Exhibit 10.15
LICENSE AGREEMENT
Dated June 24, 1997
Between
Xxxxx Xxxxx, Inc.
("Licensor")
and
Signature Eyewear, Inc.
("Licensee")
Certain portions of this agreement have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for an order
granting confidential treatment pursuant to Rule 406 of the General Rules and
Regulations under the Securities Act of 1933.
EXHIBIT 10.15
LICENSE AGREEMENT
THIS AGREEMENT is effective as of the 24th day of June, 1997, by and
between Xxxxx Xxxxx, Inc, a Delaware corporation, with a principal place of
business at 00000 X.X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, X.X.X.
("Licensor") and Signature Eyewear, Inc., a California corporation, with a
principal place of business at 000 X. Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
("Licensee").
In consideration of the mutual covenants herein contained, the parties
agree as follows:
1. Definitions.
For purposes of this Agreement, the following capitalized terms shall have
the meanings set forth below:
"Claim" shall mean any claim, demand, action, suit or proceeding.
"Contract Quarter" shall mean a three-month period ending on the last day
of the third, sixth, ninth and twelfth full calendar months of a Contract Year.
"Contract Year" shall mean a period from January 1 to December 31. The
first Contract Year is 1998.
"Exploit" shall mean manufacture, advertise, market, merchandise, promote,
publicize, sell, use, market or distribute, and "Exploitation" shall have a
correlative meaning.
"License" shall mean the exclusive right to use the Licensed Xxxx in the
Exploitation of Products throughout the world during the Term.
"Licensed Xxxx" shall mean "Xxxxx Xxxxx". The Licensed Xxxx xxx be used
only in the form set forth in Exhibit "B" to this Agreement, and such other form
as may be approved from time to time by Licensor.
"Licensed Products" shall mean Products containing the Licensed Xxxx.
"Minimum Net Sales" in any Contract Year shall mean the amount specified as
the Minimum Net Sales as set forth in Exhibit "C" to this Agreement.
"Minimum Royalty" shall mean the guaranteed minimum annual royalty payable
by Licensee to Licensor each Contract Year as set forth in Exhibit "C" to this
Agreement.
"Net Sales" during any period shall mean (a) the sum of the sales prices of
all Licensed Products (net of invoiced discounts) invoiced to customers during
such period, less (b) the sum of the sales prices previously included in Net
Sales for Licensed Products returned by customers
during such period less (c) the sum of all accounts which have become
Uncollectible Accounts during the period (or a prior period, if no deduction for
such accounts was taken during such prior period), plus (d) the sum of all
amounts received by Licensee from customers during such period which were
previously deducted from Net Sales as Uncollectible Accounts pursuant to
subparagraph (c) above. It is understood that: (i) Licensee may from time to
time deliver Licensed Products on consignment, and that such Licensed Products
are not invoiced to customers until the end of the consignment period (assuming
such Products are purchased by the customers); (ii) Net Sales do not include
revenues from sales or distributions of point of purchase displays; (iii) Net
Sales do not include amounts invoiced for sales, use, excise or other taxes, or
freight, insurance or co-op advertising allowances; and (iv) Net Sales do not
include revenue generated by the sale of cases, chains and cords to the customer
which are not sold by the customer for retail sale. Net Sales do include revenue
generated by the sale of cases, chains and cords to the customer which are sold
by the customer at retail.
"Person" shall mean any individual, corporation, association, partnership,
or limited liability company, trust or other entity.
"Products" shall have the meaning set forth in Exhibit "A".
"Shareholders" shall mean Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxx Zeicheck, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx, who are all of
the shareholders of Licensee as of the date of this Agreement.
"Sunwear" shall mean ready-to-wear sunglasses, sunglass cases, chains and
cords.
"Term" shall mean the duration of the License, as determined pursuant to
Section 3 hereof.
"Territory" shall mean the countries and jurisdictions identified in
Exhibit "E" to this Agreement and such other countries or jurisdictions as
Licensor and Licensee may from time to time agree (which agreement shall be
evidenced by an amended Exhibit "E").
"Transfer" shall mean to sell, assign and/or transfer.
"Uncollectible Account" shall mean an account in an amount in excess of
$CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION and which either: (a) one or more unpaid invoices have been
outstanding for more than one year or (b) the customer is excused from paying
its debt to Licensee by the entry of an order in a bankruptcy case filed by or
against such customer.
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2. Grant of License.
2.1 Licensor hereby grants the License to Licensee, and Licensee hereby
accepts the License. Licensee acknowledges and agrees that it may Exploit the
Licensed Xxxx only in the Territory.
2.2 Licensee shall not have the right to sub-license, share, convey,
transfer, assign or encumber the License to any Person without the written
consent of Licensor.
