdue amounts shall bear interest at the rate of ONE PER CENT (1%)
per month.
9.11 Until further notice from Licensor, all sums due to the Licensor
hereunder shall be paid in US dollars by international wire transfer to
the following account:
ABN Bank
Xxxxxxxxxxxx 00-00
Xxxxxxxxx 0000 XX
Xxx Xxxxxxxxxxx
Account Name: Xxxxx Ashley Manufacturing B.V.
Account No.:54 02 74 348
Swift Code: ABN ANL 2A
10. CONFIDENTIALITY
Any information acquired by one Party (the "First Party") in the course
of this Agreement regarding the affairs and business of the other Party
(the "Second Party") and its Affiliates shall, during the Contract Term
and for TEN (10) years thereafter, be treated by it as confidential and
shall not be disclosed without the prior consent of the Second Party,
whether such information is disclosed to the Second Party by the First
Party or otherwise obtained by the First Party as a result of its
association with Second Party except to the extent either required to be
divulged in the performance of this Agreement or that such information
falls within the public domain. Information to be treated as confidential
under this Agreement shall include, without limitation, the Parties'
customer lists, unpublished designs, marketing and business plans,
telemarketing and other unique sales techniques, and sources of supply.
11. LIABILITY, INDEMNITY AND INSURANCE
11.1 The Licensor and the Licensee each acknowledges and represents to the
other that it is not a joint venturer, partner or co-venturer with the
other and that neither party shall incur any liability on behalf of the
other party or purport to pledge the credit of the other party or accept
any order or obligation to be binding upon the other party.
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11.2 The Licensee shall indemnify and hold the Licensor, its Affiliates and
their respective officers and directors, harmless from all claims, suits,
demands, actions, losses, damages and costs, including reasonable legal
fees and court costs, which the Licensor may incur or suffer by reason of
any acts or omissions of the Licensee in connection with the importation,
distribution, marketing or sale of the Products, including, but not
limited to
(a) any manufacturing defect in a Product;
(b) the Licensee's manufacture, distribution or sale of the Products;
or
(c) the labelling, packaging or advertising of the Products in
violation of any applicable federal, state or local law or
regulation.
11.3 So long as this Agreement remains in effect and for a period of not less
than THREE (3) years thereafter, the Licensee agrees at its expense to
carry product liability insurance with respect to the Products with
limits of liability of not less than ONE MILLION US DOLLARS
(US$1,000,000) per accident and ONE MILLION US DOLLARS (US$1,000,000) per
person and to name the Licensor and its Affiliates and their respective
officers, employees and directors, as a party insured under such
insurance policy (with a waiver of subrogation in favor of the Licensor).
Prior to offering any of the Products for sale and within TEN (10) days
of a request by the Licensor, the Licensee shall furnish the Licensor a
certificate of insurance evidencing that the policy with the minimum of
coverage limits set forth in the preceding sentence is in full force and
effect.
12. COMPETITION
The Licensee undertakes that it will not without the prior consent of the
Licensor, throughout the Contract Term and for a period of SIX (6) months
thereafter, engage directly or indirectly in the Territory in the
importation, distribution, promotion or sale (either on its own account
or for or on behalf of any other party) of any range of ladies' designer
eyewear that is similar to the Products in price and any of (i) style,
(ii) market position and (iii) market segment, nor engage in activities
which would prejudice the performance of its obligations under this
Agreement, provided that the Parties acknowledge that:
(a) the wholesale distribution of ladies' and men's designer eyewear
as currently carried on by the Licensee; and
(b) the importation, distribution, promotion and sale of the lines of
ladies designer eyewear set forth in Schedule III
do not constitute prejudicial activities.
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13. DURATION
13.1 The Contract Term shall commence on the Commencement Date and shall
continue, unless terminated earlier according to sub-clause 13.2, until
31st January 1996.
13.2 Either party may terminate this Agreement at any time by giving the other
party notice to that effect, stating the precise reasons therefor,
effective on the date when notice is given or any subsequent date
specified in the notice, in any of the following events:
(a) any material breach by the other party for which effective
remedial action has not been undertaken within THIRTY (30) days
after notice is given specifying the breach and requiring remedy
of the same;
(b) if the other party shall be unable to pay its debts in the
ordinary course of business or shall enter into liquidation
(otherwise than for reason of corporate amalgamation or
reconstruction) or shall become bankrupt or insolvent, or shall be
placed in the control of a receiver or trustee, whether
compulsorily or voluntarily.
