EXHIBIT 10.2
AMENDMENT NO. 1 (RENEWAL)
TO TRADEMARK LICENSE AGREEMENT
This Amendment No. 2 dated October 18, 2004 amends that certain Trademark
License Agreement dated August 9, 2000 (the "Agreement"), by and between LEVI
XXXXXXX & CO., a Delaware corporation, ("LS&CO.") and GENESCO INC., a Tennessee
corporation with its principal place of business at Genesco Park, 0000
Xxxxxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("Licensee").
Whereas, LS&CO. and Licensee wish to amend the Agreement as set forth
below:
1. Section 2.1, "Initial Term" shall be amended to reflect that the Agreement
is renewed for an additional two (2) year period commencing on January 1,
2005 and ending on December 31, 2006.
2. Section 2.2, "Renewal Term" shall be deleted in its entirety and
substituted with the following:
"This Agreement shall be renewed, upon written request of Licensee
delivered to LS&CO. not earlier than April 1, 2006 and not later than June
30, 2006, for one additional two year term, commencing on January 1, 2007
and ending on December 31, 2009 (the "Renewal Term"), if: (i) Net Sales of
Products for the Annual Period beginning January 1, 2005 are no less than
$50,000,000 and (ii) Licensee is in compliance with all terms and
conditions contained in this Agreement and there is no outstanding Event
of Default existing on the date Licensee delivers its notice of renewal or
at any time during the balance of the Initial Term. Licensee shall include
with its renewal notice data demonstrating that the renewal condition set
out in clause (i) is satisfied, a written certification by the president,
a vice president or the chief financial officer to the effect that the
condition set out in clause (ii) is met and Licensee's projections for
sales of Products during the contemplated Renewal Term. Within thirty (30)
days after receipt of Licensee's renewal notice, and again on the last day
of the Initial Term, LS&CO. shall notify Licensee whether or not the
conditions to renewal set out in this Section 2.2 are satisfied or waived.
If they are satisfied, then this Agreement shall be considered renewed. If
they are not satisfied, then this Agreement shall expire and terminate at
the end of the Initial Term. Licensee's failure to timely deliver its
notice of renewal shall be treated as a final decision by Licensee that it
has elected not to renew."
3. Section 3.1, "Guaranteed Minimum Royalty" shall be revised to reflect that
the Guaranteed Minimum Royalty payments for 2005 and 2006 are as follows:
Annual Period Guaranteed Minimum Royalty
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2005 $3,496,000
2006 $3,600,000
4. Section 3.2, "Earned Royalty" shall be amended such that the last
paragraph in Section 3.2(a) is deleted in it's entirety and replaced with
the following:
"Licensee shall pay to LS&CO., no later than thirty (30) days after the
end of each quarterly period, an amount equal to the excess of earned
royalties in a quarter over the Guaranteed Minimum Royalty for that
quarter. Licensee shall pay Second Quality royalty rates on Involuntary
Discontinuations. Licensee shall pay First Quality royalty rates on Second
Quality Products for any Annual Period to the extent that sales of Second
Quality Products (other than Involuntary Discontinuations) are greater
than [____]* of total Product sales (in terms of dollars). For any such
Annual Period, Licensee shall pay LS&CO., at the time it delivers the
annual statement for that Annual Period as described in Section 9.2, an
amount equal to the amount during that Annual Period that the Licensee
owed for royalties on Second Quality Products in excess of the amount
already paid over the [____]*."
5. Section 3.3, "Payment Mechanics" shall be amended to reflect that Licensee
shall make royalty and all other required payments to LS&CO. in U.S.
Dollars by wire transfer to:
[____]*
6. Section 4.2, "Consumer Advertising" shall be deleted in its entirety and
replaced with the following:
"During each Annual Period, Licensee shall pay to LS&CO., or to such other
person or entity as LS&CO. may designate, an amount equal to [____]* on
projected Net Sales up to [____]*, [____]* on projected Net Sales between
[____]* and [____]*, and [____]* on projected Net Sales over [____]* on
products (the "Marketing Contribution") as defined in the Sales Plan
referenced in Section 4.1 of the Agreement (the "Marketing Contribution").
