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EXHIBIT 10(iii)(e)
[NAUTICA ENTERPRISES, INC. LETTERHEAD]
May 1, 1998
Mr. Xxxxx Xxx
Nautica International, Inc.
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxxxx:
This letter sets forth our agreement concerning the sale of certain new apparel
products bearing the "Nautica" trademark in the United States by Nautica
Enterprises, Inc., or one or more of its wholly-owned subsidiaries
(collectively, "Nautica") directly to third parties (the "Third Parties").
Except as provided below, Nautica will pay you a continuing regular payment in
the amount of 1.5% of the "Included Net Sales" of any "Included Products" which
are part of an "Included Line" after such Included Line becomes profitable to
Nautica, for any fiscal year of Nautica, for so long as such Included Products
and/or Included Lines are sold by Nautica to Third Parties (the "Payment").
Included Net Sales will mean gross sales (after deducting returns) of Included
Products by Nautica sold directly at wholesale (or as provided below at retail)
to Third Parties after the date hereof. The "Included Products" will only
include apparel products bearing the "Nautica" trademark and included only in
the lines listed below (the "Included Lines"): . . . (v) ladies sleepwear; (vi)
new sport technology apparel (including hats and bags)...[confidential-filed
with SEC].
The Payment for Included Net Sales by Nautica of any Included Product sold to a
Third Party at a discount of more than 20% shall be .75% of the Included Net
Sales.
In the event that an Included Line is profitable to Nautica for any fiscal year
and becomes unprofitable to Nautica for any subsequent fiscal year(s), the
Payment made to you for any and all such future unprofitable years shall be
reduced to .75% of the Included Net Sales.
No Payment shall be made with respect to retail sales by Nautica. However, if in
any fiscal year an Included Line is profitable to Nautica at retail but not
profitable to Nautica at wholesale, then for such year (i) you will be entitled
to a payment of .75% of the Included Net Sales at retail of the included
Products which are part of such Included Line and (ii) you will not be entitled
to any Payment of the Included Net Sales at wholesale.
In the event that an Included Line is not profitable for any three consecutive
fiscal years after its introduction by Nautica, such Included Line shall no
longer be an Included Line for purposes of this letter.
Nautica agrees to account for each of the Included Lines in such manner that a
detailed accounting of each Included Product and Included Line shall be provided
to you quarterly.
It is our intention that this letter shall maintain the status quo concerning
our respective rights to any intellectual property, including rights to any
Nautica names or trademarks. Accordingly, (i) nothing in this letter will modify
any such respective rights and (ii) neither you nor Nautica will submit, or
refer to, this letter, or any of its terms, in any legal proceeding relating to
such respective rights.
This letter shall be binding upon Nautica and any successors to all or
substantially all of the assets and business of Nautica.
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This agreement constitutes the entire agreement between the parties with respect
to the matters referred to herein.
Very truly yours,
NAUTICA ENTERPRISES, INC.
By: /s/ Xxxxxx Xxxxxxx
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Agreed:
/s/ Xxxxx Xxx
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