13.3 Without prejudice to the foregoing, the Licensor shall have the right to
terminate this Agreement as in the manner aforesaid in the following
events:
(a) the Licensee fails in respect of each of any two Contract Years to
generate and pay to the Licensor amounts by way of Royalty which
exceed the Minimum Royalty relative to such Year;
(b) the Licensee fails to propose a selection of styles of eyewear
and/or accessories which the Licensor is willing to approve as
Products after consideration in good faith and having regard to
the nature of the target market and the particular requirements of
the Product customer;
(c) the Licensee fails in any Contract Year to spend more than THREE
PERCENT (3%) of annual Net Sales on advertising and promotional
activities as contemplated by sub-clause 6.6;
(d) the management and/or control of the Licensee passes from the
present managers, shareholders, owners or controllers to other
parties whom the Licensor may reasonably regard as unsuitable.
13.4 Without prejudice to the foregoing, any acts or omissions by the Licensor
resulting in one or more of the following events shall be deemed a
material breach of this Agreement by the Licensor:
(a) a third-party licensee of sunglasses bearing the Trademarks, as
contemplated by sub-clause 6.7, is not held to the same standards
as the Licensee under this Agreement
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with respect to quality, styling or Approved Outlets, and as a
result the value of the Trademarks is significantly impaired;
(b) any claim or litigation referred to in sub-clause 8.7 is not
pursued with sufficient rigor, resulting in significant impairment
to the value or validity of the Trademarks.
13.5 In the event of a material breach under sub-clause 13.4, the Licensee
shall have the right to withhold all Minimum Royalty and Royalty payments
until such time as the material breach has been remedied, at which time
all such Minimum Royalty and Royalty payments shall be due and payable.
No withholding of Minimum Royalty or Royalty payment under this
sub-clause 13.5 shall constitute a material breach of this Agreement.
14. CONSEQUENCES OF TERMINATION
On termination of this Agreement (other than a termination pursuant to
sub-clause 3.3):
14.1 the Licensee shall promptly pay to the Licensor all amounts due by way of
Royalty or otherwise to the date of termination (which shall be deemed to
be the end of the calendar quarter in which it falls);
14.2 the Licensee shall make no further use of the Trademarks or Selected
Designs (subject to sub-clause 14.3);
14.3 the Licensor will, except where termination based on material breach was
occasioned by the Licensor by reason of the Licensee's gross misconduct,
permit the Licensee to dispose of any stock then in hand within up to SIX
(6) months following the date of termination subject to payment of
Royalty in respect of such sales as provided in Clause 9; and
14.4 the Licensor shall be given a right of first refusal to purchase stocks
of Products on the terms, subject to the conditions, and at a price, no
less favorable than the terms conditions and price offered to third party
purchasers.
15. EXPENSES
The expenses incurred by the Licensee in performance of this Agreement,
including all travel and out-of-pocket expenses, shall be solely for its
own account.
16. AGREEMENT PERSONAL
This Agreement is personal to the Parties and may not be assigned or
sub-contracted by either party without the consent of the other.
17. DISPUTES
17.1 Any controversy arising out of or relating to this Agreement shall be
submitted to and decided
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by arbitration only in the City of New York, pursuant to the Rules then
outstanding of the American Arbitration Association. Unless the parties
agree otherwise, there shall be three arbitrators in the arbitration
proceedings. Each party shall choose one arbitrator, and the two
arbitrators chosen shall choose a third arbitrator. The New York State
laws of evidence at trial, and of discovery in civil matters, shall apply
to the arbitration proceedings. The arbitrators sitting in any
controversy shall have no power to alter or modify any provision of this
Agreement or to render any award which, by its terms, effects any such
alteration or modification. The parties consent to the jurisdiction of
the Supreme Court of the State of New York for all purposes in connection
with this agreement to arbitrate, and the parties consent that such Court
may take the necessary proceedings for the confirmation or disaffirmance
of any award and may enter judgment thereon. Any process, notice of
motion or other application to said Court or to a Justice thereof may be
served within or without the territorial jurisdiction of said Court, by
registered or certified mail, return receipt requested, or by personal
service, or in such other manner as is permissible under the Rules of
said Court, provided a reasonable time for appearance, not less than TEN
(10) business days, is allowed. In the event of a dispute or controversy
arising under this Agreement, the prevailing party shall have the right
to recover its reasonable attorney's fees and costs.
17.2 This Agreement shall be governed by, and interpreted in accordance with,
the laws of the State of New York.
