AMENDMENT No. 1 TO THE EXCLUSIVE LICENSE AGREEMENT DATED JUNE 20, 1997
Exhibit
10.127.1: Certain confidential information in this Exhibit 10.127.1 was omitted
and filed separately with the Securities and Exchange Commission (“SEC”) with a
request for confidential treatment by Inter Parfums, Inc.
AMENDMENT
No. 1
TO
THE EXCLUSIVE LICENSE AGREEMENT
DATED
JUNE 20, 1997
BY
AND BETWEEN
S.T.
XXXXXX X.X., a Swiss corporation, registered at Fribourg Commercial Registry,
with its principal office located at rue de Xxxxxxxx 00, 0000 Xxxxxxxx,
Xxxxxxxxxxx, represented by Mr. Xxxx Sampré, CEO,
(hereinafter
referred to as “STD”),
AND
Inter
Parfums, a French corporation, registered under RCS n° B 350 219 382, with its
principal office located at 4, Xxxx Xxxxx xxx Xxxxxx Xxxxxxx, 00000 Xxxxx,
Xxxxxx, represented by Xx. Xxxxxxxx Xxxxxxx, CEO,
(hereinafter
referred to as “Inter Parfums”),
In
accordance with the provisions of Article 4.2 of the exclusive trademark License
Agreement signed by the parties on June 20, 1997, Inter Parfums and STD agreed
to conduct negotiations 36 months prior to the expiration date of the License
Agreement, on June 30, 2008, in order to discuss its renewal.
Following
a dispute involving the performance of the Agreement, and pursuant to a
settlement agreement and this amendment, signed on the same day and deemed
to
constitute an indivisible whole, Inter Parfums and STD have agreed to renew
the
Agreement in advance and to amend certain terms and conditions thereof as
follows:
1
- Term of the Agreement
Article
4
of the June 20, 1997 agreement is deleted as of January 1, 2006, and replaced
as
follows:
“4- Term
of the Agreement
This
Agreement is renewed as of January 1, 2006 for a term of 5.5 years (five and
one-half years). It shall expire on June 30, 2011.”
2
- Definitions
2.1
The
last
paragraph of Article 1 of the June 20, 1997 agreement is deleted and replaced
as
follows:
“The
term “Contractual Year” means the period from January 1 through December 31, of
the same calendar year”.
2.2
The
following is added as the last paragraph of Article 1 of the
Agreement:
“Beginning
January 1, 2006, the term “Agreement” shall mean the June 20, 1997 exclusive
license agreement, as amended by Amendment No. 1 dated March 20,
2006”.
3
- Royalties
3.1
Upon
signature hereof, Inter Parfums shall pay STD, an additional amount of
[___________
]1
for
the
extension of the Agreement, within the same conditions as provided for in
Article 6.1 of the June 20, 1997 Agreement concerning the lump-sum of
___________]2 [___________]3 paid
in
1997 by Inter Parfums upon signature of the agreement.
3.2
Article
6.2 of the Agreement is deleted and replaced as follows:
1
Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No.
10.127.1:1.
2 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:2.
3 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:3.
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“6.2 As
consideration for the rights that are granted thereto under this Agreement,
Inter Parfums shall pay STD, effective January 1, 2006, license fees of
[___________]4
of
the Inter Parfums’ annual Product sales.
The
base amount used will be the total net invoices of Inter Parfums (parent and
subsidiaries) to its customers, including any invoicing based on orders
submitted by STD, excluding POS products and promotional gifts (said products
and gifts shall in no event exceed [___________
]5
of
total sales), excluding taxes on sales or income and shipping costs, and after
deducting documented unsold returns. Payments shall be made in euros, after
deducting any tax withholding at source.”
3.3
Article
6.3 of the Agreement is deleted and replaced as follows:
“6.3 Beginning
January 1, 2006, Inter Parfums hereby agrees to pay STD the following minimum
royalties, payable
on a quarterly basis and no later than April 30, (first quarter of the
contractual year), July 31, (second quarter of the contractual year), October
30
(third quarter of the contractual year) and the January 31 (fourth quarter
of
the contractual year):
|
PERIOD
|
ANNUAL
MINIMUM ROYALTIES (in euros)
|
|
From
January 1, 2006 to December 31, 2006
|
[
|
|
From
January 1, 2007 to December 31, 2007
|
|
|
From
January 1, 2008 to December 31, 2008
|
___________
|
|
From
January 1, 2009 to December 31, 2009
|
|
|
from
January 1, 2010 to December 31, 2010
|
|
|
from
January 1, 2011 to 30 June 2011
|
]6
|
4 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:4.
5 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:5.
6 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:6.
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The
parties hereby confirm that the
calculation of the royalties payable on October 30, 2005 and January 31, 2006
was based on the previous version of Article 6.3 of the
Agreement.”
3.4
Article
6.6 of the Agreement is deleted and replaced as follows:
“6.6 Inter
Parfums hereby agrees to provide annual financial statements, certified by
its
auditor, related to the royalties and any information necessary to determine
the
base amount for calculating the royalties due for the prior contractual
year.