Licensee shall pay these amounts to LS&CO. within thirty (30) days after
receipt of invoices from LS&CO., it being understood that LS&CO. will
issue these invoices three times per Annual Period on April 1, July 1 and
October 1. If actual aggregate Net Sales exceed projected Net Sales for
any Annual Period, then Licensee shall pay to LS&CO. an agreed percentage
of the excess, with that amount payable in, and for use during, the next
Annual Period, in addition to the Marketing Contribution otherwise
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
due for that Annual Period. Marketing Contributions shall be separate from
and shall not be subject to credit for expenditures by Licensee for
cooperative advertising, trade advertising, fixture programs, trade shows,
sampling or any other promotional or sales material. LS&CO. shall use
these funds for consumer marketing of the brand and branded products
through vehicles and at the times and in the manner as LS&CO. may
determine, Licensee acknowledging that it may not receive any direct or
pro rata benefit from its Marketing Contributions.
7. Section 6.7 "Performance Attributes and Protocol." The following Section
6.7 shall be inserted after Section 6.6 as follows:
6.7 Performance Attributes and Protocol. Licensee acknowledges that,
from time to time, LS&CO. may provide certain guidelines for
developing specific chemical or technological Product performance
attributes ("Performance Attributes") to Licensee. Licensee further
acknowledges that any Performance Attributes presented to Licensee
must be tested in accordance with the relevant protocol presented to
Licensee ("Performance Protocol") and must be marketed and sold in
accordance with LS&CO. marketing strategies associated with the
Performance Attributes. Licensee agrees that it shall not sell any
Products containing or identifying any Performance Attributes
without first (a) complying with the associated Performance
Protocol, (b) submitting the results from certain tests identified
in the Performance Protocol to LS&CO. and (c) submitting Product
packaging, including but not limited to Product hang-tags, to LS&CO.
for approval. LS&CO. shall have the right, in its sole discretion,
to revise, supplement or replace the Performance Attributes and/or
the associated Performance Protocol from time to time and may cause
Licensee to discontinue production or sale of any Product containing
Performance Attributes in the event that Licensee is not in
compliance with this Section 6.7. Licensee acknowledges that
consistent presentation of all Performance Attributes associated
with the Trademarks is essential to LS&CO.'s marketing strategy and
that information provided to Licensee in connection with this
Section 6.7 constitutes Confidential Information (as defined in
Section 17.1) and/or Proprietary Information (as defined in Section
17.2).
8. Section 10 of the Agreement shall be replaced with the following:
Global Sourcing and Operating Guidelines
10.1 LS&CO. Reputation. LS&CO. has and is determined to maintain a
worldwide reputation for ethical business conduct. To that end, LS&CO.
adopted Global Sourcing and Operating Guidelines ("GSOG") setting forth
standards of conduct it requires from, among
others, its licensees, including Licensee. Licensee acknowledges that
its conduct, and the conduct of any subcontractor, must reflect
positively on LS&CO.'s reputation and accordingly agrees to the
provisions of this Section 10.
10.2 Ethical Responsibility. Licensee agrees that Licensee shall,
and shall cause its subcontractors to follow the highest standards of
business ethics in conducting all aspects of its operations under this
Agreement.
10.3 Global Sourcing and Operating Guidelines.
(a) Licensee represents and warrants that its key officers and
managers have read and understand the GSOG, including but not limited
to its Business Partner Terms of Engagement ("TOE") and the Country
Assessment Guidelines attached to this Agreement as Exhibit H.
(b) Licensee agrees that it shall, and shall cause its
permitted subcontractors to, comply with the requirements of the GSOG
at all times.
10.4 Effect on Compliance with Laws. Licensee shall be fully
responsible for compliance with all local laws and regulations
applicable to Licensee's operations. If the requirements of the GSOG
are stricter than the requirements of applicable law, the requirements
of the GSOG shall control.
10.5 TOE Assessment. Licensee acknowledges that LS&CO. requires
official, approved TOE assessments ("TOE Assessments") to be performed
from time to time to ensure TOE compliance on all manufacturing facilities
or subcontractors used by Licensee to produce any Products, including
branded samples. Beginning on December 1, 2004, Licensee shall conduct all
TOE Assessments required by LS&CO. through Verite Inc. or another LS&CO.
approved third-party monitoring company.