18. PURCHASE OF SELECTED DESIGNS
The Licensee may purchase materials bearing Selected Designs from the
Licensor or its Affiliates at the lower of
(a) the Licensor's or its Affiliates' standard wholesale price,
including customary trade discounts, or
(b) the lowest wholesale price at which the Licensor or its Affiliates
sell such materials to its customers, on at least net THIRTY (30)
day terms, provided that the Licensee's purchase orders relate to
similar quantities of the Selected Designs, to the extent that
such materials may be reasonably required by the Licensee for the
production of Products or for the purposes of marketing or
promoting the Products hereunder.
19. GENERAL PROVISIONS
Entire Understanding
--------------------
19.1 This Agreement (including the Marketing Plans and other documents to be
agreed to pursuant this Agreement) constitutes the sole agreement between
the Parties.
Modifications
-------------
15
19.2 This Agreement may not be modified otherwise than by written instrument
signed by both Parties.
Communications
--------------
19.3 Every notice or other communication under this Agreement shall be in
writing delivered personally, by telex, or by facsimile addressed to the
relevant Party, with its address set out below, or to any telex or
facsimile number published as belonging to it (or such other address,
telex or facsimile number as is notified in the manner herein provided by
one Party to the other). Every notice or other communication shall be
deemed to have been received, in the case of a telex message or facsimile
transmission, at the time of dispatch or transmission, and in the case of
a letter when delivered personally.
19.4 In proving the giving of a notice hereunder it shall be sufficient to
prove that the notice was left or that the telex bears the correct
answerback of the Party to whom the notice was sent, or that the sender's
original facsimile has printed on it or attached to it a proper automated
endorsement to the effect that it was received by or at the facsimile
number of the Party to whom the facsimile was sent.
Communications to the Licensor:
-------------------------------
Xxxxx Xxxxxx Manufacturing B.V.
Xxxxxxxxxxxxx 00
0000 XX
Xxx Xxxxxxxxxxx
For the Attention of the Managing Director
with copy to:
Xxxxx Ashley Holdings plc
000 Xxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx
XX0 0XX
United Kingdom
For the Attention of the Company Secretary
Communications to the Licensee:
------------------------------
USA Optical Distributors, Inc.
000X Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx
XX 00000
00
Xxxxxx Xxxxxx xx Xxxxxxx
For the Attention of the President
Severability
------------
19.5 The provisions contained in this Agreement are considered reasonable by
the Parties, but if any such provision is found to be invalid or
unenforceable but would be valid if some part thereof were deleted or the
scope of application reduced, such provision shall apply with such
modifications as may be necessary to render it valid or enforceable. In
any event the balance of this Agreement shall remain in effect.
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives the day and year first above written.
SIGNED by A.M.S. ) /s/ A.M.S.
-------------------------- -------------------------------
for and on behalf of )
XXXXX XXXXXX MANUFACTURING B.V. )
-------------------------------
SIGNED by Xxxxxxx Xxxxx ) /s/ Xxxxxxx Xxxxx
-------------------------- --------------------------------
for and on behalf of )
USA OPTICAL DISTRIBUTORS, INC. )
------------------------------------
17
SCHEDULE I
PRODUCTS
[Agreed styles to be described]
18
SCHEDULE II
TRADEMARKS
XXXXX ASHLEY
[Trademark Graphic]
19
SCHEDULE III
LINES OF LADIES DESIGNER EYEWEAR
WHICH DO NOT CONSTITUTE PREJUDICIAL ACTIVITIES
WIMBLEDON
CALIFORNIA ATTITUDES
GENERIKA
CAMELOT
20
AMENDING AGREEMENT
THIS AGREEMENT is made the 2nd day of August, 1993.
BETWEEN
1. XXXXX XXXXXX MANUFACTURING B.V. a company incorporated in the
Netherlands and having its principal place of business at Xxxxxxxxxxxxx 00, 0000
XX Xxxxxxxxx, Xxx Xxxxxxxxxxx (hereinafter called "the Licensor") of the one
part; and
2. SIGNATURE EYEWEAR, INC., (formerly known as USA OPTICAL DISTRIBUTORS,
INC.), a company incorporated in the State of California having its principal
office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, X.X.X. (hereinafter
called "the Licensee") of the second part; and
3. XXXXX XXXXXX LIMITED, a company incorporated in England and having its
registered office at 000 Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx, Xxxxxxx (hereinafter
called "the Additional Licensor") of the third part.
WHEREAS:
1. The Licensor and the Licensee entered into a License Agreement dated
28 May, 1991 (the "License Agreement") granting the Licensee certain rights to
use the Trademarks in connection with the importation, distribution, marketing
and sales of Products; and
2. The Licensor and the Licensee desire to amend the License Agreement as
set forth herein; and
3. The Additional Licensor is the owner of.the Trademarks in the United
Kingdom, and the Licensor is the owner of the Trademarks in territories outside
the United Kingdom.