2.3 Licensee acknowledges and agrees that the License is applicable only
to Products. Licensor reserves the right to Exploit and to grant to other
Persons the right to Exploit the Licensed Xxxx on any products other than
Products. Nothing in this Agreement shall preclude Licensor from using the
Licensed Xxxx in connection with the sale by Licensor of any type of Sunwear.
3. Term.
3.1 The License shall be in effect from the date first written above to
December 31, 2002, or such later date as may be determined in accordance with
Section 3.2, if not sooner terminated pursuant to the terms of this License.
3.2 If not earlier terminated, Licensee may renew this License for two
consecutive three-year terms upon written notice of intent to renew no sooner
than 150 days and no later than 90 days prior to the expiration of the Term, or
any extension thereof. Provided, however, that at Licensor's option, the License
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shall not be renewed if: (i) Licensee is in material breach of this Agreement:
and (ii) within 30 days of receipt of such renewal notice, Licensor notifies
Licensee in writing that it elects not to permit renewal of the License as a
result of such material breach (which notice specifies in reasonable detail the
nature of such breach); and (iii) Licensee fails to cure and correct such breach
within 30 days of receipt of such notice. Any such renewal shall be on the same
terms as this License, however, during any renewal period Licensee shall pay a
royalty of CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION% of all net sales made directly to customers
and CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION% of all Net Sales made to distributors, and shall be
subject to Paragraph 3.7 below.
3.3 This Agreement may be terminated by the non-breaching party due to a
material breach of any of the terms or provisions of this Agreement, provided
written notice of such material breach is given to the breaching party and the
breaching party fails to cure such breach within thirty (30) days of receipt of
such notice.
3.4 Termination of this Agreement shall not relieve any of the parties of
its then outstanding and unfulfilled obligations or liabilities under this
Agreement, including without limiting the generality of the foregoing, any
obligation related to the payment of royalties to
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Licensor. On the effective date of the termination of this Agreement, all rights
of the Licensee under this Agreement shall terminate and Licensee shall cease to
use the trademarks, trade names and symbols of the Licensor, except that for a
period of twelve (12) months from the effective date of termination Licensee may
continue to sell stock on hand or which has been ordered prior to termination.
3.5 Upon the effective date of termination of this Agreement, Licensee
shall assign to Licensor any and all right in the Licensed Marks which were used
in connection with the sale of the Products or which may have accrued by
Agreement, operation or otherwise and shall not thereafter use the Licensed
Marks, "Xxxxx" and/or "Xxxxx" or a confusingly similar word or xxxx as a
trademark or otherwise. On termination of this Agreement for whatever reasons,
Licensee shall consent, and agrees to execute such documents to evidence such
consent, to the cancellation of any registration of Licensee as a registered
user or licensee of any trademarks incorporating "Xxxxx" and/or "Xxxxx".
3.6 Licensor may terminate the License by written notice to Licensee
within 30 days of a Change of Control, unless Licensor shall have approved the
Change of Control. Licensor shall be deemed to have approved a Change of Control
if Licensor shall have received a written notice of a proposed Change of
Control, and shall have approved such proposed Change of Control in writing or
shall have failed to deliver notice of disapproval within 20 days of receipt of
such written notice of the proposed Change of Control. A "Change of Control"
with respect to Licensee shall be deemed to occur if any Person (other than an
underwriter in a public offering or a parent corporation of Licensee formed
after the date hereof) acquires at least 30% of the outstanding voting
securities of Licensee (or, if applicable, the parent corporation of Licensee)
and is the largest shareholder of Licensee (or, if applicable, the parent
corporation of Licensee). For this purpose, the Shareholders (and any family
trust, under which a Shareholder, or a member of a Shareholder's immediate
family, is a beneficiary, to which a Shareholder's shares have been transferred)
shall be deemed to be one shareholder.
3.7 Any failure by Licensee to generate the Minimum Net Sales for the
Contract Year ending December 31, 2000, or any Contract Year thereafter, shall
not constitute a material breach under Paragraph 3.2 of this Agreement. However,
Licensor shall have the right to renegotiate the Minimum Net Sales and the
Minimum Royalty (a) for the first three-year renewal term, if Net Sales for the
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Contract Year ending December 31, 2000, and Net Sales for either of the two
subsequent Contract Years, are less than the Minimum Net Sales, or (b) for the
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second three-year term, if Net Sales for any two Contract Years of the first
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three-year renewal term shall be less than the Minimum Net Sales. Licensor may
exercise its right to renegotiate upon written notice to Licensee delivered not
more than 30 days after receiving Licensee's renewal notice under Section 4.2.
In the event the parties do not agree upon renegotiated terms by the end of the
then current Term after having exercised good faith, Licensor may refuse to
renew the Term or terminate the License.