Said
financial statements must be sent to STD prior to [___________]7
of
each year following the related contractual year.
With
respect to the last contractual year (January 1 through June 30, 2011), Inter
Parfums hereby agrees to provide said semi-annual financial statements prior
to
[___________]8
4
- Marketing Plan
Article
7
of the Agreement is deleted and replaced as follows:
“No
later than [___________]9 of
each year, Inter Parfums shall submit a Marketing Plan for the following
contractual year to STD for approval.
Said
Plan shall include:
|
-
|
Inter
Parfums proposals regarding product lines, prices, discounts, distribution
policy and communication
policy,
|
|
-
|
Inter
Parfums’ wishes regarding new Product line trademarks, if any (in
accordance with Article 12.2
below),
|
7 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:7.
8 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:8.
9 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:9.
4/10
|
-
|
An
updated sales estimate for the following contractual
year,
|
|
-
|
the
advertising budget for the following contractual
year.
|
For
contractual years 2010 and 2011 (first half), Inter Parfums shall submit to
STD
a Marketing Plan for 18 (eighteen) months covering the period from January
1,
2010 to 30 June 2011.”
5
- Advertising and Advertising Material
5.1
Article
10.2 of the Agreement is deleted and replaced as follows:
“Inter
Parfums hereby agrees to spend at least [___________]10 of
its Product sales for the current contractual year on Product advertising (as
defined in Article 6.2 above). The parties hereby agree that Inter Parfums
may
choose to bear all of said advertising expenses or have them borne by its
distributors,
provided, however, that distributor participation does not exceed
[___________]11
of
the total budget. The advertising budget shall cover POS advertising (shop
windows, visual displays, etc.), media advertising expenses (magazines,
newspapers, etc.), the cost of samples and testers, and PR
expenses.
For
contractual year 2011 (first half), Inter Parfums and STD hereby agree that
this
advertising budget shall equal [___________]12
of
Product sales (as defined in Article 6.2 above) for contractual year
2010.”
5.2
Articles
10. 3 and 10.4 of the agreement shall be deleted as of the renewal of the
Agreement, on January 1, 2006.
5.3
Article
10.7 of the Agreement is deleted and replaced as follows:
10
Confidential information omitted and filed separately with the SEC with
a
request for confidential treatment by Inter Parfums, Inc. No.
10.127.1:10.
11 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:11.
12 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No.
10.127.1:12.
5/10
“Inter
Parfums hereby agrees to provide STD, on an annual basis, before
[___________]13 of
each year, with a complete report on advertising expenditures made during the
prior contractual year, country by country, by region, and worldwide, separating
various advertising expenses by, first, sales location (shop windows, visual
displays, etc.), various media expenditures (magazines, newspapers, etc.),
cost
of samples and testers, and PR expenses, and, second, by indicating whether
these expenses, broken down into the same categories as above, were incurred
by
Inter Parfums or its distributors (who must be named).
Inter
Parfums shall retain at its premises for STD’s review press clippings and other
documentation of the expenses thus incurred.
For
the last contractual year (January 1 to June 30, 2011), Inter Parfums hereby
agrees to provide said report for the six-month period before [___________]14..
If
the advertising budget has not been entirely spent, STD shall have the right
to
claim from Inter Parfums either a current payment of the shortfall, plus
[___________]15 or
an
irrevocable agreement by Inter Parfums, sent by certified mail, return receipt
requested, to invest, during the following contractual year, in addition to
the
contractually agreed-upon expenditures, an amount equal to the shortfall, plus
[___________]16.
STD
reserves the right to have an audit of Inter Parfums performed to ensure that
the advertising and promotional budgets are met. The cost of said audits shall
be borne by Inter Parfums if it is shown that said advertising expenditures
were
more than [___________]17 less
than the expenditures that should have been made for the corresponding Product
sales volume under Article 10.2 above”.
13 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:13.
14 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:14.
15 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:15.
16 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:16.
17 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:17.
6/10
6
- Termination
Article
13 is deleted and replaced as follows:
“13-
Termination
13.1 Either
party may, unilaterally and ipso jure, terminate the Agreement without notice
in
any of the following cases:
a) if
any of the contractual obligations provided for in this Agreement is breached
by
either Party and said breach has not been cured within [___________]18
after
notice to cure sent by the other party;
b) with
no obligation to send such notice, if any of the material obligations of this
Agreement, e.g.,
unauthorized use of Trademarks or a Product launched without STD’ consent, is
breached for the second time by the same party;
c) if
Inter Parfums’ annual Product sales as shown in the annual financial statements
described in Article 6.6 above are less than [___________]
19 (however,
the parties must implement the provisions of this Art. 13.1(c) within one year
after the submission of said annual financial statements).