IT IS THEREFORE AGREED AND DECLARED AS FOLLOWS:
1. Except as otherwise set forth in this Agreement, all defined terms shall
have the same meaning as set forth in the License Agreement.
2. Sub-clause 1.15 is hereby deleted, and the following substituted in its
place:
"1.15 "Products" means such ophthalmic frames for prescription
eyeglasses, sunglasses, eyeglass cases and other accessories and
related items, all of which are intended for sale bearing the
Trademark, which are listed in Schedule I to this Agreement, as
amended from time to time;"
1
3. Sub-clause 1.18 is hereby deleted, and the following substituted in its
place:
"1.18 "Territory" means the United States of America (including its
territories and possessions) and Canada, as well as the following
countries added as of the date of this Amending Agreement, subject
to the restrictions set forth in sub-clauses 3,1.2 and 3.1.3
below: Mexico, New Zealand, Australia, South Africa, the United
Kingdom, and every other country in Europe (individually, an
"Additional Country"); "
4. Clause 3.1 is hereby deleted, and the following is substituted in its
place:
"3.1.1 The Commencement Date of this Agreement was 19 September, 1991. As
of February 1, 1993, the Licensor and the Additional Licensor (in
respect of the United Kingdom) hereby grant to the Licensee
exclusive rights, subject to sub-clauses 3.1.2 and 3.1.3 below,
throughout the Contract Term
(a) to use the Trademarks on or in connection with the
importation, distribution, marketing and sale of Products,
and
(b) to apply Selected Designs to packaging or promotional
materials for the Products
in the Territory upon the terms and conditions of this
Agreement;
3.1.2 Until January 31, 1994, the Licensee shall have the exclusive
right to present a marketing plan relating to the Licensee's
marketing and sales of Products in any country outside the United
States or Canada (an "Additional Country Marketing Plan"). The
Licensor's approval of the Licensee's Additional Country Marketing
Plan for any specific country, as presented to the Licensor, shall
be a condition precedent to the Licensee's sales of Products in
that country. If the Licensor fails to respond to any such
Additional Country Marketing Plan within 30 days after receipt
thereof, that Additional Country Marketing shall be deemed
approved as submitted.
If the Licensor has not approved an Additional Country Marketing
Plan for any specific Additional Country after 31 January, 1994
(or, in the case of an Additional Country Marketing Plan presented
during January 1994, 30 days after Licensor's receipt thereof),
then the Licensee shall no longer have the exclusive right to
present to the Licensor an Additional Country Marketing Plan for
that Additional Country. Instead, the Licensee shall have the
right of first refusal to sell Products in any such country, in
accordance with sub-clause 3.1.3 below.
3.1.3. Under the right of first refusal granted in sub-clause 3.1.2, on
or after 1 February, 1994, the Licensor shall have the right to
grant to a third party the exclusive right to sell Products in any
specified Additional Country for which the Licensor has not
2
already approved a plan by Licensee to sell Products, subject to
the terms of this subclause 3.1.3. In the event that the Licensor
grants such a right to a third party, the definition of the term
"Territory" under sub-clause 1.18 of this Agreement shall be
amended to reflect that grant. The procedures for granting such a
right are as follows.
If, on or after 1 February, 1994, the Licensor receives an
Additional Country Marketing Plan from a third party, the Licensor
shall deliver a written notice (the "Licensor's Notice") to the
Licensee specifying the following material terms of the offer: the
amount of any advance payment, the amount of minimum royalty
payable, the territory covered by the offer, the length of the
proposed license, and the commencement date of the proposed
license. The Licensor shall not be required to deliver to the
Licensee any information with respect to any other term of the
third party's offer. The Licensor's Notice shall further state (a)
that the third party licensee shall be held to the same standards
as the Licensee under this Agreement with respect to quality,
styling and Approved Outlets, and (b) that the third party
licensee shall not be permitted to use the marketing materials or
the eyeglass frame styles developed by the Licensee pursuant to
this Agreement.