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4. Royalty Payment
4.1 Within 30 days following the end of each Contract Quarter (starting
with the Contract Quarter in which this License is executed) during each
Contract Year, Licensee shall pay to Licensor in United States dollars as a
royalty an amount equal to the greater of: (a) the Minimum Royalty or (b) an
amount equal to the actual royalty as determined by the formula set forth in
Exhibit C, less any Minimum Royalty accrued and paid for the Contract Year. For
purposes of this Agreement, the Minimum Royalty for any Contract Year shall be
deemed to accrue in four equal quarterly installments as of the last day of each
Contract Quarter for such Year. Such payments shall deduct any amount required
by the U.S. Internal Revenue Code.
4.2 Account statements of Net Sales shall be presented to Licensor within
30 days following the last day of each Contract Quarter, commencing the Contract
Quarter in which Licensee first has Net Sales. The royalty payment in the case
of sales in foreign currency will be determined in such currency and paid at the
exchange rate current on the date the invoice is paid. Any payment not made when
due shall bear interest from the date that such payment was payable until paid
at a rate equal to the lesser of (i) corporate base rate announced by Xxxxxx
Bank in Chicago, Illinois plus two percent (2%) per annum, or (ii) the maximum
amount permitted by law.
4.3 Licensee shall keep separate records pertaining to each frame style of
the Licensed Products sold by Licensee. Account statements for each Contract
Year shall be reviewed by Licensee's certified public accountant and such
accountant shall deliver a statement in the form of Exhibit F on or before March
31 of the year succeeding the Contract Year for which the statement is given.
Any costs thereof are to be borne by Licensee. Licensor has the right, upon
reasonable notice, to audit the books and records of Licensee in connection with
Licensee's sale of the Licensed Products at least once per Contract Year but no
more than once in a six month period. Licensee shall make such books and records
available to Licensor upon such reasonable notice. The cost of such audit shall
be borne by Licensor.
4.4 Where tax at source, such as withholding tax, is payable by Licensee
under the taxation laws of any country within the Territory, a sum equivalent to
such tax payable shall be paid to Licensor at the same time as the royalty
payments hereunder, unless Licensor receives documentation sufficient for
Licensor to recover any taxes deducted. A sum equal to any withholding tax which
has been paid by Licensee to Licensor which is subsequently recovered by
Licensor will be paid by Licensor to Licensee after such tax has been recovered.
Insofar as it is possible under the relevant double tax conventions or
treaties for Licensor to obtain an exemption from the withholding of tax at
source, Licensor shall be entitled to apply to the appropriate taxation
authority in the country concerned for the relevant certificate of exemption.
Licensee shall use its best efforts to assist Licensor in applying for such
exemption.
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If royalty payments hereunder are subject to turnover or sales taxes
(for example, value added tax) in a country within the Territory or in the
country of residence of Licensor and Licensor is liable for paying such tax, a
sum equal to the tax shall be paid to Licensor by Licensee at the same time as
the royalty payment in order to compensate for such taxes. If such laws relating
to these taxes provide that payments in respect of same shall not be paid
directly to Licensor, then such sum equal to the tax shall be paid to the
competent taxation authority by Licensee on behalf of Licensor.
4.5 It is understood that under no circumstances shall Licensee be
responsible for, or be obligated to reimburse Licensor for, federal, state or
local income taxes, in any taxing jurisdiction, payable by Licensor with respect
to royalties.
5. Licensor's Warranties and Representations.
5.1 Licensor is the sole and exclusive owner (legal and beneficial) of the
Licensed Xxxx in any and all forms and embodiments thereof with respect to
Products anywhere in the world and to the goodwill attached the Licensed Xxxx.
Licensor has the sole and exclusive right to use the Licensed Xxxx as a
trademark or otherwise in connection with the Exploitation of Products anywhere
in the World. Licensor has not Transferred to any Person the right to use the
Licensed Xxxx in connection with the Exploitation by third parties of Products
anywhere in the world. Upon Licensee's request, Licensor shall furnish
registrations of or documents evidencing the rights of the Licensor in the
Licensed Xxxx at Licensee's cost and expense.
5.2 Licensor warrants that Licensee's use of the Licensed Xxxx in the
Exploitation of Licensed Products will not infringe any copyright, trademark,
trade name, trade secret, know-how or license right of any Person. Licensor
agrees to indemnify, reimburse and hold Licensee harmless from and against (i)
Claims of any Person alleging infringement of any intellectual property right,
unfair competition or unauthorized use, relating to the use of the Licensed
Xxxx, and (ii) any damages, losses, judgements, settlements, liabilities, costs
or expenses, including reasonable attorney fees, paid or incurred by Licensee in
connection with such Claims. This indemnity shall survive the term of this
Agreement.