13.2 If
any of the following breaches occur, STD may, inter
alia,
unilaterally and ipso jure, terminate the Agreement without notice, if Inter
Parfums has not cured the breach within [___________]20
after
STD
has
sent a notice to cure:
|
a)
|
without
prejudice to the application of the provisions of Article 6.8,
Inter
Parfums has not paid all or part of any contractually due
royalty;
|
18 Confidential
information omitted and filed separately with the SEC with a request
for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:18.
19 Confidential
information omitted and filed separately with the SEC with a request
for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:19.
20 Confidential
information omitted and filed separately with the SEC with a request
for
confidential treatment by Inter Parfums, Inc. No.
10.127.1:20.
7/10
|
b)
|
Inter
Parfums fails to make a quarterly payment of the remainder, if
any, of the
contractual royalties exceeding the agreed-upon minima as defined
in
Article 6.4 of the Agreement;
|
|
c)
|
Inter
Parfums breaches its advertising expenditure obligation as provided
for in
Article 10.2 of this Agreement and fails to make, within [___________]21 of
the aforementioned notice to cure, the current payment of the shortfall,
plus [___________]22,
to STD,
or, depending on STD’
choice in accordance with Art. 10.7, para. 4, does not irrevocably
agree
by certified letter, return receipt requested, to invest, during
the
following contractual year, in addition to the contractually agreed-upon
expenditures, an amount equal to the shortfall, plus [___________]23
|
|
d)
|
Inter
Parfums fails a second time to meet its advertising expenditure
obligation
as defined in Article 10.2 of this Agreement or fails to fulfill
the
undertakings it agreed under Article 13.2(c)
above;
|
|
e)
|
Inter
Parfums breaches its contractual obligations to provide the information
described in Articles 6, 7 and 10 of this
Agreement.
|
13.3 The
termination notice and notices to cure must be sent by certified letter,
return
receipt requested.
13.4 Termination
of the Agreement after any of the above-listed events occurs shall not in any
event release the parties from the obligations set forth in this Agreement
subsequent to termination.
The
termination of this Agreement by either party, for any whatsoever of the reasons
listed above, shall not grant the other party any compensation
rights.
However,
if Inter Parfums breaches its contractual obligations as provided for
in
Article 13.2 above causing
the
termination of the Agreement,
Inter Parfums must pay STD
[___________)]24
as a
penalty, to the exclusion of any other penalty.
21 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:21.
22 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:22.
23 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:23.
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13.5 On
the date of the expiration or termination of this Agreement, Inter Parfums
shall
immediately cease to use the Trademarks and shall remove any reference to said
Trademarks from its marketing documents, invoices, letterhead, advertising
material, etc. Inter Parfums shall also cease referring to STD,
the
Trademarks, and it prior relationship with STD
and/or S.T.
Dupont Paris
in
its capacity as commercial partner or licensee, and shall be solely responsible
to its sub-licensees.
13.6 For
[___________]25 after
the expiration or termination of this Agreement, Inter Parfums may market
Products that have already been manufactured, are being manufactured or being
distributed as of the termination date of this Agreement.
Within
[___________]26 after
the date of the expiration or termination of this Agreement, Inter Parfums
must
send to STD an inventory of Products remaining to be sold. Said inventory may
not represent more than [___________’]27
.
Product sales. Said volume shall be calculated using the average production
for
the [___________]28 preceding
termination of the Agreement.
Products
that were already manufactured, being manufactured or being distributed as
of
the expiration or termination date of this Agreement must be sold in accordance
with the contractual terms and conditions of sale through the previously used
commercial networks or similar networks that will not damage the reputation
of
the Trademarks.
Upon
expiration of the aforementioned [___________]29,
STD
may, at its sole discretion, elect to purchase the unsold Products from Inter
Parfums at their current price. If it does not do so, Inter Parfums must destroy
said unsold Products at its own expense in the presence of a representative
of
STD or a duly authorized court officer (“huissier”)
at
Inter Parfums’ expense.
No
later than [___________]30 after
the expiration or termination of the Agreement, Inter Parfums shall prepare
a
report of the sales made during the six months following the termination of
the
Agreement and shall pay STD the corresponding contractual
royalties.”
24 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:24.
25 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:25.
26 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:26.
27 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:27.
28 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:28.
29 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No. 10.127.1:29.
30 Confidential
information omitted and filed separately with the SEC with a request for
confidential treatment by Inter Parfums, Inc. No.
10.127.1:30.
9/10
7
-
The
following provision is added to Article 16.9 of the Agreement:
“Amendment
No. 1, dated of March 20, 2006 and the June 20, 1997 exclusive License Agreement
set forth the complete agreement of the parties regarding the subject matter
thereof and supersede all prior amendments, written or verbal agreements
regarding the subject matter thereof.”
8
-
All
other provisions of the June 20, 1997 agreement shall remain
unchanged.
Executed
in Paris/Fribourg,
in
three
originals,
on
March
20, 2006
|
S.T.
Xxxxxx X.X.,
|
Inter
Parfums,
|
|
Mr.
Xxxx Sampré
CEO
|
Xxxxxxxx
Xxxxxxx
CEO
|
10/10