The Licensee shall have 30 days to respond to the Licensor's
Notice. If the Licensee does not respond to the Licensor's Notice
within 30 days, then the Licensor shall have the right to grant an
exclusive license to the third party, under the terms set forth in
the Licensor's Notice (the "Third Party License"). If the Licensee
responds to the Licensor's Notice within that 30 day period,
delivering an Additional Country Marketing Plan for the territory
specified in the notice, and specifying terms that do not exceed
the third party's offer in all material respects (the "Licensee's
Notice"), then the Licensor shall have the right to determine in
the Licensor's sole discretion whether to grant the exclusive
right to sell Products in that Additional Country to the Licensee
or the third party, or to refrain from granting that right at that
time. If the Licensee's Notice specifies terms that exceed the
third party's offer in all material respects, then the Licensor
shall not have the right to grant the exclusive right to sell
Products in that Additional Country to the third party at that
time, but may, in its discretion, (a) grant that right to the
Licensee, (b) solicit from the third party an offer which matches
or exceeds the Licensee's offer in all material respects, or (c)
refrain from granting that right at that time. If Licensor elects
to solicit such an offer from the third party, and then within a
reasonable period of time obtains from the third party an offer
which matches or exceeds the Licensee's offer in all material
respects, the Licensor shall have the right to grant the exclusive
right to sell Products in that Additional Country to the third
party.
In determining whether or not the Licensee's offer matches or
exceeds the third party's offer, the Licensor shall examine the
Licensee's past performance in countries outside the United States
and Canada, taking into consideration the Licensee's decisions,
after consultation with Licensor, to grow slowly in order to
ensure success.
3
The Licensee's right of first refusal relating to the territory
covered by the Licensor's Notice shall terminate once the Licensor
and the third party have entered into the Third Party License. If
the Third Party License is terminated for any reason, the Licensor
shall notify the Licensee within a reasonable period of time of
such termination, and the Licensee shall have the right to make an
offer to have the exclusive license for the territory previously
covered by the Third Party License, but shall no longer have a
right of first refusal related to that territory.
Any disputes arising out of or otherwise related to the right of
first refusal granted under sub-clauses 3.1.2 and 3.1.3 of this
Agreement shall be submitted to arbitration pursuant to the rules
of the American Arbitration Association."
5. The portion of Clause 8 in quotation marks is hereby deleted, and the
following substituted in its place:
"Sold by Signature Eyewear under license from Xxxxx Xxxxxx"
6. Clause 9.3 is hereby deleted, and the following substituted in its place:
"9.3 The Amount of Royalty in U.S. dollars payable for each Contract
Year for each Category defined in sub-clause 13.1.4 shall in no
event be less than the Minimum Royalty amount for that Category as
set forth below:
Minimum Minimum Minimum
Royalty Royalty Royalty
for for for
USA & Additional Non-
Canada Countries Optical Total
Contract Optional Optical Sunwear Minimum
Year Sales Sales Sales Royalty
INITIAL TERM:
1993/94 ***
1994/95 ***
1995/96 ***
FIRST RENEWAL TERM
1996/97 ***
1997/98 ***
1998/99 ***
1999/00 ***
2000/01 ***
4
ADDITIONAL RENEWAL TERMS
2001/02 ***
2002/03 ***
2003/04 ***
2004/05 ***
2005/06 ***
7. Clause 13.1 is hereby deleted, and the following substituted in its
place:
"13.1.1 The Contract Term commenced 19 September, 1991, and shall,
unless terminated earlier in accordance with sub-clauses 13.2,
13.3 or 13.4(b) below, remain in effect for an initial term
ending on 31 January, 1996 (the "Initial Term"). The Contract
Term is subject to a first automatic renewal term of five
Contract Years (the "First Renewal Term"), as set forth in
sub-clause 13.1.2, and additional one-year renewal terms
(individually, an "Additional Renewal Term"), as set forth in
sub-clause 13.1.3 below.
13.1.2 Subject to sub-clauses 13.2 and 13.4(b), on February 1, 1996 the
Contract Term shall be automatically renewed for the First
Renewal Term for all Categories (as defined in sub-clause
13.1.4), provided that the amount of Royalty payable to the
Licensor for each of the final two Contract Years of the Initial
Term for each such Category is equal to or greater than the
Minimum Royalty for that Category during those Contract Years,
as set forth in sub-clause 9.3 above.
The Licensor shall have the right, for a period of 90 days after
31 January, 1996, to terminate the Licensee's rights with
respect to any Category defined under sub-clause 13.1.4 above if
the Licensee fails in respect of any two Contract Years to have
sufficient Net Sales to generate Royalty amounts which equal or
exceed the Minimum Royalty for that Category and those Contract
Years; if the Licensor does not exercise such right to terminate
the Licensee's rights within the 90 day period, the Licensor's
right to terminate shall be deemed to be waived.