6. Licensee's Warranties and Representations.
6.1 Licensee warrants that it will not enter into any license agreement or
other arrangement similar to this Agreement for Products during the Term with
any of the following competitors of Licensor: Lands End, R.E.I., J. Crew, LL
Bean, Patagonia, The Gap, Abercrombie & Fitch, or any other entity which
Licensor reasonably designates by written notice to Licensee, at any time during
the Term, to be a competitor of Licensor with a business similar to the current
business of Licensor and/or the foregoing entities.
6.2 Licensee warrants that it will budget and spend for advertising,
merchandising and marketing (including point of purchase displays and sales
incentives) of the Licensed Products in U.S. dollars at least $CONFIDENTIAL
INFORMATION OMITTED AND FILED
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION prior to the end of the
first Contract Year and $CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION during the second Contract Year.
Licensee's advertising and marketing budget for each additional Contract Year
will be as the parties shall agree but not less than $CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
7. Confidentiality.
7.1 In connection with this Agreement, each party will be provided, and
will have access to, certain Confidential Information of the other party. Each
party acknowledges and understands that the other party's Confidential
Information is a valuable asset and property of such other party, and that such
other party could suffer irreparable harm from the disclosure of all or any of
such Confidential Information to other Persons. Accordingly, each party agrees,
on behalf of itself and its directors, officers, employees, agents and advisors
(collectively, "Representatives"), except as required by law, (i) to hold all of
such other party's Confidential Information in strict confidence and to treat
such other party's Confidential Information with at least the same degree of
protection afforded its own confidential information, (ii) not to disclose any
of such Information to third parties without the specific prior written consent
of such other party, and (iii) not to use any such Confidential Information
except for purposes absolutely necessary to the performance of its obligations
and the protection of its rights under this Agreement. Each party shall be
responsible for, and shall indemnify and hold the other party harmless from, any
losses, costs, expenses and damages incurred or suffered by such other party
arising or resulting from the breach of these covenants by such party or any of
its Representatives.
7.2 "Confidential Information" includes confidential and/or proprietary
information such as business plans, marketing plans, projections, financial
statements and data, contracts, customers, know-how, designs, operating methods,
employees and ownership information.
"Confidential Information" does not include information which (i) is
or becomes generally available to the public other than as a result of
disclosure by the other party or its Representatives; or (ii) was available to
the other party on a non-confidential basis prior to its disclosure to the other
party as evidenced by documents in the other party's files; (iii) is obtained
from third parties not subject to a similar duty to maintain such information as
confidential.
7.3 If a party or any of its Representatives is legally required to
disclose any Confidential Information of the other party (other than such
Confidential Information subject to Section 7.5 below), such party shall
promptly notify the other party of such requirements so that the other party may
seek an appropriate protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. If such protective order or
other remedy is not obtained, or that a party grants a waiver hereunder, such
other party or its Representatives may furnish that portion (and only that
portion) of the Confidential Information
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which such party or its Representative is legally compelled to disclose, and
such party shall use its best efforts to obtain reliable assurance that
confidential treatment will be accorded any Confidential Information so
furnished. In no event shall a party or any of its Representatives oppose any
action by the other party to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the Confidential
Information.
7.4 No party may issue a press release regarding this Agreement or the
subject matter hereof without the prior consent of the other party.
7.5 Licensee has advised Licensor that it intends, in the immediate
future, to file a registration statement with the Securities and Exchange
Commission ("SEC") to issue and sell capital stock in an underwritten public
offering. In connection with such registration statement, and thereafter
assuming Licensee becomes a "public company" subject to disclosure and reporting
obligations under federal and state securities laws, Licensee may be required to
disclose the License and information regarding the License, including sales of
Licensed Products. Except as provided below, the parties agree not to disclose,
and to maintain as confidential, the royalty rate, the Minimum Royalty, Minimum
Net Sales requirements and the amount of royalties paid under this Agreement
(the "Non-Public License Information"). In this regard, if Licensee believes it
is required by law, based upon the advice of counsel, to file a copy of this
License with the SEC, Licensee shall request and make every reasonable effort to
obtain confidentiality of the Non-Public License Information for the initial
term, and shall thereafter request and make every reasonable effort to obtain an
extension of the confidentiality order for any renewal term of the License and
for the period subsequent to termination or expiration of the Term or renewal
term. However, Licensor acknowledges and agrees that Licensee shall not be in
breach of this Agreement as a result of the filing of this Agreement if the SEC
does not issue a confidentiality order regarding the Non-Public License
Information (or any portion thereof) so long as Licensee makes every reasonable
effort to obtain the confidentiality order.
7.6 Neither Licensor nor Licensee may provide the License Agreement to any
third party or disclose the terms and conditions of the License Agreement to any
third party except: (a) if legally required pursuant to subpoena or legal
process, in which event the provisions of Section 7.3 shall apply; (b) to
persons providing or proposing to provide debt or equity financing, underwriters
and/or broker dealers arranging or proposing to arrange for debt and/or equity
financing, or potential acquirers, provided, in each case, that such person is
under a confidentiality obligation with respect to such information; and, (c)
pursuant to Section 7.5.