(a) [____]*
(b) For the purposes of monitoring compliance with this
Section Licensee shall provide LS&CO. with a complete list of all the
manufacturing facilities, subcontractors and suppliers it intends to use,
including details of the purposes of the proposed use of such
manufacturing facilities, subcontractors and suppliers. Licensee
represents that it is presently using the third-parties listed on Exhibit
J to manufacture Products, and that it is not subcontracting with a third
party beyond those listed on Exhibit J. Licensee shall, within thirty (30)
days after completion of a manufacturing facility TOE Assessment, deliver
a copy of the assessment to LS&CO. Licensee shall not begin production at
any manufacturing
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
facility until LS&CO. reviews and approves, as specified under Section 19,
the TOE Assessment.
(c) It is understood and agreed that LS&CO. makes no
representations or warranties with respect to the GSOG, including the TOE
and the TOE Assessments, and that LS&CO. shall not be liable to Licensee
or its subcontractors or its suppliers for any failure to comply with the
GSOG, the TOE or the LS&CO. Restricted Substances List. Any verification
or monitoring shall not relieve Licensee from its obligation to strictly
comply with the GSOG, the TOE, the LS&CO. Restricted Substances List and
all applicable laws and regulations.
10.6 Effect of Breach. This Section 10 is of the essence of this
Agreement. Any failure by Licensee or any of its subcontractors to comply
with the GSOG shall be grounds for declaration of an Event of Default by
LS&CO. under Section 13.
9. Section 13.1(i) shall be amended by inserting the words, "or Proprietary"
between "Confidential" and "Information."
10. Section 13.2 "Effectiveness and Cure" shall be amended by inserting
subsections "(a)" and "(i)" in both occurrences.
11. Section 15, Indemnity, is hereby amended by adding Sub-section 15.3,
"Licensee Indemnified Claim Notification and Handling" as follows:
[____]*
12. Section 17.1 "Confidential Information" shall be substituted in its
entirety by the following:
17.1 "Confidential and Proprietary Information." Except as otherwise
provided in this Agreement, all information disclosed by one of the
parties (the "Discloser") to the other party (the "Recipient") is
considered confidential and: (i) shall remain the exclusive property
of the Discloser; (ii) shall be used by the Recipient only in
connection with its performance under this Agreement; and (iii)
shall be maintained in confidence by Recipient as described in this
Section 17. "Confidential Information" means any formula, pattern,
program, method, marketing programs, profitability, corporate
strategy, technique, process, design, sketch, color card, color
story, artwork, know-how, specifications, procedures, development
plans, methods of production, use, operation and application,
material, business plan, customer or personnel list or financial
statement, Performance Attributes or Protocol, or any Proprietary
Information, or any other information which is not available to the
general public. "Proprietary Information" means any and all
information disclosed by LS&CO. to Licensee related to any LS&CO.
design, design schedule, line- strategy, marketing
* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
program, business plan, technology, any Sales Plan, Performance
Attribute, Performance Protocol and any other information clearly
marked "LS&CO. Proprietary Information." Confidential Information
shall include, without limitation, information disclosed in
connection with this Agreement, but shall not include information
that: (i) is now or subsequently becomes generally available to the
public through no wrongful act or omission of Recipient; (ii)
Recipient can demonstrate to have had rightfully in its possession
prior to disclosure to Recipient by Discloser; (iii) is
independently developed by Recipient without use, directly or
indirectly, of any Confidential Information; or (iv) Recipient
rightfully obtains from a third party who has the right to transfer
or disclose it.
13. Section 24.2, "Relationship of the Parties" is hereby amended by adding
to the fifth paragraph, after the words, "...personal injuries" the
phrase, "timely handling of Indemnified Claims,..."
14. Except as set forth above, all other terms and conditions contained in
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 by
their respective officers hereunto duly authorized as of the day and year first
written above.
LEVI XXXXXXX & CO. GENESCO INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxx
------------------- ----------------------
Xxxxx Xxxxxx Name: Xxxxxxxx X. Xxxxxx
President Title: CEO, Genesco Branded
Dockers(R) & Slates(R) U.S. Footwear