13.1.3 Subject to sub-clauses 13.2 and 13.4(b), on February 1, 2001,
and on February 1 of each succeeding year, the Contract Term
shall be automatically renewed for an Additional Renewal Term,
for all Categories (as defined in sub-clause 13.1.4), provided
that the amount of Royalty payable to the Licensor for each of
the previous two Contract Years for each Category is equal to or
greater than the Minimum Royalty for that Category during those
Contract Years, as set forth in sub-clause 9.3 above.
The Licensor shall have the right, for a period of 90 days after
31 January of any Additional Renewal Term Contract Year, to
terminate the Licensee's rights with respect to any Category
defined under sub-clause 13.1.4 above if
5
the Licensee fails, in respect of the two Contract Years then
ended, to have sufficient Net Sales to generate Royalty amounts
which equal or exceed the Minimum Royalty for that Category and
those Contract Years; provided that, if the Licensor does not
exercise such right to terminate the Licensee's rights within
the 90 day period, the Licensor's right to terminate shall be
deemed to be waived.
13.1.4 For the purposes of determining the Minimum Royalty payable
under this Agreement, the following categories (the
"Categories") have the meanings set forth below:
"USA & Canada Optical Sales" means sales of Products in the
United States of America (including its territories and
possessions) and Canada which are made to stores specializing in
ophthalmic frames for prescription eyeglasses, whether those
sales are made directly to such stores or through distributors
which specialize in selling to such stores.
"Additional Countries Optical Sales" means sales of Products in
all other countries within the Territory other than the United
States and Canada which are made to stores specializing in
ophthalmic frames for prescription eyeglasses, whether those
sales are made directly to such stores or through distributors
which specialize in selling to such stores.
"Non-Optical Sunwear Sales" means sales of sunglasses which are
Products made to stores which do not specialize in ophthalmic
frames for prescription eyeglasses, whether those sales are made
directly to such stores or through distributors which specialize
in selling to such stores."
8. Sub-clause 13.2 is hereby amended (a) to be known hereafter as
sub-clause 13.2.1, and (b) to add the following sub-clause 13.2.2:
"13.2.2 The Licensor shall have the right, for a period of 90 days after
any Contract Year, to terminate the Licensee's rights with
respect to any Category defined under sub-clause 13.1.4 above if
the Licensee fails in respect of any two Contract Years to have
sufficient Net Sales to generate Royalty amounts which equal or
exceed the Minimum Royalty for that Category and those Contract
Years; provided that, if the Licensor does not exercise such
right to terminate the Licensee's rights within a 90 day period
after the end of any Contract Year, that right shall be deemed
to be waived.
9. Sub-clause 13.4(a) is hereby deleted, and the following substituted in
its place:
(a) a third-party licensee which obtains the license to sell
eyeglass frames bearing the Trademarks, in any of the
Categories, as contemplated by sub-clauses 13.1.2, 13.1.3 and
13.1.4 above, is not held to the same standards as the Licensee
under this
6
Agreement with respect to quality, styling or Approved Outlets,
and as a result the value of the Trademarks is significantly
impaired;"
10. The portion of Clause 19.4 entitled "Communications to the Licensee" is
hereby deleted, and the following is substituted in its place:
"Communications to the Licensee:
--------------------------------
Signature Eyewear, Inc.
000 Xxxxx Xxxxxx Xxx.
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
For the Attention of the President
Communications to the Additional Licensor:
-----------------------------------------
Xxxxx Ashley Limited
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx
Xxxxxxx
For the Attention of the Company Secretary"
11. Clause 6.7 and sub-clause 13.3(a) are hereby deleted.
12. Except as otherwise stated herein, all remaining clauses of the License
Agreement shall remain in full force and effect, provided that all
references to the Licensor therein shall be deemed to include the
Additional Licensor where applicable.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives the day and year first above written.
SIGNED by ) /s/
for and on behalf of ) ------------------------
XXXXX XXXXXX MANUFACTURING B.V. )
-------------------------------
SIGNED by ) /s/
for and on behalf of ) ------------------------
XXXXX ASHLEY LIMITED )
--------------------
SIGNED by ) /s/ Xxxxx Xxxxxxx
for and on behalf of ) --------------------------
SIGNATURE EYEWEAR, INC. )
-------------------------------
(formerly known as
USA OPTICAL DISTRIBUTORS, INC.)
7
SCHEDULE I
PRODUCTS
The following are the styles of eyeglass frames approved by Licensor, as
of April 30, 1993.