8. Licensee's Responsibilities.
8.1 Licensee will procure and maintain during the Term and for one year
thereafter Comprehensive General Liability Insurance with limits not less than
$5,000,000 for personal injury per occurrence and $1,000,000 for property damage
per occurrence, and Professional Liability Insurance (Errors and Omissions),
including but not limited to coverage for optical related services and
contractual liability specifically covering the indemnity of this Agreement.
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All Insurance shall be with a company reasonably acceptable to
Licensor with a "Best" rating of at least "A-VII." All liability insurance
policies shall name Licensor as an additional insured and shall include a
severability of interest clause with respect to claims, demands, suits,
judgments, costs, charges, and expenses arising out of, or in connection with
any loss, damage, or injury resulting from the negligence or other fault of
Licensee, its agents, representatives, employees and subcontractors. Licensee
shall furnish Licensor with a certificate of insurance showing that such
insurance is in effect. The policies will include a clause stating that the
insurance will not be canceled or reduced without at least thirty (30) days
prior written notice to Licensor. If any policy is so canceled, Licensor may
terminate this Agreement on 24 hours notice.
8.2 Licensee agrees to protect, defend, hold harmless and indemnify
Licensor, from and against any and all expenses, claims, actions, liabilities,
reasonable attorney's fees, litigation costs and expenses, damages, and losses
of any kind whatsoever (including without limitation of the foregoing,
accidental death of, or injury to, persons or damage to property, claims of
infringement of intellectual property rights, including copyrights, trademark,
trade dress and/or patent claims), actually or allegedly suffered by any person,
persons, product, customers or property arising in any way out of, or incidental
to, the Licensed Products or this License, provided, however, that this
indemnification shall not extend to claims against Licensor which, if made
against Licensee, would obligate Licensor to indemnify and defend Licensee
pursuant to Section 5.2 of this License. Licensee shall promptly notify Licensor
of any suit or threat of suit as to which Licensor or Licensee may have
obligations under this License and be given reasonable opportunity to defend the
same. Licensee shall cooperate with Licensor with regard to the defense of any
such suit or threatened suit and Licensor shall have authority to settle or
otherwise dispose of any such suit or threatened suits, and to appeal any
judgement which may be entered. In addition, if Licensee is advised or otherwise
learns that another party is infringing upon Licensor's intellectual property
rights, Licensee will immediately advise Licensor by written notice. This
indemnity shall survive the term of this Agreement.
8.3 All costs and expenses associated with the design, manufacture,
development, advertising, marketing and interactive media of Licensed Products
shall be the responsibility of Licensee, including but not limited to the
marketing and distribution of Licensed Products through any catalog of the
Licensor.
8.4 Licensee will extend and offer all of Licensor's employees and
dependents of employees a discount of not less than CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION% off
the suggested retail purchase price of all Licensed Products.
8.5 Licensee will appoint and identify an exclusive Brand Manager for all
Products. The duties of the Brand Manager shall include those set forth in
Exhibit D.
8.6 The content and presentation of all designs, advertising, marketing,
and promotional materials for the Licensed Products, and the use of the Licensed
Xxxx with
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Licensed Products and such materials shall be subject to the prior written
approval of Licensor, which approval shall not be unreasonably withheld.
Licensor will advise Licensee of its objections to any original materials within
(10) ten business days of receipt thereof, and objections to any revised
materials will be submitted by Licensor within five (5) days of receipt thereof.
Failure to object within the specified time periods shall be deemed approval.
Licensee will send to Licensor one (1) copy of the line sheets and one (1)
sample of each style of Licensed Products, promotional materials and advertising
which features or references the Licensed Products or any variation of
Licensor's name or xxxx. No materials will be distributed which have not been
approved by Licensor.
8.7 Licensee agrees to extend to its customers of Licensed Products a high
level of guarantee and service and to use its best efforts to utilize the
highest level of quality and technology, consistent with the cost and wholesale
price of the Licensed Products, in the design and manufacturing process of
Products which is available in the Product industry.
8.8 Licensee agrees to assume liability and to reimburse Licensor for all
costs associated with Licensed Products which may be returned for any reason
directly to Licensor, and its channels of distribution.
8.9 Licensor will work with Licensee to develop merchandising and
incentive programs. Licensor will sell its goods to Licensee for that purpose on
either a cost-plus or best price basis. Licensee will bear all costs and
expenses relating to these programs.
8.10 Licensor shall register the Licensed Xxxx for use in connection with
Products in each country in which Licensee markets and sells Licensed Products
at the sole cost and expense of Licensee. Licensee shall notify Licensor of each
country in which it intends to market and sell the Licensed Products
sufficiently in advance for timely registration. Licensee shall not be obligated
to pay for registration of the Licensed Xxxx in any country with respect to
which it reasonably determines that the benefits would not justify the costs of
registration; provided, however, that Licensee shall inform Licensor of such
determination. If Licensor advises Licensee that it disagrees with Licensee's
determination, Licensee shall either pay for registration or not sell or
distribute (and/or cause not to be distributed by its customers) in such
country.
8.11 If Licensee becomes aware of any infringement by any Person of the
Licensed Xxxx with respect to Products in the Territory, Licensee shall, at its
cost and expense, attempt by written demand to obtain the prompt voluntary
cooperation of such infringing party to cease such infringement. If such written
demand does not cause such infringing party to cease such infringement, Licensee
shall:
a. With respect to the United States and its territories and
possessions and those foreign countries where gross annual sales are
greater than $500,000.00, advise Licensor, and the parties shall
jointly commence and prosecute to conclusion by final judgment or
settlement, an action to stop the infringement
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unless both parties agree not to prosecute such action. All costs and
expenses of any such action shall be borne 75% by Licensee and 25% by
Licensor;
b. With respect to those countries where gross annual sales are less
than $500,000.00, advise Licensor, and the parties shall mutually
agree upon whether to jointly commence (and prosecute to conclusion by
final judgment or settlement) an action to stop the infringement. All
costs and expenses of any such action shall be borne 75% by Licensee
and 25% by Licensor. In the event the parties cannot agree, either
party may prosecute such an action at its sole cost and expense. The
other party shall cooperate in the prosecution of such action at no
cost.
9. General Provisions
9.1 Upon request with reasonable notice, at any time during normal
business hours, Licensor shall have the right to inspect all suppliers and
manufacturers of Licensed Products to verify that Licensor's business and
product standards are being observed. Licensee agrees to use the Licensed Xxxx
only with Products which, at a minimum, have been manufactured in accordance
with the same or better standards used on similar products made for Licensor and
consistent with the image of products offered through Licensor's catalogs and
stores.
9.2 Licensee agrees that all Licensed Products shall meet or exceed all
legally applicable laws, standards, regulations and guidelines in jurisdictions
where sold.
9.3 Labeling on all Licensed Products shall comply with Licensor's
specifications, and the laws, rules and regulations (including FTC rules and
regulations) of the jurisdictions where the Licensed Products are sold. Any
additional labeling or changes (if not required by law) must be approved by
Licensor.
9.4 Each party shall immediately inform the other party of any information
pertaining to claims of rights of third parties pertaining to the Licensed Xxxx
and its use in the Territory.
9.5 This Agreement shall be governed by the laws of the State of
Washington and of the federal laws of the U.S.A.
9.6 This Agreement represents the complete agreement of the parties and
replaces any prior agreement concerning the Licensed Xxxx, and the parties agree
that they have not executed this Agreement based upon any promise,
representation or warranty not expressly set forth in this Agreement.
9.7 No amendment or modification hereof shall be effective unless agreed
to in writing by the party against whom enforcement is sought.
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9.8 Nothing in this Agreement shall be construed to or cause either party
to be deemed the agent or representative of the other party. Neither party shall
so hold itself out nor shall either party be liable or bound by any act or
omission of the other party.
9.9 Failure of either party at any time to enforce any provision of this
Agreement shall not affect the right of that party to seek or require full
performance, nor shall the waiver by either party of a breach hereunder be
construed to be a waiver of any further or similar breach of any other or the
same provision.
9.10 Licensor requires and Licensee warrants that all Licensed Products
shall be manufactured and/or produced in accordance with all applicable laws,
rules and regulations in the country where the Licensed Products are
manufactured, including, but not limited to, such laws, rules and regulations
related to minimum age of employment, minimum wages, forced labor, safety,
sanitation, building codes and working conditions. Licensee shall adopt a
program to ensure that each manufacturing facility and/or other vendor or
subcontractor (collectively "Manufacturer") complies with the aforesaid. At a
minimum, such program shall include a physical inspection of each Manufacturer
and an interview with the owner and/or senior management of Manufacturer prior
to the first performance of any work on the Licensed Products. A written report
of the inspection signed by Licensee and setting forth the scope of the
inspection and the results thereof shall be provided to Licensor as a condition
precedent to Licensee's right to sell the Licensed Products produced by such
manufacturer. Such inspections, together with a written report, shall be
required at least once annually thereafter during the Term and any subsequent
term, to ensure compliance. In the event Licensee fails to implement such a
program, Licensor may, at its option, terminate the License and/or require
Licensee to terminate its relationship with Manufacturer. In the event that it
is determined by Licensor, or any other entity, whether or not a party to this
License, and upon notice to Licensee, that a Manufacturer does not meet
applicable laws, rules and/or regulations, Licensee shall demand such
Manufacturer to come into compliance with such laws, rules and/or regulations
within the sooner of 30 days of notice of such noncompliance or the time period
required by the local governing body. In the event that such Manufacturer fails
to comply, Licensee shall terminate its relationship with such Manufacturer,
upon request of Licensor. In the event that Licensee fails to terminate its
relationship with such Manufacturer, Licensor may, at its option, terminate this
License. In no event shall Licensee or any Manufacturer utilize forced labor or
establish a minimum age of employment below the age of completion of compulsory
education in the applicable country.