1. Xxxxx Ashley eyeglass frames for women:
XXXX
ARABELLA
XXXXX
XXXXXXXXX
EMMA
XXXXXXX
XXXXXXXX
XXXXX
XXX
JULIET
XXXX
XXXXXXX
XXXXXXXX
SOMERSET
TESS
2. Xxxxx Ashley sunglasses:
SUN 101
SUN 102
SUN 103
3. Xxxxx Xxxxxx for Girls eyeglasses:
XXX
XXXXX
LILY
8
FURTHER AMENDING AGREEMENT
--------------------------
THIS AGREEMENT is made on 18 December, 0000
X X X X X X X:
1. SIGNATURE EYEWEAR, INC. (formerly known as USA Optical Distributors,
Inc.), a company incorporated in the State of California having its principal
office at 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxx, XX 00000, XXX ("the Licensee") of the
first part; and
2. XXXXX ASHLEY LIMITED, a company incorporated in England and having its
registered office at 00 Xxxxxx'x Xxxx, Xxxxxx, XX0 0XX (the "Licensor") of the
second part.
INTRODUCTION
1 The Licensor's assignor and the Licensee entered into a licence
agreement dated 28 May 1991 (the "Licence Agreement").
2 The Licence Agreement was amended by agreements dated 2 August 1993, 31
May 1994, 30 January 1995, 21 August 1995, and 4 October 2000.
3 The parties now wish to amend the Licence Agreement further.
IT IS THEREFORE AGREED:
1. Clause 13.2.1 (b) of the Licence Agreement is hereby deleted and
replaced with the following:
"(b) if the other party shall enter into liquidation (otherwise than for
reason of corporate amalgamation or reconstruction) or shall become
bankrupt or shall be placed in the control of a receiver or trustee,
whether compulsorily or voluntarily."
2. There shall be added a new clause 13.2.1A as follows:
"For the avoidance of doubt, and without affecting the meaning of
material breach for any other purpose, non-payment of Royalty shall be a
material breach for the purpose of clause 13.2.1(a)."
3. Any definition in the Licence Agreement shall apply to this agreement.
4. For this agreement, Licence Agreement shall mean the Licence Agreement
as amended unless the context otherwise dictates.
5. This agreement shall be effective from 24 October 2002.
6. Save as provided here, the Licence Agreement shall remain unaffected.
IN WITNESS whereof, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives the day and year first above
written
SIGNED by )
for and on behalf of )
SIGNATURE EYEWEAR, INC. )
SIGNED by )
for and on behalf of )
XXXXX XXXXXX LIMITED )
PLEASE REPLY TO FAX NO: x00 00 0000 0000
Our ref: WGW/vcm/Letter 14042003
14 April 2003
Mr Xxxxxxx Xxxxxx
Signature Eyewear, Inc.
000 X Xxx Xxxxxx
Xxxxxxxxx
XX 00000
XXX
Dear Xx Xxxxxx
LICENCE AGREEMENT BETWEEN XXXXX ASHLEY LIMITED (BY ASSIGNMENT FROM XXXXX XXXXXX
MANUFACTURING BV) AND SIGNATURE EYEWEAR, INC. DATED 28 MAY 1991 (AS AMENDED FROM
TIME TO TIME) (THE "LICENCE")
We refer to the Licence. The terms used in this letter shall have the same
meaning as in the Licence unless the contrary is indicated. We refer to your
e-mail dated 17 March 2003 addressed to Xxxxx Xxx. In consideration for the sum
of [***], which shall be added to the sum of [***] due by 7 April 2003 mentioned
below, we are agreeable to the following:
1. The actual royalties from the quarter ending 31 January 2003 which remain
unpaid as of the date hereof ($121,851) must be paid on or before the
following dates:
(i) [***] (plus with the consideration of $1 mentioned above
giving a total of [***]) by 7 April 2003;
(ii) [***] by 21 April 2003; and
(iii) [***] by 3 May 2003.
2. The table for the Minimum Royalties for the Additional Renewal Terms ending
31 January 2004 through 2008 shall be deleted and replaced with the
following:
Minimum
Additional Renewal Terms ending Royalty
------------------------------- -------
January 2004 [***]
January 2005 [***]
January 2006 [***]
January 2007 [***]
January 2008 [***]
3. The Additional Renewal Terms ending in January 2007 and 2008 are subject to
the additional proviso that no material breach which, if capable of remedy,
has not been within the prescribed grace period has been committed from the
date hereof up to 31 January 2006.