12
9.11 All notices required under this Agreement shall be addressed and
delivered as follows:
To Licensor: Xxxxx Xxxxx, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxxx, Director of Licensing
Mailing Address:
X.X. Xxx 00000
Xxxxxxx, XX 00000
With Copy to: Spiegel, Inc.
Legal Dept.
0000 Xxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
To Licensee: Signature Eyewear, Inc.
000 X. Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
XXXXX XXXXX, INC.
Licensor
By: /s/
------------------------------------
Title: Exec. V.P., CFO
---------------------------
Date: 6/23/97
-------------------------------
SIGNATURE EYEWEAR, INC.
Licensee
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Title: President
-------------------------------
Date: 6/24/97
-------------------------------
13
EXHIBIT "A"
PRODUCTS
As used in the License Agreement the term "Products" means Eyewear Frames,
Eyeglasses, Eyeglass cases, chains and cords, all manufactured for use with
prescription lenses including prescription sunglass lenses. Products does not
include Sunwear.
This Exhibit is incorporated by reference in the License Agreement under date of
June 24, 1997.
Approved:
By: /s/
-----------------------------------
By: /s/ Xxxxx Xxxxxxx
-------------------------------
EXHIBIT "B"
FORM OF LICENSED XXXX
The Licensed Xxxx shall be the following as used in connection with prescription
eyewear:
. Xxxxx Xxxxx, Inc.
. Xxxxx Xxxxx
. Xxxxx Xxxxx since 1920
. [LOGO] See Attached Exhibit B-1
. [LOGO] See Attached Exhibit B-1
This Exhibit is incorporated by reference in the License Agreement under date of
June 24, 1997.
Approved:
By: /s/
-----------------------------------
By: /s/ Xxxxx Xxxxxxx
-------------------------------
EXHIBIT "C"
ROYALTY SCHEDULE
The following royalty rate shall apply to the License Agreement during the
initial Term:
Annual Net Sales Royalty Rate
--------------------------------- -------------------------------------------
0 to $CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND WITH THE SECURITIES AND
EXCHANGE COMMISSION EXCHANGE COMMISSION% of total Net
Sales (Net Sales as defined in the License
Agreement)
$CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND WITH THE SECURITIES AND
EXCHANGE COMMISSION and above EXCHANGE COMMISSION% of total Net
Sales
An additional CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION% of Total Net Sales shall be paid on all
sales made directly to Distributors.
In the event of renewal of the License Agreement after the initial term,
the Royalty shall be as set forth in the License Agreement for the Renewal Term.
Minimum Royalty Schedule
------------------------
There shall be minimum Royalty as follows for the Term, including any Renewal
Terms as follows:
Contract Year Minimum Net Sales Minimum Royalty
=========================================================================
1997 $CONFIDENTIAL $CONFIDENTIAL
INFORMATION INFORMATION OMITTED
OMITTED AND FILED AND FILED SEPARATELY
SEPARATELY WITH THE WITH THE SECURITIES AND
SECURITIES AND EXCHANGE EXCHANGE COMMISSION
COMMISSION
1998 $CONFIDENTIAL $CONFIDENTIAL
INFORMATION INFORMATION OMITTED
OMITTED AND FILED AND FILED SEPARATELY
SEPARATELY WITH THE WITH THE SECURITIES AND
SECURITIES AND EXCHANGE EXCHANGE COMMISSION
COMMISSION
1999 $CONFIDENTIAL $CONFIDENTIAL
INFORMATION INFORMATION OMITTED
OMITTED AND FILED AND FILED SEPARATELY
SEPARATELY WITH THE WITH THE SECURITIES AND
SECURITIES AND EXCHANGE EXCHANGE COMMISSION
COMMISSION
2000 and each $CONFIDENTIAL $CONFIDENTIAL
Contract Year INFORMATION INFORMATION OMITTED
thereafter OMITTED AND FILED AND FILED SEPARATELY
(INCLUDING ANY SEPARATELY WITH THE WITH THE SECURITIES AND
RENEWAL SECURITIES AND EXCHANGE EXCHANGE COMMISSION
TERMS) COMMISSION
Licensee agrees to pay Licensor $CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION upon License Agreement
signing, which shall be applied against the first royalties (minimum or actual)
accruing in 1998.
This Exhibit is incorporated by reference in the License Agreement under
date of June 24, 1997.