4. The Minimum Royalty for the Additional Renewal Term ending 31 January 2004
shall be payable as follows:
(i) [***] on or before 30 April 2003;
(ii) [***] on or before 31 July 2003;
(iii) [***] on or before 31 October 2003;
(iv) [***] on or before 28 February 2004; and,
(v) the balance [***] shall be payable in accordance with Section
9.4 of the License as if it were the sole Minimum Royalty for
such Additional Renewal Term.
5. For the avoidance of doubt, the Minimum Royalties for the Additional
Renewal Term ending 31 January 2004 and each Additional Renewal Term
thereafter are intentionally not segregated by product type or territory.
6. At least six months prior to the end of the Contract Year ending 31 January
2008 provided that Siganture Eyewear, Inc. has not committed any material
breach of terms of the Licence, the parties will discuss and consider the
renewal of the Agreement for a further Additional Renewal Terms. If there
is no agreement on further Additional Renewal Terms, the Licence shall end
on 31 January 2008.
7. Xxxxx Xxxxxx waives any right to terminate the Licence as may exist as of
31 January 2003 based on clause 13.2.2, and agrees that for all purposes
under the Licence and the Licensee shall be deemed to have not failed in
the Contract Year ended 31 January 2003 to have sufficient Net Sales to
generate Royalty amounts which equal or exceed the Minimum Royalty in any
Category of such Year.
8. The revised Minimum Royalties shall revert to the original Minimum
Royalties with retrospective effect if Xxxxx Ashley shall be entitled to
terminate the Licence in accordance with its terms, or, if applicable,
under the common law.
Any amendment or waiver made by this letter shall be void or ineffective AB
INITIO should a change of control to which Xxxxx Xxxxxx approves does not occur
by 30 April 2003. Further, any consent to any change of control relating to the
Transaction (as defined in the relevant Consent document) signed by or on behalf
of Xxxxx Ashley Limited on or around the date hereof is signed subject to
acceptance of this offer, and subject to the condition that you replace your
existing bank credit facility or facilities (term and/or revolving) in an
aggregate amount not less than [***] and that you obtain an additional term
facility in the amount not less than [***].
To accept this offer of variation, please sign below on both copies of this
letter and return one to me by post and by fax. A transaction report showing
that the fax has been received at x00 00 0000 0000 or actual receipt at the
above fax number constitutes communication of acceptance.
Yours sincerely
/s/ XXXXX XXX
Director of Corporate and Strategic Affairs
-------------------------------------------
For and on behalf of Xxxxx Ashley Limited
cc: Xx Xxxxxx Xxxxxx, Licensing Manager, Xxxxx Ashley
Xx Xxxx Xxxxx, Messrs Xxxx Xxxxx
Signed: /s/ Xxxxxxx Xxxxxx Date: 4/14/03
---------------------------------------------- -----------
For and on behalf of Signature Eyewear, Inc.
Chief Financial Officer
[SIGNATURE EYEWEAR LETTERHEAD]
February 9, 2007
Xxxx Xxxxxx
Head of Operations
Xxxxx Xxxxxx Limited
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx
XX0 0XX
Dear Xxxx:
Per our conversation, Xxxxx Ashley confirms there is no minimum sales
requirement for the 2006/07 contract year.
1. For the 2006/07 contract year ending January 31, 2007, Signature will
pay a royalty minimum of *** (a final payment of *** to be made
March 19, 2007).
2. For royalty and administrative support in conjunction with building
the brand, in respect of the year ending January 27, 2007, Signature
will pay Xxxxx Xxxxxx *** (three payments of *** in May 07, August
07, November 07, and the balance of *** in January 08).
3. Signature also agrees to a fee of ***, in respect of the year ending
January 27, 2007, to be paid in March of 2007.
4. Signature and Xxxxx Ashley agree to extend the license agreement until
January 2010 under the following terms and conditions:
a.) Signature will pay Xxxxx Xxxxxx the greater of *** royalty or
the minimum royalty as outlined below:
b.) Year Minimum Royalty
---- ---------------
2007/06 ***
2006/09 ***
2009/10 ***
Signature truly appreciates Xxxxx Xxxxxx'x understanding in regard to the future
development of the Xxxxx Xxxxxx eyewear brand. We are excited to work together
to build a strong and profitable eyewear business in the years to come.
Please sign our memorandum of understanding and fax back to 000-000-000. If you
have any questions please call us at 9 am (PST) on Thursday.
Best,
Xxxxxxx Xxxxxx /s/ Xxxx Xxxxxx
---------------------- ------------------------------
CEO Approved and Accepted
Signature Eyewear Xxxx Xxxxxx-Head of Operations
Xxxxx Xxxxxx Limited