Approved:
By: /s/
------------------------------------
By: /s/ Xxxxx Xxxxxxx
------------------------------------
EXHIBIT "D"
BRAND MANAGER JOB DESCRIPTION
This Exhibit is incorporated by reference in the License Agreement under date of
See "Attachment to Exhibit D"
Approved:
By: /s/
-----------------------------------
By: /s/ Xxxxx Xxxxxxx
-------------------------------
ATTACHMENT TO EXHIBIT "D"
XXXXX XXXXX EYEWEAR BRAND JOB DESCRIPTION
I. MAIN RESPONSIBILITY
To actively coordinate the business of Xxxxx Xxxxx Eyewear frames, in close
cooperation with the executives of each respective department, including
product inventory, sales, customer service, marketing, finance, and
merchandising.
II. ADDITIONAL DUTIES AND RESPONSIBILITIES
PRODUCT MANUFACTURING
. Work with the import department to confirm frame quantities, colors,
and sizing per the consensus of the design team.
. Review frame purchase orders to ensure frame spec information has been
relayed to the factories as specified.
. Upon delivery of the frames from the factory - work with the design
team to ensure that frames match original (signed-off) specs,
including size, color, materials, etc.
PRODUCT INVENTORY
. Confirm product delivery from factories along with the import
department to ensure prompt and on time delivery.
. Monitor on-going product inventory levels to ensure sufficient
inventory levels for rollout shipments.
. Frame analysis - determine which styles/skills are selling.
. Weekly meeting with Import Manager to overview the entire Xxxxx Xxxxx
frame inventory to decide reorders.
. Update the import department on any accounts rolling out product
different from the actual frame release date.
MARKETING
. Ensure that customer requests for marketing materials are delivered on
time per the customer's specifications.
. Confirm that sales program support materials are produced and
delivered on time.
. Hand-carry all marketing projects through the internal approval
process.
. Prepare frames for photo shoot.
. Approve, identify and hand label all Xxxxx Xxxxx photography.
. Gather all information necessary to produce marketing support
material, including program participation guidelines and copy.
. Initiate all job orders.
. Update price book, source directory, and quarterly frames book to
ensure product information is correct and all distributors are listed.
. Review WIP sheet to ensure marketing jobs are on time and updated on a
weekly basis.
. Send Signature sales reps all updated marketing materials as it
becomes available.
. Maintain new product spec sheets.
CUSTOMER SERVICE
. Ensure all related information is relayed to customer service, so that
it is known and available to anyone inquiring.
. Compile distributor rollout orders from Signature sales reps for
customer service to process.
. Ensure computer information is current, updated, and accurate.
. Work with department manager on product allocation
. Input price schedules and levels of new product.
. Maintain all various International, California direct, chains, and
distributor price lists and order forms.
. Ensure rollout orders are to warehouse on time per scheduled release
date.
. Keep Signature reps informed of any account issues or concerns.
WAREHOUSE
. Review P.O.P. inventory to ensure availability on current product.
. Ensure rollout shipment numbers are accurate for kit packout.
. Review product for quality control when necessary.
. Update frame release scheduling.
. Have monthly calendar meeting to schedule upcoming warehouse events.
. Execute off site and inventory adjustment requests.
FINANCE
. Review monthly sales by style and sku to determine "best seller".
. Resolve issues with credits, returns, etc.
. Advise when rollout shipping and billing is completed.
. gather special information as needed by finance.
EXHIBIT "E"
TERRITORY
Asia
-Indonesia
-Japan
-Malaysia
Australia
-Australia
-New Zealand
Europe
-Austria
-Belgium
-Denmark
-France
-Germany
-The Netherlands
-Norway
-Sweden
-United Kingdom
North America
-Canada
-United States and its territories and possessions
South America
-Brazil
-Columbia
This Exhibit is incorporated by reference in the License Agreement under date of
June 24, 1997.
Approved:
By: /s/
------------------------------------
By: /s/ Xxxxx Xxxxxxx
-------------------------------
EXHIBIT F
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Signature Eyewear, Inc.
We have audited, in accordance with generally accepted auditing standards, the
balance sheet of SIGNATURE EYEWEAR, INC. as of October 31, 1997, and the related
statements of income, changes in stockholders' equity and cash flows for the
year then ended, and have issued our report thereon dated January XX, 0000.
In connection with our audit, we have read the sales journals recording sales of
the Licensed Products and nothing came to our attention that caused us to
believe that the Company failed to comply with the royalty fee provision of the
license agreement dated June XX, 1997 with Xxxxx Xxxxx, Inc. However, our audit
was not directed primarily toward obtaining knowledge of such noncompliance.
This report is intended solely for the information and use of the board of
directors and management of Signature Eyewear, Inc. and Xxxxx Xxxxx, Inc. and
should not be used for any other purpose.
Los Angeles, California
January XX, 1998
